DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty

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DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
DAVINES GROUP
SUSTAINABILITY
REPORT
2019/2020
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
Every new beginning comes from
    some other beginning’s end.
                Lucius Annaeus Seneca

                                        |4|
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
INDEX
6. LETTER FROM THE CHAIRMAN
   AND CEO

THE DAVINES GROUP
9. AN OVERVIEW OF OUR BUSINESS
10. MILESTONES
12. THE “STAKEHOLDER WHEEL”
14. OUR BRANDS

OUR COMMITMENT
17. ACTIVELY CONTRIBUTING
   TO THE SDGS
20. RESILIENCE
22. BEING A B CORP

OUR PERFORMANCE
32. PEOPLE
35. PLANET
41. COMMUNITY
44. PROJECTS

FURTHER INFORMATION

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DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
TO BE THE BEST                                                                                      LETTER
FOR THE WORLD,                                                                                      FROM THE CEO
CREATORS OF GOOD
LIFE FOR ALL,                                                                                       In a normal situation there would be much             methods. And since many aspects of our
THROUGH BEAUTY,                                                                                     to celebrate about what happened in 2019.
                                                                                                    First and foremost, the B Corp re-certification,
                                                                                                                                                          lives and also of the market are changing,
                                                                                                                                                          some of them probably forever, we must
ETHICS AND                                                                                          which rewarded an enormous team effort
                                                                                                    involving the staff of both Parma main’s office
                                                                                                                                                          learn both to manage them and to turn them
                                                                                                                                                          into opportunities. However, it would be a
SUSTAINABILITY.                                                                                     and the branches, which achieved a result that
                                                                                                    we can be proud of. Or our transformation
                                                                                                                                                          serious mistake to think that these are the
                                                                                                                                                          only ways in which we can learn. We cannot
                                                                                                    into a Benefit Corporation, which testifies to        rule out the possibility that a health threat
                                                                                                    our Group’s deep commitment to positively             similar to what we have experienced will
                                                                                                    impacting all stakeholders and to promoting           reoccur. Indeed, if humanity does not focus
                                                                                                    this philosophy in order to spread it to an           on resolving the consequences of global
                                                                                                    increasing number of companies. Not to                warming, it will certainly face disasters on
                                                                                                    mention the company’s economic and financial          a much larger scale than those that we have

LETTER
                                                                                                    performance, which is concrete proof that this        experienced in recent months. While we
                                                                                                    model not only meets the needs of people              must address this issue with even greater

FROM THE
                                                                                                    and society while protecting the environment,         determination, we must also tackle no less
                                                                                                    but it can also generate growth and profits.          serious “diseases”, such as pollution and

CHAIRMAN                                                                                            Today, however, it is difficult to rejoice at these   unequal distribution of resources, which
                                                                                                    results. External circumstances require us to         has reached unsustainable levels. It would
                                                                                                    adopt extraordinary management in which               be wonderful if this mobilization to fight the
                                                                                                    continuity between the past and the future is         virus, despite all its inefficiencies and errors,
The time has come for the Davines Group to        more emphatically in the unfortunate year
                                                                                                    no longer certain. The challenges are different       could now be replicated to combat these other
work to achieve a systemic change. We are         in which I am writing, 2020, whose memory
                                                                                                    and as we reaffirm the principles in which            types of “disease”, which would ultimately
driven to do so by our corporate consciousness,   will never leave us and whose consequence
                                                                                                    we believe, we have to come to terms with a           also make us more resistant to health risks.
which underpins our vision of Sustainable         for Davines is our renewed and reinvigorated
                                                                                                    new reality. For our part, we have faced this         Davines wants to play a leading role in this
Beauty and B Corp ethos. This consciousness       determination. A great effort will still be
                                                                                                    crisis by ensuring the safety of our employees        mobilization and that is why we are committed
hinges on an awareness of the fragility of our    required from everyone so we can contribute
                                                                                                    and the company, by turning isolation into            to continuing to provide a good example of
human condition and the nature of things.         to a new paradigm of regeneration, which is
                                                                                                    an opportunity to shorten the distance with           this vision of life, business and society, and
Our strong business vocation stems from           now increasingly necessary for the survival of
                                                                                                    our customers, by providing them with all our         to increasingly involving other organizations
gratitude and our choices from a desire to be     our species. Now we just have to overcome
                                                                                                    support during the reopening phase, and by            in order to create a movement of people
part of a movement towards a regenerative         it, each in our own sphere. Davines will do
                                                                                                    opening up to change when it represents an            and businesses capable of promoting truly
economy. An approach to science, study            so in its own field through the indispensable
                                                                                                    opportunity for improvement. Beyond this              sustainable economic, social and environmental
and research in line with a vocation that         work of everyone in its global community; we
                                                                                                    response, however, the turmoil that we have           development.
encompasses a part that is more connected         are all required to become many little heroes.
to the soul and spirit, to the good karma that                                                      experienced shows the extent to which our
we seek. Davines wants to be all this. No,                                                          lives and society can be affected by events
we have not arrived anywhere – the Village                                                          outside our control. This crisis has disrupted
is not our destination. Davines is only for                                                         the lives of people, institutions and businesses
those who want to continue on a very specific                                         Chairman
                                                                                                    more than any other disruptive event we can                                  CEO and general manager
path of commitment and sacrifice towards                                           Davide Bollati   imagine. We can only successfully recover                                             Paolo Braguzzi
overcoming their own limits, adopting a heroic                                                      from such situations, in spite of the damage,
attitude. A hero is only a hero if they manage                                                      if they are an opportunity to learn. In this
to go beyond their own self-interest, with the                                                      case, it is reasonable to assume that, should
aim of pursuing a greater common good. It                                                           a crisis of this nature reoccur, governments
is this road and no other that is mapped out                                                        and health services will be able to react
for Davines. This is worth reiterating even                                                         more effectively, in terms of both timing and

                                                                                                                                                                                                              |8|
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
THE DAVINES GROUP   AN OVERVIEW OF OUR BUSINESS
                    2019

                                        36 3
                                  YEARS BRANDS
                               IN BUSINESS          IN SKINCARE
                                                    AND HAIRCARE
                                             7      PARMA           DEVENTER

                              OFFICES               LONDON
                                                    NEW YORK
                                                                    MEXICO CITY
                                                                    HONG KONG
                               WORLDWIDE            PARIS

                           PRESENT IN 90
                               COUNTRIES

                                        709         OF 46
                              COLLEAGUES            NATIONALITIES

                                        58 28
                           FORMULAS MILLION
                                  DESIGNED          UNITS SOLD

                               €163 117.4
                              MILLION B CORP SCORE
                           TOTAL TURNOVER           OBTAINED
                                             +10%
                                      +16%
                               +13%

                                                                                  | 10 |
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
MILESTONES

OUR COMPANY'S DEVELOPMENT                                                               OUR PATH TOWARDS SUSTAINABILITY

 1983                                       2019                                         2005                                          2020
 The Bollati family founds a cosmetics      The Davines Village gardens are              The “Carta Etica” is written.                 The Group obtains B Corporation
 laboratory to create formulations and do   inaugurated.                                                                               recertification. Sponsorship of the World
                                                                                                                                       Happiness Report. Co-creation of the
 production for third parties.
                                            2018                                         2006                                          Regeneration 20/30 alliance.

 1992                                       The Davines Village opens. The/skin
                                            regimen/ line becomes its own independent
                                                                                         The Parma office begins to use electricity
                                                                                         from renewable sources. The first CO2
                                                                                                                                       2019
 The company decides to concentrate                                                      equivalent (CO2eq) compensation project
 on producing and distributing under the    brand.                                       is launched.                                  The Davines Group’s main events are
 Davines brand.                                                                                                                        carbon neutral. “A single shampoo” is
                                                                                                                                       launched entirely carbon neutral. This
                                            2016                                         2007                                          project is a symbol to our dedication. The
 1994                                       The Hong Kong branch opens. Construction
                                            work begins on the Davines Village.
                                                                                         Creation of the Sustainable Beauty concept
                                                                                                                                       main office in Parma and the New York
                                                                                                                                       office become Benefit Corporations.
 International distribution starts.                                                      and drafting of the “Sustainable Beauty
                                                                                         Manifesto”.

