Responsible Leather Round Table Summit 2020 Thank You to Our 2020 Conference Sponsors

Responsible Leather Round Table Summit 2020 Thank you to our 2020 Conference Sponsors:

Responsible Leather Round Table Summit 2020 #TextileExchange20 Soil Health Biodiversity Water

Responsible Leather Round Table Summit 2020 OUR MISSION Textile Exchange inspires and equips people to accelerate adoption of preferred materials in the textile value chain. We focus on carbon reduction, soil health, water and biodiversity as part of our holistic approach to drive positive impact for the entire industry.

OUR VISION We envision a global textile industry that protects and restores the environment, while enhancing lives. By

2030 we aspire to guide the textile industry to reduce GHG emissions (CO2 equivalents) by 45% from a 2020 baseline. OUR STRATEGY Our strategy is to accelerate climate action in the textile industry by providing trusted data and reporting, market- based solutions, and a community that can do what no single company or organization can do alone.

Responsible Leather Round Table Summit 2020 #TextileExchange20 Anti-Trust Statement

Textile Exchange convenes the textile community and values diversity of views, expertise, opinions, backgrounds, and experiences. It is expected that members of this community will collaborate by sharing ideas, information, and resources of publicly available information only and avoid discussions on price, strategic plans or other private and sensitive information.

Responsible Leather Round Table Summit 2020 #TextileExchange20 Responsible Leather Round Table Summit

December 15, 2020

Responsible Leather Round Table Summit 2020 #TextileExchange20 Meet the Team

Anna Heaton Stefanie Pokorski Chair of Animal Welfare Innovations & Standards Committee Senior Coordinator

Anne Gillespie Director of Impact Acceleration

Nicole Lambert Chair of Leather Production Committee

Josefina Eisele Deborah Taylor Chair of Deforestation/ Conversion-free committee Co-Chair of Leather Production Committee Larysa Valachko Impact Coordinator

Responsible Leather Round Table Summit 2020 #TextileExchange20 Agenda

• Welcome • Industry updates • Leather Impact Accelerator (LIA) • Impact Incentives update • RLRT and the Climate+ Strategy • Textile Exchange Climate+ Strategy • Leather and Beef: Impacts and Opportunities • Break • How to Move Forward • Brainstorming/discussion • Close

Responsible Leather Round Table Summit 2020 #TextileExchange20 Welcome

Using the Zoom chat box:

Please say ‘Hello!” in the different languages that you speak

Then tell us:

• Which country you are in, and • How long it has been since you last saw a real, live cow?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – Covid-19 Impacts

• Various degrees of impact in different countries but overall global leather production has dropped by between 20% - 30% on average as a result of reduced operations and demand.

• The worst affected have been the low income – high producing countries like India where facilities were not equipped to deal with a whole industry shutdown

• Increased online sales - fewer losses than anticipated

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – COTANCE SER 2020

Confederation of National Associations of Tanners and Dressers of the European Community (COTANCE)

• Social Environmental Report 2020: ✓ an update on the first report (2013) ✓ key social and environmental indicators for the leather industry in Europe. ✓ available in different languages

• European Social Environmental Report – Euroleather

• Short video summaries: • COTANCE European Leather Association - YouTube

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – PNAS Report

Proceedings of the National Academy of Sciences of the United States of America (PNAS)

• Insightful report on beef exports from Brazil (December 3, 2020):

• valuable information and metrics for sourcing and procurement of raw materials

• The full report available: The origin, supply chain, and deforestation risk of Brazil’s beef exports | PNAS

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – UK News: England & Wales Ban Live Exports

• The Department for Environment, Food & Rural Affairs (Defra) proposed to ban the export of live animals for slaughter and fattening from England and Wales.

