KATHMANDU HOLDINGS LIMITED Sustainability Report 2019 SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 1 Inspiring adventure is what inspires us.

The people who make up Kathmandu are travellers and adventurers from all over the globe. From our beautiful, untamed home New Zealand, we go out into the world with a purpose at heart.

Whakaoho te Manurau I in sustainable product roto ia tatou development and doing To inspire and equip the business ethically. We’re adventurer in all of us. focused on minimising environmental impact, and Since 1987, we’ve been look to contribute to the engineering gear to equip wider community. adventurers around the world We believe we have in their quest to discover. an opportunity, and Our passion is to inspire responsibility, everyone to feel the thrill of to help create a better world. travel and adventure. Nothing enriches us like Na tatou – nga kaitiaki exploring our planet, which is o te Ao why caring for it is at our We need to care for this Southern Alps / Ka Tiritiri o te Moana – South Island, New Zealand core. We strongly believe world together 2 SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 3 Our top 5

BECAME A CERTIFIED B CORP, sustainability MEETING THE HIGHEST VERIFIED STANDARDS OF SOCIAL AND highlights. ENVIRONMENTAL PERFORMANCE

At Kathmandu, sustainability isn’t a department, it’s a way of doing SCORED AN ‘A’ IN THE A ETHICAL FASHION REPORT things. Here are some of our TWO YEARS RUNNING highlights from this year.

RANKED SECOND IN THE TEXTILE EXCHANGE REPORT 2 THREE YEARS RUNNING

LAUNCHED OUR NEW ‘BEST FOR THE WORLD’ FIVE YEAR SUSTAINABILITY PLAN

RECYCLED 9.3 MILLION PLASTIC BOTTLES INTO OUR GEAR 4 SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 5 Contents. Chairman’s and CEO’s report.

6 Ta matou korero – Our Stories Kathmandu becomes a certified B Corp. Our fight against modern slavery. And a campaign to encourage helpful travellers.

Our biggest news in sustainability this year is the announcement that 12 Ta matou rerenga – Our Journey Kathmandu has become the largest company in Australia and An in-depth review of our strategy has led to an ambitious New Zealand to join the B Corp new five-year plan. movement. Certified B Corporations commit to using business as a force for good to create a more sustainable and 22 Nga kaiwhakarato – Our Suppliers inclusive economy. Moving beyond compliance to improving the lives of workers in The certification measures our supply chain. performance in five categories: governance, workers, customers, DAVID KIRK XAVIER SIMONET community and the environment. CHAIRMAN CHIEF EXECUTIVE OFFICER Sustainability has always been part 32 Nga hua – Our Products of the Kathmandu DNA, and this A move towards more recycled materials and fibres from renewable milestone reflects the hard work resources sets up the future. our teams have done over the years to improve the lives of people in our supply chain and our community and the efforts we’ve made to 46 Ta matou tapuwae – Our Footprint lessen our impact on the planet. This year, we released a five-year We set a goal to have net zero environmental harm from our business sustainability plan that pushes our operations by 2025. efforts in all these areas even further. It includes our new social impact statement to positively impact the lives of 100,000 people 54 Ta matou hapori – Our Community through adventure and education. A new social impact statement aims to empower our community to The plan also challenges us to positively change the lives of 100,000 people in the next five years. integrate the principles of circular economy throughout our business. It’s all part of our mission to inspire and equip the adventurer in all of us. 64 Ta matou ranga – Our Team A focus on diversity has led to a rainbow network and new roles for people with disabilities. 6 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 7 Business as a force for good.

Kathmandu has become the largest In the B Corp certification, certified B Corporation (B Corp) in Kathmandu was awarded high scores Australia and New Zealand. in the workers, environment and community sections. These scores We are proud to be the first publicly reflect the work we’ve done in listed certified B Corp in New Zealand preferred fibres and materials as well and the first outdoor apparel and as protecting the rights of employees equipment retailer in Australia and in our supply chain. New Zealand to become one. Kathmandu is part of a global ethical Globally, there are more than 3,000 business movement driving a more companies that have become sustainable and inclusive economy. certified B Corps after completing the certification process. There are nearly By harnessing the power of business, 300 certified B Corps in Australia and B Corps aim to use profits as a means New Zealand, making it the fastest to positive impacts for their growing region per capita. employees, communities and the environment. “Kathmandu’s announcement as New Zealand’s first B Corp-certified B Corp is an initiative from B Lab, a multinational retail business and global non-profit movement of people Australasia’s biggest B Corp is a using business as a force for good. significant milestone for Australia, The B Corp assessment process New Zealand and the wider B Corp measures a company’s performance movement,” says B Lab Australia & in five categories: governance, New Zealand CEO Andrew Davies. workers, customers, community and the environment. “Certification is open to all sizes of business, and we are seeing increasing “The B Corp certification is a milestone interest from large corporations achievement for the company and across the world Kathmandu’s reflects Kathmandu’s exceptional certification sends an important record in sustainability leadership, signal for other big businesses to which has been fundamental to our follow in their lead.” success,” says Kathmandu CEO Xavier Simonet. “Sustainability is part of Kathmandu’s Kathmandu meets the DNA and is integral to our entire operation, from our supply chain to highest standards of our materials and products and our operational footprint.” positive social and environmental impact 8 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 9 Slavery is not history.

Did you know that there are more opportunity for businesses to make a people in slavery now than at any dent in this problem,” Gary says. 75% of modern other time in human history?1 It’s Gary has seen modern slavery and slaves are hiding estimated that 40.3 million people are human trafficking firsthand. For eight trapped or working against their will.2 in global supply years, he worked as a human rights As a criminal industry, the global investigator, going undercover in 13 chains. profits from human trafficking are countries to help rescue enslaved

second only to the drug trade.3 Human people and facilitate the prosecution trafficking accounts for approximately of the perpetrators. For Kathmandu, this meant ensuring 25% of modern slavery.1 our supply chain was transparent “Right now, less than 2% of people in and that our workers had a voice. We The other 75% of modern slaves are slavery are liberated and their worked in partnership with our hiding in global supply chains.1 This is perpetrators held accountable.3 This suppliers and in collaboration with often in the form of debt bondage or rate shows that governments and other brands to proactively address debt slavery. This is when a person is NGOs working on this problem are not such risks. forced to work to pay off a debt. It going to address this issue without might start when a mother seeks a the help of the private sector. The At the heart of the Kathmandu loan to provide resources for her Australian Modern Slavery Act creates approach to human rights in the children and then finds her entire the opportunity for collaboration supply chain is the brand statement – family forced into labour for the ever- between businesses, governments to inspire and equip the adventurer in increasing loan. Attempts to escape and NGOs.” all of us. are often met with violence. Gary says the Act will mean all large “That includes the people who make The solution requires action from businesses will have to become more our gear and to inspire adventure governments, NGOs and businesses. aware of the risks. presupposes that you have the freedom to adventure in the first place.” The 2018 Global Slavery Index found “Initially, it might be confronting for 36 countries were taking steps to some businesses who have just investigate forced labour in business assumed that their supply chain is or public supply chains, up from just free of slavery. A lot of people assume four countries in 2016. that slavery ended in the 1800s. When they start to look, they might be Australia was one of them. The surprised to find that their supply Modern Slavery Act was passed by chain includes high-risk industries or the Australian Government in product lines that cause, contribute or October 2018. are directly linked to modern slavery.” From 1 July 2019, every company with Gary is hopeful about the response that revenues of AU$100 million or more will come from more open reporting. are required to track the risks in their supply chains. From 1 July 2020, “The aim is not to say that you don’t 1. The Mekong Club, Oct. 2019, themekongclub. these companies will be required to have slavery in your supply chain. The org report their risks and what they are legislation is encouraging companies doing about it. to report where they identify those 2. International Labour Organization and Walk Free Foundation. Global Estimates of Modern risks so that they can be addressed,” Kathmandu Corporate Social Slavery: Forced Labour and Forced Marriage, Gary says. “Allowing businesses to Response-ability Manager Gary Shaw 2017, pp. 1–68. https://www.ilo.org/wcmsp5/ discuss slavery risks in the open groups/public/---dgreports/---dcomm/ says the legislation is a big step without fear of shame or criticism will documents/publication/wcms_575479.pdf forward for reducing slavery. allow for the collaboration necessary 3. United States Department of State. “With 75% of modern slavery to shut it down.” Trafficking in Persons Report. US Department of happening in the global supply chains State Publication Office, June 2017, pp. 1-454 of businesses, there is a huge https://www.state.gov/wp-content/ A worker at one of our supplier factories uploads/2019/02/271339.pdf outside of Ho Chi Minh City, Vietnam. 10 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 11

“We felt we had a responsibility to Helpful or harmful. help people think more deeply about their impact.” Travel and tourism is a US$8 trillion harmful effects of tourism and provides issues in the three-part documentary industry and the largest employer on education about how individual series. The films explored the impacts Earth. But as Elizabeth Becker writes travellers can be more helpful in the of tourism in Bali, Nepal and Australia. in Overbooked, “Travel and tourism choices they make when travelling. PAUL STERN Kathmandu General Manager has become a behemoth, capable of GENERAL MANAGER The report looks at a problem called Marketing and Online Paul Stern says doing great good and great damage.” MARKETING AND ONLINE “tourism leakage”. This is when the series and report were designed to As part of our World Ready brand companies in developed nations take educate customers and the public on proposition last year, we decided to more profit from travellers than the how to have a more positive impact. take some responsibility to educate less-developed destinations, which “It’s part of our purpose to inspire travellers and address some of the still have to absorb the costs. people to go travelling, but we felt we impacts of travel. The report found that, on average, for also had a responsibility to help Helpful or Harmful is a report and every US$100 spent by a tourist from people think a bit more deeply about documentary series commissioned by a developed country, only US$5 stays their impact.” Kathmandu and released last year. in the developing destination This content reached millions of country’s economy. Research commissioned by people. It sparked discussion on social Kathmandu found a third of Aussies Tourism can also be harmful when it media – with many people grateful to and half of Kiwis think of themselves overloads infrastructure, damages learn more about how they could be as the best travellers in the world, yet nature, alienates local residents or more helpful. only 20% of us make an effort to spend threatens culture and heritage. The second phase of this project will our money to benefit local people. These ideas were explored by launch this year to include markets To help travellers match their actions investigative journalist Jan Fran, who beyond Australia and New Zealand. with their intentions, the Helpful or travelled to three areas impacted by Harmful report shines a light on tourism to shine a light on these

HARMFUL EFFECTS OF TOURISM

ALIENATED LOCAL DAMAGE TO OVERLOADED DEGRADED TOURIST THREATS TO RESIDENTS NATURE INFRASTRUCTURE EXPERIENCE CULTURE & HERITAGE

WAYS TO BE HELPFUL

PURIFY YOUR OWN GET OFF THE LEARN SOME LOCAL CHOOSE LOCAL, OFFSET YOUR WATER BEATEN TRACK LANGUAGE ETHICAL OPERATORS FLIGHTS A local Nepalese man outside a waste incinerator. Burning of waste surges in Nepal during peak tourism seasons. Nepal. in hiking while a break takes Sherpa guide Chhiring expedition Nepalese 12 SUSTAINABILITYREPORT 2019 OUR JOURNEY OUR SUSTAINABILITYREPORT 2019

Our journey. Ta matou

rerenga. 13 14 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 15

SOCIAL IMPACT TEAM PRODUCTS FOOTPRINT We’re aiming to be best Empower our community All Kathmandu team 100% of products Net zero environmental to positively change members embody the designed, developed and harm from our business. 100,000 lives. company purpose and manufactured using for the world. values. elements of circularity ACTION POINTS ACTION POINTS principles. Operate only zero-waste Through collaboration, our ACTION POINTS facilities. partners, suppliers and provide all team members ACTION POINTS Set science-based targets Summit Club members will access to programmes that Define our own unique to combat climate change. strive to: align with the company's circularity principles. purpose. Operate with a net zero · improve the standard carbon footprint. of living and working Rank in the top quartile Four years ago, the United Nations After a comprehensive review of our conditions for 50,000 of high performance for Have 100% sustainable “Our new released a roadmap for ending current practices and strategies, Brian workers in our supply employee engagement. packaging materials by chain 2025. sustainability poverty, fighting injustice and tackling and Mary’s report showed that, be a leader in diversity and climate change by 2030. The although we are a leader in Australasia · provide 30,000 Nepalese inclusion. action plan is not Sustainable Development Goals and we stack up with global leaders people with access to address the most pressing challenges on material choices and human rights, quality education about Kathmandu of our time, including climate change, we still have room to improve being the Best in resource depletion, poverty and social compared to global competitors in · give 10,000 Summit justice – aiming to help everyone from some areas – particularly around our Club members access the World. It’s governments and businesses to environmental footprint, governance to volunteering and SDG SDG SDG citizens to transform our world by and social impact. outdoor adventure focused on stimulating actions that benefit The report strongly advised · provide 10,000 people and the planet. making the best Kathmandu to invest in these areas. disadvantaged youth These 17 global goals have defined with outdoor education decisions for the Both Brian and Mary emphasise one the agenda for good business – thing. “Our vision for Kathmandu is · proactively address because all businesses will benefit world.” to be a bright, shining voice of modern slavery within from more resilient communities, human rights coming out of the our industry SUPPLIERS GOVERNANCE CIRCULAR reliable access to natural resources southern hemisphere – and they can OLIVIA BARCLAY and a healthy population. · enhance worker do it at home as well as around the All direct suppliers across Become a leading global Integrate circular BRAND MANAGER wellbeing through Although we’re proud of the work world. They can do it with that mindset transformation our business meet our B Corp using our business economy principles we’ve done already, we know that Kathmandu spirit of adventure and training. minimum expectations as a force for good. within the business. doing our part for sustainable do it in an active way. There is a real on their social and development will require us to keep opportunity for Kathmandu to lead in environmental impacts. ACTION POINTS ACTION POINTS trekking this path. Understanding the people space, generating truly Become a leading certified Establish recommerce and where we are is the first step. positive social impacts.” ACTION POINTS B Corp with an impact rental business models that Ensure all suppliers across score of >120. support and drive circular This year, we brought in Drs Brian and our entire business are economy solutions. Mary Nattrass of Sustainability subject to measuring and Partners to review our sustainability improving their social and strategy and initiatives. Based in environmental impact. Canada, Brian and Mary are global leaders in sustainability, having worked with some of the world’s biggest brands.

