Fashioning a brighter future - CONTENTS - Fashion Footprint

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Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS   PRODUCTS   ENVIRONMENT   EMPLOYEES          COMMUNITY   2020 TARGETS

                                                2017

                                                                      REPORT
                                                Fashioning a brighter future
Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS   PRODUCTS   ENVIRONMENT         EMPLOYEES           COMMUNITY   2020 TARGETS

                                    Contents
                                    Foreword                  P. 03          Products       P. 07

                                    About Fashion Footprint   P. 04          Environment    P. 17

                                    Governance                P. 05          Employees      P. 25

                                    Stakeholder Engagement    P. 06          Community      P. 30

                                    Policies & Procedures     P. 06          2020 Targets   P. 36
Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS                      PRODUCTS                         ENVIRONMENT                       EMPLOYEES                             COMMUNITY                      2020 TARGETS

                                                                                        FOREWORD
                                         Ian Grabiner
                                         Arcardia Group CEO

                                         Fashion Footprint is endorsed by our           Fashion Footprint incorporates both the social          More than ever we operate in a challenging, fast
                                         Group Chief Executive Ian Grabiner and the     and environmental dimensions of the way Arcadia         moving and global marketplace. With retailers on
                                         steering group is chaired by Alda Andreotti,   manages our business and supply chain. For us it        the high street and online, sharing suppliers and
                                         Group Supply Chain Director.                   is about education, clarity, integrity, hard work and   factories, we must continue to work collaboratively
                                                                                        excellent communication.                                with other brands, NGOs and to participate in
                                                                                                                                                industry initiatives, such as the Better Cotton
                                                                                        As we strive to produce fashionable products in         Initiative and the Bangladesh Accord on Fire and
                                                                                        a responsible and ethical way across all parts of       Building Safety. These collaborations demonstrate
                                                                                        our business, Fashion Footprint is establishing         our Fashion Footprint values in action.
                                                                                        a legacy for the future. This report takes you
                                                                                        through our programme highlights, and how               We continue to use our Fashion Footprint
                                                                                        we are addressing environmental and social              programme to provide focus, harnessing under
                                                                                        challenges across four key areas: products,             one banner the diverse activities to ensure that
                                                                                        environment, employees and communities.                 Arcadia continues to be a responsible retailer.
                                                                                                                                                We appreciate that this is a challenge for us
                                                                                        Over the past year we have been focusing on:            and the rest of the retail industry.

                                                                                        • Working with and training our suppliers to            Over the next year we will be reviewing the
                                                                                          ensure they meet our code of conduct, whilst          Fashion Footprint strategy. We look forward to
                                                                                          looking for opportunities to further improve          sharing the outcome of this review as we issue
                                                                                          conditions for workers in our supply chain.           our next Fashion Footprint report, ensuring we
                                                                                        • Finding new ways to reduce our environmental          use our size and scale to focus our energy on
                                                                                          impact by reducing air miles, energy use              the most important and impactful areas.
                                                                                          and waste.
                                                                                        • Engaging employees through lively and targeted        As always, we would love to hear from you.
                                                                                          communications to support our goals and               Please contact us at
                                                                                          enhance our initiatives.                              hellofashionfootprint@arcadiagroup.co.uk
                                                                                        • Identifying ways in which Arcadia can benefit the
                    Alda Andreotti                                                        wider community, via charity work, education
           Group Supply Chain Director                                                    and social integration.
                                                                                                                                                Alda Andreotti
                                                                                                                                                Group Supply Chain Director
Fashioning a brighter future - CONTENTS - Fashion Footprint
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           ABOUT
                                                                                                        The activities and reporting of our Fashion Footprint programme
                                                                                                        are divided into four key pillars:

           Fashion Footprint is Arcadia Group’s programme to monitor and manage
           the social and environmental impacts of our business, providing a focus
           and framework for our activities. Fashion Footprint continually reinforces our
           commitment to sustainability; a commitment that we believe makes just as
           much sense from a business perspective as it does from an ethical one.

           Our Fashion Footprint vision provides us with a mission statement that we
           can all get behind: to produce fashionable products in an ethical way and
           demonstrate a responsible attitude towards people and the environment.

           OUR STRATEGY
           We will review our Fashion Footprint strategy over the coming year to ensure
           its continued relevance and impact. This work may include a materiality
           assessment and a review of our 2020 targets. We will share further
           information of this work in our 2018 report.
Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS                           PRODUCTS   ENVIRONMENT                         EMPLOYEES                          COMMUNITY                        2020 TARGETS

Governance                                             The following Arcadia colleagues make up the steering group and have responsibility for the various
                                                       workstreams within the Fashion Footprint programme:

Fashion Footprint is governed by a steering
group, which comprises senior members of               Alda Andreotti                                      Sarah Heaney                                         Carole Simpson
our business. The group meets regularly                Group Supply Chain Director                         Head of Public Relations                             Retail Operations Director
to provide governance, guidance and
risk assessment across all our social and              Jamie Beck                                          Maria O’Connell                                      Fiona Wenlock
environmental responsibilities and ensure these        Head of Supplier Management                         Senior Group Internal Communications Manager         HR Director
activities remain integral to Arcadia’s strategy.
                                                       Colin Campbell                                      Ian Poulton                                          Rachel Bull
Endorsed by our Group Chief Executive Ian              Head of Risk Management                             Purchasing Director                                  Community Partnerships Manager
Grabiner, the steering group is chaired by Alda
Andreotti, Group Supply Chain Director. Activity       Andrew Clarke                                       David Shepherd
is divided across a series of working groups,          Chief Information Officer                           Managing Director
each of which is aligned with one of the four key
pillars and has a steering group member as their
sponsor to oversee progress towards targets.
The day-to-day running of the Fashion Footprint
programme is the responsibility of Jamie Beck,
Head of Supplier Management, and his team.
Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS                               PRODUCTS   ENVIRONMENT                            EMPLOYEES                            COMMUNITY                          2020 TARGETS

Stakeholder                                                                                                                                                                 Policies &
Engagement                                                                                                                                                                  Procedures
Stakeholder engagement is a vital element of                to make tangible progress and improvements             We further strengthened ties with the Fashion Retail     Policies and procedures are also an important part
all four of our key pillars. It plays a strategic role      for workers in our supply chain.                       Academy this year, safeguarding the talent pipeline      of how we work and we have a comprehensive list
in the success of our working groups and how                                                                       for our industry. Please see here for more info.         of business policies in place that are appropriate
they feed into the pillars, as well as how we               CUSTOMERS                                                                                                       to an organisation the size of Arcadia Group.
communicate progress.                                       Knowing that the topics covered by Fashion             OTHER RETAILERS AND BRANDS                               Some examples include:
                                                            Footprint are increasingly important to our            We collaborate with other high street retailers
We have identified the following six groups as              customers is one of the key drivers for our work. We   on a wide variety of projects and initiatives.           • Workplace Diversity
our principal stakeholders. The dialogue and                want our customers to be confident that we trade       Examples of this include the Accord on Fire              • Health and Safety Policy
interaction we have with them are instrumental              ethically and consider our environmental impacts.      and Building Safety in Bangladesh, the Joint             • Right to Organise Guarantee
to Fashion Footprint.                                                                                              Turkey Project, ACT, the Better Cotton Initiative,       • Home Workers Policy
                                                            TRADE UNIONS, GOVERNMENTS, NGOs,                       Canopy and the Sustainable Clothing Action
EMPLOYEES                                                   CAMPAIGNING GROUPS AND STUDENTS                        Plan. For more on all these activities, see our          These are in addition to our Code of Conduct
Our colleagues are vital stakeholders and we                This is the most diverse group of stakeholders we      Products section.                                        and its Guidebook, Migrant Workers’ Guidelines
recognise the important role they play in helping           work with and can be seen broadly as civil society                                                              and Animal Welfare Policy.
us achieve our Fashion Footprint vision. This year          and government. All input and feedback from            THIRD PARTY SERVICE PROVIDERS
we have implemented actions driven by feedback              this group has a significant impact on our work.       We work with a number of carefully chosen
from our latest Fashion Footprint employee survey.          This year we have continued to work with various       third party service providers, whether it’s testing
We are changing the way we communicate our                  members of this stakeholder group.                     our products or independently auditing our
activities under the programme; updating our                                                                       suppliers’ factories. These companies work
teams regularly and providing more training.                During 2017 we continued our engagement with           in partnership with our own teams, providing
                                                            the cross-industry initiative Action Collaboration     valuable specific expertise and local knowledge
SUPPLIERS, THEIR FACTORIES                                  Transformation (ACT), which aims to establish a        to support our programmes.
AND FACTORY WORKERS                                         living wage framework. This consortium includes
This group of stakeholders is particularly crucial          global brands, retailers and IndustriALL, the global
to our activities within the Products pillar. Many          trade union that represents millions of workers
of our ethical trading projects rely on their               around the world.
transparency and willingness to work together
Fashioning a brighter future - CONTENTS - Fashion Footprint
CONTENTS                                  PRODUCTS                       ENVIRONMENT                    EMPLOYEES   COMMUNITY   2020 TARGETS

Products
Where and how we make our products provides             worker/management dialogue into workplace
opportunities to demonstrate how seriously we           practices and support the establishment of a
take our responsibilities and strive to use our size    living wage. We have also completed further
and scale to make a positive difference throughout      improvements to our ethical audit system.
our supply chain.
                                                        Collaborating with other stakeholders continues
Various initiatives are underway to support our         to be an essential component of this pillar. We
suppliers to improve working conditions and             work with local and international specialists, trade
reduce the environmental impact of fabrics we use.      unions, NGOs and other retailers to combine
                                                        resources and expertise.
Reporting within this pillar falls under three
key areas:

• Ethical Trading
• Environmental Impacts
• Animal Welfare

This year we have moved forward in our various
projects to improve industrial relations, embed
Fashioning a brighter future - CONTENTS - Fashion Footprint
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08 Products | Ethical Trading                                                                                                                          Green graded factories are low risk but
                                             Our ethical trading work is wide ranging, multi-
                                             layered and involves a variety of stakeholders.                                                           require annual audits to ensure standards
                                             We have a number of on-going areas of activity.                                                           are being maintained.

                                             ETHICAL AUDIT PROGRAMME                                                                                   Overall this year we reviewed 1,371 ethical audits

Ethical Trading                              We do not own or operate any factories and
                                             Arcadia Group is rarely dominant in an individual
                                             factory. Nonetheless, we have strong working
                                                                                                                                                       for factories producing Arcadia products. 81.8%
                                                                                                                                                       of our factories were graded green (low risk),
                                                                                                                                                       17.7% were graded orange (high risk) and 0.5%
                                             relationships with our network of international                                                           were graded red (critical risk).
                                             suppliers, 55% of which have been with us for
                                             three years or more. Goods sold by Arcadia are                                                            We continue to work towards 100% of our
                                             currently manufactured in over 1,000 factories                                                            factories operating with a green rating.
                                             through 688 suppliers. Our top 20 suppliers
                                             provide 47% of our goods.

                                             This year Arcadia products were made in 48
                                             countries worldwide, although our top ten
                                             sourcing countries accounted for 91% and the
                                             top five for 73% of the goods we sold. These top    Code of Conduct Guidebook to support and
                                             five countries are: China, Turkey, Romania, India   accelerate the resolution of problems identified
                                             and Vietnam.                                        during audits.

                                             This year we made further system improvements to    We have a traffic light system grading system.
                                             our programme, supporting the way we do business
                                             and further underpinning our ethical approach.      If a factory audit is graded red we will not work
                                                                                                 with this factory until the issues have been
                                             Under our ethical audit programme, our suppliers    resolved. Red issues include serious breaches of
                                             must submit an independent third-party factory      our Code of Conduct and local laws, such as non-
                                             ethical audit, no older than a year, to receive a   payment of the minimum wage or locked fire exits.
                                             grading for a new factory set-up. These audits
                                             are semi-announced* or entirely unannounced.        Orange rated issues are often complex and we
                                             In order to help reduce ‘audit fatigue’ we accept   allow factories a window of up to six-months for
                                             third-party audit reports from a small number of    remediation. However, our expectation remains
                                             recognised organisations and auditing companies     that non-compliances should be resolved as
                                             as long as they are independent and non-            quickly as possible and each non-compliance
                                             modifiable. We provide tools such as our            has its own specific timescale for remediation.       *an audit can take place anytime over a two week window that is provided by the auditor
Fashioning a brighter future - CONTENTS - Fashion Footprint
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                                                              Valid8
09 Products | Ethical Trading
                                                      ETHICAL TRADING    ORDERS                       correctly, freeing up time for our ethical trading
                                                                                                      team to focus on more complex issues, while
                                                                                                      ensuring robust data and reporting are maintained.

                                                                                                      We continually upgrade the system to respond
                                                                                                      to our business needs, improve efficiencies and
                                                                                                      provide us with enhanced supply chain data.

                                                                                                      Another new system function launched this
                                             ETHICAL AUDIT SYSTEM                                     year is a landing page dashboard that provides         We also require suppliers to add the GPS
                                             We continue to leverage the benefits of our              a visual sense check of our suppliers’ current         location of their factories; this will provide
                                             internally developed, online ethical audit               position. It includes factory ratings and their        increased transparency, assist us in mapping
                                             platform, Valid8.                                        position within the system, offering enhanced          risk across our first tier supply chain and
                                                                                                      visibility for all stakeholders. The dashboard flags   support our auditing processes.
                                             Valid8 is a purpose-built system designed to             upcoming audits and any factories that are at risk
                                             accurately and efficiently store and manage              of disengaging within a time period specified by       Although factory audits are an important
                                             our supplier and factory ethical information. It         each user.                                             element of our ethical trading programme,
                                             replaced the previous manual system of factory                                                                  we acknowledge that this is not enough to
                                             set-ups and has been designed to be more                                                                        drive long-term change. This is why we work
                                             accurate, robust and transparent. It is used by                                                                 on the projects outlined under this Fashion
                                             our suppliers to set up factories, upload, store                                                                Footprint pillar.
                                             and archive audit information, manage corrective
                                             actions and validate the supply base.

                                             This year we further streamlined processes,
                                             automating previously manual elements. Under
                                             strict criteria, the system will auto-grade factories
                                             based on information entered on our system,
                                             after compulsory verification from auditors and
                                             our technologists.

                                             Safeguards are in place to flag any key issues and our
                                             teams always manually check higher risk locations.

                                             We work closely with expert audit partners to verify
                                             factory audit reports and ensure they are logged
Fashioning a brighter future - CONTENTS - Fashion Footprint
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10 Products | Ethical Trading                COUNTRY RISK ASSESSMENTS                              JOINT TURKEY PROJECT (JTP)
                                             We carefully prioritise, monitor and respond to       The JTP was established with Topshop, Topman
                                             issues in all sourcing countries. Our teams and in-   and another high street retailer who jointly shared              I think it was about 2-3 years ago.
                                             country consultants visit high-risk and important     the common goal of establishing mature systems           We gathered in the garden and they made some
                                             sourcing locations.                                   of industrial relations and building the factories’      announcements about worker rights. I remember
                                                                                                   productivity to support a wage ladder.                   myself being quite happy and hopeful about the
                                             Bangladesh                                                                                                     things I heard there. I felt like something good is
                                             Bangladesh remains a small but important              The JTP’s mission is to develop and implement            about to come. After that announcement I felt
                                             sourcing country for several Arcadia brands.          a strategic and holistic programme to improve            like they protected our rights better and treated
                                             We are committed to our role in driving safety        factory productivity, workers’ conditions, working       us better.”
                                             and sustainability within the Bangladesh Ready-       hours, earnings and worker management                    Worker in Turkish factory
                                             Made Garment industry, having signed the Accord       dialogue. It uses established communication
                                             on Fire and Building Safety in Bangladesh.            processes, training and industrial engineering.
                                                                                                   The aim of the programme is to empower factory
                                             Our work as a signatory of the Bangladesh             owners, managers and workers to create a fair                    The handbook established dialogue
                                             Accord has continued this year and the current        working environment while reducing audit fatigue.        between worker representatives and management,
                                             agreement comes to an end in May 2018. As of                                                                   became a tangible outcome from management to
                                             August 2017, Arcadia’s Bangladesh factories were      Last year we indicated that outputs from a full          workers, and not from consultants, enabling reps
                                             87% remediated.                                       impact assessment report of the JTP had taken            to talk about harder issues such as scheduling
                                                                                                   longer than expected. Although the report did            annual leave in advance.”
                                             We have played an active role in the programme,       not provide the level of detail we were seeking,         Local NGO
                                             which will further help to steer improvements in      it has helped us to identify successes and
                                             Bangladesh. We expanded our role as lead brand        challenges within the programme and how they
                                             from 10 to 12 factories, which involves providing     can be used to further our aspirations for a
                                             guidance and support for these factories.             beyond-auditing model.                                   The programme, evolved over recent years
                                                                                                                                                            providing valuable lessons and new methodologies
                                             UK                                                    Over the past 3 years the factories involved have        to follow in future, ended this year.
                                             While we focus our auditing efforts on global         seen an improvement in worker/management
                                             sourcing locations, we are also conscious that UK     dialogue and management systems initiatives.
                                             factories are not without risk and we also monitor    Overall productivity has increased and thanks to
                                             factory conditions here. We have carried out          an incentive scheme there has been a reduction
                                             many UK factory visits this year as local sourcing    in overtime, enabling workers to spend more time
                                             continues to be important for speed to market.        with their families.
CONTENTS                   PRODUCTS    ENVIRONMENT                             EMPLOYEES                          COMMUNITY                          2020 TARGETS

11 Products | Ethical Trading                   STRATEGIC LABOUR PROJECTS                            of association is guaranteed continues to be a          Workers’ Federation who are now part of

                                           a)   Living wage
                                                The Arcadia Group supports the position that
                                                all workers in our supply chain, including piece
                                                                                                     significant challenge and only a small percentage
                                                                                                     of our suppliers’ factories are known to have trade
                                                                                                     union presence.
                                                                                                                                                             IndustriALL, the global trade union organisation.
                                                                                                                                                             This is included in our Code of Conduct Guidebook,
                                                                                                                                                             part 4, pages 258-9. We request that suppliers
                                                                                                                                                             post the RTOG on factory notice boards, verbally
                                                rate, subcontracted, informal, home and migrant      As part of Arcadia’s factory auditing process, if       explain it and physically provide to all workers
                                                workers, should always receive sufficient wages to   a factory is found to be actively preventing or         twice yearly with pay slips. When visiting factories
                                                meet their needs for nutritious food, clean water    limiting workers to join or form a union, this is       we request to see this and when speaking with
                                                and other basic requirements, as well as providing   considered a red issue and will be reported to our      workers auditors ask them if they have had this
                                                a discretionary income.                              Ethical Trading team and immediately addressed          guarantee communicated to them.
                                                                                                     with our supplier.
                                                We are part of the multi-retailer initiative ACT                                                             To date, we have had the RTOG document
                                                (Action, Collaboration, Transformation), which       We communicate with suppliers and factories             translated into Vietnamese and Arabic, adding to
                                                was formed specifically to address the issue         about the benefits of freedom of association and        the versions in Chinese, Bangla, Hindi, Romanian,
                                                of living wages in the textile and garment           as a minimum we expect our suppliers to ensure          Turkish and Urdu. Translated versions are also
                                                supply chain. The initiative aims to improve         that factories give workers the right to organise.      made available on our website and the extranet,
                                                wages in the industry by establishing industry                                                               which we use to communicate with our suppliers.
                                                collective bargaining in key garment and textile     We produced a ‘Right to Organise Guarantee’
                                                sourcing countries, supported by world class         (RTOG) template, drafted with the help of the           Freedom of Association is also an important
                                                manufacturing standards and responsible              International Textile, Garment and Leather              part of worker/management communications
                                                purchasing practices.                                                                                        within our Human Resources Management
                                                                                                                                                             Systems Portfolio, see Management Systems and
                                                ACT created a Purchasing Practices Self-                                                                     the Joint Turkey Project for more information.
                                                Assessment tool for ACT members to evaluate
                                                their own Purchasing Practices. The Self-
                                                Assessment tool was completed in August
                                                2017 by approximately 17 members and 833
                                                                                                                                                  c)         Purchasing practices
                                                                                                                                                             We believe that by improving the way we design
                                                                                                                                                             and buy goods and by raising awareness
                                                employees. This insight will be used to help ACT                                                             amongst our teams through training, we can
                                                members define best practice as well as identify                                                             have a positive impact on how suppliers’ factories
                                                challenges faced and areas for improvement.                                                                  manage their employees, their production and

                                           b)   Freedom of association
                                                The Arcadia Group believes that worker
                                                representation and dialogue with management is
                                                                                                                                                             their working environments.

                                                                                                                                                             We have also supported development within
                                                                                                                                                             purchasing practices this year under our
                                                fundamental to empowering workers to improve                                                                 partnership with ACT.
                                                their working conditions. Ensuring that freedom
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12 Products | Ethical Trading
                                           d)   Vulnerable workers                                       of migrant workers who travel from one country
                                                                                                         to another for employment. Although migration is
                                                                                                                                                                 Such has been the success of the new approaches
                                                                                                                                                                 that the supplier is planning to adopt them at its
                                                Home Workers                                             generally beneficial, vulnerable groups can be at       new facilities in Bangladesh and Madagascar. Initial
                                                Home working involves carrying out tasks on              risk of exploitation.                                   feedback has been very positive:
                                                products at home. When managed properly this
                                                allows workers, usually women, to earn an income,        This led us to develop our Migrant Workers’                      It’s a good thing this company is doing
                                                thereby supporting their family. We support home         Guidelines, which are available in Part 4 of our        – recognising that workers here do suffer from
                                                workers and acknowledge that the lack of visibility,     Code of Conduct Guidebook.                              stress and helping us find a way of dealing with
                                                combined with a complicated employment status,                                                                   it. Since I started using this technique I’ve felt a
                                                has made them a vulnerable worker group. This is         We liaise with relevant suppliers to verify that        lot more relaxed and less worried.”
                                                why we work on improving our understanding of            best practice standards are in place, identify          Worker Representative
                                                home workers in our supply chain.                        any challenges and mitigate risks in the
                                                                                                         recruitment process.
                                                We have found that the most effective way of
                                                engaging with contractors has been to arrange            This year we have continued to make significant
                                                face-to-face sessions to communicate Arcadia’s           progress in our work with a Mauritius-based supplier,           This is a very important issue. I am so
                                                and our suppliers’ responsibilities. We continue         focusing on creating more effective workplace           pleased that we can give workers something
                                                to use the toolkit and guidelines we have                dialogue to support improved worker engagement.         that is just for them – something they can own
                                                developed for this purpose and these will evolve                                                                 to help improve their lives not only here in the
                                                as the project progresses.                               Workers were invited to elect their own                 factory but in everything they do”.
                                                                                                         representatives, with more than 300 worker              Factory Manager
                                                This year, fashion trends have seen a return to          representatives trained across five factories in four
                                                embellishment, embroidery and other added value          different languages. Representatives learnt methods
                                                activities, often carried out by home workers.           to raise, investigate and resolve issues. They were
                                                This has created a need for greater focus on the         taught about health and safety and provided with
                                                employment of home workers in India, where               wellbeing techniques. Female representatives have               It’s easy to feel ‘forgotten’ as a supervisor.
                                                such specialised work is typically centred. Our          received further training in partnership with the       Everyone talks about management development
                                                representatives make regular visits to home              Working Women Worldwide organisation.                   and worker training. Nobody talks about the
                                                workers in key locations, specifically in the state of                                                           supervisor. We get more stress than most people,
                                                Uttar Pradesh, to check workers are being correctly      The representatives meet monthly in each factory        because we get it from both sides. Now someone
                                                paid. This process enables us to implement our           and have selected spokespeople who attend a             is showing that they recognise that we get
                                                Home Workers Guidelines.                                 joint meeting with management every two months          stressed too. This is really important to us and
                                                                                                         to review more complex cases that may require           helps us a lot. Thank you!”
                                                Migrant Workers                                          budgetary or policy decisions.                          Supervisor
                                                In recent years, the Arcadia Group has actively
                                                improved the recruitment and working conditions
CONTENTS                   PRODUCTS   ENVIRONMENT                            EMPLOYEES                           COMMUNITY                    2020 TARGETS

13 Products | Ethical Trading

                                             Syrian Workers in Turkey                                                                                  Contract Workers
                                             Arcadia insists that all workers must be treated        Within this time, we had Syrian workers without   Contract labour remains a major concern in
                                             fairly, without discrimination and paid a fair living   the correct paperwork identified in two of the    countries like India. This is why we monitor the
                                             wage. In addition, working hours should not be          factories used by our suppliers.                  use of contract workers in our suppliers factories
                                             excessive, working hours and wages must be                                                                and work with those that have high numbers
                                             documented and child labour must not be used.           In both cases, the documents had been applied     of contracted employees. Wherever possible,
                                                                                                     for, and the factories are awaiting receipt.      we encourage factories to employ contract
                                             We work in partnership with our suppliers in            Arcadia continues to monitor the situation        workers directly. We are also working to ensure
                                             Turkey to identify and monitor the risks regarding      in both factories, one of which has already       contractors are fully registered.
                                             refugees, providing support where needed.               received the outstanding documentation to
                                             We continue to work closely with our audit              legally employee the worker identified.
                                             partners in Turkey, where increased focus has
                                             been placed on ensuring auditors are trained to         In collaboration with other stakeholders we
                                             identify and manage any suspected unauthorised          continue to monitor the situation.
                                             migrant workers. We have reminded our Turkish
                                             suppliers to use our Migrant Worker Guidelines
                                             to manage the recruitment and employment
                                             of migrant workers, ensuring conditions of
                                             employment are no less favourable than those
                                             afforded to local workers.

                                             During Sept 2016 and Aug 2017 169 audits
                                             were conducted on a semi-announced or un-
                                             announced basis in Turkey.
CONTENTS                   PRODUCTS   ENVIRONMENT                           EMPLOYEES                          COMMUNITY                        2020 TARGETS

14 Products | Ethical Trading                MODERN SLAVERY ACT
                                             We published our first Modern Slavery Statement
                                             in February 2017, you can view it here. Our next
                                             update will take place in February 2018.

                                                                                                  MANAGEMENT SYSTEMS                                    PROHIBITED ACTIVITIES
                                                                                                  Our management systems project currently              There are a number of controversial manufacturing
                                                                                                  focuses on two factories in India with the aim        processes that the Arcadia Group will not tolerate:
                                                                                                  of creating a better environment for dialogue
                                                                                                  between workers and management, thus                  • Sandblasting: a process that is used to give
                                                                                                  encouraging freedom of association and                  denim a worn or faded look is banned due to
                                                                                                  collective bargaining, with the overall aim             potential health hazards faced by workers if they
                                                                                                  of improving working environments.                      breathe in the fine silica particles used.

                                             CODE OF CONDUCT GUIDEBOOK                            The latest stage of the project in India began        • Uzbek cotton: This is banned due to concerns
                                             Our Code of Conduct Guidebook provides
                                                                                                  this year with a series of site visits and 350          about forced and child labour in Uzbekistan
                                             practical guidance to suppliers and factories
                                                                                                  employee interviews.                                    during cotton harvesting.
                                             on how to improve labour standards based
                                             on our Code of Conduct.
                                                                                                  In one factory, work has taken place to identify      • Mulesing: a sheep husbandry practice used
                                                                                                  and convert casual workers to formal contracts.         in the Australian wool industry to remove skin
                                             Our Code of Conduct Guidebook is available in
                                                                                                  Worker representative committees have been              from sheep (often without anaesthetic) to
                                             English, Chinese, Hindi and Turkish as these four
                                                                                                  reformed and restructured while feedback                prevent flystrike.
                                             languages cover close to 80% of factories in our
                                                                                                  sessions have been held to enable employees to
                                             top ten sourcing countries. We are working to
                                                                                                  share their concerns with management. Workers         • Live feather plucking: Down is banned following
                                             translate the Guidebook into additional languages,
                                                                                                  (and their families) have been given access to          discussions with People for the Ethical Treatment
                                             reflective of our sourcing countries.
                                                                                                  medical care benefits.                                  of Animals (PETA) regarding investigations into
                                                                                                                                                          animal cruelty in sourcing feathers (down).
                                             The Guidebook includes helpful items such as
                                             training slides and notes, policy statements and
                                                                                                                                                        Our ethical audit database (Valid8) improves our
                                             template contracts and handbooks for factories to
                                                                                                                                                        verification process to ensure that factories are
                                             use as a guide to creating their own versions.
                                                                                                                                                        compliant. For more information on our animal
                                                                                                                                                        welfare programme please see page 16.
CONTENTS                  PRODUCTS   ENVIRONMENT                           EMPLOYEES                             COMMUNITY                       2020 TARGETS

15 Products | Environmental Impact          SUSTAINABLE CLOTHING ACTION PLAN                      SCAP signatories are committed to a
                                            We have renewed our commitment to the                 seven-point action plan:
                                            Sustainable Clothing Action Plan (SCAP) and its
                                            2020 targets. SCAP’s ambition is to improve the       1. Use a common assessment tool to measure
                                            sustainability of clothing across its lifecycle. It        baseline position and track changes in footprint

Environmental                               brings together the clothing industry, government
                                            and other stakeholders to take action to reduce
                                            their carbon, water and waste footprint, along with
                                                                                                  2.
                                                                                                       over time.
                                                                                                       Reduce the environmental footprint of
                                                                                                       clothing through fibre and fabric selection.

Impacts of our                              providing support, tools and guidance.

                                            SCAP’s 2020 commitment will see us measure
                                                                                                  3.   Over the longer term, work with our supply
                                                                                                       chain partners to reduce the environmental
                                                                                                       footprint of their processes.
                                                                                                                                                          BETTER COTTON INITIATIVE
                                                                                                                                                          The Better Cotton Initiative (BCI) exists to make

Products                                                                                          4.                                                      global cotton production better for the people
                                            and reduce our overall carbon, water and waste             Extend the useful life of clothes and reduce
                                                                                                                                                          who produce it, better for the environment it
                                            footprints across all our brands. Using SCAP’s             the environmental impact of clothing through
                                                                                                                                                          grows in and better for the industry’s future
                                            footprint calculator, we measure and report the            our product design and services.
                                            total impacts of the clothes we sell in the UK on     5.   Develop effective messaging to influence
                                                                                                                                                          by developing Better Cotton as a sustainable
                                                                                                                                                          mainstream commodity.
                                            an annual basis.                                           consumer behaviours, which will reduce the
                                                                                                       environmental footprint of clothing.
                                            SCAP have officially partnered with MADE-BY,          6.   Increase re-use and recycling to recover
                                                                                                                                                          BCI has a system which helps retailers and
                                                                                                                                                          brands source Better Cotton, driving volumes
                                            a European not-for-profit organisation with a              maximum value from used clothing.
                                            mission to improve environmental and social           7.   Develop actions that help keep clothes
                                                                                                                                                          while exerting minimal pressure on suppliers.
                                                                                                                                                          The aim is to increase the flow of Better Cotton,
                                            conditions within the fashion industry. We will be         out of landfill.
                                                                                                                                                          tracing the volumes sourced by each member,
                                            working with MADE-BY under our commitment to
                                                                                                                                                          through the production process.
                                            help SCAP reach its 2020 goals.

                                                                                                                                                          Arcadia is a full member of BCI. We are making
                                            We closely monitor the outputs of SCAP’s working
                                                                                                                                                          good progress towards our 2020 target to source
                                            groups and support the programme where we
                                                                                                                                                          20% of our cotton as Better Cotton. This year we
                                            can with any requests for engagement and
                                                                                                                                                          have been focusing on sourcing BCI in our largest
                                            information. We are looking to work even more
                                                                                                                                                          ranges, for example, Topshop Denim.
                                            closely with the group over the coming year as
                                            we review our overall Fashion Footprint strategy.
                                                                                                                                                          SUSTAINABLE FABRICS
                                                                                                                                                          Our brands have supported projects that explore
                                                                                                                                                          the sustainability of fabrics, including recycled
                                                                                                                                                          wool, up-cycling surplus and off-cut materials.
                                                                                                                                                          We are currently exploring new projects that focus
                                                                                                                                                          on the use of sustainable materials.
CONTENTS                  PRODUCTS   ENVIRONMENT                          EMPLOYEES                           COMMUNITY                          2020 TARGETS

16 Products | Environmental Impact          CANOPY                                              WORLDWIDE CHEMICAL COMPLIANCE
                                            Every year, 120 million trees are logged for        We have an on-going programme in our brand
                                            fabrics including rayon, viscose, modal and other   product teams to embed an understanding of
                                            trademarked textiles. That number is projected      our global chemical compliance requirements
                                            to double by 2025 and many of those trees           into their key competencies.
                                            originate from the world’s most ancient and
                                            endangered forests or controversial sources. At a   This year we have developed focused internal team
                                            time when keeping carbon-rich forests standing      training on chemicals and the testing methods
                                            is a key strategy in mitigating the growing         used to identify them. We have also increased the
                                            impacts of climate change, we have joined forces    external training given to our suppliers with the
                                            with international not-for-profit environmental     support of our laboratory partners.
                                            organisation Canopy to address this rapidly
                                            emerging threat to forest ecosystems.               Our legal and safety requirements and restricted          Our policy states that Arcadia Group suppliers
                                                                                                substances list is continually reviewed, to ensure        must adhere to the following sourcing standards:
                                            We are committed to sourcing viscose fabrics        that it is aligned with global legislation and industry
                                            that are free of endangered forests and to          best practice. This is communicated to suppliers          • Leathers, skins and feathers must only be
                                            supporting Canopy’s work to secure large-scale      both directly and via our laboratory partners. The          obtained as a by-product and not be the sole
                                            forest conservation and catalyse the                teams continue to grow and develop to meet the              purpose of the slaughter of an animal.
                                            next generation of fabrics.                         challenges of chemical compliance worldwide.              • No products in full or part are to be sourced from
                                                                                                                                                            endangered species listed by the Convention on
                                                                                                ANIMAL WELFARE                                              International Trade in Endangered Species (CITES)
                                                                                                The Arcadia Group is committed to a proactive               or International Union for the Conservation of
                                                                                                approach to animal welfare and we take part in              Nature (IUCN).
                                                                                                on-going dialogue with industry partners to ensure        • Angora, down, real fur or pelts are not to be
                                                                                                our policy is both progressive and comprehensive.           used on any products supplied to Arcadia Group.
                                                                                                                                                          • Skins should not be obtained while an animal
                                                                                                All suppliers are required to sign up to our animal         is alive.
                                                                                                welfare declaration as part of our Code                   • Feathers should not be plucked from live animals.
                                                                                                of Conduct.                                               • Arcadia Group branded cosmetics, and their
                                                                                                                                                            ingredients, must not be tested on animals.
                                                                                                                                                          • Karakul must not be used (also known as
                                                                                                                                                            broadtail and astrakhan), or any skin products
                                                                                                                                                            from aborted animals in goods supplied to us
                                                                                                                                                          • Wool cannot be sourced from producers
                                                                                                                                                            that use mulesing as part of their animal
                                                                                                                                                            husbandry strategies.
CONTENTS                               PRODUCTS                            ENVIRONMENT                     EMPLOYEES   COMMUNITY   2020 TARGETS

Environment
A key part of being a responsible retailer is to          This year we have embarked on two new
minimise our environmental impacts. We need to be         major projects.
mindful of the potential impacts our business can
have in both the process of bringing our goods to         The first is to review our global sourcing footprint,
market and in the retail stores in which they are sold.   looking for greater end-to-end efficiencies.
                                                          The second will see us create a bespoke UK
In this pillar we focus specifically on energy,           Distribution Center (DC) to meet our future
waste and transport. This spans across multiple           requirements, with a focus on sustainable
departments including Property, Purchasing and            design through the BREEAM standard.
Logistics and also external consultants who assist
us with tracking progress against our targets.

Our long-term commitments continue to be to:

• Lower our energy consumption
  (and reduce CO2 emissions).
• Identify waste streams and work to reduce these.
• Reduce our consumption of other valuable
  resources such as water.
• Transport our products while reducing impact
  on the environment.
CONTENTS                 PRODUCTS   ENVIRONMENT                           EMPLOYEES                            COMMUNITY                       2020 TARGETS

18 Environment | Our Environment           COLEGRAVE HOUSE REFURBISHMENT
                                           The transformation of our London headquarters         sustainable value in a series of categories, ranging
                                           was completed in September 2016. This three-year
                                           project created a stunning 21st century workplace
                                                                                                 from energy to ecology. Each of these categories
                                                                                                 addresses the most influential factors, including low
                                                                                                                                                         The transformation
                                                                                                                                                         OF OUR LONDON
                                           designed to both excite and inspire our people.       impact design and carbon emissions reduction;

Our Environment                            The building was completed to the BREEAM
                                                                                                 design durability and resilience; adaption to climate
                                                                                                 change; and ecological value and biodiversity

                                                                                                                                                         HEADQUARTERS
                                           standard - the world’s leading sustainability         protection. We were happy to achieve a ‘very
                                           assessment method for master planning projects,       good’ BREEAM rating.
                                           infrastructure and buildings. It addresses a number

                                                                                                                                                         WAS COMPLETED IN SEPTEMBER 2016.
                                           of lifecycle stages such as new construction,
                                           refurbishment and in-use. BREEAM measures

                                                                                                                                                         This three -year project
                                                                                                                                                         CREATED A STUNNING
                                                                                                                                                         21ST CENTURY
                                                                                                                                                         WORKPLACE
                                                                                                                                                         designed to both
                                                                                                                                                         EXCITE AND INSPIRE OUR PEOPLE.
CONTENTS                   PRODUCTS   ENVIRONMENT                             EMPLOYEES                          COMMUNITY                             2020 TARGETS

19 Environment | Transport & Logistics                                                             reducing empty running by consolidating click               selecting best-in-class partners we can be sure
                                                                                                   and collect orders, which account for 6% of                 that they share our commitments to reducing
                                                                                                   our total volume.                                           environmental impacts and CO2 emissions.

                                                                                                   We have further investigated the benefits of                LOGISTICS CONSOLIDATION BENEFITS
                                                                                                   working in partnership with DHL to combine                  This year we have explored a more flexible
                                                                                                   deliveries with those of other retailers, particularly      approach to the movement of products into
                                                                                                   where our brands occupy a retail space within               Europe. We have increased sea freight out of

Transport & Logistics                        Wherever possible, we seek to minimise the
                                             impact of transporting products especially as our
                                                                                                   a department store.

                                                                                                   After a successful pilot of the DHL shared user
                                                                                                                                                               Turkey, rather than transporting product by road.
                                                                                                                                                               Under our new multi-transport model, products
                                                                                                                                                               are shipped from Turkey to Trieste, transported by
                                             global reach as a retailer continues to grow.         network in remote locations in north Scotland, it           rail from the Italian seaport to Germany and finally
                                                                                                   has now been fully adopted in that region. We are           moved by road to the UK via Dover. We have
                                             For the tenth consecutive year we have                planning to roll out similar pilots in the South West       reduced truck journeys by 5% using this model.
                                             significantly reduced global transport CO2            and East Anglia during 2018.
                                             emissions, resulting in a 16% reduction against a                                                                 We have also consolidated container usage. We
                                             5% target.                                            Once again our core team of drivers received                no longer use shorter 20ft containers, improving
                                                                                                   training in fuel-efficient and safety conscious             consolidation to fit our goods into fewer, larger
                                             We drive this continuous improvement by               driving style this year, thereby increasing our             containers. Similarly, in the US, consolidation has
                                             scrutinising all areas of our operations including:   miles per gallon travelled.                                 also resulted in reduced journeys.

                                             • Transport planning and scheduling                   We have made significant progress in recent years           When we consider the relative impacts of the
                                             • Improved fuel efficiency from updated fleet         to reduce CO2 emissions in transportation. We are           different methods of moving our products, it is
                                                and driver behaviours                              focused on continuous improvement and anticipate            clear that moving goods by sea has the least
                                             • Reduced business travel via company cars.           achieving a 3% annual reduction until our existing          impact in terms of emissions per kilometre
                                                                                                   fleet is replaced in two to three years’ time.              travelled and our ocean freight partners continue
                                             Improvements made to the way we plan and                                                                          to focus on reducing emissions.
                                             schedule our journeys resulted in a 16% mileage       We continue to explore all options with our
                                             reduction this year, significantly over-achieving     transport partner and will look at new innovations
                                             against our 2017 target.                              such as alternative fuels and a new fleet, in line
                                                                                                   with our replacement programme.
                                             A particular area of focus has been scheduling
                                             overnight deliveries when roads are quieter.          Our UK-based initiatives are supported by the
                                             This has also increased our fuel efficiency.          commitments made by our third party forwarders
                                                                                                   and carriers. The long-term partnerships we have
                                             We have continued to utilise vehicle space,           forged in this area continue to reap benefits. By
CONTENTS                   PRODUCTS   ENVIRONMENT                             EMPLOYEES                           COMMUNITY                       2020 TARGETS

20 Environment | Transport & Logistics       GLOBAL SUPPLY CHAIN ENGINEERING                                                                               NON-CLOTHING SUPPLIER
                                             We embarked on a holistic review of our supply                                                                TENDER CREDENTIALS
                                             chain this year, which will provide a picture of                                                              Arcadia regularly invite suppliers to tender
                                             our global sourcing footprint. The project will                                                               for contracts to supply services such as
                                             examine our worldwide operations, reinforcing                                                                 transport, cleaning and energy management.
                                             our aspiration to establish a joined up end-to-end                                                            As part of a recent review of such tender
                                             process from the development of product to the                                                                procedures, we have added ethical and
                                             delivery to our customer.                                                                                     environmental considerations within the pre-
                                                                                                                                                           tender questionnaire stage of the process.
                                             Much of this work will be informed by the outputs
                                             of our new Singapore DC. It has changed the way                                                               SINGAPORE DISTRIBUTION
                                             we work with suppliers in the region, resulting in                                                            CENTRE UPDATE
                                             more direct deliveries and greater efficiencies in                                                            Meanwhile, our Singapore DC has expanded it’s
                                             moving product through the supply chain.                                                                      reach by adding new markets, including South
                                                                                                                                                           Africa and South America.

                                             UK DISTRIBUTION STRATEGY                                                                                      In its first year, the DC shipped 1.2m units and
                                             Project Trinity will see the creation of a new,
                                                                                                                                                           reduced nautical miles travelled by 6,770 miles
                                             purpose-built DC in the Midlands as well as retrofit
                                                                                                                                                           per unit.
                                             and refresh projects within our existing distribution   We are already reaping rewards within our
                                             centres.The building itself will have strong            existing DC in Leeds, where a new warehouse
                                             environmental credentials with lots of natural light    management system has been adopted. Evans
                                             via an entry atrium, energy efficient lighting with     was the first of our brands to go live with the new
                                             low energy modes, and highly efficient building         system, which will see paper eliminated from
                                             materials. We are hopeful that the building will        the process and increased efficiency via the use
                                             achieve an ‘excellent’ BREEAM rating. A local           of highly accurate radio frequency technology.
                                             green travel plan will also be in place to support      Product will be moved around the warehouse
                                             employees to minimise their impact.                     more productively, improving stock turn and
                                                                                                     reducing waste.
                                             It is anticipated that the first despatches from
                                             the new DC will take place in mid-2019.                 Deliveries will be more easily tailored for
                                                                                                     individual stores, reducing journeys, thereby
                                             Building an entirely new DC from scratch at             reducing CO2 emissions and increasing
                                             the Daventry International Rail Freight Terminal        speed of product to the consumer.
                                             enables us to design and build a future-proof
                                             state-of-the-art centre offering capacity for our
                                             immediate needs and room for growth.
CONTENTS                   PRODUCTS   ENVIRONMENT                          EMPLOYEES                          COMMUNITY                          2020 TARGETS

21 Environment | Energy Efficiency

Energy Efficiency                            ENERGY SAVINGS ACCREDITATION
                                             We continue to pursue accreditation under
                                                                                                 STORES ENERGY EFFICIENCY
                                                                                                 This year we have carried out a Wireless Building       stores in Ireland joined CTK this year, as we are
                                             the ISO 50001 system run by the International       Management System (BMS) trial across 4                  now able to monitor consumption there for the
                                             Organization for Standardization. The key           Topshop stores bringing the total numbers of            first time.
                                             driver for this is achieving compliance with the    stores with operating wireless BMS to 8.
                                             Government’s new Energy Savings Opportunity                                                                 As part of the CTK campaign, our Topshop stores
                                             Scheme (ESOS), which supports the EU Energy         We are planning to install wireless BMS into a          compete to become the lowest energy consumer.
                                             Efficiency Directive (EED).                         further 12 Topshop flagship stores by April 2018.       League tables are compiled using data from
                                                                                                 This has resulted in an average energy saving           monthly energy reports, enabling stores to spot
                                             This year we have maintained our accreditation      of 20% in these stores. All new stores will have        anomalies and peaks of energy usage. This year
                                             under ESOS and we are currently reviewing our       wireless BMS and LED lighting as standard.              we have extended the initiative to Outfit, while
                                             options for ESOS Phase 2 Compliance.                                                                        Wallis will follow early in the next reporting year.
                                                                                                 Last year we installed LED lighting in our Topshop

                                             ENERGY EFFICIENCY AND CO2 EMISSIONS                 store in Leicester and in this store alone we have
                                                                                                 seen a 40% saving in energy consumption.
                                                                                                                                                         Our aim for 2018 is to roll out the campaign to all
                                                                                                                                                         our remaining brands. Currently, overall savings
                                             Our total combined energy usage (gas and
                                                                                                                                                         are running at 5%.
                                             electricity) has decreased by 5% this year. Our
                                                                                                 CUT THE KILOWATTS CAMPAIGN
                                             corresponding CO2 emissions for our head offices,
                                             distribution centres and stores has reduced for
                                                                                                 Since April 2015 we have been running Cut the           DC ENERGY EFFICIENCY
                                                                                                 Kilowatts (CTK) to engage our retail colleagues in      We have made further progress in our goal to
                                             the tenth consecutive year by 7%.
                                                                                                 our efforts to reduce energy consumption.               deliver energy savings throughout our UK DCs
                                                                                                                                                         this year.
                                             Since 2015, 100% of our energy has come from
                                                                                                 Initially the campaign was launched in partnership
                                             renewable sources. We reviewed our energy
                                                                                                 with Topshop to create a ‘club’ of 50 stores that       Our Milton Keynes DC has seen the completion
                                             purchasing contracts this year and we continue
                                                                                                 agreed to detailed scrutiny of their energy usage.      of a project to replace all its lighting with LED
                                             to source all our UK and ROI electricity from
                                                                                                 Regular usage reports highlighted opportunities to      lamps. The energy reduction rate is currently 47%.
                                             renewable generation.
                                                                                                 switch off and save energy without compromising
                                                                                                 on store performance or customer service.               Meanwhile, our Leeds DC completed a
                                                                                                                                                         similar project to install more energy-efficient
                                                                                                 In September 2016 we achieved our aim of rolling        lighting, achieving a 32% reduction in energy
                                                                                                 out CTK across the entire Topshop chain. Our            consumption.
CONTENTS                 PRODUCTS   ENVIRONMENT                         EMPLOYEES                           COMMUNITY                       2020 TARGETS

22 Environment | Recycling & Waste

Recycling & Waste                          WATER CONSUMPTION
                                           Last year we appointed a water consultant to help
                                                                                               RECYCLING AND WASTE – STORES
                                                                                               This year we have maintained a 95%
                                           us better understand our consumption patterns.      recycling rate (this does not include stores
                                           We embarked on a project this year to detect        in shopping centres as they have their own
                                           leaks, which achieved a saving of 16,000m3 of       waste management system). We consider our              These devices are also delivering the benefits
                                           water. This equates to more than 44,000 bathtubs    performance in this area to be strongly established    of new store software that communicates price
                                           or 6.5 olympic sized swimming pools.                and we do not currently anticipate further             change bulletins direct to the devices, replacing
                                                                                               opportunities to increase this figure significantly.   the previous paper-based system.

                                                                                               While around 300 stores are under our direct           E-receipts are now well established and we have
                                                                                               responsibility, for stores in shopping centres,        significantly exceeded our target of having 20% of
                                                                                               waste management continues to be the                   transactions paperless, having achieved 34% of
                                                                                               responsibility of the centre’s landlord. This has      receipts shared with customers in this way. We will
                                                                                               been an area we have strived to influence and our      continue to drive further conversion in this area.
                                                                                               experience is that landlords have become more
                                                                                               engaged in this challenge recently. These sites are    In June 2017 we introduced a new warehouse
                                                                                               now achieving an 80 – 85% recycling rate at non-       management system in our Leeds DC for our
                                                                                               Arcadia managed shopping centre locations.             Outfit and Evans brands. Operators use a new
                                                                                                                                                      handheld terminal that displays pick instructions,
                                                                                               For some time we have recognised that aiming           replacing a paper-based system for preparing
                                                                                               for a paperless model wherever possible in both        deliveries to stores.
                                                                                               stores and head office should be a priority.
                                                                                                                                                      Two more of our brands, Wallis and Dorothy
                                                                                               We updated our handheld terminals in stores this       Perkins, are scheduled to move to the new
                                                                                               year, replacing the existing model with ones that      system in January and we anticipate the
                                                                                               have improved battery performance and now              remainder of our brands will follow later next year.
                                                                                               need charging once a day rather than the twice         We intend to include an update on paper savings
                                                                                               daily required by their predecessors.                  in next year’s report.
CONTENTS                 PRODUCTS   ENVIRONMENT                            EMPLOYEES                         COMMUNITY                       2020 TARGETS

23 Environment | Recycling & Waste

                                                                                                ONLINE ORDER PACKAGING
                                                                                                We have made further progress this year in our
                                                                                                project to reduce the impact of the bags used in
                                                                                                the despatch and delivery process of online orders.

                                                                                                Last year we reduced the microns and increased
                                                                                                recycled polymer used in the manufacturing
                                                                                                process. Both trials were conducted with
                                                                                                Topshop. Following this successful pilot, we rolled
                                                                                                out the new bags to all our brands this year.

                                                                                                Towards the end of this reporting year we             single-use bags and increasing bag thickness
                                           HANGERS                                              introduced a revised version of the bags across       and strength to encourage re-use.
                                           This year we have made a concerted effort            all our brands featuring increased recycled
                                           to encourage the re-use of hangers. Our              content, which now forms 75% of the polymer           Next year across all brands we will be introducing
                                           recycling programme has seen an uplift of            used in the bags.                                     store re-use carrier bags that contain 25%
                                           43%. This is due to our continued drive to                                                                 recycled plastic.
                                           ensure our suppliers source from accredited          CARRIER BAGS
                                           hanger suppliers. In total, just under 9.6 million   Following the introduction of the government’s
                                           hangers were recycled this year.                     carrier bag charge, we have seen a reduction
                                                                                                in the number of carrier bags used, in relation
                                                                                                to sales. Arcadia have focused on phasing out
CONTENTS                 PRODUCTS   ENVIRONMENT                           EMPLOYEES                            COMMUNITY                         2020 TARGETS

24 Environment | Recycling & Waste                                                               EVOLVING OUR WORKPLACE
                                                                                                 This year saw the launch of PeoplePoint, a                Our corporate servers are moving to a new
                                                                                                 new payroll system that provides a hub where              model of energy-efficient solid-state disc storage
                                                                                                 employees can access all HR information and               that uses only a fraction of the electricity of its
                                                                                                 documentation. A key environmental benefit                predecessor, along with reduced cooling/air-
                                                                                                 is that all payslips are now held online, further         conditioning requirements. The new arrangement
                                                                                                 reducing our paper consumption. Historically              was agreed at the end of this year and we
                                                                                                 we printed 23,000 payslips each month and                 anticipate that benefits will be seen from the first
                                                                                                 distributed them to stores and head office. For           quarter of 2018.
                                                                                                 stores, these were sent via an internal delivery
                                                                                                 system and for head office a van was used to
                                                                                                 travel between the office locations.

                                                                                                 Using the new system, which was launched in
                                                                                                 head office in May and across retail in July and
                                           RECYCLING AND WASTE                                   August, employees log on to an online portal to
                                           – HEAD OFFICE                                         view their payslips. Reaction has been positive
                                           Last year we reported on improved recycling           and we are proud of saving of over 300,000
                                           of waste at our newly refurbished London              sheets of A4 paper, envelopes and ink each year.
                                           headquarters at Colegrave House. In this site we
                                           now also recycle toner cartridges, spent batteries    Our strategy regarding company devices is to
                                           and have recently introduced glass recycling.         provide more portability enabling employees to
                                                                                                 use them at their desks or on the move. All new
                                           Our new energy-efficient multi-function devices       devices are equipped with cameras to make video
                                           that require employees to manually confirm print      conferencing more accessible. In reality, we often
                                           requests are now well established in Colegrave        find screen sharing of documents combined with
                                           House. The new devices have driven a significant      audio conferencing proves to be the most effective
                                           reduction in paper consumption and our next step      approach to meetings with remote stakeholders,
                                           is to introduce similar devices into our Marylebone   allowing our employees to work from anywhere
                                           House offices.                                        they can get a secure internet connection.

                                           We have reviewed our strategy on waste at             Greater portability is also contributing to a reduction
                                           Marylebone House since the moves that followed        in office space occupancy at our Marylebone
                                           the full reoccupation of Colegrave House. This has    House head office in London. We have achieved
                                           enabled us to establish full waste separation and     a 20% reduction in space within IT in London,
                                           recycling for the first time.                         reducing our heating and lighting needs.
CONTENTS                           PRODUCTS   ENVIRONMENT   EMPLOYEES   COMMUNITY   2020 TARGETS

Employees
We recognise the key role that the Fashion
Footprint programme plays in employee
satisfaction.

The majority of our employees are under 35 with
high levels of environmental and social awareness
and expect this to be reflected in their place
of work. So it is essential that we continue to
demonstrate our commitments and engage our
employees in support of Fashion Footprint.

This year we have focused on responding to the
insights gathered through our Fashion Footprint
employee surveys across both head office and
retail teams.

Both communities clearly expressed an interest
in receiving Fashion Footprint updates. Therefore,
we are embracing digital channels to ensure
effective and timely communication.
CONTENTS                PRODUCTS   ENVIRONMENT                             EMPLOYEES                           COMMUNITY                           2020 TARGETS

26 Employees | Engagement                EMPLOYEE ENGAGEMENT
                                         This year we introduced a new email channel             Dragon Children’s Foundation and the Manchester
                                         called ‘Your Footprint’, which has enabled              Emergency Fund.
                                         us to improve communication about Fashion
                                         Footprint-related topics, such as charity activities,   HEALTH AND WELLBEING
Employee                                 volunteering and wellbeing on a regular basis.

                                         This year we celebrated the launch of the Fashion
                                                                                                 Another major focus this year was employee
                                                                                                 health and wellbeing.

Engagement                               Footprint digital report with a complimentary
                                         reusable water bottle. The bottle was selected in
                                         response to a request from employees to reduce
                                                                                                 To mark Mental Health Awareness Week, we
                                                                                                 offered free fitness and meditation classes, treats
                                                                                                 and tips to boost mental health and resilience,
                                         waste such as plastic cups and bottles.                 including mindfulness guides and a visit from the
                                                                                                 Mental Health Foundation. The restaurant in our
                                         We incentivised employees to engage with last           London head office joined in by offering a special
                                         year’s report with a competition to win a monthly       mood-boosting menu!
                                         home delivery food box complete with recipes.                                                                    LEADERSHIP EXPECTATIONS
                                                                                                 Meanwhile, the teams in Leeds established a              We consistently focus not just on what we do
                                         This year Blue Dragon Children’s Foundation was         Fashion Footprint working group towards the end          but how we do it, and this year we updated
                                         announced as our new Fashion Footprint charity          of this year to provide focus and direction for the      our ‘expectations’ for our employees.
                                         partner for the next three years. It was chosen by      programme. Activities organised by the group
                                         our employees from a shortlist of charities. More       included wellbeing workshops on stress, coping           These Leadership Expectations set out the
                                         details on this can be found in the Communities         with cancer and donating blood. Six local                behaviours that reflect our values at every level
                                         section of this report.                                 community outreach events focused on                     within our head office functions, supporting our
                                                                                                 developing future talent.                                people to fulfil their potential.
                                         We celebrated the launch of this new partnership
                                         with our first ever Group Charity Week in May.                                                                   As organisations come under greater pressure
                                         Colleagues were challenged to fundraise                                                                          to adapt and perform in a rapidly changing and
                                         individually or as a team and the top three                                                                      complex environment, we recognise that we need
                                         fundraisers were rewarded with a team social                                                                     to respond with leadership behaviours and agile
                                         event. Group Charity Week culminated in a silent                                                                 processes that can be flexed when necessary.
                                         auction, with our brand teams donating items
                                         for our employees to bid on. Arcadia Group                                                                       By developing our leadership capability, we can
                                         matched the total amount raised. Fundraising                                                                     build more authentic relationships, engage our
                                         from a charity sample sale was also matched by                                                                   teams and build a more future-focused and
                                         one of our suppliers. In total, £11,000 was raised                                                               customer-centric organisation that also reflects
                                         and proceeds were divided between the Blue                                                                       our Fashion Footprint objectives.
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