• The plans (which do not currently include Scotland) enter into a joint eight-week consultation

• The full report available: • England and Wales to ban live animal exports in European first | Live exports | The Guardian

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates - Leather Naturally – 2020 Highlights Factsheet Example • New Website – ‘Get the Facts, Understand Leather’ https://www.leathernaturally.org/ • Metcha Leather Inspirational Platform https://metcha.com/

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates

• A new campaign: “Real Leather. Stay Different” • Fabrizio Nuti: New President of the Italian Leather Industry Association. • More information: https://chooserealleather.com/real-leather/sustainable- • More information: leather-international-campaign/ • ASSEMBLEA UNIC – CONCERIE ITALIANE Sustainable Leather Foundation

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – UNECE Transparency & Traceability Project

• To Enhance Transparency & Traceability for Sustainable Value Chains in the Garment & Footwear Sectors

• Policy Recommendations are currently open for public review

• Work on planning for Leather Blockchain Pilot has started: https://www.unece.org/tradewelcome/traceability-for- sustainable-garment-and-footwear.html

Responsible Leather Round Table Summit 2020 #TextileExchange20 Industry Updates – Sustainable Leather Foundation

• Industry Led – Consumer Focused approach

• Objectives: ✓ To create a framework that supports and unifies the existing work within the leather industry. ✓ To support good practice and demonstrate conformance across the leather manufacturing value chain.

• Focus on 3 pillars of sustainability: Environmental, Social, Governance

• The Audit Standard: pilots during the first quarter of 2021

• QR codes for consumer facing information and a transparent dashboard based app for value chain participants. https://www.sustainableleatherfoundation.com/

Responsible Leather Round Table Summit 2020 #TextileExchange20 Leather Impact Accelerator (LIA) Updates

Responsible Leather Round Table Summit 2020 #TextileExchange20 Leather Impact Accelerator (LIA) Review

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Review

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Key Value Propositions

Inclusive development

Deforestation/Conversion Free Addressing animal welfare leather production areas through a tiered approach

Focus on process-based Building traceability into the system performance over time

Linking brands to farms Opportunity for brands to make claims about their support for improved practices

Addressing both environmental and Global tool with regional social aspects of leather production applicability

Responsible Leather Round Table Summit 2020 #TextileExchange20 Key Updates from LIA

Responsible Leather Round Table Summit 2020 #TextileExchange20 Animal Welfare Standards Benchmark – Key Updates

Slatted flooring: • Only permitted at baseline and option1 for veal calves - not beef cattle • Prohibited for all types of cattle at options 2 and 3 • When permitted, must not be bare concrete - can be covered with rubber matting or be made of alterative materials like plastic

Space in housing: • Clarification than the space required per 100kg liveweight in Option 2 is the minimum required for benchmarking, not the specific requirement

Branding: • Baseline prohibition on face branding remains • Option 2 prohibition on any branding (unless required by regulation) remains • New requirement at Option 1 for certifications to cover method and placement of brands

Responsible Leather Round Table Summit 2020 #TextileExchange20 Animal Welfare Standards Benchmark – Key Updates

The benchmarking process:

• Clarification that a certification must meet the applicable benchmark requirements for the level it is being benchmarked against • For example, some requirements are now specific to veal calves or specific to beef cattle. A certification that only covers beef cattle does not need to include veal calf standards that match the benchmark

• Reminder that benchmarking will be done in conjunction with the certification bodies/standards owners. • If their standards do not exactly match the LIA benchmark, they will have to opportunity to demonstrate how their requirements and audit process meet the same outcomes as LIA.

Responsible Leather Round Table Summit 2020 #TextileExchange20 Leather Production Standards Benchmark – Key Updates

• Leather Production Environmental Standards Benchmark: no major changes

• Leather Production Social Standards Benchmark:

SSCI, Version 1.0, PART III - AI: Processing and Manufacturing scope (social)

ALIGNED with SSCI BASED on SSCI Less prescriptive

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Claims & Corporate Commitment – Key Updates

LIA Claims Guide LIA Corporate Commitment • Aligned with Textile Exchange Standards • Now 2 modules: Claims Policy 1. Impact Incentives purchases • Scripted allowed language 2. Supply chain traceability + certification • Only AW Options 2 and 3 may to LIA-approved standards make claims about ‘animal welfare’ • Traceability module to be added when • AW Baseline and Option 1 claims will only systems are available be about animal management/husbandry • All modules require annual progress reporting in the Corporate Fiber and Materials Benchmark (CFMB)

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Release & Voting

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Version 0.1 Timeline

VOTE

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA Version 0.1 & “2021 Pilot Year”

LIA Version 0.1 will be fully launched and ready for use on January 5th, 2021

About “Version 0.1 and the Pilot Year” • Implementation of all LIA components will begin. • Impact Incentives can be traded and claimed during the pilot year. • We will continue to review feedback and results throughout the year. • Revisions may be made at the end of the year; if major changes are needed, we will engage with stakeholders again.

