2021 A COMMON THREAD SUSTAINS US - TFG Limited

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2021 A COMMON THREAD SUSTAINS US - TFG Limited
A COMMON
THREAD
SUSTAINS US

              2021
              SUSTAINABILITY OVERVIEW REPORT
              THE FOSCHINI GROUP LIMITED
2021 A COMMON THREAD SUSTAINS US - TFG Limited
CONTENTS

                                 About our report 3

                                 Who we are 7

                                 A leadership view on sustainability 29

                                 Our sustainability strategy 35

                                 Localisation and job creation 41

                                 People and communities 57

                                 Environmental efficiency 79

                                 Product stewardship and supply chain 91

                                 Appendices 105

                                 This sustainability overview report was
                                 prepared by the TFG sustainability team
                                 in collaboration with content owners
                                 in TFG Africa, TFG London and TFG
                                 Australia. It relates to the financial year
                                 from 1 April 2020 to 31 March 2021 with
                                 the full scope and boundary, frameworks
                                 as well as key indicators provided on
                                 page 4.

                                 The report was approved by the
                                 Supervisory Board’s Social and Ethics
                                 Committee on 27 July 2021.

                                 Prof. F Abrahams
                                 Chairperson of the Social and Ethics
                                 Committee

SUSTAINABILITY OVERVIEW REPORT 2021                                            1
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                 Who we are                  A leadership view    Our sustainability   Localisation and    People and   Environmental                  Product stewardship   Appendices
 report                                               on sustainability         strategy          job creation     communities     efficiency                     and supply chain

    THE DORSET RUNNER

    (From the Whistles sustainable trainer project)

                                                                                                                                                         01
                                                                                                                                                          ABOUT OUR
                                                                                                                                                          REPORT

 2                                                    THE FOSCHINI GROUP                                                         SUSTAINABILITY OVERVIEW REPORT 2021                         3
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                     Who we are                  A leadership view               Our sustainability               Localisation and    People and                           Environmental                    Product stewardship                 Appendices
 report                                                   on sustainability                    strategy                      job creation     communities                             efficiency                       and supply chain

     ABOUT OUR REPORT
     Our 2021 sustainability overview report provides insight into our non-financial performance and prospects in relation to
     environmental, social and governance (ESG) issues that have a material impact on the long-term success of the business.

     The report aims to reflect the manner in which sustainability is integrated into our business, in accordance with the
     recommendations of King IV. It further aims to present our perspective on what sustainability means for operations
     and includes information on the progress against our strategic focus areas.

     The acquisition of Jet in September 2020 was a significant event and affects comparability.

     While information is provided on all three business segments in this report, prominence is given to TFG Africa as it accounts for
     69% of the Group’s turnover. We are increasing our sustainability data collection and disclosures for TFG London and TFG Australia.

     OUR REPORTING SUITE
     This report is a concise communication, supplemented by further reporting elements and information available in our investor
     centre (www.tfglimited.co.za). In conjunction with our integrated annual report, these reports provide a comprehensive view
     of TFG’s performance. Non-financial information provided in this report was not assured externally, other than indicated below:

                    Financial                                 Governance                              Environmental and
                    reporting                                  reporting                               social reporting

       Target audience: shareholders,                      Target audience:                            Target audience:
     investment community and analysts                     All stakeholders                            All stakeholders

                            External                                    External                                  External
                            assurance                                   assurance                                 assurance
      Reporting             status and            Reporting             status and            Reporting           status and
      element               provider              element               provider              element             provider

     Annual financial       Audited by            TFG corporate         No external           TFG                 No external
     statements             Deloitte & Touche     governance and        assurance             sustainability      assurance
                            (see external audit   Supervisory Board                           overview report
                            report)               Committee reports

     Results                Reviewed by           King IV register      No external           B-BBEE              Assured by Mazars
     announcement           Deloitte & Touche                           assurance             credentials         Consulting Services
                                                                                              and scorecard       Proprietary Limited

     Results                No external           Notice of annual      No external
     presentation           assurance             general meeting       assurance

    The full suite of reports can be found at: www.tfglimited.co.za.

    Although we make significant efforts to ensure the validity and accuracy of information, the non-financial data provided in this
    overview is not externally assured. This report contains certain forward-looking statements. These statements are not guarantees
    of operating, financial or other results, which may differ materially from what is expressed or implied by such statements.

    We value your views. Please send your questions or comments regarding this report to NyaraiP@tfg.co.za

     OUR TIME FRAMES
     Short term                                   Medium term                                Long term

     Current to one year                          One to three years                         Three to 10 years

                                                                                                                                                                                                    Disclaimer
                                                                                                                                                Images in this report showing people not wearing masks were either taken prior to COVID-19 or in a safe environment.

 4                                                         THE FOSCHINI GROUP                                                                                                      SUSTAINABILITY OVERVIEW REPORT 2021                                           5
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our   Who we are   A leadership view    Our sustainability   Localisation and    People and   Environmental                  Product stewardship   Appendices
 report                  on sustainability         strategy          job creation     communities     efficiency                     and supply chain

                                                                                                                            02
                                                                                                                             WHO WE
                                                                                                                             ARE

 6                       THE FOSCHINI GROUP                                                         SUSTAINABILITY OVERVIEW REPORT 2021                         7
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                     Who we are                    A leadership view                Our sustainability               Localisation and    People and   Environmental                  Product stewardship   Appendices
 report                                                     on sustainability                     strategy                      job creation     communities     efficiency                     and supply chain

             WHO WE ARE
             OUR VISION AND MISSION
             To be the leading fashion and lifestyle omnichannel retailer in Africa whilst growing our
             international footprint by providing innovative products and creative customer experiences and by
             leveraging our portfolio of diverse brands to differentiate our offering. Our talented and engaged
             people will always be guided by our values, social conscience and customer-centric mindset.

                 THE TFG DIFFERENCE                                             OUR VALUES
     29 LEADING FASHION LIFESTYLE RETAIL BRANDS                                 TFG believes that teamwork coupled with
                                                                                professionalism in all aspects of retailing will continue
          OF WHICH 25 ARE OMNICHANNEL                                           to be the foundation for the future

       4 284 TRADING OUTLETS IN 26 COUNTRIES
               ON five CONTINENTS
                                                                                 P       PASSIONATE ABOUT SERVICE
                                                                                         We passionately and truly believe that
                                                                                         the customer comes first.
              Income diversification
             THROUGH 79%:21% CASH VS CREDIT SALES
                       CONTRIBUTION                                              R       RESILIENCE
                                                                                          e have the courage of our convictions and
                                                                                         W
                                                                                         the boldness to constructively challenge.
            R378,1 million INVESTED IN DIGITAL
            TRANSFORMATION AND E-COMMERCE OVER
                    THE PAST TWO YEARS                                            I      INTEGRITY
                                                                                          ur word is our honour, we are
                                                                                         O
                                                                                         honest and ethical.
      Integrated online platform FOR
       ALL TFG AFRICA ONLINE BRANDS WITH SINGLE
       CHECK OUT AND MULTIPLE PAYMENT OPTIONS
                                                                                D        DIGNITY & RESPECT
                                                                                          e treat everyone the way we want
                                                                                         W
                                                                                         to be treated.

            9,3% COMPOUND ANNUAL GROWTH RATE
                                                                                E2
                                                                                         EMPOWERMENT
                 IN TURNOVER OVER FIVE YEARS                                              e embrace diversity and create equal
                                                                                         W
                                                                                         opportunity for all in a supportive
                                                                                         environment.
        10,1% COMPOUND ANNUAL GROWTH RATE
               FOR TFG AFRICA OVER FIVE YEARS                                            EXCELLENT PERFORMANCE
                                                                                          e are accountable and drive performance
                                                                                         W
                                                                                         in a creative and innovative way.
     26,4 million TOTAL NUMBER OF myTFGrewards
       LOYALTY MEMBERS (TFG AFRICA INCLUDING JET)

       13,9 million SOCIAL MEDIA FOLLOWERS
        AS AT MARCH 2021 ACROSS ALL TFG BRANDS
       AND    152 million SITE VISITS DURING THE
                      PAST FINANCIAL YEAR

              TFG AFRICA SOCIAL MEDIA AUDIENCE
            >200% AHEAD OF CLOSEST COMPETITOR

        18%  TFG AFRICA MARKET SHARE OF ONLINE
       TRAFFIC COMPARED TO “ONLINE ONLY” BRANDS
       (SimilarWeb online monitoring tool, user sessions for web
                        and app March 2021)

     37% TFG AFRICA MARKET SHARE OF ONLINE TRAFFIC
            COMPARED TO “BRICK AND MORTAR” BRANDS
        (SimilarWeb online monitoring tool, user sessions for web
                         and app March 2021)

 8                                                         THE FOSCHINI GROUP                                                                                  SUSTAINABILITY OVERVIEW REPORT 2021                         9
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                     Who we are                   A leadership view          Our sustainability   Localisation and    People and                                                          Environmental                        Product stewardship                          Appendices
 report                                                    on sustainability               strategy          job creation     communities                                                            efficiency                           and supply chain

                                                                                                                                   TFG
                                                                                                                                 LONDON

    ABOUT TFG
    Our corporate profile                                                                                                       5%
                                                                                                                              CONTRIBUTION
    TFG is one of the foremost independent chain-store                                                                        TO TURNOVER
    groups in South Africa and has a diverse portfolio
    of 29 leading fashion retail brands offering clothing,
    jewellery, cellphones, accessories, cosmetics, sporting                                                                                                         1          Sweden
    apparel and equipment, and homeware and furniture
                                                                                                                                             Ireland
    from value to upper market segments.                                                                                                     and UK
                                                                                                                               380
    TFG was established in 1924 and listed on the
    Johannesburg Stock Exchange (JSE) in 1941.                                                                                 188

    The majority of our turnover is in the form of cash sales
                                                                                                                                                            12      Netherlands
    to customers, with the balance being from our own in-
    house credit offering. Credit is offered to customers in                                                                                          44        Germany
    South Africa, Namibia, Botswana, Lesotho and Eswatini.
    Revenue is also generated from interest received on                                                                                           5        34      Switzerland
    customers’ store cards and through value-added services                          USA      27

    available to our TFG Africa customers.                                                                                           20     Spain                                            Kuwait
                                                                                                                                                                                                                                                                                15   Japan
    Our focus is on speciality retail where we invest in                                                                                                                                       5
                                                                                                                                                                                                          Qatar
    brands and build brand equity. Our brands cater for                                                                                                                                             4
    market segments from value to upper income while                                                                                                                                                                                                     17     2     Hong Kong
                                                                                                                                                                 Bahrain            1
    providing convenient shopping experiences in-store                                                                                                                                                      14     UAE
    and online. Our unique portfolio of brands, geographic                                                                                    Saudi Arabia                 7

    spread and customer retention initiatives differentiate                              21
                                                                                                                                                                                                                                                   3      Macau
    us from other retailers locally and abroad.
                                                                                      Mexico
    South Africa and Namibia are TFG Africa’s most
    significant markets, with the UK and Ireland being
                                                                                                                                                                                                                          TFG
    the most significant markets for TFG London. TFG                                                                                                                                                                     AFRICA                            1        Singapore
    Australia is focused on Australia and New Zealand.

    We source our product offering both locally and offshore,
    with strong in-house design teams across all business                                                                                                                                31     Zambia
                                                                                                                                                                                                                    67%
                                                                                                                                                                                                                    CONTRIBUTION
    segments. TFG Africa’s manufacturing capabilities are                                                                                                                                                           TO TURNOVER
    coordinated through our own factories and various
    independent cut, make and trim (CMT) factories. This                                                                                                                                44     Botswana
    provides significant quick response capability and is a key                                                                 Namibia     106

    differentiator for the Group.                                                                                                                                                                                                                      Australia    487   33
                                                                       TFG is included                                                                                                  18     Eswatini

    Our strategic pillars drive our value-creating business model:     in the Fashion                                                                                          20       Lesotho
                                                                       Transparency Index,
                                                                       which encourages brands
                                                                       to be more transparent
                                                                       and to provide enhanced                                                             2 710
      Customer      Leadership         Profit          Growth          disclosures in respect of                                                                                                                                                       TFG
                                                                                                                                                                                                                                                                               New Zealand   34
     & employee
                                                                       social, environmental and                                                                                                                                                    AUSTRALIA
      obsession

                                                                                                                                                                                                                                                   16%
                                                                       supply chain matters.                                                                            South Africa

                                                                                                                                                                                                                                                  CONTRIBUTION
                                                                       TFG is included in the                                                                                                                                                     TO TURNOVER
                                                                       FTSE/JSE Responsible
    Our stakeholders                                                   Investment Index.

            Customers                      Shareholders
                                                                       TFG is a level 6
                                                                       contributor to Broad-
                                                                                                                                                                                                                         E-COMMERCE
            Employees                      Suppliers                   Based Black Economic
                                                                       Empowerment (B-BBEE)                                                                                                                                                             TFG’s number of stores
                                                                       in South Africa.
                                                                                                                                                                                                                         12%
            Governments,                   Non-profit                                                                                                                                                                                                   TFG’s number of concessions
            legislators and                organisations and
                                                                                                                                                                                                                                                        TFG Africa
            regulators                     communities                                                                                                                                                                   CONTRIBUTION
                                                                       TFG is included in the Vigeo                                                                                                                      TO TURNOVER                    TFG London

            Environment
                                                                       Eiris Specialised Retail                                                                                                                                                         TFG Australia
                                                                       Emerging Market ranking.

10                                                          THE FOSCHINI GROUP                                                                                                                     SUSTAINABILITY OVERVIEW REPORT 2021                                                       11
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                    Who we are                  A leadership view             Our sustainability              Localisation and    People and                             Environmental                  Product stewardship   Appendices
 report                                                  on sustainability                  strategy                     job creation     communities                               efficiency                     and supply chain

     OUR EVOLVING SUSTAINABILITY FRAMEWORK
     We made some important developments to our sustainability strategy this
     year. We now explicitly reference the Group imperative to create jobs under
     the localisation pillar, have organised our people and community efforts
     under a dedicated pillar, and have introduced a product stewardship pillar
     to reference the efforts we are making towards sustainability in relation to
     the products that we buy and manufacture.

     Previously we reported against other global goals. To improve our focus and have more impact, we made a decision to
     reduce these goals to three. The primary focus is on SDG 8, SDG 9 and SDG 12. We acknowledge there may be other SDGs
     we support indirectly, but we believe it is important to focus our efforts and disclosures on demonstrating meaningful impact.
     We also identified targets that are aligned to global targets per goal. This will enable our stakeholders to monitor and track
     our performance, thereby enhancing the transparency and value of our sustainability reporting.

      SUSTAINABILITY                                                                                                                      GOALS FOR EACH                                              SUSTAINABLE
      PILLARS                                                                                                                             SUSTAINABILITY PILLAR                                       DEVELOPMENT GOALS

                                                                                                                                          • Increase localisation
                                                                    TFG invests in creating local capacity through skills
                                                                    and supplier development as well as expanding                         • Local job creation

                Localisation and job creation                       manufacturing facilities to create jobs and shorten lead              • Develop local enterprises and suppliers
                                                                    times. Through localisation, we can offer customers                   • Facilitate local fashion through brand collaboration
                                                                    a wider range of in-demand, in-season products.

                                                                                                                                          • Transformation
                                                                    We are transforming to reflect the diversity of our
                                                                    customer base and the communities we operate                          • Development
                                                                    in. This includes investment and partnerships with                    • Holistic wellbeing
                People and communities                              government, a particular focus on B-BBEE and continued                • Engagement and retention
                                                                    social investment through the TFG Foundation. We
                                                                    create inclusive workplaces to attract, develop and
                                                                    retain talent.

                                                                                                                                          • Work towards a zero waste business and value chain
                                                                    We are increasing resource efficiency across our
                                                                    operations by using world-class automation and                        • Reduce emissions in line with climate change science
                                                                    more energy efficient lighting and manufacturing                      • Become more transparent and inspire customers
                Environmental efficiency                            equipment. We are working towards zero waste,
                                                                    and are committed to the Plastic Pact. The Group is
                                                                    one of the founding members of the South African
                                                                    Plastic Pact.

                                                                                                                                          • Sustainable manufacturing and buying practices
                                                                    We are committed to developing an ethical and
                                                                    transparent supply chain that sources commodities                     • Compliance in the supply chain
                                                                    responsibly. This includes developing enterprises and                 • Preferential procurement
                Product stewardship and supply chain                diversifying our supplier profile in support of B-BBEE.
                                                                    We want to practice responsible product stewardship
                                                                    in the way we design, manufacture, sell and dispose of
                                                                    products to minimise environmental impact.

12                                                       THE FOSCHINI GROUP                                                                                                       SUSTAINABILITY OVERVIEW REPORT 2021                         13
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                      Who we are                  A leadership view                      Our sustainability                 Localisation and     People and                               Environmental                        Product stewardship                     Appendices
 report                                                    on sustainability                           strategy                        job creation      communities                                 efficiency                           and supply chain

      OUR MATERIALITY PROCESS AND MATRIX                                                                                                                CHALLENGING TRADING ENVIRONMENT
                                                                                                                                                        TFG continues to be exposed to uncertain and unstable economic, social and political environments in all territories in which
       TFG’s material matters are a combination of risks, opportunities and issues                                                                      it has a presence, which could lead to constrained growth, affects consumer confidence and spending patterns as well as
                                                                                                                                                        customers’ purchasing power and influence their ability to settle accounts. The COVID-19 pandemic brought economic,
       that can directly or indirectly affect the Group’s ability to create sustainable                                                                 political and social upheaval and the global economy experienced the deepest downturn since the 2008 financial crisis.

       value in the short, medium and long term.                                                                                                        Risks impacting TFG                        Opportunities and risk management

                                                                                                                                                        • In South Africa, load shedding,          • The Group has an increasingly diversified business model and strives to
       These matters are reviewed and updated as part of                   The material matters identified apply to TFG Africa,                           the performance of state-owned             increase accessibility to the market by growing its footprint in varied locations.
       the continuous enterprise risk cycle. Several factors               TFG London and TFG Australia, albeit with different                            enterprises, youth unemployment,         • We continue to refine our credit score models and our collection strategies
       are considered when determining these material                      levels of likelihood and impact. They remain aligned                           social inequality, and corruption          are regularly reviewed.
       issues. These factors are both internal and external                with the Group’s material matters reported in 2020.                            continue to be a concern and have        • Resilience of the Group and strength of the statement of financial position
       and include the Group’s strategy, expectations and                                                                                                 been exacerbated by the COVID-19           allows the Group to take advantage of opportunities to expand our footprint
       concerns of our stakeholders, sustainability in our supply          The items depicted below stem from a robust debate                             pandemic. These factors impact both        and increase our manufacturing capacity.
                                                                           and discussion on all material items. The key material                         consumer and investor confidence,
       chain, competitor landscape and our current trading                                                                                                                                         • We implemented optimisation programmes to drive efficient use of
                                                                           matters arising from this discussion are articulated on                        interest rate and inflation.
       environment across all the territories in which we operate.                                                                                                                                   resources and reduction in cost base.
                                                                           pages 15 to 17.                                                              • Tension remains between China and
       For each material matter we indicate whether the trend                                                                                             Australia which could negatively
       is increasing, remaining stable or decreasing as well                                                                                              impact supplier relationships for
       as whether TFG’s ability to create value is likely to be                                                                                           TFG Australia.
       impacted in the short, medium or long term. We also                                                                                              • COVID-19 and the success of the
       indicate which of our strategic pillars are impacted by the                                                                                        vaccination roll-outs will continue to
       relevant material matter.                                                                                                                          impact all locations in which TFG
                                                                                                                                                          operates.

                                                                                                                                                                         Trend                                      Term                                 Strategic pillars
       MATERIALITY ASSESSMENT
                                                                                                                                                                    Increasing                                     S–M
                                                                                             Impact and response to the pandemic

                                                                                        Challenging trading environment
                                                                                                                                                        DISRUPTION IN RETAIL ACROSS OUR VARIOUS MARKETS AND CHANNELS
    Stakeholder importance

                                                                        Data privacy               Fashion trends and customer preference
                                                      Job creation                                                                                      Delivering an integrated, secure omnichannel customer experience across our various brands continues to be a strategic
                                                                                                                                                        objective for TFG. Our customers expect a seamless experience across all channels and in all interactions with the Group.
                                                                                                  Disruption in retail                                  The COVID-19 pandemic has led to increased activity on the Group’s e-commerce platforms and accelerated changes in
                                                 Sustainable and responsible sourcing                                                                   consumer behaviour and expectations.
                                                          Operational resilience              Reliance on IT
                                                                                                                                                        Risks impacting TFG                        Opportunities and risk management
                                               Water security                Cost effectiveness
                                                                                                   Continuity of supply chain
                                              Climate change                 Regulatory environment                                                     • Accelerated change in retail trends      • Strategic investment in digital transformation is a strategic priority for
                                                                                          Talent management                                               necessitates that we be flexible in        the Group and a focus in the short to medium term to support our future
                                                                                                                                                          how we engage with our customers.          resilience and success.
                                                                                                                                                          Failure to meet this demand could        • We have structured our business with a renewed focus on the customer.
                                                                               Employee wellbeing                                                         erode customer loyalty.
                                                                                                                                                        • Adapting the Group’s store network
                                                                                                                                                          to the changing needs of the
                                                                                                                                                          Group’s customers and securing
                                                         Business impact                                                                                  the most appropriate mix of multi-
                                                                                                                                                          channel distribution.
                                                                                                                                                        • Ability to provide quality customer
                                                                                                                                                          experiences and growing brand
                                                                                                                                                          affinity impacting on growth outlook
                                                                                                                                                          and future brand equity.

                                                                                                                                                                         Trend                                      Term                                 Strategic pillars

                                                                                                                                                                    Increasing                                  S–M–L

14                                                          THE FOSCHINI GROUP                                                                                                                     SUSTAINABILITY OVERVIEW REPORT 2021                                                    15
2021 A COMMON THREAD SUSTAINS US - TFG Limited
About our                     Who we are                   A leadership view             Our sustainability               Localisation and     People and                              Environmental                       Product stewardship                   Appendices
 report                                                    on sustainability                  strategy                      job creation      communities                                efficiency                          and supply chain

     Our materiality process and matrix continued

     FASHION TRENDS AND CUSTOMER PREFERENCES                                                                                                 TALENT MANAGEMENT: ATTRACTING, RETAINING AND DEVELOPING KEY TALENT
     As TFG aspires to be a leading fashion and lifestyle omnichannel retailer, our ability to offer, predict and deliver according          Our ability to create value depends on our people. TFG has to retain and develop its core and critical skills pool, while
     to the latest trends and customer preference is essential for value creation. The COVID-19 pandemic has accelerated the                 continuing to attract the best talent in the industry and embedding a culture of high performance.
     casualisation of the customer and customers are increasingly seeking value and consistent products as they experience the
     financial effects of mechanisms employed by governments across the world to contain the pandemic.                                       Risks impacting TFG                        Opportunities and risk management

     Risks impacting TFG                           Opportunities and risk management                                                         • In South Africa, it is essential that    • We continue to invest in talent through various talent development
                                                                                                                                               we attract and retain employment           programmes to develop our future leaders, including our educate to employ
     • Our ability to generate profits             • Our brands are positioned as fashion-forward and premised on our market-                  equity candidates.                         initiative.
       could be undermined by a failure to           leading, in-house capabilities in clothing and store design.                            • Considering the highly competitive       • Employment equity plans that provide clear accountabilities and targets are
       quickly and accurately interpret and        • In South Africa, value continues to be created through our quick response                 retail market, a lack of focus on          in place for each division in TFG Africa.
       respond to fashion trends.                    supply chain while increasing local manufacturing capacity remains a                      talent management could erode
                                                                                                                                                                                        • In line with our digital transformation strategy, we are leveraging technology
     • The ability of our brands to cater            strategic objective.                                                                      TFG’s leadership pipeline and impact
                                                                                                                                                                                          to enhance our employee experience, which includes offering online training.
       for a shift in consumer preferences.                                                                                                    the ability to execute our strategic
                                                                                                                                               objectives.                              • Transformation plans include reskilling and training of our talent.

                      Trend                                         Term                               Strategic pillars                     • It is key and challenging to attract     • Expansion of our local supply chain positively influences job creation and
                                                                                                                                               and train staff with skills necessary      upskilling.
                                                                                                                                               to carry out the Group’s digital
                 Increasing                                       S–M                                                                          transformation initiative.

                                                                                                                                                              Trend                                     Term                                Strategic pillars
     CONTINUITY OF SUPPLY CHAIN
     TFG seeks to have a diversified supplier base to minimise the effect of disruptions and endeavours to ensure that its                                  Stable                                  S–M–L
     suppliers operate in an ethical and sustainable manner. The COVID-19 pandemic impacted the global production and
     movement of product and threatens the financial stability of vendors across the supply chain.

     Risks impacting TFG                           Opportunities and risk management                                                         RELIANCE ON IT
                                                                                                                                             IT continues to change the environment in which TFG operates and alters how we create, process and disseminate
     • Reputational damage due to failure          • TFG seeks to ensure that its suppliers operate in an ethical manner, which              information critical to business performance. The Group has become increasingly dependent on IT to conduct certain
       to maintain ethical standards for the         includes working with Sedex to improve and monitor the ethical business                 operational and processing activities and continuous innovation is required to provide a seamless customer experience
       manufacturing of its products.                practices across the supply chain.                                                      and respond to market disruptors.
     • Failure by key suppliers to meet            • Regular review of the supplier base and related geographies.                            Risks impacting TFG                       Opportunities and risk management
       their supply obligations.
                                                   • We continue to develop our quick response capability in the TFG Africa
     • Loss at or disruption to in-house             supply chain; quick response units have grown to represent 87% of TFG Africa’s          • Failure to properly understand the      • TFG recognises the importance of IT and continues to invest in this area – as
       manufacturing facilities in South Africa.     total manufactured units.                                                                 impact of IT innovation in the retail     prioritised in our digital transformation strategy.
     • Impact of climate change on the                                                                                                         sector could undermine the future
                                                   • We continue to invest in local manufacturing capabilities influencing job                                                         • We continue to invest in cyber security and the Risk Committee is regularly
       continuity of supply.                                                                                                                   growth and success of the Group.
                                                     creation and upskilling.                                                                                                            updated on IT-related risks and mitigation plans.
     • Impact of the COVID-19 pandemic                                                                                                       • Increased risks of cyber security
                                                   • Renewed prioritisation of environmental factors affecting our business in                                                         • IT disaster recovery plans are in place across the Group and are regularly
       on production and transport of                                                                                                          incidents that threaten the privacy
                                                     our sustainability strategy, and establishment of a Product Stewardship and                                                         reviewed.
       products.                                                                                                                               of our employee and customer-
                                                     Supply Chain pillar, priorities and targets.
                                                                                                                                               related data.
                                                                                                                                             • Increasing reliance on IT has raised
                      Trend                                         Term                               Strategic pillars
                                                                                                                                               the significance of potential IT
                                                                                                                                               failures within the Group.
                 Increasing                                       S–M
                                                                                                                                                              Trend                                    Term                               Strategic pillars

                                                                                                                                                         Increasing                                S–M–L

                                                                                                                                             OPERATING CONTEXT
                                                                                                                                             The environment in which we operate spans across five continents and 26 countries. In each of these territories our ability
                                                                                                                                             to implement our strategy and create value in the short, medium and long term is influenced by the local regulatory context,
                                                                                                                                             our competitor landscape, local economic and political conditions.

                                                                                                                                             Globally, the speed and effect of technology advancement and increased focus on sustainable supply chain are critical to
                                                                                                                                             creating sustainable value. We recognise that the COVID-19 pandemic will continue to influence the environment in which
                                                                                                                                             we operate over the coming years, affecting our customers, our suppliers and our employees and their communities.

16                                                          THE FOSCHINI GROUP                                                                                                         SUSTAINABILITY OVERVIEW REPORT 2021                                                  17
About our                   Who we are                 A leadership view            Our sustainability             Localisation and    People and                               Environmental                   Product stewardship                  Appendices
 report                                                on sustainability                 strategy                    job creation     communities                                 efficiency                      and supply chain

     AN INTEGRATED VALUE CHAIN
                                                                                                                                            CUTTING, SEWING AND FINISHING
     We have a retail-driven value chain with global sourcing capabilities that serves 29 leading fashion lifestyle brands in
     merchandise categories that include clothing, homeware and furniture, jewellery, cell phones and cosmetics. We source
     our product offering locally and offshore, with strong in-house design teams across all business segments. TFG Africa’s          Level of control and future investment:
     manufacturing capabilities coordinate production through our own factories and various independent cut, make and
                                                                                                                                      High. We have a vertical integration strategy at
     trim (CMT) factories. This provides significant quick response capability and is a key differentiator.                                                                                              Localisation and         Product stewardship
                                                                                                                                      TFG Africa that aims to expand local manufacturing
                                                                                                                                      and design significantly to 40% of the Group’s apparel               job creation             and supply chain
                                                                                                                                      purchases in the next five years. To achieve this,
                                                                                                                                      TFG embarked on the rapid expansion of its local
                                                                                                                                      manufacturing capacity and capability. This initially
         Fibre           Knitting           Cutting, sewing      Warehousing and        Retail           Use      End of life                                                                             Environmental                People and
                                                                                                                                      included the purchase of the assets and take-on of                    efficiency                communities
      production        and dyeing           and finishing         distribution
                                                                                                                                      the employees of TCI Epping and Ndabeni, House
                                                                                                                                      of Monatic, Raydene Fashions and assets of Playtex.                  Related material matters and risks:
                                                                                                                                      These manufacturing assets and employees have been
                                                                                                                                      integrated into Prestige Clothing Proprietary Limited with
            FIBRE PRODUCTION                                                                                                          its five manufacturing hubs in Maitland, Epping, Caledon,
                                                                                                                                      Durban and Johannesburg. Prestige Clothing Proprietary               Continuity of       Fashion trends and
                                                                                                                                      Limited as at 1 May 2021 is now the largest apparel                  supply chain       customer preferences
      Level of control and future investment:
                                                                                                                                      manufacturer in South Africa with more than 2 300
      Currently low with significant work done by TFG London                                                                          employees and over 300 learnerships. Once complete,
      to improve traceability and product stewardship.                                Product stewardship                             those candidates will join the company.
      Recyclable fibres and fabrics are key components of our                           and supply chain
      verticalisation strategy.
                                                                           Related material matters and risks:
      This is an area of future development and focus for
      South Africa in terms of traceability and product
      stewardship. A champion for this has been appointed
                                                                                         Continuity of                                      WAREHOUSING AND DISTRIBUTION
      in the current year.                                                               supply chain

                                                                                                                                      Level of control and future investment:
                                                                                                                                      Medium. South African distribution into African markets
                                                                                                                                      is managed via eight distribution centres, including one              Environmental      Product stewardship
                                                                                                                                      as part of the Jet acquisition. Distribution for TFG London             efficiency         and supply chain
            KNITTING AND DYEING                                                                                                      and TFG Australia is mostly based on an outsourced
                                                                                                                                      model. TFG London distributes inventory for outlets and              Related material matters and risks:
      Level of control and future investment:                                                                                         online orders through four distribution centres while
                                                                                                                                      TFG Australia utilises seven distribution centres. Investment
      Low, however, TFG is engaging with government
                                                                                                                                      in new technology and efficiency improvement projects           Challenging trading   Disruption in retail across
      through the R-CTFL masterplan to remove import                        Localisation and      Product stewardship
                                                                              job creation          and supply chain                  included radio frequency identification (RFID) and OneStock        environment           our various markets
      duties through rebates on woven fabrics, knitted fabrics                                                                                                                                                                    and channels
                                                                                                                                      optimisation in TFG Africa. OneStock, which has been
      and yarns. Currently the duties have been removed on
                                                                                                                                      running in the UK business for several years, enables us
      woven fabrics through off-take agreements with South                 Related material matters and risks:
                                                                                                                                      to fulfil surging online orders directly from stores.
      African mills. We have seen success in this area.

                                                                                         Continuity of
                                                                                         supply chain

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 report                                                 on sustainability                   strategy                     job creation     communities                              efficiency                     and supply chain

     An integrated value chain continued

            RETAIL                                                                                                                              USE

      Level of control and future investment:                                                                                             Level of control and future investment:
      High. We continue to invest in digital transformation and                                                                           Low. In some of our brands we have tailoring and
      omnichannel infrastructure for our brands. Our customer-               Localisation and           Product stewardship               repair services which we support and subsidise so as              Environmental      Product stewardship
      facing employees are supported through a number of                       job creation               and supply chain                to promote repair over garments being discarded.                    efficiency         and supply chain
      digital channels. We are reviewing our store footprint and
      customer experience, and launched a new mobile in-store                                                                                                                                              Related material matters and risks:
      payment solution at TFG Africa. We invested in energy                   Environmental                  People and
      efficiency improvements in Jet stores after the acquisition.              efficiency                  communities
                                                                                                                                                                                                                    Fashion trends and
                                                                               Related material matters and risks:                                                                                                 customer preferences

                                                                            Challenging trading      Disruption in retail across
                                                                               environment              our various markets
                                                                                                           and channels                         END OF LIFE

                                                                         Fashion trends and                 Continuity of                 Level of control and future investment:
                                                                        customer preferences                supply chain                  Low. We are working with partners and businesses to
                                                                                                                                          sustain and improve the outcomes of our recycled textile          Environmental      Product stewardship
                                                                                                                                          waste through TFG Africa with an aim to achieve increased           efficiency         and supply chain
                                                                         Talent management:           Reliance on information             levels of circularity, and TFG Australia supports Thread
                                                                       attracting, retaining and            technology                    Together, an Australian organisation that sources and
                                                                                                                                                                                                           Related material matters and risks:
                                                                        developing key talent                                             redistributes excess clothing.

                                                                                                                                                                                                                    Fashion trends and
                                                                                                                                                                                                                   customer preferences

     “Mapping our supply chain and forging long-lasting transparent relationships
     was key this year. Identifying hot spots for risks, we are building a network
     of support and sparking fruitful multi-stakeholder collaborations.”
     – TFG London

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About our                   Who we are                 A leadership view            Our sustainability               Localisation and    People and                              Environmental                         Product stewardship                  Appendices
 report                                                on sustainability                 strategy                      job creation     communities                                efficiency                            and supply chain

     OUR STAKEHOLDERS
                                                                                                                                              SHAREHOLDERS
     Our stakeholders are those individuals and groups that have an interest in
     our business, and can influence TFG’s ability to create or preserve value.                                                         We have 12 644 shareholders, with 25,8% of shares held outside South Africa and 76,6% public shareholding. We believe
                                                                                                                                        it is vital to ensure alignment between our strategic focus and the long-term interests of shareholders, and to continue to
     If not managed proactively, these relationships can sometimes result in                                                            meet their expectations through consistent strategy execution and risk management.
     value erosion.
                                                                                                                                        How we engage                                                  Our response and actions in 2021
     By understanding the common threads that connect us to our stakeholders, we can contribute to improved customer
     and employee experiences and enhance our supply chain. Stakeholder engagement also provides input into what is                     We engage with shareholders through presentations,             Shareholders’ main concern during the past year was the
                                                                                                                                                                                                       impact of COVID-19 on the business, and interactions
     material for TFG and what the Group must focus on to remain a competitive and sustainable business.                                roadshows and meetings where we receive feedback and
                                                                                                                                                                                                       were therefore mainly centred around our response to the
                                                                                                                                        discuss their matters of interest.
                                                                                                                                                                                                       business impact with regard to remuneration, dividends
     A RESPONSIVE APPROACH TO ACHIEVE QUALITY ENGAGEMENTS                                                                                                                                              and our capital position. We value the strong support
                                                                                                                                                                                                       that we received from shareholders with the rights offer,
            CUSTOMERS                                                                                                                                                                                  which was 2,3 times oversubscribed and allowed us to
                                                                                                                                                                                                       strengthen the statement of financial position.

                                                                                                                                                                                                       We have continued more frequent communication
      Our customers are diverse in their spread across geographies, gender, age and income groups. Our customers are a
                                                                                                                                                                                                       with shareholders, initiated in the previous financial
      strategic priority as they provide income through the purchase of our products and services. Therefore, we put our                                                                               year, including quarterly trading updates. The Board
      customers at the forefront of everything we do. We offer them a diverse range of fashion, lifestyle and homeware                                                                                 had productive engagement with shareholders on
      choices through brand experiences that encompass their channel of preference.                                                                                                                    remuneration, which shaped our approach and led to a
                                                                                                                                                                                                       revised remuneration structure.

      How we engage                                                Our response and actions in 2021
                                                                   The safety and wellbeing of our customers, employees                 Needs and expectations                                         Key measures we track
      We engage with our customers through our call centre,
      digital media, online and in-store experiences as well       and suppliers was a key priority during the past year.               As our major source of financial capital, shareholders         • Share price performance (%)
      as through focus groups and surveys. Our Voice of            Throughout our business operations in all the territories            require sustainable growth. This requires transparent and      • Full-year dividend per share (cents)
      Customer (VoC) tool is an example of an effective way        where we have a footprint, we implemented strict                     ongoing communication regarding environmental, social and
                                                                   COVID-19 safety protocols in our stores to ensure the                                                                               • ESG ratings
      for all TFG Africa brands to listen to their customers’                                                                           governance-related matters, our strategy, business model,
      point of view daily.                                         safety of our customers, and our frontline employees.                approach to capital allocation and future growth prospects.
                                                                   This included screening protocols upon store entry, as
                                                                   required by law, adjusting store layouts where required
                                                                   to ensure social distancing and limiting the number of
                                                                   customers who shop at the same time. Store employees                       EMPLOYEES
                                                                   were also issued with masks where regulations required this.

                                                                   In TFG Africa, we introduced new payment channels to                 We value the skills and experience of our employees which enables us to implement and execute our strategy and deliver
                                                                   account customers and created virtual customer centres               our products and services to our customers. Our 34 891 employees are diverse in their spread across geographies,
                                                                   to ensure that we could still assist our customers, even             gender, age and skills profiles.
                                                                   during the initial level 5 lockdown in April 2020.

                                                                   To support struggling customers during the tough                     How we engage                                                  Our response and actions in 2021
                                                                   economic conditions, we also offered a payment holiday               The past year required different ways of engaging with         The safety and wellbeing of employees were of paramount
                                                                   for April and May 2020.                                              employees, both as a result of remote-working but also         importance during the past year, and so was the preservation
                                                                                                                                        to support our employees during a challenging year.            of jobs. In TFG Africa, we therefore continued to pay
                                                                   Key measures we track                                                                                                               employees during April and May 2020, while Supervisory
      Needs and expectations                                                                                                            Multiple channels were used for communication, including
                                                                                                                                                                                                       and Operating Board fees were temporarily reduced in
                                                                                                                                        WhatsApp and other digital channels and a COVID-19
      Customers raise specific issues relating to in-store         • The number of myTFGrewards customers                                                                                              support of employees. Those employees, who were able
                                                                                                                                        portal which provided access to communication, policies
      experiences or credit queries. They engage with us           • The number of active TFG Africa account customers                                                                                 to, were assisted to work from home, while employees
                                                                                                                                        and documents in one secure place.                             who were unable to work from home were not required
      regarding merchandise and fashion trends.
                                                                   • Customer complaints                                                                                                               to take annual leave during this time. We also assisted
                                                                                                                                                                                                       eligible employees with access to government relief
                                                                                                                                                                                                       through TERS from June 2020.

                                                                                                                                                                                                       In TFG Australia and TFG London, employees were able
                                                                                                                                                                                                       to receive payment through the JobKeeper and furlough
                                                                                                                                                                                                       government-relief programmes.

                                                                                                                                                                                                       Upon return to the workplace, various screening
                                                                                                                                                                                                       procedures were put in place in line with government
                                                                                                                                                                                                       health and safety protocols. This included using an
                                                                                                                                                                                                       app we developed to allow employees the opportunity
                                                                                                                                                                                                       to complete the screening questions on their mobile
                                                                                                                                                                                                       devices, prior to entering any TFG buildings.

22                                                      THE FOSCHINI GROUP                                                                                                       SUSTAINABILITY OVERVIEW REPORT 2021                                                  23
About our                   Who we are                 A leadership view             Our sustainability              Localisation and    People and                             Environmental                       Product stewardship                    Appendices
 report                                                on sustainability                  strategy                     job creation     communities                               efficiency                          and supply chain

     Our stakeholders continued

            EMPLOYEES continued                                                                                                               SUPPLIERS continued

                                                                   Our response and actions in 2021 continued                                                                                        Our response and actions in 2021 continued
                                                                   As physical training sessions could not be held during this                                                                       Within TFG Africa, we continue to structure investments
                                                                   year, we made online learning available for employees,                                                                            – both monetary and non-monetary – into our TFG Africa
                                                                   which included COVID-19 training on health and safety.                                                                            local manufacturing supply base to encourage job creation.
                                                                                                                                                                                                     We continuously explore opportunities to provide access
                                                                   To keep everyone connected while working from                                                                                     to and develop Black-owned and Black women-owned
                                                                   home, all employees could log in virtually to financial                                                                           suppliers. We spent over R1,6 billion this year with Black-
                                                                   results presentations and communications sessions,                                                                                owned and Black women-owned suppliers. We have a
                                                                   ‘Conversations with Anthony’, was launched to stream                                                                              deliberate strategy for supplier development that includes
                                                                   through updates on strategic initiatives. During the early                                                                        incubation and spend shifting to empowered suppliers.
                                                                   and most critical phases of the lockdown, there were                                                                              In 2021 we provided more than R36 million of support to
                                                                   weekly updates sent out from our CEO to address critical                                                                          supplier development beneficiaries in the form of loans and
                                                                   issues and reassure employees.                                                                                                    advances, donations of machinery and fabrics, preferential
                                                                                                                                                                                                     payment terms and human resources capacity.
      Needs and expectations                                       Key measures we track
      Employee engagement focus areas include communication        • Employee retention                                                                                                              Key measures we track
                                                                                                                                        Needs and expectations
      about training and development, human resource policies,     • Investment in training, including bursaries
      remuneration and performance management.                                                                                          Our suppliers require oversight and transparent              • Percentage of TFG Africa apparel units procured from
                                                                   • Employees participating in training interventions                  communication on various supply chain-related issues           TFG Merchandise Supply Chain
                                                                     (physical and virtual)                                             and non-merchandise procurement matters.                     • Percentage of Top 100 suppliers onboarded on the
                                                                   • Learnerships, internships or apprenticeship programmes
                                                                                                                                                                                                       Sedex platform
                                                                   • Diversity and inclusivity
                                                                                                                                                                                                     • Enterprise and supplier development spend
                                                                   • Employee wellbeing
                                                                                                                                                                                                     • Number of jobs created in our strategic suppliers
                                                                   • Employee engagement

            SUPPLIERS                                                                                                                         GOVERNMENTS, LEGISLATORS AND REGULATORS

      The TFG supplier base consists of merchandise and non-merchandise suppliers, with the latter including landlords.                 This stakeholder group includes revenue authorities, regulators and government departments in the countries
      Our mutual intent is to establish trust and loyalty and align business interests for the long term. This ensures that             in which we trade.
      we deliver merchandise of high standards, at the right price and in locations convenient to our customers. Through
      transparent supplier take-on procedures and agreements, we ensure we source ethically.                                            How we engage                                                Our response and actions in 2021
                                                                                                                                        We engage with government through business and               As a proudly South African business, and in support
      How we engage                                                Our response and actions in 2021                                     industry associations such as Business Leadership            of government’s 2030 retail, clothing, textile, footwear
                                                                   Supplier engagements intensified this year due to                    South Africa and the National Clothing Retail Federation     and leather (R-CTFL) Masterplan for the clothing
      We engage with suppliers through various teams
                                                                   COVID-19 restrictions and supply chain disruptions.                  of South Africa, employer organisations outside of           manufacturing sector, TFG Africa has been actively
      within our business, depending on the nature of the
                                                                                                                                        South Africa and the Australian Retail Association.          driving increased local procurement and supplier
      engagement. Engagement occurs through formal take-
                                                                   We proactively engaged with landlords in each of our                 We provide verbal and written submissions on proposed        development over the past five years. Collaborative
      on procedures, supplier audits, visits and assessments,
                                                                   territories in order to reach agreement on fair rentals both         legislative changes (both in South Africa and outside of     initiatives in 2021 include:
      merchandise order discussions and service requests,
                                                                   during and post the periods where we were not able to                South Africa) and attend industry-relevant meetings at
      purchase order discussions, landlord negotiations and
                                                                   trade, while we worked with our merchandise suppliers                Parliament in South Africa.                                  • Engaging with government in support of a cut in
      account management discussions. Within our local
                                                                   to either cancel or delay merchandise orders in order to                                                                            yarn import duties to advance South African clothing
      TFG Africa supply chain, we also partner with small
                                                                   respond to the shift in customer demand and to prevent                                                                              manufacturing.
      suppliers to increase and improve their operational and
                                                                   the build-up of inventory.                                                                                                        • Investing in our network of CMT partners to create
      financial capacity.
                                                                                                                                                                                                       capacity and ensure their sustainability. We have
                                                                                                                                                                                                       started a new SMME cluster in partnership with the
                                                                                                                                                                                                       KwaZulu-Natal government, which will assist 15 new
                                                                                                                                                                                                       companies and support our capacity requirements.

                                                                                                                                        Needs and expectations                                       Key measures we track
                                                                                                                                        Government requires businesses to participate in growing     • Regulatory fines or penalties
                                                                                                                                        the economy through job creation and by complying with all   • Taxes – direct, indirect and staff
                                                                                                                                        applicable regulatory requirements.
                                                                                                                                                                                                     • B-BBEE level contributor status

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About our                     Who we are                    A leadership view             Our sustainability               Localisation and    People and                                 Environmental                       Product stewardship                  Appendices
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     Our stakeholders continued

             COMMUNITIES AND NON-PROFIT ORGANISATIONS                                                                                                ENVIRONMENT

      Our employees and their communities are at the core of our commitment to transformation, and we are transforming                        Fashion retail depends on a long and complex supply chain that requires water, materials, chemicals and energy from
      to reflect the diversity of our customer base and the communities we operate in.                                                        its point of origin in agriculture and petrochemical production, manufacturing, logistics and retail.

      How we engage                                                     Our response and actions in 2021                                      How we engage                                                     Our response and actions in 2021
      In South Africa, the TFG Foundation serves as the vehicle         In South Africa, our socio-economic investment                        We have established formal business champions and                 During the year we initiated efforts directed at
      through which we channel social investment activities in          of R13,9 million this year contributed to:                            working committees for each sustainability strategy pillar,       understanding the upstream environmental impacts of
      communities. Other key partners include government,                                                                                     including, for the first time this year, the environment.         the products that we buy, manufacture and sell; as well
      for example through the R-CTFL Masterplan, and the                • The community and empowerment work of non-profit                    Fundamental to how we bring about change in this area is          as further downstream, for example in the area of fabric
      Services Sector Education and Training Authority (SETA).            organisations through donations of R3,5 million worth               through our procurement and we are working to formally            recycling and avoiding clothing ending up in landfill.
                                                                          of merchandise                                                      evaluate the environmental impact of our purchases as
      Throughout the Group, our brands also make direct                                                                                                                                                         In our own operations, we are already increasing our
                                                                        • Student bursaries to the value of R1,2 million                      well as the credentials of our suppliers in this regard.
      contributions to the communities in which they operate                                                                                                                                                    resource efficiency across our operations by using world-
                                                                        • Face mask donations to over 300 000 learners at                     Increasingly, it is the role of these working committees to
      through direct brand-led corporate social investment                                                                                                                                                      class automation and more energy efficient lighting and
                                                                          primary schools across South Africa                                 advocate for consideration of environmental interests and
      activities.                                                                                                                                                                                               manufacturing equipment.
                                                                                                                                              trade-offs in the context of business activities, decisions
                                                                        • Distribution of 30 000 Sew Good blankets to
                                                                                                                                              and sources of supply. Going forward, we are looking
                                                                          communities in need
                                                                                                                                              to thoughtfully engage more actively outside of the
                                                                        In Zambia, we partnered with SOS Children’s Villages to               organisation with relevant external stakeholder groups
                                                                        distribute 1 200 masks to five primary and two combined               with regards to environmental aspects.
                                                                        schools in the Copperbelt area. Following the outbreak of the
                                                                        COVID-19 pandemic, the government of Zambia required all              Needs and expectations                                            Key measures we track
                                                                        school children to wear masks. However, for many families
                                                                                                                                              Due to the scale and complexity of fashion retail’s supply        • Greenhouse gas emissions
                                                                        and children masks were unaffordable. TFG Africa sourced
                                                                                                                                              chain, the global fashion industry is one of the most polluting   • Business waste reduction
                                                                        a local supplier in Zambia to produce masks and assist in
                                                                                                                                              and wasteful industries in the world. In response, fashion
                                                                        identifying schools that would benefit most.                                                                                            • Textile waste recycled
                                                                                                                                              retailers are increasingly expected to focus on climate risk
                                                                                                                                              in the supply chain and mitigating this through renewable         • Reduced use of plastic
                                                                        TFG Australia continued to support Thread Together, an
                                                                        Australian organisation whose mission and focus is to                 energy purchases, actively reducing supply chain carbon           • Reuse of supplier cartons
                                                                        source new and excess clothing from fashion retailers and             footprints and improving material selection.                      • Energy efficiency
                                                                        redistribute items to those in communities most in need.                                                                                • Transparency in own operations
                                                                        Total donations for the financial year amounted to 71 000kg
                                                                        which equals approximately 212 000 shirts.

                                                                        TFG London donated a selection of samples and clothes to
                                                                        Smart Works UK, a charity that provides high-quality interview
                                                                        clothes and interview training to unemployed women in
                                                                        need. These women are referred from organisations such
                                                                        as job centres, work programmes, prisons, care homes,
                                                                        homeless shelters and mental health charities.

      Needs and expectations                                            Key measures we track
      The Group, in all three of its major territories, works with      TFG Africa:
      various organisations to provide assistance and support           • Blankets made and donated through Sew Good
      through monetary and/or merchandise means.
                                                                        • Amount donated through TFG Africa corporate social
      In South Africa, many communities are challenged by lack            investment funding and brands
      of access to housing, clean water and sanitation, quality         • Amount invested into beneficiary schools
      education, social protection, good healthcare, electricity and
      jobs. These challenges are exacerbated by slow progress           TFG London and TFG Australia:
      with economic empowerment and endemic corruption,                 • Value of donations in local currency
      combined with the impact of measures to mitigate
      the spread of COVID-19. Communities and non-profit
      organisations require collaboration between the private
      sector, public institutions and development partners to help
      build resilient economies post-COVID-19.

26                                                           THE FOSCHINI GROUP                                                                                                          SUSTAINABILITY OVERVIEW REPORT 2021                                                27
About our   Who we are   A leadership view    Our sustainability   Localisation and    People and   Environmental                  Product stewardship   Appendices
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                                                                                                                            03
                                                                                                                             A LEADERSHIP
                                                                                                                             VIEW ON
                                                                                                                             SUSTAINABILITY

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About our                    Who we are                 A leadership view             Our sustainability             Localisation and     People and                               Environmental                  Product stewardship               Appendices
 report                                                 on sustainability                  strategy                    job creation      communities                                 efficiency                     and supply chain

     A LEADERSHIP VIEW ON SUSTAINABILITY                                                                                                        TFG is committed to contributing to the Sustainable
                                                                                                                                                Development Goals. What are your priorities in
                                                                                                                                                this regard?

                                                                                                                                        Anthony: We have been on an interesting journey with the
     TFG’s Chief Executive Officer Anthony Thunström and Chief Financial Officer                                                        Sustainable Development Goals (SDGs). We realised that
     Bongiwe Ntuli reflect on 2020 and 2021 and touch on the significant insights                                                       our priority goals have to be flexible because the world
     that continue to shape our sustainability journey.                                                                                 around us might require a different emphasis, for example
                                                                                                                                        during a period such as COVID-19. We need to be able
                                                                                                                                        to pivot in our focus areas, in the same way as we pivoted
            Sustainability starts with an organisation’s view                COVID-19 certainly brought new insights and                our Prestige clothing factory in Maitland in the past year.
            of its role in the world. What are your thoughts                 purpose to TFG. Did this result in any changes             In April 2020, at a time when only essential items could
            on sustainability at TFG and how this is evolving?               to your sustainability strategy?                           be manufactured and sold in our stores, 100 employees
                                                                                                                                        returned to the factory to produce face masks.
     Anthony: Our role is shaped by what people will                  Anthony: We made a few important and strategic                    These face masks were quality tested and designed
     remember about TFG many generations from now, much               sustainability decisions this year. One of the first              in collaboration with a leading university and advanced
     like we will think back to 2020 as a year we will never          things we recognised was the need to include the                  textile manufacturer. By rapidly switching production,
     forget. Even though it was really difficult, it made us          environment formally as one of our stakeholders. As a             we could manufacture 200 000 face masks that were
     aware of our strengths, the importance of community,             result, we started looking at our upstream inputs with            donated to every TFG employee, their families and
     and what it means to be human. TFG showed up                     a lot more attention than before. Our businesses in the           nearby communities. In addition, the TFG Foundation, in
     this year as a Group that makes a huge contribution              UK and Australia are significantly ahead in terms of              collaboration with the Department of Education and Gift
     to people’s lives. In the South African context, our             understanding their raw material and manufacturing                of the Givers, donated a further 300 000 face masks to
     commitment to create jobs is intrinsic to our role as a          supply chains. We are using their expertise, and                  vulnerable primary school learners around the country.
     leading fashion lifestyle retailer.                              have aligned our sustainability pillars across the                                                                                               BONGIWE NTULI
                                                                      Group. Following this process, the Supervisory Board              We continue reporting on our contribution to SDGs 8
     Bongiwe: Investors are asking about our role and                 approved four sustainability pillars. We formulated key           and 12, and added SDG 9 this year as it is strongly                          Chief Financial Officer
     purpose more and more. It is about more than just a              performance indicators for each, and will be launching            aligned to our localisation imperative:
     list of social initiatives. We exist as part of a system in      internal sustainability dashboards at the start of the new
     which we develop and support local supply chains by
     acting responsibly, creating jobs and developing skills.
                                                                      financial year. This means that sustainability is no longer
                                                                      the domain of a few small teams in the Group; it is
                                                                                                                                                                                                                 42,3%        of our total apparel
                                                                                                                                                                                                              was manufactured locally in South Africa
     Ultimately we offer lifestyle and clothing brands through        everyone’s business.
     which our customers can express individual identity.                                                                                                                                                            against a target of 45%
                                                                                                                                        SDG 8: Decent work and economic growth
                                                                      Bongiwe: It is important that we track our non-financial
                                                                      indicators with the same strategic view and discipline            In South Africa, in particular, we continue to experience
                                                                                                                                        slow economic growth, widening inequalities and
                                                                                                                                                                                                              95factories
                                                                      as we do for financial information. We made significant
                                                                      investments in sustainability initiatives this year, and          insufficient jobs to keep up with a growing labour force.
                                                                                                                                                                                                                   jobs were created in TFG Africa
                                                                      expect impact and returns. For example, the Supervisory           We believe that empowerment, entrepreneurship and                                 against a target of 56
                                                                      Board approved an additional R34,2 million investment             job creation are key areas where we can contribute and
                                                                      in skills development despite COVID-19 impacts on                 accelerate progress.
                                                                      financial performance. We know this investment has the
                                                                      potential to make a huge difference in a lot of people’s
                                                                      lives if we spend every cent effectively, and ensure that
                                                                                                                                                                                                            1and097      new learnerships, internships
                                                                                                                                                                                                                 graduate opportunities were created
                                                                      we are creating the right skills to support our digital                                                                             at TFG Africa against a target of 910 this year
                                                                      transformation, in-store customer experience and
                                                                                                                                        SDG 9: Industry, innovation and
                                                                      commitment to local manufacturing.
                                                                                                                                        infrastructure
                                                                      Following a successful rights offer in July 2020 and the
                                                                      acquisition of Jet in September 2020, our priority was
                                                                                                                                        By investing in local manufacturing and supplier
                                                                                                                                        development we can contribute to sustainable                         90%      of textile waste was recycled
                                                                                                                                                                                                             by TFG Africa against a target of 100%
                                                                      to adjust our debt profile. We are in a strong position           industrialisation. This includes investment in technology to
                                                                      to make further opportunistic acquisitions that will              promote innovation and improve efficiencies, especially in
                                                                      contribute to our long-term sustainability. Our intent            the use of natural resources.

                                                                                                                                                                                                          100%
                                                                      is to bolster local manufacturing capacity and quick
                                                                      response capability while looking at job creation for                                                                                           of TFG Africa’s plastic packaging
                                                                      the most vulnerable people in our African operations.                                                                                was reusable or recyclable or compostable
                                                                      We also invested in a digital B-BBEE tool to assist in                                                                                             against a target of 100%
                                                                      collecting evidence during the audit and verification
                                                                      process.                                                          SDG 12: Responsible consumption and
                                                                                                                                        production
                ANTHONY THUNSTRÖM                                                                                                       We are committed to reducing our ecological footprint
                                                                                                                                        by changing the way we produce and consume goods
                                                                                                                                                                                                             91%      of TFG Africa’s supplier spend
                                                                                                                                                                                                             (excluding Jet) is with Sedex compliant
                Chief Executive Officer                                                                                                 and resources. We are working on creating more efficient                  vendors against a target of 55%
                                                                                                                                        production and supply chains to shift the world towards a
                                                                                                                                        more resource-efficient economy that will be able to deal
                                                                                                                                        resiliently with climate change.

30                                                      THE FOSCHINI GROUP                                                                                                         SUSTAINABILITY OVERVIEW REPORT 2021                                      31
About our                    Who we are                  A leadership view             Our sustainability               Localisation and    People and   Environmental                  Product stewardship   Appendices
 report                                                  on sustainability                  strategy                      job creation     communities     efficiency                     and supply chain

     Bongiwe: Although the SDGs are global goals, they are             The people and technology we have at our disposal in our
     equally relevant to TFG and our stakeholders wherever             factories allow us to be nimble. TFG currently has
     they work and live.                                               1 417 employees across our Maitland and Caledon factories
                                                                       and we plan to grow this by 2 000 in the next year, with
     Our participation in the YES programme is an example              an overall target of 5 000 jobs over the next few years. We
     where we contribute to the SDGs and also to one of South          intend to roll out our local expansion programme, including
     Africa’s most pressing social issues. Almost 500 unemployed       taking over factories that are in trouble and absorbing them
     young people have been kitted out with smartphones                into our value chain, allowing us to upskill their employees.
     pre-programmed with training content and guidance. They
     joined TFG stores, across brands and locations in April           Bongiwe: In addition to what Anthony mentioned, I remain
     2021 to gain work experience. These young people join             excited about our digital transformation. We made the
     a cohort of more than 1 000 people who have been                  right strategic decisions a few years ago, for example in
     welcomed by TFG on learnerships and internships that              omnichannel and brand building, which served us well this
     we run across stores, factories, distribution centres,            year. During COVID-19, online shopping exploded. This
     contact centres and head office operations.                       extended to social media where, for example, as a Group
                                                                       we now have 13,9 million social media followers.
             What makes you excited about the year ahead?
                                                                       I speak for both Anthony and myself when I say that
                                                                       we would not have been able to pull through, serve our
     Anthony: In some ways the challenges from 2020                    customers and kept the lines running in the past year
     brought new energy to the business. We continue to find           without our employees. Despite the difficult and challenging
     growth opportunities, with the Jet acquisition being the          year, our people have again shown their resilience and
     standout milestone for the past year. Because Edcon was           agility, adapting to new models and ways of work to ensure
     undergoing business rescue at the time of the acquisition,        our customers had good experiences in all formats.
     there was a public interest aspect to the acquisition, over
                                                                       Sincere thanks to all on behalf of Anthony, myself,
     and above the commercial benefit for TFG. Over and
                                                                       the Operating Board and the TFG Supervisory Board
     above the commercial benefit for TFG, by acquiring Jet
                                                                       for everything that they have done and continue to do.
     we secured employment for more than 5 600 employees
                                                                       We are now well positioned to take advantage of the
     throughout our operations in Africa, entered into new
                                                                       eventual economic recovery in all our territories and
     lease agreements for the 425 Jet stores and committed
                                                                       will continue to invest in brands, jobs and people.
     to 318 existing local suppliers.

     Our plans for local manufacturing and skills development
     are very ambitious and exciting. In partnership with the
     South African government, we have already invested more
     than R1 billion to create a diversified local supply chain to
     reduce reliance on China and other international suppliers.

     We are proudly invested in South Africa, and remain committed
     to increasing our local manufacturing capabilities and
     supply chain to promote job creation.

32                                                        THE FOSCHINI GROUP                                                                             SUSTAINABILITY OVERVIEW REPORT 2021                         33
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