Pentland Group Corporate Responsibility Review 2012 2012 2011 2010 CORPORATE RESPONSIBILITY: HOW ARE WE MEASURING UP? CONTENTS About Pentland Group 04 About this Review 06 Chairman’s introduction 08 About CR at Pentland 10 Products 16 Environment 22 Ethical trade 28 Our people 34 CR 2012 Community 40 03 Portfolio Global reach YEAR IN WHICH TODay’s PENTLAND GROUP WAS Through our wholly-owned subsidiary The Group holds a variety of other Pentland Group and Pentland Brands FOUNDED, THEN CALLED Pentland Brands we manage sports, shareholdings, including a 57% stake in have headquarters in London, UK. THE LIVERPOOL SHOE outdoor and fashion brands including JD Sports Fashion plc, which operates Within the UK, we also have offices in COMpaNY Berghaus, Boxfresh, brasher, ellesse, JD Sports, Bank, Blacks, Millets, Nottingham, Reddish, Sunderland and 1932 KangaROOS, Mitre, Prostar, Red Scotts, Size?, Champion, Chausport Wakefield, and distribution centres in or Dead, and Speedo. We also hold and Sprinter stores, and manages Blackburn and Sunderland2. licenses to make footwear for Lacoste brands including Brookhaven, Carbrini, About and Ted Baker globally, as well as Diadora, Duffer, Fila, Kooga, Kukri, Pentland was one of the pioneers OVER Kickers in the UK and Ireland. In Mckenzie, Nanny State and Sonetti. in Hong Kong, forming a sourcing September 2012 we added to our company in the early 1960s. We portfolio with the acquisition of the maintain a significant presence in Pentland rugby brand Canterbury. Hong Kong, and now have offices 12,000 in five more of our major Asian sourcing markets: China (Shenzhen), WORK FOR PENTLAND GROUP India (Chennai), Indonesia (Jakarta), Thailand (Bangkok) and Vietnam (Ho Group Chi Minh City). With the addition of 10,400 Canterbury, we also have bases in PEOPLE ARE EMPLOYED Australia and New Zealand. Pentland Group is a family-owned, UK-based BY JD SPORTS FaSHION company that focuses primarily on the apparel Nearly 2,000 people work directly for and footwear industries. Pentland Group and Pentland Brands globally2. A further 10,400 people are Founded in 1932 in Liverpool, UK, by Berko NEARLY employed by JD Sports Fashion, most and Minnie Rubin, Pentland was originally of them in retail. Read more about our people on page 34. called the Liverpool Shoe Company and traded purely in shoes, first as a wholesaler before expanding into manufacturing. We celebrated our 80th anniversary in 2012. 2,000 PEOPLE WORK FOR In 2011 the business reported consolidated PENTLAND BRANDS global turnover of £1.5 billion, with sales in around 195 countries across Europe, the Americas, Asia, the Middle East, Africa and Australasia1. 1 2011 financial figures are the latest available. 2 This includes Canterbury. 04 05 UN Global Compact Ten Principles ETHICAL TRADE, pagE 28 OUR PEOPLE, pagE 34 This Review presents Pentland This Review comprises our 2012 Group’s approach to being a communication on progress to the ETHICAL TRADE, pagE 28 responsible business and our United Nations Global Compact Human rights corporate responsibility activities (UNGC), an initiative for businesses during the 2012 calendar year. that are committed to aligning their Labour rights operations and strategies with ten 1. BUSINESSES SHOULD It covers the companies and brands universally accepted principles in the SUPPORT AND RESPECT BUSINESSES SHOULD BUSINESSES wholly-owned by Pentland Group3. areas of human rights, labour, the THE PROTECTION OF 3. UPHOLD THE FREEDOM 4. SHOULD UPHOLD THE Where appropriate it includes environment and anti-corruption. INTERNATIONALLY OF ASSOCIATION ELIMINATION OF ALL information relating to JD Sports As part of our UNGC membership, PROCLAIMED HUMAN RIGHTS AND THE EFFECTIVE FORMS OF FORCED Fashion, in which Pentland Group we have committed to reporting RECOGNITION OF THE AND COMPULSOry holds a significant stake but does not annually on our progress in each BUSINESSES SHOULD MAKE RIGHT TO COLLECTIVE LABOUR exercise direct management control4. of these ten areas. 2. SURE THAT THEY ARE NOT BARGAINING COMPLICIT IN HUMAN RIGHTS ABUSES PRODUCTS, pagE 16 ENVIRONMENT, pagE 22 About REPORTING ON OUR Environment 7. BUSINESSES SHOULD 5. BUSINESSES SHOULD 6. BUSINESSES SHOULD this PROGRESS SUPPORT A PRECAUTIONary UPHOLD THE EFFECTIVE UPHOLD THE ELIMINATION APPROACH TO ENVIRONMENTAL ABOLITION OF CHILD OF DISCRIMINATION IN CHALLENGES LABOUR RESPECT OF EMPLOYMENT THIS YEAR AND OCCUpaTION Review 8. BUSINESSES SHOULD UNDERTAKE INITIATIVES TO PROMOTE GREATER ABOUT CR AT PENTLAND, pagE 10 ENVIRONMENTAL RESPONSIBILITY Anti-corruption BUSINESSES SHOULD BUSINESSES SHOULD WORK AGAINST 9. ENCOURAGE THE 10. CORRUPTION IN ALL ITS FORMS, DEVELOPMENT AND DIFFUSION INCLUDING EXTORTION AND BRIBEry OF ENVIRONMENTALLY 3 For the purposes of this Review, Canterbury is included within the scope of JD Sports Fashion, unless otherwise stated. Pentland acquired Canterbury from JD in September 2012 and Canterbury will be included within the scope of Pentland Brands’ reporting from 2013 onwards. FRIENDLY TECHNOLOGIES 4 JD also reports separately on its corporate responsibility activity through its Annual Report and Accounts. 