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA 0.1 Core Documents – Voting Now Open!

Farm Level Documents Leather Production Documents

Responsible Leather Round Table Summit 2020 #TextileExchange20 How to Vote

1. Review the final drafts of the core LIA documents. 2. Make sure you have signed the LIA IWG charter and are a VOTING member. 3. Go the JotForm link: https://form.jotform.com/203244633627251 4. Cast your vote!

A few reminders: • Only voting members of the LIA IWG may vote. Go to: https://www.jotform.com/TextileExchange/lia-iwg-charter to sign if you have not already. • Your votes are for the core LIA benchmark/criteria documents only. We will be continuing to develop and revise supplemental documents include the LIA Claims Guide, Verification Manual, etc.

Responsible Leather Round Table Summit 2020 Voting Closes December 22, 2020

• You may cast 1 vote for either of the following options:

1. All core LIA documents 2. Individual documents from the core group – relevant to your area of focus or knowledge (may choose more than 1)

• A vote of 'agree' means that you are in approval of the final draft • A vote of 'disagree' means that you are not in approval of the final draft

Responsible Leather Round Table Summit 2020 Impact Incentives Updates

Responsible Leather Round Table Summit 2020 #TextileExchange20 INCENTIVES

INCENTIVES

Meets requirem ents? INCENTIVES IMPACT Dat a INCENTIVES INCENTIVES INCENTIVES Yes TRADING VERIFICATION PLATFORM Farm BODY FA CILITATOR Brands/Retailers CLAIMS INCENTIVES DATA & DATA

IMPACT REPORTS

A D IMPACT PARTNERSHIP

SHARED DATA • Export data to NGO’s, Governm ent, etc • Interface w ith thirds parties

Responsible Leather Round Table Summit 2020 SCALE SPEED TRANSPARENCY DATA

FLEXIBILITY VALUE CREDIBILITY COLLABORATION www.impactincentives.Responsible Leatherorg Round Table Summit 2020 Impact Incentives

• Impact Incentives Launch – October 26, 2020 • Launch webinar is available at www.impactincentives.org • Impact Incentives video released (3 minutes) • ISEAL Landscape Grant • 2021 Piloting with all members

Responsible Leather Round Table Summit 2020 #TextileExchange20 Responsible Leather Round Table Summit 2020 RLRT and the Climate+ Strategy

Responsible Leather Round Table Summit 2020 #TextileExchange20 Claire Bergkamp

COO, Textile Exchange

Responsible Leather Round Table Summit 2020 #TextileExchange20 A driving force for urgent climate action in textile fiber and materials production. Soil Health Enabling and guiding the textile industry to Biodiversity reduce GHG emissions (CO2 equivalents) 45% by 2030 in the pre-spinning phase of + textile fiber and materials production. Water Grounded in Partnership+ Amplifying positive impacts in soil health, water, + biodiversity.

Responsible Leather Round Table Summit 2020 Strategy Pivot

FROM: Raising Awareness TO: Accelerating Adoption 2002-2020 2020-2030 Lead the industry: Grow the industry: Prioritize strategy execution by measuring outcomes to Launching & supporting the adoption of PFM through Market- significantly accelerate adoption of PFM and be a leading voice driven solutions best practices, traceability, and SC commitments on industry priorities to close GHG emissions

Standards: Comprehensive PFM Guidance: Verify and support the adoption of a portfolio of PFM across 7 Lead on problem-solving across the fiber portfolio standards, over 18,000 certified sites

Fiber Report: Data Rich Communications: Collect and deliver reports on preferred fiber and material Measuring, benchmarking, and driving PFM evolution with easily production and consumption accessible and useful data presentation and sharing

Convening / Engagement: Convening / Partnership: Significant growth across all key activities: Round Tables, Prioritize based on solutions to Climate+ outcomes. Focus Conference (up to 900+ in 2019), Membership (17– 425+ disproportionately on partnerships that evidence benefits. Choose members) where to follow or support others to lead.

Business models: Funding model: Improve and enhance existing funding streams; move toward Shift from grants and industryResponsible funds Leather to a membership Round Table and highly digital & monetize IP; risk reduction / retention of existing services model in based Summiton membership 2020 and certification fees. funding streams Baseline: 2019 Emissions

Fiber Volume 2019 611 million tonnes CO2e Material Tonnes % Polyester 57,700,000 52.5% Cotton 26,000,000 23.7% Nylon 5,580,000 5.1% MMCF 7,084,100 6.4% Wool 1,070,000 1.0% Down 270,000 0.2% Other 4,870,216 4.4% * Leather 7,300,000 6.6%

Responsible Leather Round Table Total 109,874,316 100% Summit 2020 * Based on Higg MSI Values – under review 2030: Portfolio Approach BAU: 845.9M tonnes 50% preferred cotton 50% rPoly 50% Preferred MMCF** Aggressive 30% rNylon Substitution 20% rWool 533.5M tonnes 20% plant-based materials

Slow growth (1%)

e 2

CO Innovation Gap

45%: 336M tonnes Tonnes

Innovations will include expanded Regenerative and Carbon Sequestration Practices and Circular Solutions

Responsible Leather Round Table BAU: Business as Usual Summit 2020 **estimates based on Lenzing Viscose Ecovero from Europe The Round Table Evolution

Responsible Leather Round Table Summit 2020 #TextileExchange20 New Round Table Structure

Animal Fibers Wool Roundtable

Mohair

Alpaca Animal Fibers Down and Materials Cashmere MSCP MSA Leather Roundtable

Responsible Leather Round Table Summit 2020 #TextileExchange20 Marginalized fiber Climate beneficial Responsible Animal Animal Welfare producing small grazing Fiber Standards holders (social)

• Wool • Wool • Wool • Wool • Mohair • Mohair • Mohair • Mohair • Alpaca • Alpaca • Alpaca • Alpaca • Cashmere • Cashmere • Cashmere • Down • Leather • Leather

Biodiversity Soil Carbon Etc.

• Animal-based • Animal-based fibers fibers • Plant-based • Plant-based fibers fibers

Responsible Leather Round Table Summit 2020 #TextileExchange20 New Terms of Reference: Purpose

The purpose of the Responsible Leather Round Table is to support Textile Exchange’s sustainability vision with a focus on the leather industry. • To promote among our stakeholders understanding and appropriation of the Textile Exchange Climate+ strategy as a direction for the industry in the next decade • To fulfil the shift from discussions to actions and deliver measurable results annually.

Responsible Leather Round Table Summit 2020 #TextileExchange20 RLRT Terms of Reference: Objective & Scope

The objectives of our work are: • Set meaningful goals that contribute to the overall industry carbon reduction by 45% by 2030, and address biodiversity, soil health, water and the rights of people and animals. • Determine how to measure and track progress towards these goals • Identify and prioritize actions each year of the next decade • Mobilize the RLRT stakeholders and others to take actions to meet these goals • To establish partnerships with major players in the industry for collective efforts towards the goals

The Responsible Leather Round Table addresses the full beef/leather value chain, with an emphasis on the impacts at the farm level.

Responsible Leather Round Table Summit 2020 #TextileExchange20 Let's talk about moving forward

Responsible Leather Round Table Summit 2020 #TextileExchange20 Leather & Beef – Impacts & Opportunities

Responsible Leather Round Table Summit 2020 #TextileExchange20 Global Roundtable for Sustainable Beef (GRSB) Goals

New strategic plan to communicate our ambition and create an energizing platform to drive further The GHG SMART Goal: progress. Reduce the carbon footprint of each unit of beef by 30% by 2030 on a pathway to climate neutrality. To achieve this, we have committed to setting goals for key sustainability indicators. Be able to report measured progress by 2025

The reason why: Land Climate Animal Use The GRSB commits to delivering climate action across the beef Welfare Change supply chain to support the urgent global ambition to limit global temperature rises to 1.5 degrees by

How we’re going to get there: TBD TBD • Demonstrate and scale climate neutral beef production.

• Safeguard and build upon the carbon stores in soil and landscapes managed by producers.

Responsible Leather Round Table Summit 2020 #TextileExchange20 Grazing Practices and Carbon Sequestration

Responsible Leather Round Table Summit 2020 #TextileExchange20 LIA, Impact Incentives, and Climate+

LIA is a tool that enables brands to address their full supply chains. It creates a credible framework to recognize the actions at the different stages and make meaningful claims.

Impact Incentives provide the opportunity for fast and direct action to stop deforestation or conversion, and the give market support for best practices

The Impact Alliance amplifies the impacts across multiple commodities and creates opportunities for coordinated action (e.g. in target landscapes)

Responsible Leather Round Table Summit 2020 #TextileExchange20 How to make impact happen?

DEFORESTATION & CONVERSION-FREE (DCF)

All Impact Incentives support farms that are verified to meet the Accountability Framework definitions of Zero Gross Deforestation or Conversion. Because the Impact Alliance represents multiple sectors, we have the opportunity to amplify impacts in high-risk landscapes. For example, incentives can be sold for soy, beef and cattle in the Amazon Biome.

Making impact happen. How to move forward to Climate+

1. Set our goals

2. Define our measurement system Soil Health 3. Establish the baseline* 4. Set the strategy – “how” Biodiversity 5. Create an execution plan +

6. Execute Water 7. Review 8. Revise 9. Re-Act

Responsible Leather Round Table Summit 2020 #TextileExchange20 Brainstorming Together

Responsible Leather Round Table Summit 2020 #TextileExchange20 Brainstorming Topics

Goals Measurements Strategy

Responsible Leather Round Table Summit 2020 #TextileExchange20 Goals

Given the disproportionate impact of leather, let’s think about how we set our goal in relation to the Climate+ goal (45% reduced CO2 emissions from textile fiber and material production by 2030).

1) Which aspects of cattle production do we prioritize? ❑ grazing systems ❑ deforestation and land conversion (DCF) ❑ feed inputs ❑ enteric emissions (methane production) ❑ other

Responsible Leather Round Table Summit 2020 #TextileExchange20 Goals

Given the disproportionate impact of leather, let’s think about how we set our goal in relation to the Climate+ goal (45% reduced CO2 emissions from textile fiber and material production by 2030).

2) Who should we work with?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Measurements

3. Which industry and global goals most deserve our attention? ❖ SDGs ❖ UNFCCC ❖ Fashion Pact ❖ New York Declaration on Forests ❖ Consumer Goods Forum Zero Net Deforestation Commitment ❖ Other?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Measurements

4. Given the different industry and global goals that exist, in addition to carbon, what do we need to measure and report on for leather?

❖ Biodiversity ❖ Animal Welfare ❖ Ecosystem preservation ❖ Water management ❖ Other?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Measurements

5. Are there any specific KPIs that we should look at?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Measurements Data Collection Systems

6. Which of these data systems should we look at? Who do we align with to set the baselines? ❖Delta Framework ❖COOL Farm ❖Ecological Tool Outcome ❖Farm Footprint Verification Calculator (EOV) – by Savory Institute ❖Science Based Targets ❖Carbon Disclosure ❖Gold Standard Project

Responsible Leather Round Table Summit 2020 #TextileExchange20 Strategy

7. What strategies should we focus on to meet the Climate+ goals

❖ Promote the use of Leather Impact Accelerator (LIA) ❖ Drive Impact Incentives use ❖ Expand the scopes addressed by Impact Incentives ❖ Set leather industry targets ❖ Cross-commodity landscape pilots ❖ Collaboration with GRSB or other industry groups ❖ Other?

Responsible Leather Round Table Summit 2020 #TextileExchange20 Thank you

ResponsibleLeather.org / [email protected]

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Responsible Leather Round Table Summit 2020