SDG

SDG SDG 16 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 17

A NEW FIVE-YEAR PLAN BEST FOR THE PLANET BEST FOR THE WORLD After a comprehensive review by This pillar sees a big shift towards Kathmandu, we have created a circularity principles. The Ellen OUR 2025 SUSTAINABILITY GOALS five-year plan – Best for the World. MacArthur Foundation describes the three principles of a circular economy This new plan takes the as designing out waste and pollution, recommendations from the keeping products and materials in use Sustainability Partners review and and regenerating natural systems. For groups them into three pillars: people, INTEGRATE CIRCULAR ECONOMY Kathmandu, this means applying planet and practice. these principles to the way our PRINCIPLES WITHIN OUR BUSINESS products are designed, developed and BEST FOR PEOPLE manufactured. Our goal is to have 100% of our products designed, This pillar covers all the people in our developed and manufactured using network – from the 50,000 people in elements of circularity principles. our supply chain to our 2,000 BECOME A LEADING GLOBAL employees as well as our customers Our waste and carbon footprint are and our wider community. This year, another part of our impact on the CERTIFIED B-CORP we created our social impact planet. Our aspirational goal for 2025 statement that sums it all up. Our is to have zero environmental harm 2025 aspirational goal is to empower from our business operations. To get our community to positively change there, we’ll need to become carbon the lives of 100,000 people. We’ll zero, operate zero-waste facilities and 100% OF PRODUCT DESIGNED, inspire and equip people to discover look at how we can remove waste their potential through education, from our supply chains. DEVELOPED & MANUFACTURED personal development and wellbeing. USING CIRCULARITY PRINCIPLES To achieve this goal, we’ll take action BEST FOR THE WORLD IN PRACTICE over the next five years to improve the In this pillar, we focus on governance standard of living and working and widening the circular economy conditions for people in our supply principles to the whole business. This chain. We’ll help our partners provide year, as part of our goal to use our 30,000 Nepalese people with access NET ZERO ENVIRONMENTAL HARM business as a force for good, we to high-quality education. We’ll give became a certified B Corp. This FROM OUR BUSINESS 10,000 Summit Club members access means Kathmandu meets the highest to outdoor adventure and volunteering verified standards of positive social opportunities with free events. and environmental impact. Our five- For our team, we are aiming for 100% year goal is to become a leading B of team members to embody the Corp by lifting our assessment score EMPOWER OUR COMMUNITY TO company purpose and values. That from 83 points to more than 120. means we will be a leader in diversity POSITIVELY CHANGE 100,000 LIVES The executive team and wider and inclusion and will rank in the top leadership team will have training and quartile for employee engagement. It accountability for sustainability will also mean staff have access to performance. A sustainability programmes that align with the governance structure will provide clear company’s purpose. performance accountability for all of ALL KATHMANDU TEAM MEMBERS our sustainability and community impact strategies. EMBODY THE COMPANY PURPOSE For the whole organisation to shift to AND VALUES circular principles, we’ll need to clearly define what our own circularity principles are across the organisation. From there, we’ll be able to experiment with internal business models that ALL SUPPLIERS MEET OUR MINIMUM drive circular economy solutions. These might be recommerce, repair or rental EXPECTATIONS ON THEIR SOCIAL business models. AND ENVIRONMENTAL IMPACTS 18 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 19

A little B CORP TEXTILE EXCHANGE ENVIRO-MARK SOLUTIONS Certified B Corporations® Our membership with the Our membership with Enviro- (B Corps™) are for-profit Textile Exchange supports Mark Solutions helps us to companies that use the our materials strategy, and measure, manage and reduce help from power of business to build a we also participate in their our carbon footprint. more inclusive and Preferred Fiber & Materials our friends. sustainable economy. Market Report.

Every explorer knows that a journey is better with someone by your side. As we continue the OUTDOOR INDUSTRY CANOPY AUSTRALIAN PACKAGING journey of sustainability, industry partnerships ASSOCIATION COVENANT ORGANISATION provide important support ­– resources, We have been partners information and frameworks. We participate in OIA’s with Canopy since 2016. We We submit an annual report to Sustainability Working Group, work with them to use our the APC, which supports our a collaborative platform of influence in our fabric packaging and waste strategy. more than 300 outdoor brands supply chain to protect the and suppliers working together world’s remaining ancient to identify and implement and endangered forests better business practices. and endangered species habitat.

SUSTAINABLE APPAREL LEATHER WORKING GROUP AUSTRALIAN HIMALAYAN COALITION FOUNDATION Our work with the LWG helps Membership of the SAC gives us to assess the environmental We have been partners with us access to the Higg Index compliance and performance the AHF since 2011. We work modules. We’ve been using capabilities of our tanneries with the AHF to support the index since 2014, which and to promote sustainable communities in Nepal, the supports our sustainability and appropriate environmental nation that inspired our brand. strategy. The index guides us on business practices within the the environmental and social leather industry. impacts of our products and how we can improve.

FAIR LABOR ASSOCIATION GREEN BUILDING COUNCIL HIMALAYAN TRUST AUSTRALIA NEW ZEALAND We became the first brand in the southern hemisphere to Our membership with the We have partnered with the achieve FLA accreditation. GBCA supports our green Himalayan Trust to further This verifies that our social building programme. improve outcomes in education compliance programme in our We also work in collaboration in remote rural Nepal. supply chain exceeds the most with this organisation in stringent global standards. trialling new projects. “B Corps form a community of leaders BLUESIGN® CARBON DISCLOSURE ELEVATE and drive a global PROJECT Our bluesign® system Elevate Limited is our movement of people partnership supports our We submit an annual chosen supply chain partner chemicals management report to the CDP, which and an industry leader in using business as a programme, materials supports our carbon sustainability, auditing and force for good.” and products so that measurement and reduction improvement services. they are environmentally programme. and socially friendly. B CORP COMMUNITY 20 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 21

KEY Our world.

FACTORIES 101 TOTAL

China – 80 Vietnam – 11 Indonesia – 3 New Zealand – 3 Nepal – 1 Italy – 1 Spain – 1 Taiwan – 1

Iceland Russia MATERIALS SOURCING Norway

Denmark UK Scotland Germany

Lithuania Mongolia Canada Ireland Poland Netherlands Belgium France Austria OPERATIONS Switzerland Macedonia China New Zealand Spain Italy Greece 48 stores USA South Korea Japan 1 distribution centre Malta Iraq 1 headquarters – Christchurch Algeria Afghanistan Nepal Egypt Australia Mexico Thailand Pakistan Laos Taiwan 119 stores Yemen Hong Kong 1 distribution centre Myanmar Cambodia 1 headquarters – Melbourne Vietnam India Philippines Ethiopia America Nigeria Sri Lanka Somalia Malaysia 1 headquarters – Bozeman Indonesia United Kingdom Rwanda Kenya 1 store Papua New Guinea Peru Brazil Tanzania

Fiji Zambia Samoa

Namibia Chile Australia COMMUNITY South Africa SPONSORSHIPS

Argentina 14 Adventure Sponsorship winners travelled to Mongolia, Namibia, Zambia, New Zealand Tanzania, Kenya, New Zealand, Samoa, Papua New Guinea, Nepal, Australia, Peru, Norway, England, France

214 adventure sponsorship recipients

49* NATIONALITIES ACROSS OUR TEAM

*Estimated at the time of publication City, Vietnam. Minh Chi Ho of outside factories supplier our of one at A worker 22 SUSTAINABILITYREPORT 2019 OUR SUPPLIERSOUR SUSTAINABILITYREPORT 2019

Our suppliers. Nga

kaiwhakarato. 23 24 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 25

TGI factory manager New social impact Ms Nguyen Trang. statement includes workers.

Our new five-year sustainability This year, we travelled to one of our “The aspiration strategy focuses on people, planet most progressive factories in Vietnam is that we would and practice. We have included our to collect stories from the workers 50,000 supply chain workers in our about how this training is already empower and social impact aspiration: to empower changing lives. our community to positively change Corporate Social Response-ability inspire our 100,000 lives. We’ll do this by Manager Gary Shaw says, “At a proactively addressing modern slavery workers.” baseline, we want to ensure that the in our industry, by working to improve worst forms of modern slavery and the standard of living and working exploitation are eradicated. But that’s GARY SHAW conditions for those people in our just a baseline. The aspiration is that supply chain and by enhancing worker CORPORATE SOCIAL we would empower and inspire our wellbeing with education, training RESPONSE-ABILITY MANAGER workers to grow and flourish in the and mindset transformation. same way we want to ourselves.” Mindset training helps workers see new possibilities.

Vietnamese supplier TGI has Trang says the people who go through such sad circumstances. Instead of implemented a mindset training the training are better employees and hiding in fear, we were inspired to be programme for its employees. Factory tend to stay with the company longer. courageous and change together. manager Ms Nguyen Trang says they “We would like to improve the “After taking the course, I feel like, when saw this programme being used in education of the community. We there are difficulties, I can openly share. another company with good results want to see our employees develop I can now openly report to my and implemented it at TGI in 2015. their life with a transformed mindset supervisors to solve the obstacles and The first round of training included so they will be happier in their job and not be afraid or hide things. 200 workers, and the second round in their family.” “What we learned was powerful included 500 workers. My Le Thi is a worker who went because we could apply our new skills Trang says she’s seen the changes through the training. “I discovered I and ways of interacting with others to firsthand. “They can organise their had the ability to change my mindset our work but also in our daily life with daily life better. They are more and overcome difficulties. There was a friends and family.” confident in themselves and in their class where we wrote down each of abilities. Before, when we offered the challenges we were facing. After people promotions, many would that, each person had the DriFill down jackets being refuse. The mindset training helps opportunity to share their obstacles. produced in Shenzhen, China. open their mind and be more positive.” I heard about such difficult stories, 26 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 27 How one factory protects SUPPLIER PROFILE workers from debt Social media tools create bondage. opportunities for change.

The International Labour Organization These interest-free loans are Last year, we introduced a new way Kathmandu Corporate Social This is one example of how open lines of “We created loans estimates that around 8 million approved on a case-by-case basis. for workers around the world to let us Response-ability Manager Gary Shaw communication with workers can spark to help the people around the world are enslaved Stories are collected by the Youth know directly when they felt their explains, “In one case, we received a improvement. Kathmandu is currently due to what is known as debt Union and put to the management human rights were being complaint about a particular manager rolling out an equivalent platform in employees have a bondage. It happens when people sell board. The company also has a compromised. WeChat is one of the who was behaving in an unprofessional Vietnam to ensure workers there can their labour in exchange for a loan charitable foundation called Golden world’s largest multipurpose manner towards some female workers. also communicate immediately and better life.” and then become trapped in a Heart, which gives grants of US$500– communication platforms, and this directly with the company. “As a result of our intervention, the situation where they are unable to $10,000 to employees who are facing year, we have heard from several factory invested in leadership training “We aim to come alongside our suppliers repay or escape the bond. The hardship. The TGI management workers via this channel. MS NGUYEN TRANG and a review of management. They and work together to improve,” Gary practice is illegal, but penalties are board contributes US$22,000 per FACTORY MANAGER These led to ongoing conversations hired someone to help them change says.” In this case, our partner ELEVATE rarely enforced in the parts of the year to this fund. with our China-based supply chain the company culture, and when the was able to recommend the necessary world where it’s most common. This is Progressive companies like TGI can see specialist and resulted in Kathmandu manager concerned was unwilling to steps for improvement and facilitate the extreme end of the spectrum, but the benefits of workers who are less contacting our suppliers to seek change his behaviour, he was training. This is going beyond risk debt can be crippling for many low- vulnerable and more engaged. clarification, redress or immediate ultimately dismissed.” management and compliance to wage workers. action. genuine positive change.” As a result of Kathmandu’s Kathmandu’s Vietnam-based supplier commitment to sustainability, we TGI has taken a progressive step have identified suppliers like TGI as Corrective action towards helping workers who find "high-potential, high-growth vendors plans themselves facing debt. that will be allocated more business. Factory manager Ms Nguyen Trang Kathmandu issued 144 “By supporting companies like TGI with explains, “Some workers need to corrective action plans our business, we are directly borrow money to help their parents following social audits preventing and proactively addressing build a house or for a wedding, designed to identify and those factors that fuel modern university fees for their children or in OUR SUPPLIERS 2019 collaboratively improve the slavery,” Corporate Social Response- the case of illness. If they borrow working conditions and ability Gary Shaw says. money from a private bank, the wellbeing of those in our supply interest is 20%. We created loans chain. from our management board to help the employees have a better life so 101 37 Factory exits they don’t have to worry and can KATHMANDU KATHMANDU BRANDED concentrate on their job.” BRANDED FACTORIES SUPPLIERS Kathmandu exited 34 factories. Some were as a result of consolidating a number of smaller suppliers with whom we had very little influence. The % remaining suppliers were exited 100 144 NEW SUPPLIERS SCREENED CORRECTIVE after repeatedly failing to USING SOCIAL CRITERIA ACTION PLANS improve and showing no intention or desire to do so. By working with fewer suppliers, we can increase our purchasing power, allowing us to have more influence over workplace 29 34 625 best practice. TOTAL AUDITS EXITS HOURS TRAINING STAFF 28 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 29 Laborlink gives Another 'A' score in the workers a voice. Ethical Fashion Report.

The 2019 Ethical Fashion Report was Kathmandu scored an A again this Tearfund CEO Ian McInnes says this is “Honest A worker at one of our supplier released by Tearfund in April. year and ranked as one of New a sign that accountability is starting factories outside of Ho Chi Minh City, Vietnam. Zealand’s top five companies. to motivate change from companies. transparent The Ethical Fashion Report sheds light communication on what the industry and individual Companies are assessed at three Kathmandu Corporate Social companies are doing to address critical stages of the supply chain – Response-ability Manager Gary Shaw is how we create issues such as forced labour, child raw materials, inputs production and says the report helps raise the bar on labour and other forms of worker final stage production. This year, in human rights in the supply chain. change.” exploitation. Each report – since the addition to the four established key “Companies are competitive by launch of the first in 2013 – has areas of grading (policies, nature. Now instead of trying to be tracked progress within the industry. transparency and traceability, the best in the world, they’re GARY SHAW The change since 2013 has been auditing and supplier relationships, competing to be the best for the CORPORATE SOCIAL significant. The 2019 report assessed and worker employment), Tearfund world. Like the Modern Slavery Act, RESPONSE-ABILITY MANAGER 130 fashion companies (representing has added a fifth grading criteria – the Ethical Fashion Report invites 480 brands) on how well they environmental management. companies to become more aware of mitigate the risk of exploitation in their supply chain and the impact Tearfund said this year saw the most their supply chain. they have on the world.” substantial progress in traceability down the supply chain since its conception in 2013.

One of the other tools we use to “We did an audit this year on one of understand the concerns of workers in our new suppliers that came back our supply chain is Laborlink, an almost perfect with a score of 93%. anonymous confidential survey tool However, in the anonymous Laborlink that workers complete using their survey, 58% of workers reported that own mobile phone. their supervisors often or sometimes yell at them. So the workers’ “Audits are very good at looking at the wellbeing is still being impacted, and building, checking that fire escapes that is a concern.” aren’t blocked and that workers are getting fairly paid, but it doesn’t Gary says the next step is a reveal things like harassment or conversation with the factory bullying, which can have a much managers. “We’ll ask if they more detrimental impact,” says recognise the issues involved and Corporate Social Response-ability are equipped to address them. If Manager Gary Shaw. not, we’ll invite them to work with ELEVATE to change the culture of The traditional audit process does their workplaces and make it clear include interviews with workers, but to all what is acceptable. these are often done on the factory premises, in sight of their managers, “We don’t expect or anticipate and it’s not surprising that they result perfection. What we do require is in very few complaints. Some workers honest transparent communication are worried they will lose their jobs if so we can work on these issues they speak up, or in some cases, there together. This is how we create is a cultural expectation that they change. We collaborate with ELEVATE remain silent out of misplaced loyalty because they understand the issues, to their employer. have the experience and expertise and know the culture,” Gary says.

Garments being manufactured at TGI in Vietnam. 30 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 31 Ongoing progress.

COLLABORATION ADDRESSES SUPPLY CHAIN GOES PUBLIC WORKER CONCERNS In December, we made 100% of our In three cases, our grievance Tier 1 manufacturing list public on the mechanism resulted in us working with Open Apparel Registry. other brands to increase our influence. Gary says this move creates greater “Sometimes our spend with a transparency and accountability. “In particular factory isn’t significant, so the past, many brands saw this as a our voice is not as influential,” explains risk. But today, it’s best practice. It Corporate Social Response-ability means that, if someone finds human Manager Gary Shaw. “This is a rights violations in our supply chain, common problem for businesses all we want people to be able to track us over the world who truly want to down and let us know about it. We make a difference but don’t have the are not about self-protection. We are leverage or influence to do so on their about collaboration and doing the own. However, as an example, by best for the world.” working together with other brands, Tier 1 includes all of our we were able to approach one of our manufacturers. Gary says the next shared factories with a unified and step is to increase transparency to our powerful voice as together we made Tier 2 suppliers, like fabric mills. up more than 90% of their business. They were suddenly very responsive and eager to address the issues we OBOZ TAKES FIRST STEPS ON raised.” This approach has been CORPORATE SOCIAL welcomed by other brands. “New RESPONSIBILITY JOURNEY ways of doing business built on Gary spent time with the team at partnership and collaboration are Oboz this year to share his supply essential if we are going to chain approach and knowledge. meaningfully improve the lives of Oboz CEO Amy Beck says, “It was workers and their communities.” great to have Gary and his knowledge to partner with us on this very important topic. We are in the “We were able to process of building our CSR and sustainability road map. By working approach with a with the Kathmandu team and their processes, standards and training, unified and this will be an area of focus and powerful voice as priority for our teams and partners.” together we made up more than 90% of their business.”

GARY SHAW Workers in our Nepalese factory handmaking CORPORATE SOCIAL our annual Christmas ornament. All proceeds go to our community partners to fund RESPONSE-ABILITY MANAGER education in Nepal. on location in Kaikoura. Ben member Club Summit 32 SUSTAINABILITYREPORT 2019 OUR PRODUCTSOUR SUSTAINABILITYREPORT 2019

Our products.

Nga hua. 33 34 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 35

Kathmandu team member Jacinta wearing an Earthcolours tee while exploring the farmers markets in Vietnam. Every Earthcolours product is dyed with fully traceable, patented Number two in the Earthcolours that come from agricultural world for the third waste like nutshells, leaves and vegetables. year running.

The Textile Exchange is a global non- More importantly, the benchmarking “It’s about learning profit on a mission to transform the programme has been able to track and moving textile industry. It uses industry progress in the industry as a whole. benchmarking to help brands The number of companies forward as an understand where they are and where participating grew 106% to 111 they might be heading. As a network, companies from 17 countries with an industry.” the Textile Exchange helps brands estimated combined turnover of share their knowledge and join forces US$1.65 trillion. The report showed MANU RASTOGI to influence change. that the Founders Club – who have been using the tool for three years – The Corporate Fiber & Materials HEAD OF PRODUCT INNOVATION are outperforming other companies. AND PRODUCT SUSTAINABILITY Benchmark is an annual report that helps businesses to measure how their Kathmandu Head of Product preferred fibre and materials strategy Innovation and Product Sustainability stacks up and to track progress. Manu Rastogi says, “The Textile Exchange benchmarking is a great Kathmandu is one of 43 companies in tool and has helped us develop the Founders Club of the Textile insights and strategies into areas for Exchange and has reported its improvement. It’s not about being material choices to the benchmark first or being last on the chart, it’s study for three years. more about learning and moving For all three years, we’ve sat in the forward as an industry.” Leader’s Circle for the Outdoor/Sports category – with a number two ranking. GLOBAL SCOREBOARD

WORLD RANKING IN THE TEXTILE EXCHANGE PREFERRED #2 MATERIALS REPORT

by volume on the Preferred #7 Down Leaderboard

by growth on the Preferred #5 Down Leaderboard

INCLUDED IN THE 100% CLUB ON THE PREFERRED DOWN LEADERBOARD, PREFERRED LYOCELL LEADERBOARD AND PREFERRED MAN-MADE CELLULOSICS 100% LEADERBOARD 36 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 37

Summit Club member Jarod putting his Solus pack to good use in Cuba. The Solus pack is made with REPREVE fabric and recycles 13 Recycled plastic bottles. materials win.

When it comes to choosing the most “Recycling is a key component of that. sustainable materials, there are few If we want to shrink the loop, we’ve got easy answers. Cotton is a natural, to keep materials in use for as long as renewable material, but its we can,” Manu says. “Our goal is to environmental impacts are almost become a recycling champion – not three times greater than polypro. The just recycled polyester but nylon and materials that win the sustainability cotton and TPU in our rainwear.” game change based on what you’re Polyester holds the title as the number measuring and where the material is one fibre used worldwide. Only 15% is being made. Some methods use more produced using recycled materials – energy, but if it’s renewable energy, the rest is virgin polyester produced the impact decreases. for consumer demand. There are so many variables that it Recycled polyester has been part of could be a full-time job just figuring the Kathmandu range since the 1990s. out what’s the best product to buy. The REPREVE brand of recycled Luckily, at Kathmandu, there’s polyester is now used in 101 products someone whose job it is to do all this in the Kathmandu range. We recycled analysis for you. His name is Manu 9.3 million bottles last year alone. Rastogi, and his title is Head of Manu says that measures of Product Innovation and Product sustainability change depending on Sustainability. which lens you look through. If water Manu uses tools like the Higg Materials use is most important, one material Sustainability Index, life cycle analysis wins. If carbon emissions is most and conversations with individual important, another material wins. suppliers to make decisions on which Life cycle analysis is an attempt to materials have the least impact. see a product with all the lenses stacked together. The ultimate aim is to move towards a circular economy where products sit “People tend to go towards natural within a closed loop, because we fibres, but a life cycle analysis shows know that 85% of a product’s impact polyester is the best of the lot. We do comes from its materials. all that research in the background.”

Our plastic bottle 2020 2020 10.0 recycling journey TARGET MILLION

2019 9.3

ACTUAL MILLION

2019 7. 5

TARGET MILLION

2018 6.7 MILLION 38 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 39 100% sustainable cotton on the horizon.

Sustainable For the last five years, we’ve been better for the people who produce cotton breakdown working to transition our entire it, better for the environment it range to sustainable cotton. This grows in and better for the year, we hit 99%, and from sector’s future. They aim to do September 2019, all new products that by making Better Cotton a will be made exclusively with mainstream commodity. sustainable cotton. Last year, more than 1 million Head of Product Innovation and metric tonnes of Better Cotton Product Sustainability Manu went into the world’s supply Rastogi says the biggest chains. Better Cotton was grown challenges came when converting by 2.2 million farmers in 21 % the tail end – the blended fabrics countries and made up 19% of that were only 5% or 10% cotton. global cotton production. 99 Manu is excited about growing the Sometimes, this meant approaching suppliers who we recycled cotton percentage in the didn’t have large volumes with and range. When it comes to impact, asking them to switch to Better recycled cotton beats other Cotton Initiative (BCI) yarns. sustainable cotton hands down. It takes pre-consumer waste from “The first step is asking,” Manu the factory floor and blends the says. “We found that most of our % % fabric back to a yarn, removing all suppliers didn’t realise how easy it BCI organic the heavy impacts from the 65 22 was to do. We would give them growing and dyeing phases of the resources to go further down cotton production. % % the chain to the yarn supplier. In fairtrade recycled 9 3 the end, everyone said yes.” Better Cotton makes up the largest chunk of our sustainable cotton portfolio. The BCI exists to

make global cotton production %

2020 100 TARGET 12.1 Our sustainable % 2019 99 cotton journey MILLION % bottles worth of fresh 2018 78 water saved in 2018* % 2017 74 By using more solution-dyed polyester, nylon and polypropylene, recycled and % fairtrade cotton, we have been able to 2016 59 increase our water savings from 11.5 % million bottles for 2018 to 12.1 million 2015 38 bottles for 2019.

Summit Club Member Hayley wearing the new Kathmandu Logo Tee on location in Cuba * based on 500ml bottles. 40 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 41 A growing resource.

As we transition away from fossil Commercial bio- fuels, the world will need renewable materials to replace the synthetics based synthetics that make up many outdoor products. Bio-based materials are essentially come from synthetics made from plants. Not only renewable sugars, can they can help reduce our dependence on fossil fuels, they can starches and also absorb CO2 when growing to give us a climate-neutral alternative. lipids – think corn,

Of course, it’s never that simple. If beets, sugar cane

growing plants for synthetic fabrics

takes away from land we need for and plant oils.

food or if it requires fertilisers that broader range of renewables, cause the release of nitrous oxide, including algae, fungi and bacteria. then we’re not really winning. But these problems are slowly being Kathmandu made its foray into bio- tackled, and bio-based synthetics is based materials with EarthColors dye, one of the major areas of innovation which is made from the inedible parts in the textile industry. of nuts, fruits and seeds. This year, our Stockton Jacket used a bio-based Today’s commercial bio-based waterproof membrane. synthetics come from renewable

Summit Club member Jen wearing the sugars, starches and lipids – think “Bio-based materials will move up our highly sustainable Stockton Jacket during corn, beets, sugar cane and plant oils. preferred fibre and material portfolio,” an unexpected sun shower in Tasmania. The Stockton Jacket features recycled REPREVE In the future, there may be an says Head of Product Innovation and face fabric, recycled polyester insulation opportunity to extend this to an even Product Sustainability Manu Rastogi. and a recycled inner lining. 42 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 43

DATA BREACH CARE AND REPAIR Between 8 January and 12 New quality February, an unidentified third party gained unauthorised access to Kathmandu’s website. During programme rewards this process, the third party may have captured customer personal information and payment details excellence. entered at checkout for potential 3,546 fraudulent use. As soon as we became aware of REPAIRS this incident, we took immediate steps to confirm that our online “We’ve spent the store and our wider IT environment were secure. After this, we worked last two years closely with leading external IT and designing a new cyber security consultants to fully SAFETY investigate the circumstances of programme that the incident and confirm which addresses quality customers were impacted. Reported incidents Our number one focus was to of manufacturing.” were a result of clearly identify who had been (and foreign articles rule out who had not been) found in clothing and potentially affected by this TARA STRANGWICK some equipment incident and also identify precisely GROUP PRODUCT failures. Over half of what information was involved so OPERATIONS MANAGER the reported we could meaningfully inform our incidents resulted in customers about how they may no injuries and four have been affected. were a result of Kathmandu proceeded to roll out 11 non-compliance with a global notification campaign to Incidents voluntary codes. directly notify 19,726 potentially affected customers and 24 regulators/law enforcement agencies in 93 jurisdictions. It is not clear the exact amount of Quality is at the heart of The Supplier Quality Excellence Five core suppliers were onboarded individuals who suffered a loss or Kathmandu’s sustainable approach to programme is designed to be an early into the programme this year. These fraud as a result and no product development, because even detection system that picks up suppliers represent 43% of our total substantiated complaints were the greenest material choices won’t manufacturing problems before the spend. The programme is working. received from customers or stack up if the products don’t have a product leaves the supplier. The aim is First-time pass rates improved by 38%. Customer return regulators. long and useful life. to reduce the number of The programme also includes a rates for quality unacceptable products that arrive to As an organisation, we attach a Group Product Operations Manager Certified Factory Auditor initiative, our warehouses and, ultimately, to high value to our customer data, Tara Strangwick explains, “There are designed to make sure factory reduce the number of customer and we take the protection of our lots of facets to quality. One part is inspectors are crystal clear about our returns due to manufacturing customers’ data very seriously. We designing for quality. Does the quality standards. Only those that workmanship. % have worked and will continue to product do what it’s supposed to do? pass the programme become 2016 0.34 work with the relevant authorities Then there is the quality of The new Supplier Quality Excellence Certified Factory Auditors and are and independent security experts. development. Does everything tick programme is an award-based system able to inspect product on our behalf. % the boxes for the user and does it for suppliers. The programme includes This year, we certified our first two 2017 0.31 Kathmandu conducted a post- work? And then there is the quality of a factory quality audit that helps drive groups of auditors at two of our incident review of the security the manufacturing. We’ve spent the continuous improvement in a factory’s suppliers’ factories in China. % breach, and from this review, we last two years designing a new quality processes. The programme 2018 0.26 understand our management programme that addresses that.” also includes product inspections and approach to the breach was % adequate. Further changes have incorporates customer feedback by 2019 0.20 aligning with return rates. been made to upgrade credit card payment processing systems to prevent this happening again. 44 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 45

Oboz products will incorporate more sustainable materials in Oboz the next two years. sustainability update.

WITH DAWSON WESTENSKOW, DIRECTOR OF PRODUCT

WHAT ARE THE BIGGEST WHAT PROGRESS HAVE YOU MADE SUSTAINABILITY CHALLENGES FOR THIS YEAR? OBOZ WHEN IT COMES TO I think the biggest progress we have PRODUCT? made in sustainability in 2019 has been I think overall our biggest in setting up verification mechanisms. sustainability challenge has been The first was getting integrated into clarifying our core values as a the Kathmandu factory audit system. company and then using those values That has been a huge step for us, and to inform the overall sustainability it has been great to have the support strategy. The challenge is that we can of Kathmandu during that process. go so many different directions when The second form of verification is it comes to product-related around restricted substance list testing. sustainability, but we really need clear We are working with a third-party overarching values that inform where testing firm to help set up that we should go. We are in the process of programme. doing that work. The transition to Forest Stewardship Council (FSC) mixed packaging has been a big win this year. We will complete this transition before the “We have started end of 2019. to incorporate We have also started to incorporate more sustainable materials into our more sustainable development process. We will be launching products in 2020 and 2021 materials into our that utilise a percentage of recycled development materials as well as bloom algae foam (replacing 30% of petroleum- process.” based materials in our insoles). These changes will not impact all products, but we are testing them in collections DAWSON WESTENSKOW with the hope of using them more DIRECTOR OF PRODUCT broadly in the future. in Christchurch. store flagship new Our 46 SUSTAINABILITYREPORT 2018 OUR FOOTPRINTOUR SUSTAINABILITYREPORT 2019

Our footprint. Ta matou

tapuwae. 47 48 SUSTAINABILITY REPORT 2019 OUR FOOTPRINT SUSTAINABILITY REPORT 2019 49 Our footprint.

Become carbon neutral. That was one WASTE more than $1 million annually to of the recommendations of global increase recycling and reduce litter. Just as we were narrowing in on our sustainability experts Brian and Mary zero waste to landfill target, China Kathmandu Brand Manager Olivia Nattrass when they did an in-depth shut the doors to recycling plastics, Barclay says Kathmandu will work review of Kathmandu’s footprint last which created a chain reaction. with Love NZ Soft Plastic Recycling year. They also recommended we Australia, inundated with its own to recycle polybags as soon as keep up the continuous improvements waste, stopped accepting soft possible. “We also want to encourage in reducing waste. plastics from New Zealand. people to support companies who As a result, we’ve developed an are making recycled products. This is Last year, we reported 100% of our ambitious five-year plan that aspires how we will create a sustainable, polybags in New Zealand were to net zero environmental harm from circular economy.” collected for recycling. Eight of our our business operations. New Zealand stores’ soft plastics In practice, this means operating zero were collected by the Love NZ Soft CONVERTING AND REDUCING waste to landfill facilities, setting Plastic Recycling Scheme. When PACKAGING science-based targets to address Australian processors stopped The packaging department is a place climate change, understanding the accepting New Zealand plastics, the where small things can add up to alternatives to plastic polybags with an scheme was halted, and the make a big difference. A few years intent to remove these from the supply Packaging Forum, which runs the ago, we consolidated our packaging chain and becoming net zero carbon. scheme, began searching for an suppliers and used the Avery onshore processor. Dennison Greenprint packaging audit Two companies have been engaged, tool to assess the footprint of our and the scheme has restarted with packaging options across six factors – limited collection in Auckland. Three fossil material, trees, water, energy,

Kathmandu Auckland stores have CO2 and waste. joined this trial. Last year, we converted the final The polybags are sent to Future Post, pieces of our packaging to soy-based who are turning them into long-lasting inks and Forest Stewardship Council- fence posts for farms, fruit growers, certified card. vineyards and other rural sectors. Now, we are reducing the amount of In September, a second onshore trial packaging we produce. Instead of started with 2nd Life Plastics, a Levin printing separate inserts, we are company making recycled plastic utilising space on the inside of folded Tim Jarvis documentary matting, fibre optic cable, buckets and swing tags to reduce the amount of submitted to international other products. Kathmandu’s Hamilton paper, ink and cost. film festivals. store was able to join this trial. We started with one range of Donna Hellens of the Packaging Forum products and have already reduced Kathmandu global ambassador Tim says packaging helps preserve products the number of pieces of paper by Jarvis has been climbing the summits and extend shelf life. “You need to 131,738 or 13.97%. of 25 equatorial glaciers that will have have packaging in a lot of areas. The zero ice in 25 years. His mission is to We’ll continue this work on other most important thing is reducing, the use these expeditions to raise product ranges, because every little Oboz next is to look for ways to reuse and awareness of climate change around bit adds up. then the rest we need to recycle.” the globe. According to Trees for the Future, between 1 August 2018 and 31 July The Packaging Forum brings together The 25 Zero documentary will premiere 2019, Oboz funded the planting of more than 200 companies who this year and has been submitted to 503,810 trees. Total trees planted from belong to voluntary product International film festivals. inception to 30 June 2019 – 2,618,511. stewardship schemes. They invest 50 SUSTAINABILITY REPORT 2019 OUR FOOTPRINT SUSTAINABILITY REPORT 2019 51 Net zero environmental harm from our business by 2025.

We’ve set a goal to become net zero To achieve CEMARS certification, an Our overall carbon by 2025. To get there, we’ll be organisation must measure their following four steps – measure, organisation’s full greenhouse gas recycling rate manage, verify, mitigate – with the emissions so they understand their help of Enviro-Mark Solutions, who impact on the global climate. All % paper/ are independent experts in operational emissions are measured – 98 cardboard environmental certification. including vehicles, business travel, fuel and electricity, paper and waste. We have achieved our second year of Once the footprint has been % polybags and certification in the Certified Emissions shrink wrap measured, the organisation must 87 Measurement And Reduction Scheme develop plans to manage and reduce (CEMARS®) programme through their emissions continually. To % co-mingled Enviro-Mark Solutions. Achieving maintain CEMARS certification, the recycling CEMARS certification means we are 27 organisation needs to reduce measuring, managing and reducing emissions on a five-year cycle. our greenhouse gas emissions to Store waste standards that meet international Identifying science-based targets and breakdown best practice. actual reduction of Scope 2 emissions are the next summits for us to conquer. Targets are considered science-based if they are in line with what the latest climate science says is necessary to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.

% 2018 80 % Company-wide 2019 79 recycling rate % paper/ 50 cardboard % 2017 72 % polybags and 30 shrink wrap

% co-mingled 10 recycling

% non-recycled 10 material 52 SUSTAINABILITY REPORT 2019 OUR FOOTPRINT SUSTAINABILITY REPORT 2019 53 Our carbon footprint gets audited and certified.

The business has had a fantastic year As a direct result we estimate our Our Scope 2 emissions include all of of record growth, which includes Scope 2 emissions have grown this our stores and distrubution centres the addition of three new stores year, impacting our target of a 20% and office electricity usage. Our main in Australia as well as more team reduction of Scope 2 emission by 2020. emissions come from Australia as coal members joining our head offices. It is the main energy source. The increase in our CO e reinforces the was also one of the hottest recorded 2 need for our business to set Science Our reported Scope 3 emissions from summers reported1 and we saw our Based Targets, in order for us to transport is primarily through sea electricity usage for our retail stores achieve Net Zero Environmental harm freight and air freight emissions from increase. Electricity in our stores in the from our business by 2025. factories to distribution centres. State of Victoria spiked especially, we are investigating the cause and what FY19 results are still in the process we can do to reduce their power usage. of being audited, numbers we have reported on are our estimate.

OUR CARBON JOURNEY

TOTAL SCOPE 2 EMISSIONS AUS NZ UK SCOPE 2 AVERAGE CARBON EMISSIONS PER STORE

7,230 638 53 TONNES CO2e 2017 7,921 TONNES CO2e 2017 48.6 5,582 630 40 TONNES CO2e 2018 6,251 TONNES CO2e 2018 38.1 6,340 492 40 TONNES CO2e

2019* 6,862 *Pre audited estimate TONNES CO2e

2019* 40.8 Numbers have been 4,788 *Pre-audited estimate % REDUCTION updated since 2018’s report in line with the CEMARS 2020 20 OF 2012 CO2e certified data. Our carbon offsetting SCOPE 3 TRANSPORT EMISSIONS regenerates native forest.

*Pre-audited estimate *Pre-audited estimate From 2016–2018, we started a programme to offset all of our business air travel emissions through the Hinewai Reserve on New Zealand’s Banks Peninsula. The Hinewai project focuses on the regeneration of native vegetation and habitat for wildlife. For 2019, we have been broadening our search for local partners across Australia, New Zealand and the United States to further our offsetting 1,696 TONNES CO2e* 155 TONNES OF STOCK MOVED* 752 TONNES CO2e* 5,745 TONNES OF STOCK MOVED* programme.

1. Bureau of Meteorology. (2019, March 1). 2018–19 was Australia's hottest summer on record, with a warm Autumn likely too. Retrieved October, 2019, from http://www.bom.gov.au/climate/updates/articles/a032.shtml 54 SUSTAINABILITY REPORT 2019 OUR COMMUNITY SUSTAINABILITY REPORT 2019 55

Nepalese school children celebrate Sir Edmund Hillary’s 100th birthday. Our community. Ta matou Ta hapori. 56 SUSTAINABILITY REPORT 2019 OUR COMMUNITY SUSTAINABILITY REPORT 2019 57

“Education is Focusing impact to always a catalyst for human change lives. development.”

HELEN CLARK FORMER NEW ZEALAND PRIME MINISTER AND FORMER ADMINISTRATOR OF THE UNITED NATIONS DEVELOPMENT Our community work is framed by our EVEREST AND EDUCATION To support better education for PROGRAMME new social impact statement: to Nepalese children, both the AHF and Sir Edmund Hillary sat at a high- empower our community to positively HTNZ provide teacher training and altitude camp in the Everest region one change 100,000 lives in the next five equipment. night when he asked his friend Sirdar years. We’ll do this by inspiring and Urkien what he would most like for his This year alone, AHF provided access equipping people to discover their children and the Sherpa people. Urkien to education for more than 11,000 potential through education, personal said a school for his community was people, training more than 400 development and wellbeing. the thing they most needed. A year teachers and providing resources and For our community, that means later, Sir Ed had fulfilled that wish for materials to 96 schools. working with our partners to provide his friend, and 26 more schools And the impact this is having? The AHF 30,000 Nepalese people with access followed along with two hospitals, six reports, “In eight of our project schools, to quality education and giving health clinics and a rebuilt monastery. the average learning achievement in 10,000 Summit Club members access Sir Ed’s aid work was the great the Nepali language in the past year to volunteering opportunities and achievement of his last 50 years of life. for grades 1–3 is 71.7% compared to outdoor adventure. Sir Ed’s legacy continues through the the district average of 59.24%.” work of our partners, the Australian The HTNZ has been working to improve GIVING BACK TO THE REGION THAT Himalayan Foundation (AHF) and the the quality of education in the Everest INSPIRED OUR BRAND Himalayan Trust New Zealand (HTNZ). region, with a focus on improving This year, with the help of our Former Prime Minister Helen Clark literacy learning for children aged 5–8. customers, we have raised more than travelled to the Everest region this The four-year programme involves $260,000 for education programmes year to celebrate Sir Ed’s 100th teachers and parents and aims to in Nepal. birthday and to see firsthand some of improve the way literacy skills are the work of the trust he founded. taught in the early years. This money has come from our growing range of products that give “All along the trekking route, I’ve met In 2019, HTNZ completed the rebuild back and through adventure people who have been educated in of 150 earthquake-strengthened fundraising events like the Neverest the schools established by Sir Edmund classrooms at 36 schools across the and Summit Challenges and the Hillary and the Himalayan Trust. Many Everest region to replace those Summit Club Treks. have gone on to become teachers, destroyed in the 2015 earthquakes, health workers, doctors, community 7,000 students benefited this year leaders and to work in trekking and from educational resources and tourism. Education is always a equipment at 61 schools, 94 teachers catalyst for human development, and at 22 schools benefited from teacher I’ve been reminded of that every day training and 1,500 students at seven here in Nepal,” she says. high schools now have access to better libraries and equipment. Though the earthquakes of 2015 damaged many schools, the challenge Investing in education for Nepalese today is more about the quality of people is just one way we can fulfil our education being delivered than the goal to positively impact 100,000 lives. classrooms they are delivered in.

Former New Zealand Prime Minister Helen Clark in Nepal for Sir Edmund Hillary’s 100th birthday celebration. 58 SUSTAINABILITY REPORT 2019 OUR COMMUNITY SUSTAINABILITY REPORT 2019 59

Woollen birds hand-knitted in Nepal raised money for our Himalayan charity partners Nepal through an last Christmas. artist’s eyes.

Artist Sean Duffell owns a very Artist Sean Duffell valuable collection of drawings. They travelled to Nepal as part were given to him by a class of of the Artists Series Tee. Nepalese children when he travelled to Nepal as a contributor to our Artists Series T-Shirt.

The t-shirt sales contribute to the Developing products work done by the Himalayan Trust

and the Australian Himalayan

Foundation to improve education for to support Nepal. Nepalese children.

“We spent a day teaching drawing to a class of local Namche kids,” Sean says. “I was amazed at how good their English was. The kids were fizzing on having a class dedicated solely to drawing.” KHUSI BEANIE home alone. But once I am here, I feel PRODUCT SALES FOR NEPAL like I am in a community and knitting The 10-day trek to Everest Base Camp Employment in Nepal can be a has become like a therapy for me.” included several stops at schools challenge. Women tend to have lower

supported by the Himalayan Trust. rates of education and less chance to Sapana is 22 years old and one of the

earn an income. many women employed to knit the Sean describes the trip as “inspiring, Khusi Beanie. As the only woman in life-changing and motivating – all the This is why our Khusi Beanie is so her family with paid work, it’s given cliché things – but I do think travel has much more than a hat. It’s a chance her a sense of independence. the power to broaden your horizons, for us to connect to the place that especially when you’re learning about inspired our name – and a way for our “Young girls like me want to be

Khusi Beanie 23,332 different cultures and how they live and TOTAL UNITS SOLD customers to support the independent,” Sapana says. “Now I how they are connected with the Earth.” craftspeople of Nepal. Each beanie is do not have to depend on money hand-knitted in Nepal and helps to from someone else.” As an artist, Sean appreciated the improve the lives of the knitters, who ancient Nepalese culture as reflected The Khusi Beanie is in stores this value their independence, their through art. “We live in such a young winter for the third year. community and the chance to use country, so when you see artworks their traditional craft. that are thousands of years old, it THE BIRD THAT GAVE BACK really blows your mind.” Sabina uses her income on household

expenses for her family – the rest she We continued our Christmas Giving Sean is a self-taught artist who grew Artists Tee saves for a rainy day. programme by making the gift of up in the South Island. As a teenager, $33,720 DONATED FROM SALES education available to more children Sean was always drawing. “Art is a degree in Christchurch. Sean worked The brief was to use an animal from “I feel independent and proud of myself.” in Nepal. Inspired by the national bird big part of skateboard culture. But in a Wellington graphic design studio Nepal or New Zealand. Sean put Before joining the knitting business, of Nepal, our woollen Himalayan my father didn’t want me to go to while doing street art with friends on forward a few options, and the kea 31-year-old Sabina experienced regular monal was handmade by artisans of art school – he thought it was a the side. When his wall paintings got was chosen. headaches. Now, knitting is both a Nepal. The $10 customer donation for waste of time.” noticed, he started doing more and Sean’s Artists Series T-Shirt design livelihood and a support unit. each bird was passed on to our more commissioned work. Five and a Instead, Sean became a professional includes New Zealand’s iconic Himalayan charity partners to provide half years ago, Sean left his day job “I feel a strong connection with the skater, travelling around New Zealand mountain parrot, the kea, and his books, literacy materials and teacher to work full-time as an artist. other knitters. We work like friends, to demos and competitions. Drawing nature-inspired patterns. For each training in Nepal. This Christmas, our and this helps us enjoy our work,” remained a hobby. At 27, he decided When Sean was contacted by t-shirt sold, $5 will be donated to the generous customers helped us raise

Xmas giving $57,940 Sabina says. “I used to have frequent that he couldn’t keep skateboarding Kathmandu to design an Artists Series Himalayan Trust New Zealand and $57,940 for this cause. FROM CUSTOMERS headaches when I used to stay at forever and did a graphic design T-Shirt, he was “psyched”. the Australian Himalayan Foundation. 60 SUSTAINABILITY REPORT 2019 OUR COMMUNITY SUSTAINABILITY REPORT 2019 61 Getting customers into the outdoors.

Kathmandu exists to inspire and equip HIKE CLUB EVERESTING SUMMIT CLUB VOLUNTEERING the adventurer in all of us. Our This year, we started Hike Club – a In our annual Neverest Challenge in Summit Challenge Summit Club programme helps make series of events that span trail running, Australia and the Himalayan Trust profile: Samuel Muir this real for customers every day by hiking, navigation, wilderness skills New Zealand Summit Challenge, creating a community of adventurers. Twelve-year-old Queenstown boy and photography. The aim is to participants walk or run the Samuel Muir gave up his winter We use Summit Club events to make provide affordable outdoor equivalent of the height of Mt Everest school holidays to take on the it easy for customers to get outdoors. adventures for our Summit Club – 8,848 metres – to raise money for the Himalayan Trust’s Summit members to learn new skills in the people of Nepal. The New Zealand 7EVENTS 540PARTICIPANTS (170 IN AUS) Challenge and raise $1,900 for outdoors. Eleven events across event grew from 69 participants last RUN CLUB education in Nepal. Australia and New Zealand saw 150 year to 330 this year, and the total Our Run Club programme continued people participate. raised between the two events for our “I just saw the need, I just want to to expand this year with more than Himalayan partners was $145,000. help,” he says. 6,000 participants across three cities. WORKPLACE GIVING VOLUNTEERING Samuel’s challenge was to climb The Run Club aims to get customers the equivalent of Mt Everest – 2,500 800 outdoors to explore local trails. The Higg Index, sustainability self- Our partnership with Tangaroa Blue 8,848 metres. He used TREES PLANTED NATIVES PLANTED assessment tool provided by the continued to help Summit Club These free weekly meet-ups are Queenstown’s mountains to help Sustainable Apparel Coalition, members connect and make a professionally coached and focus on him get there, eventually climbing challenges us to involve our staff in our difference in their communities. Eight building a range of skills that put trail more than 9,000 metres. community partnerships. We are proud events saw 540 people work together running techniques into practice all to report that 100% of our Kathmandu to collect more than a tonne of rubbish Samuel has also cycled the Otago over the city. executive team are on board, and the and plant more than 3,000 plants. Central Rail Trail to raise money for company matched employee children with cancer. donations dollar for dollar to raise a 616 502

“He loves a good challenge,” says RUBBISH kg (NZ) kg (AU)

total of $22,000 this past year. COLLECTED his mum Victoria.

SUMMIT CLUB PARTICIPATION Run ClubRun 6,625km Club Hike 150people OVER 150 RUNNING SESSIONS OVER 11 EVENTS

$10,167 Nepal treks FROM CUSTOMERS

Kathmandu supported Marc Cross Red Neverest andNeverest $145,000 1,604kg Nieuwenhuys (Adventure Sponsorship RAISED FOR NEPAL FROM 49 STORES winner) to tackle the Murray River, Summit Challenge Summit bringing awareness to clinical depression. 62 SUSTAINABILITY REPORT 2019 OUR COMMUNITY SUSTAINABILITY REPORT 2019 63

The Mobile Malaria Project received support from our Adventure Coast to Coast Rangers founder Sponsorship programme. Jess De Bont with Linwood College participant Hengi.

Adventure Sponsorship recipients hit the road to fight malaria. Coast to Coast

Rangers give kids a go.

Our Summit Club Adventure reach the parts of the continent most “Although global malaria rates have The Coast to Coast Rangers “Each year, we have different students. Hengi says the experiences outdoors Sponsorship programme equips our in need. They visited malaria workers halved over the past 20 years, programme gives kids who might not Some years, we might use the are remarkable. “Usually, you just see customers for adventure. and researchers to document the progress more recently has stalled,” otherwise have the opportunity to programme to keep students from this kind of stuff on TV or on your approaches and technologies used on says expedition leader Dr George participate in the Kathmandu Coast joining gangs. Sometimes, it might be phone, just scrolling, but to actually We received 422 applications last year the front line of malaria control. Busby. “By working with colleagues in to Coast a chance to give it a go. to keep them in school and also for do it is something different. It’s not and gave sponsorships in free or Namibia, Zambia, Tanzania and striving more in school. By getting every day you get to do the Goat Pass discounted gear to 47 applicants. Camping on the top of the car, the In its fourth year, the programme is Kenya, our journey will help us to them out into nature, we’re building run or see that amazing view.” Among them were three Oxford three researchers are also sponsored by Kathmandu and has understand the challenges facing confidence. They’re gaining self- University scientists who took a collaborating with African scientists seen 40 kids trained by founder Jess malaria researchers in Africa in 2019.” esteem and becoming role models in portable DNA sequencing laboratory to trial the latest DNA technology in De Bont. their schools and in their families.” from Namibia to Kenya to learn more the field. Jess says the exercise involved in about malaria. Linwood College participant Hengi This adventure was undertaken during training helps these kids do better at joined Coast to Coast Rangers for the With a state-of-the-art lab in the the rainy season when malaria flares school. There’s also great benefits in second year. This time, the school’s boot of a car, the Mobile Malaria up. The route took them 6,300 getting outside and away from screens. head boy decided to do the full race Project spent eight weeks driving and Kilometres across Africa, where 90% in tandem with Jess. trekking to remote communities to of the world’s cases of malaria occur. flagship store. flagship new our of opening the at waiata a sing members team Christchurch 64 SUSTAINABILITYREPORT 2019 OUR TEAM OUR SUSTAINABILITYREPORT 2019

Our Team. Ta matou

ranga. 65 66 SUSTAINABILITY REPORT 2019 OUR TEAM SUSTAINABILITY REPORT 2019 67

More employment Our Tangata opportunities for people Whenua, Our People. with disabilities.

He aha te mea nui o te To be true to our purpose of inspiring We are committed to being a next- We want our teams to fully represent We have partnered with IDEA Services “As a successful and strong brand, ao? He tangata! He and equipping the adventurer in all of level inclusive employer. We are the communities we work in. New Zealand and its employment Kathmandu can be very influential in us, it’s important that we recognise passionate about having workplaces support team to develop a successful showing their support and The ACEs (Adventure Challenges tangata! He tangata! the wealth of diversity that exists in that welcome, celebrate and leverage ACEs programme. commitment to inclusion. They’ve Everyone) programme was developed our communities, our customers and our differences. taken an important step to represent What is the most to make our workplaces more Ian Whittle of IDEA Services says, “The our teams. We are backyard all people, and I think it can never be Diversity and inclusion is more than inclusive for people with disabilities. Kathmandu programme is an inspiring important thing in the adventurers and world travellers with a underestimated how important big just one group or identity. It’s how we move towards total inclusion.” world? It is people, it is shared passion for the great outdoors. companies like Kathmandu have the can ensure that our unique cultures, Sustainability is in our hearts. ADAPTING OUR WORKPLACES For the people Ian and his team works power to move things. It is a big deal people, it is people. experiences, beliefs and identities are with, getting a job can be life changing. in our sector, and it’s great that woven into the fabric of Kathmandu. We are creating more accessible Kathmandu are being thoughtful workplaces so that existing positions “Having a paid job gives them a about stepping up.” can be more attainable to candidates feeling of importance, value and with mobility challenges. We have worth. And obviously when you’re Kathmandu Group Learning and modified aspects of store design generating your own income, that Development Manager Kelly Hopkins including point of sale counters creates a real feeling of says, “Our ACEs have different specifically designed for team empowerment. It makes you feel like challenges, but they have even more members utilising wheelchairs. you’re not so different.” in common with our teams – they share our values including a love of In paid work, people gain social skills travel and adventure and passion for ADAPTING OUR POSITIONS and confidence. Another massive the environment, and they have all benefit, Ian explains, is forming We have created accessible positions been hired because of what they can natural friendships, which improves that can be filled by candidates with bring to Kathmandu.” emotional wellbeing. There is no more differing intellectual abilities and natural place to make new friends challenges. We have created a sales than in a work environment. floor assistant position to greet and assist customers in our stores. We Ian says we have a long way to go to have adapted positions within our shift attitudes about employment for support offices and are continuing to people with intellectual disabilities, but explore new opportunities throughout he hopes that others will be inspired by all our workplaces. the steps Kathmandu has taken.

EMILY CAN’T WAIT TO GO TO ROME. Her favourite, she says, is helping in the kitchen. “I like stopping by and 23-year-old Emily Coull is one of the seeing my close friends that I’ve made ACEs employed at Papa Kainga here at Kathmandu.” (Christchurch Support Office) two afternoons a week. Emily helps out at Emily is putting all her earnings into a reception, tidies the kitchen, takes the savings account, earmarked for travel. mail around and helps our customer “I love history and I love travelling. I’m service and HR teams. saving up to go to Europe one day, and my dream is to go to Rome.” “I’m just loving it,” says Emily. “Everybody is so lovely and nice here, Christchurch team members at the start of the Kathmandu and I enjoy the jobs I’m doing.” Coast to Coast. 68 SUSTAINABILITY REPORT 2019 OUR TEAM SUSTAINABILITY REPORT 2018 69

Tyler takes on the Team members go Coast to Coast. outdoors on two wheels.

The Kathmandu Coast to Coast race brings together two big names in adventure each February for an epic multisport race across the Southern Alps of New Zealand. Competitors start at Kumara beach on the West Coast and run 2km inland to their bikes and then ride to the foothills for a 30km mountain run. Then it’s a 15km road bike followed by a 70km kayak down the braided bends of the mighty Waimakariri River and a 70km ride to the finish line at New Brighton beach. This year, 23 team members participated in the race and Chris Harte won the mountain run.

Christchurch team member Chris Harte after winning the Kathmandu Coast to Coast mountain run.

Tower Junction store team member Tyler Belcher. Rainbow Kampers.

Tyler Belcher loves getting outdoors. can load and unload my wheelchair “I’d love to work my way up here and We are proud to have established an Our Rainbow Kampers community Kathmandu Rainbow Kampers “Any day of the week, I’d rather be out from the car.” hopefully build a career.” employee-led rainbow community aims to create a culture that purpose: Diversity and inclusion are there doing it than sitting in front of network, Rainbow Kampers. embraces diversity and to build part of our DNA. Together we will Employment has been challenging for Tyler has a message for people who support mechanisms for team continue to build an inclusive culture the TV,” he says. The Kampers network brings together Tyler. “I’m a qualified personal trainer interact with him. “For anyone with a members. It also exists to influence based on knowledge, acceptance, team members who identify as Tyler was born with spina bifida, a but I feel like my condition has been disability, don’t assume that we can’t the business and drive diversity in mindfulness, pride, equality, respect LGBTQIA+ and allies within the condition that develops in the womb seen as a boundary when I’ve applied do things. Instead, assume that marketing campaigns and business and support for our diverse business who want to support them. and affects the spine. for roles in gyms. I used to live in people with disabilities can do decisions and engage and inspire employees. All team members feel Dunedin – it’s an older city where few anything – unless we tell you we can’t “Until I was 3 years old, I used a Rebecca Edwards, General Manager, team members, customers and our safe, supported and empowered to of the buildings are wheelchair or we need help with it.” walking frame to get around and then Group Human Resources, is the wider communities. bring their true selves to work. accessible. Christchurch is much more executive sponsor of the Rainbow Celebrating and embracing diversity I got my first wheelchair. I can walk We are committed to identifying and accessible, and that’s only improved Kampers network. She says, “It’s fuels our innovation and connects us short distances with crutches.” supporting community organisations since the earthquake with rebuilding.” important that we not only celebrate to our customers and the This doesn’t stop Tyler from getting aligned with Kathmandu’s values that As a Kathmandu customer, Tyler says and embrace diversity but also communities we serve into the outdoors. “I’ve always been work with rainbow youth in our he always felt aligned to the brand. recognise that people of diverse an outdoor person. I’m really keen communities. “Every time I’ve gone into a store, the sexualities and gender identities still on nature walks and shorter hikes team have been awesome. You could face discrimination in society and We have set a goal of achieving the – or in my case, rolls. I love to head see people were happy to be there, workplaces. It’s important that all Rainbow Tick accreditation in New out on adventures in my 4WD and and they were always welcoming.” team members feel safe and able to Zealand in 2019. bring their true selves to work.” 70 SUSTAINABILITY REPORT 2019 OUR TEAM SUSTAINABILITY REPORT 2019 71

Kathmandu Onehunga store team COMMUNICATION members hosting one of our KMD Kids New frontiers at Work initiatives. TRANSFORMED Like most retailers, we’ve found in learning. communicating with a dispersed workforce a challenge. This year, we rolled out Our retail teams are the face of our We’ve also introduced an internal This year we developed a partnership Facebook Workplace to make brand to our customers. We continue certification for footwear product with Service IQ, the industry training team communication easier. to look for ways to develop our teams knowledge. Following two days of organisation for retail organisations in Facebook Workplace looks and and provide them with career intensive training, a practical New Zealand, and we now provide our feels just like Facebook – a opportunities. assessment and an online exam, 25 New Zealand retail teams with a platform nearly everyone is team members received their development pathway for NZQA We’ve radically improved our online familiar with – except it is a certification and now sport a badge qualifications including the National retail training tools this year. Working closed network. showing their level of expert Certificate in Retail and the National with Christchurch company RedSeed, knowledge in footwear. The Footwear Certificate in Business. In the coming General Manager Retail Stores we migrated our Learning Guide Certification programme will be year, we will implement a programme and Operations Stephen Management System (LMS) to a new extended across further locations in to provide similar opportunities for our Domancie says Facebook platform that is more interactive. The 2019/20 and beyond. Australian teams. Workplace has transformed new system blends online and real- communication and world training. interaction opportunity and Group Learning and Development connected stores to teams at Team member Michelle Wong has the support office and Manager Kelly Hopkins says, “We’ve recently completed Kathmandu improved the way it looks and feels – Footwear Guide Certification. distribution centres in Australia, even the way we measure it. We also New Zealand and beyond. created our first-ever online customer “Knowledge sharing has service training course to support our increased dramatically and drive for improved customer communications have become experiences across the brand.” more streamlined.” “Kathmandu’s learning platform Workplace enables us to share connects each learner with a coach breaking news, individual or for one-on-one feedback and practice, team achievements and which has a significant positive important announcements with impact on learning transition over all team members in real time. other systems,” she says “Training that is relevant and engaging will “Every team member can now encourage team members to use it.” access a wide body of information and discussions directly from their mobile Kathmandu Kids at work. device,” Stephen says. “Team members at all levels are empowered to join in and drive conversations that align with KMD Kids at Work initiatives were General Manager Group Human their values and interests. They launched this year with events held Resources Rebecca Edward says, now have a voice that can be across Australia and New Zealand. “Parents are a critical part of our team, heard, which can range from Kathmandu kids joined parents and and we want to support them with voting for songs in store music extended whanau (family) in stores flexibility, return to work opportunities playlists, providing feedback and support offices, creating a great and whanau initiatives.” on new products to sharing experience for everyone and an their adventure experiences.” To support our parents who faced opportunity to give tamariki (children) teacher strikes in New Zealand this Workplace is also a platform of all ages a chance to see what our year, we wanted to ease concern for the executive team to listen team members do at work, experience around childcare options during these to and engage with team Ehara taku toa i te toa a workplace environment and provide events and provided Kathmandu Kids members, and for team takitahi engari he toa older tamariki with some valuable work Day events with supervised offsite members from across the experience and workplace interaction takimano. fun-filled childcare. business to share their ideas skills. For our smaller tamariki, it was and passions. My strength is not that of hugely exciting for them to see what an individual but that of their whanau do at work and be part the collective. of the fun. 72 SUSTAINABILITY REPORT 2019 SUSTAINABILITY REPORT 2019 73 Brand Values in truths in action. action.

Our Brand Truths stand for what we It’s great to have a list of values to believe in and how we put our brand guide us, but it’s the way our team into action. Here’s some of the ways puts them into action that makes we have lived our brand truth this year. them real. Here’s some of the ways we lived our values this year. WE SERVE THE ADVENTURER OPENNESS AND DIRECTNESS We involve Summit Club members with our Run Clubs, Hike Clubs, We introduced anonymous online Neverest Challenge and Summit surveys to give workers in our supply Challenge and through Kathmandu chain a way to communicate honestly Coast to Coast sponsorship. About this report with us about their working conditions.

OUR PRODUCTS MAKE FOR BETTER This is our eighth annual ADVENTURES sustainability report. It covers ENVIRONMENTAL ACTION the period from 1 August 2018 This year, we launched our most to 31 July 2019. The report is We set a goal to have net zero sustainable jacket ever. The Stockton prepared in accordance with the environmental harm from our is a waterproof, windproof and core requirements of the Global business operations, which includes breathable companion for any Reporting Initiative (GRI) becoming carbon neutral and zero adventure. Standards reporting framework. waste to landfill. It accompanies our Kathmandu SUSTAINABILITY IS IN OUR DNA Annual Report 2019, available online INTEGRITY at kathmanduholdings.com, which Our new Best for the World includes our full financial results. We joined the B Corp movement to sustainability action plan sets use business as a force for good in a ambitious five-year goals around Data in this report covers more sustainable and inclusive people, planet and practice. Kathmandu’s operations, including economy. our stores, distribution centres and support offices in New Zealand, WE EMBRACE DIVERSITY Australia, United States of America RESOURCEFULNESS This year, we introduced the ACE and United Kingdom. If any issues We recycled 9.3 million plastic bottles programme to create new roles for are material beyond these by using recycled polyester in 101 people with disabilities and launched boundaries, we have reported on products in our range. the Rainbow Kampers network to these issues and our approach to

support our LGBTQIA+ team members. managing them, but we may not have complete data available. LOVE OF TRAVEL AND ADVENTURE

Financial figures are expressed in We commissioned a report and ADVENTURE IS OUR PASSION New Zealand dollars unless created a content series to look more Our Adventure Sponsorship otherwise specified. deeply at the helpful and harmful programme helps adventurers in our We’d love to hear your feedback aspects of travel. Summit Club community live their on the report. Feel free to send dreams to use travel and adventure to comments and questions to our PASSION AND DETERMINATION make a difference. team at sustainability@ kathmandu.co.nz . Determined to be a more inclusive employer, we created new roles for people with disabilities. 74 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 75

Sustainability Report 2019: Appendix 76 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 77

TABLE 1: GRI GENERAL STANDARD DISCLOSURES IND. DESCRIPTION REFERENCE PAGE # NOTES

IND. DESCRIPTION REFERENCE PAGE # NOTES GOVERNANCE

ORGANISATIONAL PROFILE 102-18 Governance and structure Annual Report 2019 Annual The Board guides the overall governance of our Report 2019 organisation. Please see pages 14 to 22 in our 102-1 Name of the organisation Cover page Cover page Kathmandu Holdings Limited. 2019 Annual Report for more information on our governance and structure. 102-2 Activities, brands, products Introduction 1 Kathmandu is an outdoor travel and adventure and services brand. We sell our own branded gear including other brands through our online, retail and STAKEHOLDER ENGAGEMENT wholesale network. 102-40 List of stakeholder groups Our Journey, Our 18–19 — 102-3 Location of headquarters Our World 20–21 — Stakeholders Table 4 on pg 83 102-4 Location of operations Our World 20–21 — 102-41 Collective bargaining This appendix Table 10 0n — 102-5 Ownership and legal form This appendix This Kathmandu is a publicly listed company. For agreements pg 87 appendix more information, please see page 14 in our 2019 Annual Report. 102-42 Identifying and selecting Our Journey, Our — — stakeholders Stakeholders 102-6 Markets served Our World, this 20–21 Kathmandu sells products through our store appendix network in Australia, New Zealand and the 102-43 Approach to stakeholder Our Journey, Our 18–19 — UK. We also sell online and have begun to sell engagement Stakeholders Tables 4 & 5 through wholesale partners internationally. on pg 83–84

102-7 Scale of the organisation Our World, Our Team. 20–21 For full financial disclosures, please see pages 102-44 Key topics and concerns Our Journey, Our 18–19 — Annual Report 2019 33 and 35 in our 2019 Annual Report. raised Stakeholders Tables 4 & 5 on pg 83–84 102-8 Information on employees Our Team, this 64–71 — and other workers appendix Table 7 on REPORTING PRACTICE pg 86 102-45 Entities included in the Annual Report 2019 — Kathmandu Holdings Limited, Milford Group 102-9 Supply chain Our World, Our 20–21 — consolidated financial Holdings, Kathmandu Pty Ltd, Kathmandu Suppliers, Our Products 22–31 statements Limited and Kathmandu UK Limited. 32–45 102-46 Defining content and topic Our Journey, Our 18–19 — 102-10 Significant changes to the Our World, Our 20–21 — boundaries Stakeholders, Our Tables 4 & 5 organisation and its supply Suppliers, Our Products 22–31 Impacts on pg 83–84 chain 32–45 102-47 List of material topics Our Journey, Our 18–19 — 102-11 Precautionary principle Our Suppliers, 20–21 We use a precautionary approach across each Stakeholders, Our Tables 4 & 5 approach Customer health and 22–31 department of the business to ensure we do not Impacts on pg 83–84 safety, Our Footprint 32–45 harm the environment or people. 102-48 Restatements of information This appendix — No restatement this year. 102-12 External initiatives Our Journey 18–19 We collaborate with specialist organisations to support our sustainability strategy and 102-49 Changes in reporting This appendix — This is our third year using the new GRI outputs. Collaboration is absolutely core to our Standards reporting framework. development as a business.

102-50 Reporting period This appendix — 1 August 2018 to 31 July 2019. 102-13 Membership of associations Our Journey, Our 18–19 Collaboration is fundamental to our suppliers, Our Products, sustainability strategy and programme. Without Our Footprint, Our our memberships, we would not understand the 102-51 Date of most recent report This appendix — Kathmandu Sustainability Report 2019 Community complexities of our impacts and outreach to (01/08/2018 – 31/07/2019). global initiatives and communities. 102-52 Reporting cycle This appendix — Annual (01/08/2018 – 31/07/2019). STRATEGY 102-53 Contact point for questions This appendix — Olivia Barclay [email protected] 102-14 Statements from senior Chairman's and 5 — regarding the report decision maker CEO's report 102-54 Claims of reporting in Back cover — This report has been prepared in accordance ETHICS AND INTEGRITY accordance with the GRI with the GRI Standards Core option. standards 102-16 Values, principles, standards Our Team 73 — and norms of behaviour 102-55 GRI content index This appendix — This appendix.

102-56 External assurance This appendix — Kathmandu has adopted numerous certifications, partnerships and programmes that verify our various sustainability initiatives. This report has not been externally assured. 78 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 79

TABLE 2: GRI TOPICS

TOPIC REFERENCE PAGE # NOTES TOPIC REFERENCE PAGE # NOTES

GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING GRI 412: HUMAN RIGHTS ASSESSMENT

GRI 103: 103-1: Explanation of the Our Journey, 18–19 GRI 103: 103-1: Explanation of the Our Journey, 18–19 Management material topic and its boundary Our Suppliers 22–31 Management material topic and its boundary Our Suppliers 22–31 approach Table 5 approach Table 5 on pg 84 on pg 84

103-2: The management Management Table 6 103-2: The management Management Table 6 approach and its components Approach table on pg 85 approach and its components Approach table on pg 85

407-1: Operations and suppliers in which workers’ Our Suppliers 22 –31 80% of our suppliers are in China. Due to the 412-1: Operations that have been subject Our Suppliers 22–31 Nil. rights to exercise freedom of association or communist government, individual worker rights to human rights reviews or impact collective bargaining may be violated or at including freedom of association and collective assessments significant risk bargaining are inevitably at risk. Collective bargaining is almost unheard of, and independent 412-2: Employee training on human rights policies Our Suppliers 22–31 625 hours of training by 1,622 staff members unions do not typically have any real power to or procedures (80% of all Kathmandu staff) leverage change in wages or working conditions. Updating our code of conduct and terms of trade 412-3: Significant investment agreements and Our Suppliers 22–31 Every one of our 101 factories has to enter into documents; creating a new CSR strategy that puts contracts that include human rights an agreement with Kathmandu, which includes more emphasis on performance and partnership clauses or that underwent human rights signing and agreeing to abide by and be assessed and less emphasis on policing and compliance; screening against our code of conduct. A significant investing in a new CSR professional services investment includes any and every supplier company specialising in sustainability and supply because no matter how much we spend with a chain analytics’ designing and implementing supplier, our commitment to our stakeholders customised programmes that reflect our unique and shareholders is to invest our resources into supply chain; worker surveys and improved our supply chain to ensure that human rights are grievance mechanisms’ supplier training and protected. education. GRI 414: SUPPLIER SOCIAL ASSESSMENT GRI 408: CHILD LABOUR GRI 103: 103-1: Explanation of the Our Journey, 18–19 We are unable to quantify total weight or volume GRI 103: 103-1: Explanation of the Our Journey, 18–19 Management material topic and its boundary Our Suppliers 22–31 of materials that are used to produce or package Management material topic and its boundary Our Suppliers 22–31 Approach Table 5 Kathmandu’s primary products. approach Table 5 on pg 84 on pg 84 103-2: The management Management Table 6 103-2: The management Management Table 6 approach and its components Approach table on pg 85 approach and its components Approach table on pg 85 414-1: New suppliers that were screened using Our Suppliers 22–31 100% 408-1: Operations and suppliers at significant risk Our Suppliers 22–31 Child labour is common in the international apparel social criteria for incidents of child labour. industry, especially in Tier 2 and 3. We created and implemented a mandatory child labour and forced 414-2: Negative social impacts in the supply Our Suppliers 22–31 Excessive overtime, incorrect wages, workplace labour policy company wide. We also cemented chain and actions taken bullying and sexual harassment were documented a partnership with a consultancy specialising in in our supply chain. Actions taken included advising businesses in child rights and improving working with ELEVATE and the relevant suppliers the lives of children in supply chains across Asia. to provide workplace training and improvement services, provide access to better systems and GRI 409: FORCED OR COMPULSORY LABOUR processes and identify which supervisors required assistance and a change in behaviour. GRI 103: 103-1: Explanation of the Our Journey, 18–19 Management material topic and its boundary Our Suppliers 22–31 GRI 301: MATERIALS approach Table 5 on pg 84 GRI 103: 103-1: Explanation of the Our Journey, 18–19 Management material topic and its boundary Our Products 32–41 103-2: The management Management Table 6 Approach Table 5 approach and its components Approach table on pg 85 on pg 84

409-1: Operations and suppliers considered to Our Suppliers 22–31 Forced labour is still common in the international 103-2: The management Management Table 6 have significant risk for incidents of forced apparel industry. Migrant workers are especially approach and its components Approach table on pg 85 or compulsory labour vulnerable to forced labour. China, Taiwan, Vietnam and Indonesia are all high risk for No indicator We do not collect recycled materials as a forced labour and these are all areas where we percentage according to topic indicator source our product. Created and implemented a requirements. We collect data and information mandatory child labour and forced labour policy in accordance with the Higg Index and Textile company wide. Investing in a CSR professional Exchange reports. services company specialising in sustainability and supply chain analytics with the ability to access worker voice through social media and anonymous worker surveys. 80 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 81

TABLE 2: GRI TOPICS (CONTINUED):

TOPIC REFERENCE PAGE # NOTES TOPIC REFERENCE PAGE # NOTES

GRI 303: WATER GRI 305-3: Other indirect (Scope 3) GHG 46–53 We have aligned our Scope 3 emissions emissions quantification with the Higg Index. We GRI 103: 103-1: Explanation of the Our Journey, 18–19 — used the CEMARS software platform to Management material topic and its boundary Our Products 32–45 calculate Scope 3 emissions using the approach Table 5 on pg 84 certification’s latest emission factors. Our FY17/18 Scope 3 emissions have 103-2: The management Management Table 6 on pg 85 — been certified by CEMARS. approach and its components Approach table GRI 305-4: GHG emissions intensity 46–53 — GRI 416: CUSTOMER HEALTH AND SAFETY GRI 306: WASTE GRI 103: 103-1: Explanation of the Our Journey, 18–19 — Management material topic and its boundary Our Products 32–45 GRI 103: 103-1: Explanation of the Our Journey, 18–19 — approach Table 5 on pg 84 Management material topic and its boundary Our Footprint 46–53 approach Table 5 on pg 84 103-2: The management Management Table 6 on pg 85 — approach and its components Approach table 103-2: The management Management Table 6 on pg 85 — approach and its components Approach table GRI 416-2: Incidents of non-compliance 42 Kathmandu takes customer health concerning the health and safety impacts of and safety seriously. Kathmandu has GRI 306-2: Waste by type and disposal method 50–51 — products and services implemented practices to safeguard the wellbeing of its customers while instore GRI 401: EMPLOYMENT and using their purchased products. Any health and safety-related GRI 103: 103-1: Explanation of the Our Journey, — incidents are treated as high priority Management material topic and its boundary Our Team and investigated accordingly with the approach appropriate corrective action to prevent 103-2: The management Management Table 6 on pg 85 — reoccurrence. approach and its components Approach table

GRI 418: CUSTOMER PRIVACY GRI 401-1: New employee hires and employee 64–71 — turnover Table 8 on pg 87 GRI 103: 103-1: Explanation of the Our Journey, 18–19 — Management material topic and its boundary Our Products 32–45 GRI 401-2: Benefits provided to full-time Table 3 on pg 82 — approach Table 5 on pg 84 employees that are not provided to temporary or part-time employees. 103-2: The management Management Table 6 on pg 85 — approach and its components Approach table GRI 401-3: Parental leave 64–71 Only non-hazardous waste was Table 8 on pg 87 disposed of GRI 418-1: Substantiated complaints concerning 42 — breaches of customer privacy and losses of GRI 403: OCCUPATIONAL HEALTH AND SAFETY customer data GRI 103: 103-1: Explanation of the Our Journey, Table 11 on pg 88 — GRI 305: EMISSIONS Management material topic and its boundary Our Team approach GRI 103: 103-1: Explanation of the Our Journey, 18–19 — 103-2: The management Management — Management material topic and its boundary Our Footprint 46–53 approach and its components Approach table approach 103-2: The management Management Table 6 on pg 85 — GRI 403-1: Occupational health and safety Table 12 on pg 88 — approach and its components Approach table management system

GRI 305-2: Energy indirect (Scope 2) GHG 46–53 We account for our greenhouse gas GRI 403-4: Worker representation in formal Table 6 on pg 85 — emissions emissions in alignment with the joint management-worker health and safety Greenhouse Gas (GHG) Protocol. Our committees emissions figures are derived from Scope 2 purchased electricity usage GRI 403-9: Work-related injuries 64–71 — across our stores, distribution centres Table 13 on pg 89 and support offices. Our emissions factors are sourced from government GRI 403-10: Work-related ill health 64–71 — GHG reporting guidance documents Table 12 on pg 88 published in each jurisdiction that we operate in. Our FY17 and FY18 Scope 2 GRI 404: TRAINING AND EDUCATION emissions have been audited by Enviro- Mark Solutions and certified under the GRI 103: 103-1: Explanation of the Our Journey, — CEMARS programme. Management material topic and its boundary Our Team approach 103-2: The management Management Table 6 on pg 84 — approach and its components Approach table 82 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 83

TABLE 2: GRI TOPICS (CONTINUED): TABLE 4: OUR STAKEHOLDERS

TOPIC REFERENCE PAGE # NOTES STAKEHOLDER GROUP ENGAGEMENT MECHANISM FREQUENCY OF KEY ISSUES RAISED ENGAGEMENT GRI 404-2: Programmes for upgrading employee 64–71 — skills and transition assistance programmes Customers — Social media Ongoing — Animal welfare — Customer insights — Waste management GRI 404-3: Percentage of employees receiving 64–71 — regular performance and career development Table 6 on pg 85 — In our stores — Community investment reviews — Our website opportunities and sponsorship — Via our customer services team — Human rights in our supply chain GRI 405: DIVERSITY AND EQUAL OPPORTUNITY — Summit Club member — Product care and repair communication — Microfibres GRI 103: 103-1: Explanation of the Our Journey, — Management material topic and its boundary Our Team approach Staff — Performance mechanisms Ongoing — Health and safety 103-2: The management Management Table 6 on pg 85 — — Questionnaire and surveys — Waste management approach and its components Approach table — Dream Team meetings — Training — Other engagement committees — Sustainability leadership GRI 405-1: Diversity of governance bodies and 64–71 — employees Table 15 on pg 90 Suppliers — Meetings Ongoing — Fair and open procurement — Site visits practices — Fair working conditions — Environmental impacts — Product quality and safety

Factories — Meetings Ongoing — Fair working conditions — Site visits — Audits

TABLE 3: EMPLOYMENT Local communities — In our stores and offices Ongoing — Our impact on communities — Community events — Social investment and BENEFITS WHICH ARE STANDARD FOR FULL-TIME EMPLOYEES OF THE ORGANIZATION BUT ARE NOT PROVIDED TO TEMPORARY — Social media sponsorship OR PART-TIME EMPLOYEES — Website Life insurance Government — Meetings Quarterly and as required — Economic performance and regulators Healthcare Yes – Oboz only — Reports — Environmental impacts — Site visits — Community impacts Disability and invalidity coverage Shareholders — Our annual reports Quarterly and as required — Economic performance Parental leave Yes – Oboz only — Annual general meeting — All sustainability material issues — ASX and NZX announcements Retirement provision — Website

Stock ownership Yes – wider — Investor roadshows, briefing leadership team forums - Oboz only Industry associations — Meetings Annually — Environmental impacts Others — Reports — Community impacts — Workshops — Human rights in our supply chain

Investment community — ASX announcements Quarterly and as required — ESG performance — Website — Investor briefings and forums

Civil society — Social media Ongoing — Human rights in our supply chain and community — Requests for information — Environmental impacts organisations — Fair working conditions — Product materials stewardship — Supplier management 84 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 85

TABLE 5: WHERE DO OUR IMPACTS OCCUR? TABLE 6: MANAGEMENT APPROACH

MATERIAL TOPIC IN WHO IT APPLIES TO WHERE IT APPLIES LIMITATIONS TOPIC POLICIES AND ACTIVITIES EVALUATION ACCOUNTABLE ORDER OF PRIORITY AND BOUNDARIES MANAGEMENT DEPARTMENT

OUR SUPPLIERS Workers’ rights: Supplier Code of Conduct We are members of the We assess our programme Quality and CSR freedom of association Fair Labor Association. against the 10 FLA Freedom of association and Kathmandu factories and Our supply chain — and collective Its 10 principles guide principles to ensure collective bargaining suppliers bargaining, child our Corporate Social our programme is labour, forced or Responsibility team’s comprehensive for Child Labour Kathmandu factories and Our supply chain — compulsory labour, strategy working towards accreditation. We recently suppliers human rights accreditation in 2018. The evolved our CSR strategy assessment, supplier 10 principles and strategy based on the evaluation social assessment corroborates GRI’s workers’ process. Forced or compulsory labour Kathmandu factories and Our supply chain — rights indicators, which we suppliers respond to.

Supplier social assessments Kathmandu factories and Our supply chain — Materials, water Azo Dyes Policy, Down Our materials priority We participate in the Product suppliers Feather Policy, Leather list guides our materials Textile Exchange report Policy, Uzbek Cotton Policy, sustainability strategy. rankings. We use the Higg OUR PRODUCTS Nano-Silver Technology Index as a key driver for Statement of Intent, better materials. Materials Suppliers, Kathmandu Our operations Our overall sustainable Perflourinated Chemicals materials percentage use Statement of Intent, against conventional materials Sheep Mulesing Statement is too complex to calculate to of Intent, Man-Made meet topic requirements. Cellulosics Policy, Restricted Substances List. Products and services Kathmandu , consumers Our operations — Customer health We research and complete Our quality department We review our research Quality Customer health and safety Kathmandu, consumers Our operations — and safety all compliance requirements reviews products before and completion processes before entering new entering the market. Market to achieve continuous Product labelling Kathmandu, consumers Our operations — products into the market. compliance research. improvement.

Water Suppliers, Kathmandu Our operations — Customer privacy We have a stringent policy Our relevant customer Reviews are completed on Customer and process to protect services team are briefed any incidents to achieve Services Marketing Kathmandu, consumers Our operations — the privacy of our Summit on the details of the policy continuous improvement. Club members and online to ensure no breaches are account customers. made. Communication is Customer privacy Kathmandu, consumers Our operations — highly prioritised with the customer following any OUR FOOTPRINT incidents.

Economic performance Kathmandu, investors Our operations — Waste We issued a zero waste to We engage with all key We review our strategy Brand, landfill by 2018 strategy stakeholders internally and goals and objectives twice Finance, Retail Energy Kathmandu Our operations and stores — earlier this year. This strategy externally in managing our a year to evaluate how we Operations is core to the management operational waste. are managing waste. Emissions Kathmandu Our operations and stores — approach.

Waste Kathmandu, customers Our operations and stores — Carbon emissions We have a goal to reduce We report annually to the We evaluate main sources Brand, our Scope 2 emissions by Carbon Disclosure Project. of energy usage across Finance, Retail Transport Kathmandu, supply chain Our operations We currently only have the 20% by 2020 from 2012 We annually offset our Scope 2 and 3 areas. Operations information to report on sea levels. We have issued business staff air travel freight and air freight port to a carbon strategy that at a local offsetting and port Scope 3 emissions. aligns with the CEMARS conservation project in certification. We are also Canterbury, New Zealand. OUR TEAM using the Higg Index as a Using the Higg Index. guideline for understanding Employment Kathmandu Our operations —­ our Scope 3 emissions.

Occupational health and safety Kathmandu Our operations —­ Team development: As part of our People Plan We engage with all key We conduct interviews and Human new employee strategy, we integrate these stakeholders internally and surveys as a way to inform Resources hires and turnover, material topics as part of externally in managing our our strategy approach. Training Kathmandu Our operations —­ benefits for full-time our continuous improvement strategy. employees, parental management approach. Diversity and equal opportunity Kathmandu Our operations —­ leave, occupational health and safety, Compliance Kathmandu, consumers Our operations —­ training and education, diversity and equal opportunity 86 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 87

TABLE 7: INFORMATION ON EMPLOYEES AND OTHER WORKERS (INCLUDES OBOZ) TABLE 8: HIRING AND TURNOVER (INCLUDES OBOZ)

AUSTRALIA NEW ZEALAND UK USA TOTAL AUS NZ UK USA AUS NZ UK USA

BY EMPLOYMENT TYPE NEW HIRES TURNOVER

Full-time employees 384 317 5 24 730 Permanent Total 302 153 11 7 Permanent Total 291 185 9 4

Part-time employees 602 283 4 0 889 Indefinite Total 320 133 2 0 Indefinite Total 292 107 4 0

Casual 341 91 0 0 432 BY GENDER BY GENDER

Total employees 1,327 691 9 24 2,051 Permanent Male 109 63 6 5 Permanent Male 120 65 7 4

BY CONTRACT TYPE Permanent Female 193 90 5 2 Permanent Female 171 120 2 0

Permanent 911 521 9 24 1,465 Indefinite Male 145 64 2 0 Indefinite Male 131 46 2 0

Fixed-term full-time 33 30 0 0 63 Indefinite Female 175 69 0 0 Indefinite Female 161 61 2 0

Fixed-term part-time 42 49 0 0 91 BY AGE GROUP BY AGE GROUP

Casual 341 91 0 0 432 Permanent <30 221 114 9 1 Permanent <30 206 116 6 0

Total workforce 1,327 691 9 24 2,051 Permanent 30–50 70 35 2 6 Permanent 30–50 72 66 2 2

BY GENDER Permanent 50+ 11 4 0 0 Permanent 50+ 13 3 1 2

Male 567 258 6 7 838 Indefinite <30 276 110 0 0 Indefinite <30 228 88 4 0

Female 760 433 3 17 1,213 Indefinite 30–50 40 17 1 0 Indefinite 30–50 58 16 0 0

BY AGE GROUP Indefinite 50+ 4 6 1 0 Indefinite 50+ 6 3 0 0

<30 831 358 3 3 1,195

30–50 409 271 5 17 702 TABLE 9: PARENTAL LEAVE (INCLUDES OBOZ) 50+ 87 62 1 4 154

BY CATEGORY MALE FEMALE

Executive 3 7 0 1 11 1 Report the number of employees by gender that were entitled to parental leave. 611 874

Senior management 19 31 0 6 56 2 Report the number of employees by gender that took parental leave. 1 51

Management 322 169 4 4 499 3 Report the number of employees who returned to work after parental leave 1 26 ended, by gender. Non-management 983 484 5 13 1,485 4 Report the number of employees who returned to work after parental leave 3 29 ended who were still employed 12 months after their return to work, by gender.

5 Report the return to work rate of employees who returned to work after leave 100% 51% ended, by gender.

6 Report the retention rate of employees who returned to work after leave ended, 60% 60% by gender.

TABLE 10: COLLECTIVE BARGAINING AGREEMENTS (INCLUDES OBOZ)

COLLECTIVE BARGAINING AGREEMENTS

Percentage of total employees covered by collective bargaining agreements. 0 88 SUSTAINABILITY REPORT 2019 APPENDICES SUSTAINABILITY REPORT 2019 89

TABLE 11: OCCUPATIONAL HEALTH AND SAFETY (INCLUDES OBOZ) TABLE 12: WORK RELATED ILL HEALTH (INCLUDES OBOZ) CONTINUED

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM WHETHER AND, IF SO, WHY ANY WORKERS HAVE BEEN EXCLUDED FROM THIS DISCLOSURE, INCLUDING THE TYPES OF WORKER EXCLUDED A statement of whether an occupational health and Occupational health and safety management system has been safety management system has been implemented, implemented because of legal requirements in the countries we Workers that have been excluded from this disclosure 0 including whether: i. the system has been implemented operate in. because of legal requirements and, if so, a list of the re- o Model Work Health and Safety (WHS) Act ANY CONTEXTUAL INFORMATION NECESSARY TO UNDERSTAND HOW THE DATA HAS BEEN quirements; ii. the system has been implemented based on o Model WHS Regulations COMPILED, SUCH AS ANY STANDARDS, METHODOLOGIES AND ASSUMPTIONS USED recognised risk management and/or management system o Model Codes of Practice standards/guidelines and, if so, a list of the standards/ o Occupational Health and Safety Act 2004 (Vic) guidelines o Occupational Health and Safety Regulations 2017 (Vic) o Health and Safety at Work Act (HSWA) 2015 o Occupational Safety and Health Act (United States)

A description of the scope of workers, activities and Scope of workers – support offices, distribution centres, stores, casual, workplaces covered by the occupational health and safety part-time, full-time, fixed-term. management system and an explanation of whether and, if so, why any workers, activities or workplaces are not Activities include administration, logistics, customer service, sales, covered. Stock management, manual handling, staff management, product TABLE 13: WORK-RELATED INJURIES (INCLUDES OBOZ) management.

FOR ALL EMPLOYEES

Number and rate of fatalities as a result of work-related injury 0

Number and rate of high-consequence work-related injuries (excluding fatalities) 0

Number and rate of recordable work-related injuries 138 TABLE 12: WORK-RELATED ILL HEALTH (INCLUDES OBOZ) Main types of work-related injury Sprains and strains, bruising, cuts ALL EMPLOYEES ALL WORKERS WHO ARE NOT EMPLOYEES BUT WHOSE WORK AND/OR WORKPLACE Number of fatalities as a result of work-related ill health 0 IS CONTROLLED BY THE ORGANISATION

Number of cases of recordable work-related ill health 4 Number and rate of fatalities as a result of work-related injury; 0

Main types of work-related ill health Stress, repetative strain injury Number and rate of high-consequence work-related injuries (excluding fatalities); 0 (RSI) Number and rate of recordable work-related injuries; 1 ALL WORKERS WHO ARE NOT EMPLOYEES BUT WHOSE WORK AND/OR WORKPLACE IS CONTROLLED BY THE ORGANISATION Main types of work-related injury Bruising – leg

Number of fatalities as a result of work-related ill health 0 Number of hours worked Unable to calculate hours for contractors Number of cases of recordable work-related ill health 0 WORK-RELATED HAZARDS THAT POSE A RISK OF HIGH-CONSEQUENCE INJURY Main types of work-related ill health NA How these hazards have been determined Near miss incidents WORK-RELATED HAZARDS THAT POSE A RISK OF ILL HEALTH Which hazards have caused or contributed to high-consequence injuries 0 How these hazards have been determined NA during the reporting period

WORK-RELATED HAZARDS THAT POSE A RISK OF HIGH-CONSEQUENCE INJURY Actions taken or under way to eliminate these hazards and minimise risks using Engineering controls, the hierarchy of controls administrative controls, How these hazards have been determined • Incident and near miss substitution reporting • Regular safety inspections ANY ACTIONS TAKEN OR UNDER WAY TO ELIMINATE OTHER WORK-RELATED HAZARDS • Regular safety committee AND MINIMISE RISKS USING THE HIERARCHY OF CONTROLS meetings • Risk assessments Whether the rates have been calculated based on 200,000 or 1,000,000 hours worked NA – no rates calculated

Which hazards have caused or contributed to cases of ill health during Multiple Whether and, if so, why any workers have been excluded from this disclosure, including the NA the reporting period types of worker excluded

Actions taken or under way to eliminate these hazards and minimise risks using Multiple Any contextual information necessary to understand how the data has been compiled, such NA the hierarchy of controls as any standards, methodologies, and assumptions used. 90 SUSTAINABILITY REPORT 2019

TABLE 14: PERCENTAGE OF TOTAL EMPLOYEES BY GENDER AND BY EMPLOYEE CATEGORY WHO RECEIVED A REGULAR PERFORMANCE AND CAREER DEVELOPMENT REVIEW DURING THE REPORTING PERIOD (INCLUDES OBOZ)

EXECUTIVE SENIOR MANAGEMENT NON- TOTAL MANAGEMENT MANAGEMENT

Number of employees receiving 11 56 499 1,053 1,619 performance reviews/ appraisals

Male 9 38 179 409 627

Female 2 18 320 631 968

Total number of employees 11 56 499 1,485 2,051

Percentage of employees receiving 100% 100% 100% 70.91% 78.94% performance reviews/ appraisals

TABLE 15: DIVERSITY (INCLUDES OBOZ)

GENDER DIVERSITY

MALE FEMALE

BOARD

2018 5 1 AGE DIVERSITY 2019 5 1 <30 30–50 50+

EXECUTIVE EXECUTIVE

2018 8 1 2018 8 1

2019 9 2 2019 8 3

SENIOR MANAGEMENT SENIOR MANAGEMENT

2018 33 19 2018 1 44 7

2019 38 18 2019 45 11

MANAGEMENT MANAGEMENT

2018 187 282 2018 172 257 40

2019 179 320 2019 183 272 44

NON-MANAGEMENT NON-MANAGEMENT

2018 574 873 2018 973 383 91

2019 622 863 2019 1012 378 95 92 SUSTAINABILITY REPORT 2019

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