 1996                                       2013                                                                                       2018
 The [ comfort zone ] brand is born.        The Netherlands, Germany, and Belgium        2009                                          The “Davines ‘Carta Etica’, the New
                                                                                                                                       Blooming” is presented.
                                            branches open.                               The “Charter for Sustainable Research”        All Davines Group offices worldwide
                                                                                         is written.“Sustainable Beauty Day” - first
 2004                                       2012
                                                                                         edition.
                                                                                                                                       become carbon neutral.
                                                                                                                                       All our product packaging becomes carbon
 The New York branch opens.                                                                                                            neutral.
                                            The [ comfort zone ] Scientific Committee
                                                                                         2011
                                                                                                                                       2017
                                            is born.
 2006                                                                                    The “Charter for Packaging Research”

                                            2007
                                                                                         is written.                                   The Parma offices and manufacturing
 The Paris branch opens.
                                                                                                                                       facilities become carbon neutral.
                                            The Mexico City and London branches
                                                                                         2014
                                            open.
                                                                                         “I Sustain Beauty” - first edition.           2016
                                                                                         The collaboration with Slow Food begins.      The Group obtains the
                                                                                                                                       B Corporation certification.

                                                                                         2015
                                                                                         [ comfort zone ] adopts the new philosophy
                                                                                         to formulation, “Science Based Conscious
                                                                                         FormulasTM”.

                                                                                                                                                                                    | 12 |
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
THE “STAKEHOLDER
WHEEL”
In Davines, we work every day to ensure
the prosperous longevity of the company
through a concrete commitment to all those                                                            PROUD OF THE COMPANY’S
                                                              CONSIDERS DAVINES
who are directly or indirectly involved in the
                                                  AN EXEMPLARY MODEL OF                                    PERFORMANCE, BOTH TANGIBLE
company’s work - our stakeholders. The
“Stakeholder Wheel” is an overview of our              SUSTAINABILITY                                           AND INTANGIBLE, AND
commitment to our stakeholders.                                                                                     OF ITS SUSTAINABILITY

                                                                             UNITY                   OWN
                                                                                                        ER
                                                                           MM                             S
                                                                         CO

                                                                    T
                                                                  EN
                                                                NM

                                                                                                                       STA
                     BENEFITS FROM THE POSITIVE           ENVIRO                                                                     WORKING IN DAVINES
                         IMPACT OUR WORK HAS                                                                                         IS AN OPPORTUNITY

                                                                                                                          FF
                                                                                                                                      FOR SELF-FULFILMENT

                                                                                                                             AL
                               THEY ARE TREATED                                                                                       THEY BELIEVE DAVINES ADDS TO THE
                                                          SUP

                                                                                                                   CL SSIO N
                           HONESTLY AND FAIRLY,                                                                                      SUCCESS OF THEIR BUSINESS AND IS
                        AND PLAY A FUNDAMENTAL                                                                                       A SOURCE OF SATISFACTION. FOR US

                                                                                                                          TS
                         ROLE IN THE PROPAGATION                                                                                    THEY ARE A COMMUNITY OF TRAVELING
                                                            P LI

                                                                                                                     IE N
                                OF EXCELLENCE AND                                                                                  COMPANIONS, OUR ALLIES IN CREATING

                                                                                                                      E
                                                              ER

                                                                                                                   OF
                                         GOOD LIFE                                                                                 A BETTER LIFE FOR OUR FINAL CLIENTS
                                                                S

                                                                                                                   PR
                                                                        DI
                                                                             ST
                                                                                  RIB                      A L
                                                                                        U TO R       FI N
                                                                                                 S          N TS
                                                     THE BEST AND                                    C LI E            OUR PRODUCTS
                                             MOST LOYAL PARTNER THEIR                                              AND SERVICES PROVIDE
                                                        BUSINESS CAN HAVE                                      A GRATIFYING EXPERIENCE
                                                                                                         AND STICK TO THEIR PROMISES

                                                                                                                                                                         | 14 |
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
OUR BRANDS

Davines creates professional     Our mission is to cultivate   Dedicated to those who
hair products in which quality   beauty within and around us   embrace the pace of modern
is combined with the utmost      and to promote a conscious    life, /skin regimen/ slows
respect for the planet and its   lifestyle. We improve skin,   down the accelerated aging
resources. We use business       body and mind through         process thanks to highly
as a force for good, promoting   sustainable, science-based    concentrated formulations,
a regenerative model of          solutions, offering unique    botanical extracts and
Sustainable Beauty.              experiences and focusing on   professional expertise that
                                 people and the planet.        combines science and results.

                                                                                               | 16 |
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
OUR COMMITMENT   ACTIVELY CONTRIBUTING
                 TO THE SDGs

                 With 10 years left to achieve the Sustainable    The results achieved by the Davines Group,
                 Development Goals (SDGs)*, the Davines           shown in the graph on page 18, confirm the
                 Group has chosen to further its commitment       company’s concrete contribution to each SDG,
                 by adopting the SDG Action Manager, an           identifying new activities to implement and
                 innovative tool that makes it possible to        highlighting the goals that require greater
                 monitor, inspire and increase the company’s      focus.
                 contribution to achieving the SDGs.              The Davines Group’s highly positive experience
                 Launched in January 2020, the SDG Action         with the SDG Action Manager has inspired
                 Manager was developed by B Lab and the           it to encourage every company to use this
                 United Nations Global Compact to give            tool. The Davines Group has always felt a
                 companies around the world the opportunity       responsibility to contribute to the global effort
                 to set clear and dynamic SDG targets, to         advocated by the 2030 Agenda, not only by
                 compare themselves with other companies          participating in the achievement of its goals,
                 in the same industry, and to take significant    but also by inspiring others to do the same,
                 action that can benefits everyone. By            conscious that sustainable development can
                 introducing common standards for measuring       only generate shared and lasting prosperity
                 the company’s SDG footprint, which was           for everyone through collective responsibility.
                 previously a matter of speculation, this tool
                 brings greater transparency to a field that
                 is increasingly exposed to the risk of “SDG
                 washing”.
                 Enthusiastically welcomed by the B Corp
                 community, the SDG Action Manager measures
                                                                  *The 17 Sustainable Development Goals (SDGs) are set
                 companies’ contribution to each of the 17        out in the 2030 Agenda, the plan of action signed in 2015
                 goals through a questionnaire divided into six   by UN member states for shared sustainable development
                                                                  achieved by 2030 through the involvement of governments,
                 sections (business model, internal operations,   businesses and private citizens.
                 supply chain, collective action, risk level).

                                                                                                                              | 18 |
DAVINES GROUP SUSTAINABILITY REPORT 2019/2020 - Sustaining Beauty
RESULTS OF THE DAVINES GROUP’S CONTRIBUTION                                                      SOME OF OUR PROJECTS THAT ARE ONGOING OR IN THE
TO THE SDGs ACCORDING TO THE SDG ACTION MANAGER                                                  PIPELINE LINKED TO THE SDGs:
                                                                                                  relevant SDGs   project description   geographical area of influence    stakeholders involved   performance indicators

                                                                                                  ETHIOTREES                                                       ITALY FOR CLIMATE
                                                                                                      1, 4, 5, 8, 11, 13.                                               13,17
                                                                                                      EthioTrees is a “proprietary” CO2                                 Italy for Climate is an initiative by the
                                                                                                  equivalent (CO2eq) compensation project,                         Fondazione per lo Sviluppo Sostenibile,
                                                                                                  exclusive to the Davines Group, which                            promoted by a group of companies,
                                                                                                  supports landless farmers and restores                           including the Davines Group, who are
                                                                                                  the forest ecosystem in the Tembien                              working to promote the implementation
                                                                                                  highlands.                                                       of an Italian Climate Agenda, in line with
                                                                                                      Ethiopia.                                                    the objectives of the Paris Agreement.
                                                                                                      Universities, local population, NGOs.                             Italy.
                                                                                                       48 training courses provided, 8                                  Companies, NGOs, trade associations,
                                                                                                  classrooms built for educating children,                         parliament and government, regions and
                                                                                                  7 Master’s theses supported, 39,176                              cities.
                                                                                                  seedlings planted,10,000 certified carbon                             Indicators are listed on
                                                                                                  credits issued.                                                  italyforclimate.org/
                                                                                                  I SUSTAIN BEAUTY                                                 EXTRAORDINARY MANUAL
                                                                                                      17 + indirect impact on certain specific                     TO IMPROVE THE WORLD
                                                                                                  SDGs depending on the project developed.                             12, 17 + indirect impact on other SDGs
                                                                                                     I Sustain Beauty inspires and motivates                       depending on the ideas implemented.
                                                                                                  people to work towards creating a better                              This manual is not a theoretical tool,
                                                                                                  world by launching initiatives with a positive                   but a collection of 124 ideas, divided by
                                                                                                  environmental, social and cultural impact.                       their respective SDGs, designed to inspire
                                                                                                      The world.                                                   and support courageous hairdressers
                                                                                                      Hair salons, beauty salons, distributors                     who, through their profession, wish to
                                                                                                  and Group branches.                                              make the world a better place.
                                                                                                      44 projects launched.                                             The world.
                                                                                                                                                                        Hair salons, citizens.
                                                                                                  SUSTAINABLE SALON PROGRAM                                             4,031 copies distributed.
                                                                                                      4, 12, 17 + specific SDGs depending
                                                     9 Industry,                                  on the good practices implemented by                             CARBON NEUTRALITY PLAN FOR THE
       1 No poverty          5 Gender Equality       innovation and         13 Climate action     the participating salons.                                        PROVINCE OF PARMA
                                                     infrastructure
                                                                                                      The Sustainable Salon Program is a                               11, 12, 13, 17.
                             6 Clean water           10 Reduced             14 Life below
                                                                                                  sustainability training and certification                            The project was launched with the aim
       2 Zero hunger                                                                              program for salons that aim, through                             of making Parma the first Italian province,
                             and sanitation          inequality             water
                                                                                                  their work, to benefit local communities                         after Siena, to have an operational plan
                                                     11 Sustainable                               and the planet.                                                  aimed at achieving carbon neutrality by
       3 Good health         7 Affordable and
       and well-being        clean energy
                                                     cities and             15 Life on land
                                                                                                      The world.                                                   2050.
                                                     communities
                                                                                                       Hair salons, distributors and Group                             Province of Parma.
       4 Quality             8 Decent work and
                                                     12 Responsible         16 Peace,             branches.                                                             Local authorities, local bodies and
                                                     consumption            justice and strong
       education             economic growth
                                                     and production         institutions              Monitoring of the number of training                         associations, companies, NGOs, Emilia-
                                                                                                  participants and the number of certified                         Romagna region.
                                                                                                  salons.                                                               Project underway in 2020, KPIs to
SDG 17 - Partnership for the Goal, does not have its own module. Due to its cross-cutting
nature, actions relevant to companies are integrated in some of the other 16 modules.                                                                              be defined.

                                                                                                                                                                                                                           | 20 |
RESILIENCE
OUR STRATEGY TO START                                                                                                                         OUR RESPONSE TO
OVER TOGETHER                                                                                                                                 COVID-19

COVID-19 began as a health crisis, has                                    This mapping illustrates, in a simple manner,                       We have been committed for years to spreading     digital content program that has involved
rapidly evolved into an economic crisis and                               the extent to which the existing, highly                            the values of environmental and social            them in various training opportunities.
is now becoming a major humanitarian crisis,                              interconnected international system is exposed                      respect by setting an example as a company
the extent and effects of which we have just                              to major risks during periods of crisis such as                     devoted to comprehensive sustainability. The
begun to understand.                                                      this one. It also highlights how essential it is,                   current crisis, with its complex framework of
                                                                          now more than ever, to work towards achieving                       interconnections, confirms the importance          “I am convinced that a major commitment
Today, one framework that enables us to
                                                                          all of the SDGs in order to develop resilience                      and worth of our value choices and drives         to the transition to the green economy or,
understand its different aspects is that of the                                                                                                                                                 even better, to a regenerative economy,
United Nations’ SDGs, which offers conceptual                             to current and future health, economic and                          us to further strengthen them for the future.
                                                                          environmental shocks.                                                                                                 is not necessarily the solution to all
mapping of how COVID-19 impacts some                                                                                                          To meet the collective need for protection and    our problems, but is the best possible
of the goals.                                                                                                                                 health, we have developed and produced the        strategy for our species today if we want
                                                                                                                                              Gel del Buon Auspicio, a new hand sanitizing      to maintain, and possibly improve, our
                                                                                                                                              formula which has mostly been donated to          future quality of life.”
                                                                                                                                              groups that are particularly exposed to the
                                                                                                                                              emergency in our local and international          Davide Bollati, Chairman of the Davines Group
                                                                                                                                              community.
  Reduced commitment to climate action,                  Conflicts prevent effective             Aggravated backlash against globalization,
  but lower environmental impact due to                measures to counter COVID-19;                but also highlight the importance of      We have awarded a bonus to production
    reduced production and transport                                                             international cooperation on public health
                                                        those in conflict areas are at
                                                         greater risk of devastating
                                                                                                                                              plant staffs whose efforts made the timely
                                                           losses from COVID-19                                                               mass production of the Gel del Buon Auspicio
                                                                                                                                              possible.
  People living in slums face a higher risk                                                     Loss of income, leading vulnerable segments   Managers have taken a voluntary 50% pay
   of exposure to COVID-19 due to high                                                                   of society and families to fall      cut to finance a corporate solidarity fund
   population density and poor hygienic                                                                     below the poverty line
                 conditions                                                                                                                   that has allowed to financially support their
                                                                                                                                              colleagues who have been temporarily laid off.
                                                               COVID-19                                                                       The #SpreadingKnowledgeWithCare internal
                                                               PANDEMIC                                Food production and distribution       training program has allowed us to nurture
                                                                                                            could be interrupted              our staffs’ sense of belonging and to share
Suspended economic activity; lower income,
 less working time and unemployment for                                                                                                       knowledge and skills, taking advantage of
            certain occupations                                                                                                               better organization of their time made possible
                                                                                                                                              by the smart working.
                                                                                                     Devastating effect on health outcomes    Together with over 100 other companies and
                                                                                                                                              organizations, we signed the “Recovering
     Supply and staff shortages are
      leading to disrupted access to          Supply disruption and     Women’s economic gains                                                from the pandemic with a New Green Deal for
                                               inadequate access to       at risk and increased
    electricity, further weakening the
    health system’s response capacity            clean water hinder     levels of violence against                                            Italy” manifesto to re-establish and relaunch
                                                   access to clean      women.Women account
                                                                                                        School closed for many; remote
                                                                                                                                              the ambitious European Green Deal project
                                              handwashing facilities,   for the majority of health
                                                   one of the most       and social care workers         learning less effective and not      that promotes an advanced, decarbonized
                                                                                                             accessible to everyone
                                               important COVID-19
                                               prevention measures
                                                                        who are more exposed to                                               and circular economy.
                                                                                COVID-19
                                                                                                                                              To support and stand by our customers during
                                                                                                                                              this difficult period, we have developed a

Source: UNDESA

                                                                                                                                                                                                                                                | 22 |
BEING                                                                                                 WHAT IS OUR SCORE BASED ON?
A B CORP                                                                                              Discover the most significant activities
                                                                                                      that have enabled us to increase our
                                                                                                      positive impact!
RECERTIFICATION
IS A GROUP SUCCESS

2020 started for us with a special event: the      has appointed its own representative,              GOVERNANCE
B Corporation recertification, achieved with a     known as the “Sustainable Development
score of 117.4, an improvement on the score        Enabler”, who has collaborated with the
                                                                                                      IMPLEMENTED IMPROVEMENT ACTIVITY                                IT    FR    NL    GB    MX    US     HK
obtained in 2016 (99.3).                           Sustainability Department in collecting specific
                                                   data, identifying areas for improvement and        The company’s “Code of Ethics” has been updated
We have achieved this milestone over three
                                                   implementing new projects.                         with a broader and more detailed definition of the
years of ongoing commitment, during which
                                                                                                      ways in which we want to ensure the ethical, inclusive
we have involved all company departments           At the branches, the same role has been played
                                                                                                      and fair management of our business.
in a wide-ranging joint effort to increase the     by the “B Corp team” who, in collaboration
Group’s environmental and social sustainability.   with the sustainability department, also draw      We have created an organizational model that
The company has chosen not only to invest in       up an annual B Corp improvement plan that          guarantees operational compliance with the “Code of
actions with a direct sustainable impact, such     is implemented with the involvement of the         Ethics”, particularly with regard to tackling corruption.
as the use of machines that are sanitized with     entire branch team.
                                                                                                      We have communicated to all stakeholders the “Code
steam rather than chemicals, or the creation       The active and widespread participation of all     of Ethics”, the organizational model and the procedure
of benefits to increase staff well-being,          collaborators is one of the distinctive features   to follow in the event of an act of corruption.
but also in actions with an indirect impact,       of our organizational model.
focusing on the education and involvement                                                             The Davines Group’s board of directors has been
of each collaborator in order to recognize                                                            expanded to include independent members.
everyone’s tangible contribution. To this end,                                                        Performance targets related to environmental and
two separate working groups have been set                                                             social sustainability have been assigned to almost
up for the headquarters and branches.                                                                 all company directors and “first-level” managers in
At the Parma main office, every department                                                            foreign branches.
                                                                                                      An “Equality, Anti-Corruption and Anti-Discrimination
                                                                                                      Committee”, made up of employees, has been set
   DAVINES GROUP OVERALL B                                                                            up to monitor and manage anti-ethical conduct
   IMPACT SCORE - 2020                                                                                anonymously reported by other employees.
                                                     SCORE FOR EACH IMPACT AREA
                                                                                                      The composition of the Davines Group’s ownership
                                                                                                      and board of directors have been published on the
                                                                                                      national website.

                                                        GOVERNANCE                 WORKERS            To help staff to read and understand the company’s
                                                            17                       23               economic and financial data, a “Finance for non

             117.4
                                                                                                      finance” training course has been launched, which
                                                                                                      is open to all employees.
                                                                                                      The Italian company’s legal status has been changed
                                                         COMMUNITY               ENVIRONMENT
                                                                                                      to a Società Benefit and that of the American company
                                                            22                       50               to Benefit Corporation.

                                                         CUSTOMERS
                                                             4
                                                                                                      IT: Italy, FR: France, NL: The Netherlands, UK: United Kingdom, MX: Mexico, US: United States, HK: Hong Kong

                                                                                                                                                                                                                     | 24 |
WORKERS

                 Benefit Corporations, known as “Società
                 Benefit” in Italian, constitute an evolution of   IMPLEMENTED IMPROVEMENT ACTIVITY                           IT   FR   NL   GB   MX   US   HK
  WHAT DOES      the corporate legal form. Becoming a Benefit      We promote programs and initiatives that can
   BENEFIT       Corporation means redefining the company’s        improve the overall well-being of our staffs and
                 goals in statutory terms, voluntarily going       encourage them to participate in health and wellness
 CORPORATION
                 beyond the traditional aim of generating          activities. The initiatives implemented by the various
    MEAN?        profit and giving equal importance to the         offices include subsidized gym subscriptions and
                 aim of making a positive impact on society        physiotherapy sessions and the chance to participate
                 and the environment.                              in gymnastics and pilates courses at the company.
                                                                   We attach great importance to our staffs’ professional
                                                                   development throughout their career. In addition
                                                                   to constantly renewing our onboarding process for
                                                                   new collaborators, we have expanded the quantity
                                                                   and type of training offered at the Group’s offices.
                                                                   Throughout the Davines Group, we encourage
                                                                   promotions and horizontal transfers of our collaborators
                 To legally commit to the creation of shared
                                                                   by primarily publishing new job offers within the
                 value, i.e. the creation of a positive impact
                                                                   company.
 WHY BECOME      on society and the biosphere. Furthermore,
  A BENEFIT      becoming a Benefit Corporation is a legal         We have expanded the “Performance Review Plan”
                 tool to protect your company’s mission in         to an increasing number of branches to offer ever
CORPORATION?
                 the event of capital increases, leadership        more collaborators the opportunity to receive annual
                 changes, generational changes or listing on       feedback on their performance, to define clearly
                 the stock exchange.                               identified and achievable goals with their manager
                                                                   and to reflect on their career path together.
                                                                   More Davines Group offices are now equipped with
                                                                   a “Manual for Employees”. This tool brings together
                                                                   all the advocated work rules and policies, with
                                                                   clear information on prohibited behavior, such as
                 There is a frequent tendency to confuse           discriminatory behavior.
                 certified B Corps with Benefit Corporations.
                 Although they share many similarities,            The smart working program for collaborators that
                 important differences set them apart. Being a     is currently in place at the main office has been
                 B Corp means having obtained a certification,     expanded to offer all those whose job permits it to
                 available in every country in the world, which    work remotely.
                 is awarded when a company achieves a score
 WHAT ARE THE    of at least 80 out of a maximum of 200 points
  DIFFERENCES    in the standard B Impact Assessment. Being
BETWEEN B CORP   a Benefit Corporation, on the other hand,
  AND BENEFIT    means legally changing the company’s by-
 CORPORATION?    law, making a formal commitment to people
                 and the environment: to meet transparency
                 requirements over time and therefore to
                 annually self-report results. The possibility
                 to change a company’s by-law is currently
                 only available in 35 states in the USA, Italy,
                 Colombia, British Columbia and Ecuador.

                                                                                                                                                                 | 26 |
COMMUNITY                                                                                         ENVIRONMENT

IMPLEMENTED IMPROVEMENT ACTIVITY                               IT   FR   NL   GB   MX   US   HK   IMPLEMENTED IMPROVEMENT ACTIVITY                            IT   FR   NL   GB   MX   US   HK
We have extended the sustainability process for                                                   We have expanded the measurement of our
suppliers, which is already being implemented at the                                              environmental footprint both by increasing the
main office in Parma, to all Davines Group branches.                                              number of products to which we apply the “Strategic
According to this procedure, each company supplier                                                Life Cycle Assessment” (SLCA) and by starting to
is asked to annually complete two questionnaires, one                                             evaluate some of our products through the “Life
aimed at measuring its sustainability performance                                                 Cycle Assessment” (LCA).
and the other at assessing the ethics and values of
                                                                                                  All our offices worldwide are carbon neutral because
its working environment.
                                                                                                  their CO2eq emissions, including those of the production
We have strengthened the sustainability process for                                               site in Parma, have been calculated in relation to scopes
suppliers by organizing, for the first time, a summit                                             1 and 2, reduced when possible and compensated
devoted to sharing examples and best practices,                                                   by the EthioTrees project if they cannot be zeroed.
internal policies and tools to increase their sustainability
                                                                                                  In order to improve our overall environmental footprint,
performance.
                                                                                                  all Group sites have chosen to set absolute or relative
                                                                                                  reduction targets for their CO2eq emissions, water
We have increased our use of Fairtrade-certified raw
                                                                                                  and electricity use and/or waste generation.
materials to further our contribution to disadvantaged
people in the supply chain. We chose fair trade                                                   We reduced our ton per miles thanks to the logistics
because it guarantees them an improved standard                                                   and distribution policy adopted during the first B
of living.                                                                                        Corp certification. Our transportation has been made
                                                                                                  more efficient and distribution from Parma to the
Training courses on diversity and inclusiveness have                                              branches and distribution partners has resulted in
been launched for all collaborators, designed to                                                  lower emissions of polluting gases.
identify and remove barriers that could potentially
inhibit collective participation in company life.                                                 We have reduced the use of chemical agents by
                                                                                                  modernizing the sanitization of production processes
Inclusion is also actively pursued at the company                                                 through the adoption of an innovative steam sanitization
through an explicit commitment, stated in our job                                                 system.
offers, not to discriminate against any application,
supporting the celebration of diversity that is also                                              No waste from our manufacturing has been disposed
included in our “Carta Etica”.                                                                    of in landfills: all our waste is recycled or recovered
                                                                                                  through waste-to-energy processes if not recyclable.
The language of our job offers and requirements
are annually reviewed to assess their fairness,                                                   We have increased the percentage of packaging in our
inclusiveness and non-discrimination.                                                             portfolio made from recycled materials or alternatives
                                                                                                  to fossil fuel-based materials. We have also increased
Certain company venues are offered free of charge                                                 the percentage of natural and biodegradable raw
to host local events in order to actively support the                                             materials contained in our formulations, improving
community and associations that promote values                                                    the overall environmental impact of our products.
such as culture, resilience and sustainability.
                                                                                                  Our Mexican branch, which does not have access to
The Davines Group branches, following the example                                                 the market for the supply of electricity from renewable
of the Parma office, have started to organize corporate                                           sources, has installed a rooftop solar panel system that
volunteering activities that positively impact people                                             provides the office with electricity from a renewable
and the environment.                                                                              source.

                                                                                                                                                                                                 | 28 |
CUSTOMERS                                                                                LOOKING AHEAD
                                                                                         TO THE FUTURE
IMPLEMENTED IMPROVEMENT ACTIVITY                            IT   FR   NL   GB MX US HK
We have created the “Charter for Ethical Marketing and                                   We are committed to further improving
Communication” to ensure that all of our marketing and                                   our supply chain by going back as far as
communication materials, whether produced in-house                                       possible to the origin of the raw materials
or commissioned to third parties, are accurate, truthful                                 that we use, coming into direct contact with
and ethical. The document identifies the principles,                                     producers, their environment and the fields
values and processes that must be followed every                                         that provide the ingredients that we use in
time a communication addresses content related to                                        our products. We will therefore increasingly
the positive impact on the world produced by our                                         collaborate with suppliers which guarantee
company, our products and our services.                                                  that their raw materials are fully traceable
                                                                                         and which offer social and/or environmental
The potential impact of our products, both positive                                      certifications for their work. Biodiversity will
and negative, is constantly monitored by listening to                                    become increasingly central to our supplies
feedback from our customers, who are involved in                                         and the guarantee of regenerative agriculture
the design of our products and influence corrective                                      will be fundamental in our supply choices.
measures, from the formulation phase to the post-                                        We will continue our commitment to creating
launch stage.                                                                            products that are designed according to the
                                                                                         principles of eco-design, continually reducing
The training offered to our customers is guided by                                       their ecological footprint to benefit the circular
listening to their wishes and needs in order to offer                                    economy. Our production processes will
increasingly rewarding opportunities for professional                                    constantly improve and set a benchmark in
growth. Hairdressers and skin care specialists are                                       the cosmetics industry, becoming even more
therefore involved in the development and improvement                                    innovative and respectful of the environment
of the training offered by the entire Davines Group,                                     and people. Our carbon footprint will decrease
which has fully aligned itself with this practice already                                to net zero.
in use at the main office in Parma.

We manage the privacy and security of our customers’
data with the utmost care, in accordance with a formal
policy, published on all Davines Group sites, which
makes users aware of the information we collect,
the duration for which we store it and how we use
it. Every customer also has the right to choose how
we use the data that they provide to us.

                                                                                         WE WORK TOGETHER
                                                                                         TO BE THE BEST FOR THE WORLD.
                                                                                         New solar panels installed in the Mexico
                                                                                         branch.

                                                                                                                                              | 30 |
OUR PERFORMANCE               We dedicate practices designed
                              to promote a positive social
                              environment to our collaborators
                              around the world.

                   PEOPLE

                              We measure our impact throughout
                              our value chain, aiming to
                              create products with a positive
                              environmental impact.

                   PLANET

                              We support the vitality and
                              resilience of the local communities
                              in which we live and work,
                              increasing our positive impact on
                              the environment and people.

                  COMMUNITY

                              We contribute to promoting
                              sustainability by committing to
                              virtuous projects and inspiring,
                  PROJECTS    involving and supporting those who
                              implement them around the world.

                                                                    | 32 |
PEOPLE                                                                                                                                OTHER 2019 FACTS AND FIGURES
                                                                                                                                      ALL THE GROUP’S OFFICES
2019 RESULTS

   95% of Parma office executives                               skills that are not present within the company.                       ABOUT OUR COLLABORATORS
and top level managers at the branch                            In order to support the good practice of job
offices have sustainability goals                               rotation, where possible, for new “non-entry
The 80% target has been significantly
exceeded thanks to the constant efforts of
                                                                level” positions internal transfers have been
                                                                facilitated through staff role changes. By                                    59.3% women                                        234 non-italians colleagues
                                                                “non-entry level” positions, we are referring
                                                                                                                                              40.7% men
the management, the HR department and
the sustainability department to spread a                       to those that can be filled by professionals
culture of sustainability in the company and                    with at least two years of experience.
                                                                                                                                                                                                 3.7 average number of years in
to propose relevant sustainability goals for
each department, both at the main office in
                                                                   Removal of clocking in procedure
                                                                at the Davines Village
                                                                                                                                              39.5 average age                                   company
Parma and at the foreign branches. Through
this choice, the company wants to ensure                        Following the removal, in 2018, of the clocking
that decision-makers view sustainability                        in procedure for office workers, in 2019
as a key factor, on a par with turnover and                     the company also removed the clocking in
profitability.                                                  procedure for production and packaging staff.
                                                                This step was part of a broader program                              HOW WE TRANSLATE OUR VALUES INTO WORK
  100% increase in financial                                    named “Davines New Way”, launched 2 years
support during the optional                                     ago with the main goal of creating a working

                                                                                                                                     1,248.5 paid working hours for                              53.8% managerial roles held
maternity leave period and                                      environment based on trust, independence,
paternity leave days                                            responsibility and transparency. The removal of
We support working mothers and working
                                                                the clocking in procedure is both an assurance                       company volunteering                                        by women
                                                                of trust towards all collaborators and a source
fathers who decide to take optional parental
                                                                of responsibility for them.
leave by guaranteeing 60% of their salary
                                                                                                                                            600                                                  100.0%
rather than 30%, as required by current                            100% of Parma office executives                                                583
legislation. Furthermore, the second parent,                    and top level managers at the
when their child is born, is offered 5 days of                                                                                              500
paid paternity leave in addition to those
                                                                branch offices involved in 360°                                                                                                   80.0%           77.8%
prescribed by law, which numbered 5 days
                                                                assesment                                                                                                                                                         72.7%
                                                                                                                                            400
when this company concession was granted,                       In July 2019, all Parma office executives and                                                                                                                                   60%

                                                                                                                             No. of hours
with the specific aim of doubling the paternity                 top level managers at the branch offices were                                                                                     60.0%
                                                                                                                                                                                                          52.6%
leave period. The law, which has been                           involved in the 360° assessment, a procedure                                300                                                                                           50%
subsequently changed, now provides for 7                        that allows to assess the extent to which                                                                 288
                                                                managerial behaviors are consistent with those                                                                                    40.0%
days of paid paternity leave which, added                                                                                                   200                                                                                                       33.3%
to those offered by the company, brings the                     identified in the leadership model developed
total number of days available to fathers in                    by the Davines Group, from three different                                                   166
                                                                                                                                                                                121.5             20.0%
2020 to 12.                                                     standpoints: the manager, collaborators and                                 100                                                                           16.7%
                                                                colleagues of the same level. The individual                                            44
  22% of new “non-entry level”                                  results were then returned so each assessed                                   0
                                                                                                                                                                    0
                                                                                                                                                                                        46
                                                                                                                                                                                                   0.0%
positions held by internal staff                                collaborators could engage in a constructive                                                       2019                                                           2019
The 30% target has not been reached, since                      dialogue with their assessors.
                                                                                                                                                                        The                  United                           United
the company’s strong growth, a source of                                                                                                      Italy      France         Netherlands          Kingdom        Mexico
                                                                                                                                                                                                                              States
                                                                                                                                                                                                                                                Hong Kong
increased complexity, has required, for certain
new “non-entry level” positions, very specific

    goal achieved / project carried out within the set timeframe.   goal not achieved / project not carried out within the
set timeframe.

                                                                                                                                                                                                                                                              | 34 |
19.2 average number of training
        hours per year for each colleague
                                                                         GREAT PLACE TO WORK
                                                                                                                                 PLANET
                                                                                         Since 2018 we have chosen               2019 RESULTS
                                                                                         to revise the climate analysis
           30                                                                            that has been used since
                                                                                         2005, separately measuring
                                                                                         the assessment of direct                   Offset the CO2eq emissions of                                  Offset all CO2eq emissions from
           25                                                                            managers and the overall                our major events to make them                                   the lines on which we applied the
                      24                                                                 level of satisfaction through           carbon neutral                                                  LCA analysis
           20                                                                            two distinct, targeted and              The goal has been achieved. The CO2eq                           The goal has been achieved. We have
                                                                                         more in-depth questionnaires:           emissions of the main corporate events in                       offset emissions from the entire life cycle
No. of hours

                                                                         the “360° Assessment” and the “Company                  2019 were calculated and offset. These                          (excluding the use phase) of A single
           15               15.3                                         climate assessment survey”. For the latter,             involved more than 5,000 people in total:                       shampoo and Mask and Essential Haircare
                                                                         conducted with Great Place to Work, we                  World Wide Hair Tour, Tribe Event, Hair on                      lines. Total offset emissions amount to
                                     12.2
           10                                              11.5          involved, in 2019, more than 600 colleagues             Stage Bologna, Hair on Stage Manila and the                     3,681.82 tons of CO2eq. Use of LCA
                                                   9.7                   who contributed in defining the “trust index”,          National Meeting of Italian Hair Care Agents.                   analysis is extremely important to identify
                                            6.8                          the company’s internal level of trust. The results      A total of 322.4 tons of CO2eq were offset,                     the components and life stages of products
               5
                                                                         of the survey led to the award of the “Great            resulting from the energy consumption of the                    with a larger ecological footprint and,
                                                                         Place to Work 2019” annual certification.               event venues, the participants’ travel and the                  consequently, to identify possible reduction
                                                                  0
               0                                                                                                                 energy consumption of the hotels where the                      measures to limit their environmental
                                        2019
                                                                             67% Trust Index©                                    participants stayed.                                            impact.
                   Italy           France         The Netherlands
                                                                                                                                   Offset CO2eq emissions from
                   United Kingdom                 Mexico                     77% “All things considered,                         our staffs’ commute to work
                                                                                                                                 The goal has been achieved. We have offset
                                                                             I’d say this is an excellent place
                   United States                  Hong Kong
                                                                             to work.”                                           353.5 tonnes of CO2eq resulting from staffs’
                                                                                                                                 commute to work at Davines Village, measured
                                                                                                                                 through a questionnaire prepared by the
                                                                                                                                 Sustainability Department for everyone who
         OTHER 2019 FACTS                                                2020 GOALS                                              works at the Village. The collected data has
         AND FIGURES                                                                                                             also made it possible to estimate that 34.1
                                                                                                                                 tons of CO2eq emissions were saved in 2019
         PARMA MAIN OFFICE                                                  1. Redefine the current smart working                thanks to smart working and will allow for
                                                                            policy and implement it, looking ahead to            the future the development of solutions that
                   99% colleagues in                                        the “post-COVID” phase, with the aim of
                                                                            achieving organizational efficiency, a work
                                                                                                                                 further reduce the environmental impact of
                                                                                                                                 the commute to work.
                   nonmanagerial roles who have                             commute with a lower environmental
                   had performance bonuses                                  impact and a better balance between
                                                                            work and personal life for every employee.
                   78.9% colleagues who                                     2. Increase the percentage of colleagues,
                   have access to our well-being                            i n c l u d i n g 1 0 0 % m a n a g e rs a t a l l
                   platform, “davines care”                                 organizational levels at the main office in
                   (access for all Davines colleagues, excluding            Parma, with sustainability goals as part of
                   executives, who have passed the probationary             their “Performance Review Plan”.
                   period and are permanent as of 1 January each year)
                                                                            3. Increase the percentage of colleagues,
                                                                            i n c l u d i n g 1 0 0 % m a n a g e rs a t a l l
                                                                            organizational levels at the main office in
                                                                            Parma, with references to sustainability
                                                                            in their job “mission”.
                                                                                                                                     goal achieved / project carried out within the set timeframe.   goal not achieved / project not carried out within the
                                                                                                                                 set timeframe.

                                                                                                                                                                                                                                                              | 36 |
OTHER 2019 FACTS AND FIGURES                                                                                        Choosing the packaging                                       Paper and cardboard packaging
                                                                                                                                                                                 (secondary and tertiary)
ALL THE GROUP’S OFFICES                                                                                             We design packaging with the aim of limiting its
                                                                                                                    volume and weight to a minimum and strongly
                                                                                                                    encouraging its reuse or recovery, including                 2019                                92.5
                                                                                                                    through recycling, always guaranteeing
HOW DO WE CRAFT                                       Choosing the ingredients                                      safety and hygiene, with the lowest possible                 2018                    86.5
OUR PRODUCTS                                          We select environmentally friendly ingredients                environmental impact.
A product’s positive impact is determined by          that are safe, effective, high-quality and                                                                                     75%      80%        85%     90%          95%      100%
many factors that arise throughout the course         preferably obtained from organic and/or
of its life, from its creation to its production,     ethical farming that protects local biodiversity.             Packaging in recycled material                                   paper and cardboard in recycled material
distribution, use and, finally, disposal.                                                                           (primary, secondary and tertiary)
                                                                                                                                                                                     paper and cardboard in virgin material
                                                      Natural ingredients*
                                                                                                                    2019                            64.1
Life cycle impact assessment
We measure our products’ sustainability               2019                           61.2       18.7    20.1
                                                                                                                                                                                 Design and marketing
                                                                                                                    2018                       59.5
at every stage of their life cycle, using two                                                                                                                                    We create all our products with an artisan
                                                                                                                                                                          100%
different assessment methods: the Strategic           2018                           61.2       19.8      19                                                                     approach, using the most advanced cosmetic
                                                                                                                        0%      20%      40%         60%          80%
Life Cycle Assessment (SLCA) for a qualitative                                                                                                                                   technologies and inspired by the ideal of
assessment, and the Life Cycle Assessment                                                                               recycled material (paper and plastic)                    Sustainable Beauty as an inseparable unity
                                                           0%       20%       40%       60%       80%      100%
(LCA) for a quantitative assessment.                                                                                                                                             between beauty and goodness.
                                                           natural ingredients, including certified organic             non-recycled material (paper and plastic)
                                                           ingredients
Products (based on turnover) to which
the SLCA analysis has been applied
                                                           modified natural ingredients
                                                                                                                    Packaging from renewable sources
                                                                                                                                                                                 0% production waste sent to
                                                           synthetic ingredients
                                                                                                                    (primary, secondary and tertiary)
                                                                                                                                                                                 landfill
                                                      *Since 2018 we have been using our own criteria for
2019                              76.1                classifying ingredients of natural origin, which does not                                                                                                                     97.7
                                                      allow any raw material that has a small amount of synthetic   2019                             67.4
                                                      content or that does not exclusively include ingredients
                                                      obtained from sustainable processes.                                                                                       2019
                                                                                                                                                                                 2018                                          91.9
2018                              75.3                                                                              2018                              67.7

                                                                                                                                                                                     0%       20%        40%     60%          80%      100%
    0%          20%        40%   60%     80%   100%   Biodegradability of ingredients*                                  0%      20%      40%         60%          80%     100%
                                                                                                                                                                                     total solid waste recycled or recovered through
    SLCA                                                                                                                packaging from renewable sources (paper,                     waste-to-energy processes
                                                                                                                        cardboard, wood, bio-based plastic)
                                                      2019                               71.4                                                                                        total solid waste sent for incineration
                                                                                                                        packaging from non-renewable sources (virgin
                                                                                                                        and recycled plastic, steel, aluminum, glass)
Products (based on turnover) to which                 2018                             68.4
the LCA analysis has been applied                                                                                                                                                Electricity used in our offices*
                                                                                                                    Plastic packaging
                                                           0%       20%       40%       60%       80%      100%                                                                  100%
                                                                                                                    (primary, secondary and tertiary)                                   100    100       100                   100
2019                  34                                                                                                                                                          80%
                                                           highly biodegradable ingredients
                                                                                                                    2019                44.2           29.5             26.3      60%
                                                           non-highly biodegradable ingredients                                                                                                                        62.8
2018     16.2                                                                                                                                                                     40%
                                                                                                                                                                                                                40
                                                      *We use the OECD 301 method, Regulation (EC) No               2018                       56          21.9         22.1      20%
    0%          20%        40%   60%     80%   100%   648/2004, to determine our ingredients' biodegradability.                                                                                                                            0
                                                                                                                                                                                   0%
                                                                                                                        0%      20%      40%         60%          80%     100%

                                                                                                                                                                                        ly

                                                                                                                                                                                                            ce

                                                                                                                                                                                                             s

                                                                                                                                                                                                            m

                                                                                                                                                                                                                            ico

                                                                                                                                                                                                                              s

                                                                                                                                                                                                                             ng
                                                                                                                                                                                                          nd

                                                                                                                                                                                                                           te
                                                                                                                                                                                     Ita

                                                                                                                                                                                                         do
                                                                                                                                                                                                         an

                                                                                                                                                                                                                         Ko
                                                                                                                                                                                                                         ex

                                                                                                                                                                                                                         ta
                                                                                                                                                                                                       rla

                                                                                                                                                                                                     ing
                                                                                                                                                                                                      Fr

                                                                                                                                                                                                                      dS
                                                                                                                                                                                                                       M
    LCA

                                                                                                                                                                                                                      ng
                                                                                                                                                                                                    he
                                                                                                                        virgin plastic packaging

                                                                                                                                                                                                 dK

                                                                                                                                                                                                                   ite
                                                                                                                                                                                                  et

                                                                                                                                                                                                                  Ho
                                                                                                                                                                                             eN

                                                                                                                                                                                                                 Un
                                                                                                                                                                                              ite
                                                                                                                                                                                           Un
                                                                                                                                                                                           Th
                                                                                                                        recycled plastic packaging

                                                                                                                        bio-based plastic packaging                                  renewable energy           non-renewable
                                                                                                                                                                                                                energy

                                                                                                                                                                                 *including production

                                                                                                                                                                                                                                               | 38 |
CO2EQ EMISSIONS -                                                               Our methodology                                                       CO2eq emissions that we monitor and offset:
HOW WE REDUCE AND OFFSET                                                        We follow the guidelines of an internationally
OUR CARBON FOOTPRINT                                                            recognized standard, the “GHG protocol”,
                                                                                which breaks down the company’ emissions
At an environmental level, the main challenge                                   into three areas:
                                                                                                                                                      Direct              Scope 1 Indirect                  Scope 2 Indirect              Scope 3
facing our planet is the climate change                                         Scope 1, direct emissions from proprietary                            emissions                   emissions                         emissions
that threatens the resilience of the Earth’s                                    sources or sources directly controlled by the
ecosystems and human survival. Based on                                         company;
                                                                                                                                                           Combustion of               Electricity                       Life cycle (LCA) of the
this awareness, the Davines Group, together
                                                                                Scope 2, indirect emissions from consumption                               biomethane from             consumption                       analyzed products
with over 500 B Corps worldwide, committed
                                                                                of electricity, steam and heat;                                            renewable sources           (see detail p. 37)                (see detail on p. 35)
to achieving “net zero emissions” by 2030.
                                                                                Scope 3, indirect emissions that do not fall                               at the Parma office,
This goal requires us to constantly map
                                                                                within scopes 1 and 2 and that result from                                 natural gas at the US
our emissions and to reduce them as much                                                                                                                                                                                 Packaging of all
                                                                                other activities that take place outside the                               and France offices and
as possible. We will continue to offset the                                                                                                                                                                              products that leave
                                                                                Group’s production plant and offices.                                      LPG in Mexico
quantity of CO2eq that cannot be zeroed                                                                                                                                                                                  our warehouses
through EthioTrees, a proprietary reforestation                                                                                                                                      Breakdown of emissions
project.                                                                                                                                                   Combustion of fuels       based on the use of the energy
                                                                                                                                                           for the company car       mix:                                Commuting of
                                                                                                                                                           fleet                     Location-based (national grid):     colleagues at the main
                                                                                                                                                                                     1380.7 ton CO2eq                    office in Parma
                                                                                                                                                                                     Market-based (supplier chosen
                                                                                                                                                           Fugitive coolant gas      by the company):
                                                                                                                                                           emissions                                                     Main corporate events
                                                                                                                                                                                     12.71 ton CO2eq
                                                                                                                                                                                                                         (see detail on p. 35)

              CO2                    CH4                  N2O              HFCs              PFCs                    SF6                    NF3                                                                          Part of the air travel
                                                                                                                                                                                                                         made by international
                                                                                                                                                                                                                         staff
                                               Scope 2
                                              INDIRECT                Scope 1
                                                                      DIRECT

                                                                                                                                                          840                         13                                8,473
                        electricity, steam,
                       heating and cooling
                                                                                                                                                          ton CO2eq                   ton CO2eq                         ton CO2eq
                          purchased for
                             own use                       Scope 3                             transport and
                                                                                               distribution
                                                                                                                                            Scope 3
                                                          INDIRECT                                                                         INDIRECT

                                                                       company
                                                                       facilities              processing of sold
             purchased goods and services                                                      products

                                              leased assets
             capital goods                                                                                                   investments
                                                                       company            use of sold products

                                                                                                                                                                                    9,326 ton CO2eq
                     transport and            business                  vehicles
                      distribution             travel

energy production                  waste                   staffs’                         end of life of sold      leased         franchising
  and dispatch                   generation              commuting                             products             assets

                                                                                                                                                                                         To learn more:
                UPSTREAM                                             REPORTING                                   DOWNSTREAM
                ACTIVITIES                                            COMPANY                                     ACTIVITIES
                                                                                                                                                                                    further-information-c02/
Source: “Corporate Value Chain (Scope 3) Accounting and Reporting Standard” GHG Protocol

                                                                                                                                                                                                                                                    | 40 |
Our results to date                              2020 GOALS                                    COMMUNITY
  100% of the products that leave our                                                          2019 RESULTS
                                                  1. Increase the percentage of products
  warehouses have CO2eq-offset packaging.
                                                  (based on turnover) to which the LCA
  All the Group’s offices are carbon neutral      analysis has been applied.
  (100% scope 1 + 2) thanks to reduction of                                                       Organize a summit to increase                                   Create a fair and transparent
                                                  2. Define a “roadmap” to achieve the “net    our suppliers’ sustainability
  our emissions and offsetting of residual                                                                                                                     process for assessing local projects
                                                  zero emissions” target by 2030, continuing
  emissions.                                                                                   In November 2019 we organized, for the first                    We have created a fair and transparent
                                                  the decarbonization process that the
                                                                                               time, a meeting at the Davines Village for                      evaluation process that allows us to objectively
  -47.7% emissions (scope 1 + 2) compared         company has been pursuing for years.
                                                                                               our most sustainability-conscious suppliers.                    choose projects – from the many that we are
  to 2018 for the Parma office and                3. Increase the percentage of bio-based      Participants were selected based on the results                 recommended – that merit priority support.
  manufacturing plant, mainly due to the          and recycled packaging within our plastic    of the annual sustainability questionnaire and                  Firstly, we have defined both quantitative
  use of biomethane rather than gas from          packaging mix.                               the interest that they have shown in B Corp                     and qualitative KPIs according to which all
  fossil-fuel sources.                                                                         certification. During the workshop, examples                    new projects are evaluated. The sum of all
  34 ton CO2eq saved thanks to smart                                                           were shared of good practices and useful                        the KPIs defines the score assigned to the
  working at the main office in Parma.                                                         tools to increase sustainability performance.                   project, which enables the company to rank
                                                                                               Four suppliers also talked about their B Corp                   the projects that require support.
  Calculation and offsetting of CO2eq                                                          certification process.
  emissions of the main company events.
                                                                                                 Guide the Italian B Corp
  Offsetting CO2eq emissions of the life                                                       community’s 2019 impact project
  cycle of the products analyzed according
  to the LCA analysis (see detail p. 35).                                                      The project was conceived with the aim of
                                                                                               removing as much plastic as possible from
                                                                                               one of the accumulation zones that have been
                                                                                               created in the Mediterranean Sea. In view
                                                                                               of the technical limitations that emerged, a
CO2 and CO2eq                                                                                  decision was made to change the project’s
                                                                                               scope, while preserving its original purpose.
Carbon dioxide (CO2) is a climate-altering gas                                                 Consequently, two parallel initiatives have
that naturally occurs in our atmosphere; its                                                   been launched: the collection of plastic from an
very high concentration contributes to global                                                  Italian river that is a Mediterranean tributary
warming. However, CO2 is not the only gas                                                      and the implementation of local initiatives by
responsible for the greenhouse effect, which                                                   Italian B Corps. The project will continue for
is also caused, for example, by nitrous oxide                                                  the duration of 2020.
(N2O), methane (CH4) and sulfur hexafluoride
(SF6). CO2 equivalent (CO2eq) describes the                                                       Increase the number of B Corp
impact of greenhouse gases in a single unit.                                                   certified partners
For any quantity and type of greenhouse gas,
                                                                                               The goal has been achieved. In 2019, 2 new
CO2eq indicates the amount of CO2 that would
                                                                                               company suppliers became B Corps, raising
have an equivalent impact on global warming.
                                                                                               our total number of certified partners to
                                                                                               5. This result was made possible by the
                                                                                               company’s determination and the work
                                                                                               of the Purchasing Department which,
                                                                                               following the Group’s B Corp certification,
                                                                                               has promoted the creation of an
                                                                                               interdependent network among suppliers
                                                                                               by inviting them to complete the B Impact
                                                                                               Assessment (BIA).

                                                                                                   goal achieved / project carried out within the set timeframe.   goal not achieved / project not carried out within the
                                                                                               set timeframe.     project still in progress.

                                                                                                                                                                                                                            | 42 |
OTHER 2019 FACTS AND FIGURES                                              OTHER 2019 FACTS AND FIGURES
PARMA MAIN OFFICE                                                         ALL THE GROUP’S OFFICES

ABOUT OUR SUPPLIERS                                                       WE BELIEVE IN PEOPLE                 KILOMETROVERDEPARMA,
                                                                          AND SUPPORT THEM                     REFORESTATION IS ONLINE
 36.1%                  71.8%                     39.0%                                                        Since June 2020 the KilometroVerdeParma
 have a company         measure their             offer added benefits     € 550,655 donations                 website has been online, a reforestation
                                                                                                               project that aims to create green areas
 Code of Ethic          impact on the planet      to their employees       and sponsorships for social and     and permanent forests in Parma and its
                                                                           environmental purposes              province. The site publishes updates about
                                                                           To learn more:                      the project and useful information to support
                                                                                                               it. Shared contribution is one of the project's
                                                                                                               main strengths, since everyone can do
                                                                                  donation-sponsorship
                                   49.4%              51.9%
                                                                                                               their part by providing a plot of land or
                                                                                                               garden, giving their time as volunteers or
                                   with electricity   have reduced                                             participating in promotion, information and
                                   from
                                   renewable
                                                      their total
                                                      energy
                                                                           35 suppliers have completed         dissemination activities, including at schools.
                                                                           the BIA
                      32.8%        sources            consumption
              have reduced their
        total water consumption
                                                                           5 suppliers and distributors              www.kilometroverdeparma.org
                                                                           certified as B Corps since 2016

                                   8.3%                 14.9%              5 suppliers and distributors in
                                   offset their         reduced their      the B Corp certification phase      2020 GOALS
                                   CO2eq                CO2eq emissions
                                   emissions
                                                                           349 suppliers and contractors
                      51.9%                                                that work according to an ethical   1. Set up a “B Corp Beauty Coalition”, an
                                                                                                               expanded agreement between B Corp
             have reduced their                                            code of conduct                     cosmetics companies to further strengthen
               unsorted waste                                                                                  our commitment to the B Corp principle of
                                   19.5%                                   44 projects launched with the       interdependence.
                                   implement good                          “I Sustain Beauty” campaign         2. Increase the number of suppliers and
                                   practices to manage/                                                        distributors that measure their impact

                                                                           4,031
                                   reduce their impact                                                         through completion of the “Business Impact
                                                                                     distributed copies of     Assessment” (BIA).
                                   direct or indirect on                   the “Extraordinary Manual to
                                   biodiversity                            Improve the World”
                                                                                                               3. Launch a sustainability training program
                                                                                                               that enables our professional customers to
                                                                                                               increase their positive impact on the world.
                                                                                                               4. Initiate a global auditing process to ensure
                                                                                                               that all our branches that do not have the legal
                                                                                                               form of a Benefit Corporation make a special
                                                                                                               amendment to their articles of association.

                                                                                                                                                                  | 44 |
PROJECTS                                                                                             WORLD HAPPINESS REPORT AND SCIENCE & ETHICS FOR HAPPINESS
                                                                                                     Investigate happiness to create good life

                                                                                                        The Davines Group supports two research         STAKEHOLDERS INVOLVED
                                                                                                        projects on happiness and collective and        Community (states, public and private
                                                                                                        individual well-being, conscious of the         institutions, private citizens).
                                                                                                        correlation between this issue and the
                                                                                                        environment and its importance in building      RESULTS
                                                                                                        a new sustainable development model.            Support for governments, institutions
                                                                                                        The World Happiness Report is an annual         and businesses to reflect on the aspects
                                                                                                        publication by the UN SDSN (United              that determine the happiness of people
                                                                                                        Nations Sustainable Development Solutions       and communities and, consequently, to
                                                                                                        Network), under the auspices of the UN          implement strategies that promote their
                                                                                                        Secretary General, which studies and            well-being in a sustainable way.
                                                                                                        measures perceptions of global happiness
WE IMPROVE THE WORLD TOGETHER                                                                           by ranking 156 Countries according to
                                                                                                        their citizens’ happiness. Written by a
                                                                                                        multidisciplinary group of independent
REGENERATION 20/30                                                                                      experts, it is based on an assessment
A coalition of independent leaders to revitalize society and nature                                     method that intertwines social, economic
                                                                                                        and psychological criteria.
                                                                                                        The Davines Group also participates in
  We only have 10 years left to take concrete        STAKEHOLDERS INVOLVED                              working groups organized as part of
  steps to develop a new economic paradigm           Community (public institutions, private            the “Science & Ethics for Happiness”
  which, in line with the SDGs, can create           sector, policy makers, spiritual leaders, the      initiative and aimed at exploring the subject
  favorable conditions for everyone to live          academic world, NGOs and civil society).           of happiness by connecting scientific
  in prosperity. This appeal, which may              Environment.                                       investigations, philosophical knowledge
  be our last opportunity, has inspired the                                                             and spiritual teachings. The meetings,
  founders of “Regeneration 20/30” to create         EXPECTED RESULTS                                   organized by the Pontifical Academy
  a global regenerative alliance between             Suppor t for the development of a                  of Sciences in collaboration with the
  governmental and non-governmental                  regenerative economy, a system in which all        United Nations, bring together academics,
  organizations, spiritual leaders, the academic     actors are a positive force that regenerates       philosophers, scientists, spiritual leaders
  world and the private sector with a view           people, society and the biosphere.                 and enlightened entrepreneurs, fostering a
  to initiating dialogue, sharing ideas and                                                             constructive dialogue designed to achieve                                                                                                 2020

  taking concrete steps. All participants            Support for climate action to achieve net          a shared and viable understanding of the
  will have to sign a “pledge” with specific         zero greenhouse gas emissions and to shift         notion of happiness.
  and measurable commitments in three                business models towards decarbonization
  key areas: regenerative economy, climate           and a new inclusive and prosperous
  action and global happiness/well-being.            economy.
  Davide Bollati, Chairman of the Davines            Support for the development of world
  Group, is one of the founders of                   happiness in its most profound sense of
  “Regeneration 20/30”, a project that the           self-fulfillment, altruism, individual and
  company strongly supports and which is             social well-being, and a real measure of
  consistent with its values and with the            human progress.
  choices that the Davines Group has always          Support for the identification of a new
  made to address the climate emergency              21st century leadership model based on
  and improve the community’s well-being.            the values of compassion, wisdom and
                                                     courage and the working principle of                                                                         Editors: John F. Helliwell, Richard Layard, Jeffrey D. Sachs, and Jan-Emmanuel De Neve

                                                     interdependence.                                                                                                        Associate Editors: Lara B. Aknin, Haifang Huang, and Shun Wang

                                                                                                                                                                                                                                                           | 46 |
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