06 07 Chairman’s introduction CELEBRATING We are proud to have celebrated we are keen to find ways to make governmental organisations, to find Pentland’s 80th anniversary in 2012. our products more environmentally sustainable solutions to today’s social What began as a small family shoe sustainable, something that will and environmental challenges and to business in 1932 has grown into a be necessary in a resource- be ready for those of the future. multinational Group of companies. constrained world. As we have grown, so too have our With the publication of this Review, responsibilities – in particular, those Our future business success also rests which comprises our latest relating to our global supply on attracting and retaining the right communication on progress to the chain and, within it, the people who people. We are delighted that Pentland United Nations Global Compact, I have make our products. Brands was recently ranked 16th in pleasure in once again renewing our the Great Place to Work® list of the commitment to the initiative and its Passing this milestone gives us the best large employers in the UK, but ten responsible business principles. 80 opportunity to reflect on our corporate we know we must not rest on our YEARS OF responsibility efforts, successes and laurels. Generation Y employees challenges over the previous eight are joining our business and they, BUSINESS decades. Throughout this time, we have more than any before them, expect been committed to doing business the their employer to be ethically and right way, and our approach to CR has environmentally responsible. 1932-2012 constantly evolved. To achieve our CR objectives we must When we formed our CR team in the look outside our walls, to collaborate mid-1990s, it focused almost entirely and learn from others. Within our on ethical trade – working with our business, we see great value in brands on robust sourcing processes knowledge sharing between our Group R Stephen Rubin and forming the right partnerships to companies and brands. Within our Chairman, Pentland Group plc support progress in improving working industry, companies – competitors conditions. This continues to be a – are increasingly working together, priority. Now, as we look to the future, and in partnership with expert non- 08 09 Pentland Brands CR priorities Products Objective: To reduce the impact of our products on the environment Approach to CR Priorities: About CR + Sustainable materials at Pentland Brands 01 + Sustainable packaging + Restricted substances management + Supply chain environmental footprint at Pentland + Product end-of-life management We focus our CR activity on four strategic areas: product sustainability, Corporate responsibility (CR) has long been a fundamental part of Pentland’s reducing our environmental footprint, Objective: To reduce the approach to doing business. We are committed to taking steps that improve ethical trade, and support for charities Environment environmental impact of our working conditions in our supply chain and reduce the impact of our activities and community organisations. business operations on the environment. We are committed to making progress Priorities: in all these areas, paying particular attention to our most material issues of 02 + Facilities energy use/ product sustainability and ethical trade. carbon footprint Pentland Group policies These are the areas in which we can + Business travel carbon footprint make the most significant changes, + Water use and that pose the greatest potential risk + Waste and recycling to our business. We expect everyone who works + Employment Standards Policy: sets + Environmental Policy: states for Pentland Group to do business out our commitment to respect and our position on minimising the Ethical Trade Objective: To conduct business honestly, fairly and with respect for the right way. Our standards and protect the health, safety and rights environmental impacts of our people, their dignity and their rights expectations are outlined in our at work of our employees and our products and operations, while Group Business Standards Policies5, suppliers’ employees safeguarding the health and safety which are provided to everyone of our employees and the public. Priorities: who works for Pentland Group and + Code of Employment Standards 03 + Robust ethical trade processes Pentland Brands when they join the for Suppliers: