Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS

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Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
KATHMANDU HOLDINGS LIMITED

Sustainability
Report 2018
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
SUSTAINABILITY REPORT 2018   INTRODUCTION                     SUSTAINABILITY REPORT 2018                 1

                                                                                                                             World ready.
                                                            We come from New Zealand,         Whether you’re on an epic
                                                            home to some of the world’s       expedition, volunteering in
                                                            harshest conditions. Since        a remote part of the world,
                                                            1987 we’ve been engineering       or exploring the best local
                                                            outdoor gear for adventurers      trails, you can be confident
                                                            all over the world – preparing    you can take on any
                                                            all kinds of people for their     destination in any weather
                                                            next adventure.                   conditions with Kathmandu.

                                                            For us, preparation is more       We believe travel and
                                                            than having the right gear.       adventure is the ultimate
Caroline Bellamy
Adventurer and artist from
                                                            It’s a mindset. It’s having       life experience. With
Nelson, New Zealand                                         curiosity, an open mind, and      product engineering and
                                                            a hunger to learn.                expert advice, we aim to
Lake Marian, Fiordland                                                                        give you the confidence
National Park – South Island
New Zealand                                                                                   to discover the world.
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
2                    SUSTAINABILITY REPORT 2018   INTRODUCTION          SUSTAINABILITY REPORT 2018                     3

    Our top 5
    sustainability                                                                                      A
    highlights.                                                  2
    At Kathmandu, sustainability
    isn’t a department, it’s a way
    of doing things. Here are some                        #2 world ranking                            Scored an 'A'
    of our highlights from last year.                       by the Textile                            in the Ethical
                                                            Exchange for                             Fashion Report
                                                         preferred materials

            Fair Labor                                      80% towards                               Recycled 6.7
           Association                                    our zero waste to                          million bottles
           accredited                                      landfill target                           into our gear
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
4        SUSTAINABILITY REPORT 2018                                                 INTRODUCTION   SUSTAINABILITY REPORT 2018                                        5

Contents.                                                                           Chairman’s and
                                                                                    CEO’s report.

                                                                                                                                There have been some big wins
    10   Our Journey                                                                                                            for Kathmandu this year in our
         Since 1987, we’ve been building a culture of sustainability and                                                        sustainable practices. Not only
         now we’re starting to think even bigger.                                                                               did we have our human rights
                                                                                                                                work validated by Fair Labor
                                                                                                                                Association accreditation, we
                                                                                                                                also received an 'A' score in the
                                                                                                                                Ethical Fashion Report.
    18   Our Suppliers                                                                                                          We know that workers’ rights is
         Looking after the people in our supply chain is our number one priority.                                               the issue that our customers
         We’re evolving a new approach to how we do it.                                                                         and shareholders care most about,
                                                                                                                                so these results are important in
                                                                                                                                more ways than one.
                                                                                                                                We’re also incredibly proud of
    28   Our Products                                                                                                           our second placed Textile Exchange
         The materials we choose make a big difference to our impact.                                                           ranking for sustainable material
         We’ve made big strides this year in sustainable textiles.                                                              use and for diverting 80% of our
                                                                                                                                waste from landfill.
                                                                                    DAVID KIRK     XAVIER SIMONET
                                                                                    CHAIRMAN       CHIEF EXECUTIVE OFFICER      This year, Kathmandu acquired
                                                                                                                                the Oboz footwear brand based in
                                                                                                                                Montana, USA.Oboz is a leader in
    46   Our Footprint                                                                                                          footwear and product design and
         Operational efficiency supports environmental sustainability.                                                          have been one of our customers
         First we measure and then we act.                                                                                      since its inception more than ten
                                                                                                                                years ago.
                                                                                                                                All our achievements are possible
                                                                                                                                because of the many passionate
    54   Our Community                                                                                                          people who champion
         Connecting our communities, customers and causes we care about.                                                        sustainability at Kathmandu –
         Our strategy focuses on three ways to improve people’s lives.                                                          from our store network to support
                                                                                                                                offices. Sustainability isn’t a
                                                                                                                                department, it’s a way of
                                                                                                                                doing things.

    64   Our Team
         The three pillars of our People Plan are helping us develop a safe,
         engaged and high-performing team.
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
6                            SUSTAINABILITY REPORT 2018   INTRODUCTION   SUSTAINABILITY REPORT 2018                                                          7

“I think too many                                                         Tim Jarvis
 people are waiting
 for someone else                                                         uses adventure
 to save us all from
 climate change.                                                          to champion
 It will come down
 to individuals and                                                       the planet.
 organisations to be
 the change agents.”                                                      Kathmandu Ambassador Tim Jarvis
                                                                          is an environmental explorer and
                                                                                                                     Tim is highlighting the real impacts
                                                                                                                     of climate change by climbing all
                                                                          adventurer. He uses his world-first        the mountains around the equator
 TIM JARVIS                                                               expeditions to share stories about         that still have a glacier, documenting
 KATHMANDU AMBASSADOR                                                     environmental causes and help              and recording their recession.
                                                                          people to take action.
                                                                                                                     “There are 25 of those, and they’re at
                                                                          Tim was awarded 2016 Conservationist        0 degrees latitude. In a quarter of a
                                                                          of the Year by Australian Geographic        century they’ll be gone due to climate
                                                                          for his 25zero project, which is raising    change,” he says.
                                                                          awareness about the loss of
                                                                          equatorial glaciers.
                                                                                                                     GEAR TO GET OUT THERE
                                                                                                                     Tim worked with Kathmandu in the
                                                                          FINDING HIS WAY
                                                                                                                     redesign of our XT expedition gear
                                                                           When he was just 12 years old,            series, which he tested on a climb
                                                                           getting lost (and then finding his way)   of Mt Kilimanjaro in June.
                                                                           in a Malaysian jungle helped Tim
                                                                                                                     “To me, Kathmandu is about
                                                                           understand what he was capable of.
                                                                                                                      getting out there, travelling,
                                                                          “I was scared, but I got back. That
                                                                                                                      doing it responsibly, expanding
                                                                           began a feeling of being empowered
                                                                                                                      your horizons and discovering new
                                                                           in the outdoors that’s kind of
                                                                                                                      things for yourself. It’s also about
                                                                           continued ever since,” he says.
                                                                                                                      making a contribution. I think too
                                                                          Spending time in nature made Tim            many people are waiting for someone
                                                                          want to protect it, and that led to a       else to save us all from climate
                                                                          career in environmental sciences.           change. It will come down to
                                                                                                                      individuals and organisations to
                                                                          “Things have kind of gone full circle
                                                                                                                      be the change agents.”
                                                                           because now I use my expeditions
                                                                           around the world to try and highlight
                                                                           environmentalism,” he says.

                                                                          ADVENTURE ADVOCACY
                                                                          Tim has led expeditions to the South
                                                                          and North Poles, across many deserts
                                                                          and up many mountains. He retraced
                                                                          the journeys of Sir Douglas Mawson
                                                                          and Sir Ernest Shackleton using the
                                                                          100-year-old equipment that they
                                                                          would have used.
                                                                          With his latest project, 25zero,
Adventurer and Kathmandu
Brand Ambassador Tim Jarvis
testing the new XT range.
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
8                                             SUSTAINABILITY REPORT 2018                                                            INTRODUCTION            SUSTAINABILITY REPORT 2018                         9

Oboz outdoor footwear
joins our family.
This year, Kathmandu acquired Oboz –          HOW DO YOU DESCRIBE YOUR                  opportunities and we are so excited
an outdoor footwear company from              VISION AND PURPOSE?                       to continue our journey as partners.
Bozeman, Montana. Founder John                                                          We’re excited to help Kathmandu
                                              Our motto is ‘true to the trail’. Our
Connelly shares some insights about                                                     grow its footwear business in New
                                              vision is to become the next great
the Oboz journey and the                                                                Zealand and Australia and to have the
                                              American outdoor footwear brand.
sustainability ethos that has been                                                      support and resources to develop our
                                              We think our greatness will come
core to the brand from the very                                                         international businesses together.
                                              from manifesting passion, truth and
beginning.                                                                              Two key areas I believe we’ve needed
                                              soul in every pair we sell.
                                                                                        help in are sustainability and
                                              Our purpose is to inspire, enhance        innovation. We’re already seeing some
HOW DID OBOZ COME TO BE?
                                              and promote active outdoor lives.         benefits. I couldn’t be more pleased.
In January 2007, I was having dinner
                                              Our mission is to treat our employees
with REI’s footwear category manager
                                              and customers with respect and            HOW IS SUSTAINABILITY
and Chuck Roth (our director of
                                              dignity, build collaborative and          APPLIED AT OBOZ?
design). I mentioned that I was
                                              profitable alliances with our retail
considering starting a new brand.                                                       One of the things I’m most proud
                                              and distributor partners, create
The category manager said REI                                                           of (and I can’t remember whose idea
                                              shareholder value and continually
would support it and become our                                                         it was) is that we decided to plant a
                                              strive to do things better, to minimise
first customer. The next day,                                                           tree for every pair we’d sell. This was
                                              our carbon footprint and to always
Kathmandu said they’d become                                                            before we even had a company name
                                              build the best-quality and best-
our second customer. With these                                                         or any samples. We’ve now planted –
                                              performing outdoor footwear we
votes of confidence, a plan was put                                                     through Trees for the Future – just
                                              possibly can.
into motion. A factory was lined up,                                                    under 2,000,000 trees. Almost from
investors were signed up, designs                                                       the beginning, we’ve run our offices
were started, samples were made.              HOW DOES WORKING WITH                     on wind power, and we’ve offset
The brand launched at Outdoor                 KATHMANDU TAKE THE OBOZ                   our carbon footprint. All recyclable
Retailer in November 2007. We                 VISION FURTHER?                           materials are recycled. With
started a footwear company and                                                          Kathmandu’s help, we hope
                                              For me, selling the company to and
came to market in record time.                                                          to do more.
                                              working with Kathmandu is the
                                              perfect ending to what was a great        Another thing I’m very, very proud
                                              beginning. Having worked with             of is that, for the last two years, 2016
WHERE DID THE NAME
                                              Kathmandu and visited New Zealand         and 2017, we’ve won REI’s Vendor of
OBOZ COME FROM?
                                              for three years prior to starting Oboz    the Year Award for their outdoorwear
Oboz is a combination of Outside              made it feel very comfortable and like    division, their largest division.
and Bozeman. Bozeman, Montana,                it was meant to be. The businesses
is our home base and lies in the              are very compatible, and we share the
Greater Yellowstone ecosystem, which          same values. Although we were
includes five major mountain ranges           successful and had strong year-over-
and Yellowstone and Grand Teton               year growth, moving up to the
National Parks. Oboz is a unique land         number three functional outdoor
of glaciers and geysers, of bison,            brand in the US, it has been
wolves and grizzly bears where there          challenging at times competing with
is world-class fly fishing, hiking, biking,   giant, well established brands. We
climbing, river running, skiing and           don’t have the resources our big
wildlife encounters. It’s our inspiration     competitors have, so joining up with
and our testing ground.                       Kathmandu opens more growth                                                          “Our motto is
                                                                                                                                   ‘true to the trail’. “
                                                                                                                                    JOHN CONNELY
                                                                                                                                    OBOZ FOUNDER                                         Copyright Stephen Matera
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
10   SUSTAINABILITY REPORT 2018    OUR JOURNEY                 SUSTAINABILITY REPORT 2018   11

                                  “I use my
                                   expeditions around
                                   the world to try
                                   and highlight
                                   environmentalism.”
                                   TIM JARVIS
                                   GLOBAL BRAND AMBASSADOR

                                                                              Journey.
                                                                              Our
                                   Tim Jarvis explores New
                                   Zealand’s Tasman Glacier.
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
12                               SUSTAINABILITY REPORT 2018    OUR JOURNEY                              SUSTAINABILITY REPORT 2018                                                     13

                                                              A sustainability
                                                              programme built on
                                                              passionate individuals.
                                                              “Sustainability is about awareness and    “At Kathmandu, sustainability goes         supply chains.
                                                               then positive behaviour change,” says     hand in hand with everything that we
                                                                                                                                                   We look to industry partners who can
                                                               Kathmandu Sustainability Specialist       do,” says Oliver. It’s about the people
                                                                                                                                                   see the industry impacts as a whole –
                                                               Oliver Milliner.                          and empowering them to get involved.
                                                                                                                                                   did you know that the apparel
                                                                                                         There is nothing more rewarding to
                                                               From our store team members taking                                                  industry accounts for 25% of global
                                                                                                         see when new staff join the company
                                                               action to recycle shop fittings to the                                              chemical use? Organisations like the
                                                                                                         and start making sustainable choices
                                                               brand manager picking up rubbish on                                                 Sustainable Apparel Coalition help
                                                                                                         both at work and at home.”
                                                               her favourite running trails, it is a                                               brands better understand and
                                                               collection of passionate individuals                                                manage their impacts.
                                                               that have piloted Kathmandu’s            HOW DO WE KNOW
                                                                                                                                                   Overarching all this is the question
                                                               sustainability journey.                  WHAT’S IMPORTANT?
                                                                                                                                                   what’s important to a healthy planet?
                                                               We are guided by our Sustain the         Everyone who connects with our             The United Nations Sustainable
                                                               Dream strategy, which provides a         brand in some way deserves a voice in      Development Goals are a great
                                                               framework for measuring impacts          how we prioritise our environmental        framework for us to check ourselves
                                                               and driving change across the            and social work. That means                against. We’re looking for new ways
                                                               company. The strategy uses the           employees, customers, shareholders         to align our business to these goals.
                                                               Sustainable Apparel Coalition’s (SAC)    and people in our supply chain.
                                                                                                                                                   For more information about how we
                                                               Higg Index framework and aligns with
                                                                                                        This communication is happening all        engage with people close to our brand
                                                               the United Nations Sustainable
                                                                                                        the time, through interactions in store,   and prioritise environmental and
                                                               Development Goals. Our partnerships
                                                                                                        online and in the boardroom. We see        social impacts, visit: www.kathmandu.
                                                               and certifications help guide us as
                                                                                                        part of our role as education, sharing     co.nz/corporate-responsibility/reports-
                                                               well as providing a future pathway for
                                                                                                        what we have learned along the way         and-policies.
                                                               improvement.
                                                                                                        about the impacts of materials,
                                                                                                        reducing waste and working with

                                                              “Sustainability is
                                                               about awareness
                                                               and then positive
                                                               behaviour
                                                               change.”
Tim Jarvis testing the new XT                                 OLIVER MILLINER
range in New Zealand’s Aoraki/
Mt Cook National Park.                                        SUSTAINABILITY SPECIALIST
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
14                                        SUSTAINABILITY REPORT 2018                                      OUR JOURNEY                  SUSTAINABILITY REPORT 2018                                 15

A little
help from
                                                                                                                         TEXTILE EXCHANGE                            AUSTRALIAN HIMALAYAN
                                                                                                                                                                     FOUNDATION
                                                                                                                         Our membership with the
                                                                                                                         Textile Exchange supports                   We have been partners with

our friends.
                                                                                                                         our materials strategy, and                 the AHF since 2012. We work
                                                                                                                         we also participate in their                with the AHF to support
                                                                                                                         Preferred Fibre and                         communities in Nepal, the
                                                                                                                         Materials Market report.                    nation that inspired our brand.

 Every explorer knows that a journey is better
 with someone by your side. As we continue the                          OUTDOOR INDUSTRY                                 GREEN BUILDING                              HIMALAYAN TRUST
 journey of sustainability, industry partnerships                       ASSOCIATION                                      COUNCIL AUSTRALIA                           NEW ZEALAND
 provide important support ­‑ resources,
 information and frameworks.                                            We participate in OIA’s                          Our membership with the                     We have recently partnered
                                                                        Sustainability Working Group,                    GBCA supports our green                     with the Himalayan Trust to
                                                                        a collaborative platform of                      building programme.                         further improve outcomes in
                                                                        more than 300 outdoor brands                     We also work in                             education, health and
                                                                        and suppliers working together                   collaboration with this                     sanitation in Nepal.
                                                                        to identify and implement                        organisation in trialling
                                                                        better business practices.                       new projects.

                                                                        SUSTAINABLE APPAREL                              CARBON DISCLOSURE                           AUSTRALIAN RED CROSS
                                                                        COALITION                                        PROJECT
                                                                                                                                                                     We have partnered with
                                                                        Membership of the SAC gives                      We submit an annual                         Australian Red Cross since
                                                                        us access to the Higg Index                      report to the CDP, which                    2011. We support its
                                                                        modules. We’ve been using                        supports our carbon                         humanitarian work and
                                                                        the index since 2014, which                      measurement and reduction                   emergency responses.
                                                                        supports our sustainability                      programme.
                                                                        strategy. The index guides us on
                                                                        the environmental and social
                                                                        impacts of our products and
                                                                        how we can improve.

“The Higg Index                                                         FAIR LABOR ASSOCIATION                           ENVIRO-MARK SOLUTIONS                       NEW ZEALAND RED CROSS

 empowers                                                               We became the first brand in
                                                                        the southern hemisphere to
                                                                                                                         Our membership with
                                                                                                                         Enviro-Mark Solutions helps us
                                                                                                                                                                     We have partnered with
                                                                                                                                                                     New Zealand Red Cross
 organisations at                                                       achieve FLA accreditation.                       to measure our carbon                       since 2011. We support its
                                                                        This verifies that our social                    footprint as well as facilitating           humanitarian work and
 any stage of their                                                     compliance programme in our                      carbon offsetting projects.                 emergency responses.
 sustainability journey                                                 supply chain exceeds the most
                                                                        stringent global standards.
 to reduce their
 environmental impacts                                                  BLUESIGN®                                        AUSTRALIAN PACKAGING
 and strengthen the                                                     Our bluesign® system
                                                                                                                         COVENANT ORGANISATION

 communities where                                                      partnership supports our                         We submit an annual report
                                                                        chemicals management                             to the APC, which supports
 they operate.”                                                         programme, materials                             our packaging and waste
                                                                        and products so that                             strategy.
 JASON KIBBEY                                                           they are environmentally
                                                                        and socially friendly.
 SUSTAINABLE APPAREL
 COALITION CEO
Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
16              SUSTAINABILITY REPORT 2018                                                                                   OUR JOURNEY                                                   SUSTAINABILITY REPORT 2018                                              17

                                                                                                                                                                                                                                               KEY

Our world.                                                                                    Arctic

                                                                                                                                                                                                                                        MANUFACTURERS
                                                                                                                                                                                                                                              75 TOTAL
                                                                                                                                                                                                                                          (Only Kathmandu
                                                                                                                                                                                                                                           manufacturers)
                                                                                                                                                                                                                                              China – 59
                                                                                                                                                                                                                                             Vietnam – 7
                                                                                                                                                                                                                                              Taiwan – 2
                                                                                                                                                                                                                                           New Zealand – 2
                                                                                                                                                                                                                                             Indonesia – 2
                                                                                                                                                                                                                                               Israel – 1
                                                                                                                                                                                                                                               Nepal – 1
                                                                                                                                                                                                                                               India – 1

                                                        Iceland
                                                                                                                                                             Russia
                                                                                                                                                                                                                                      MATERIALS SOURCING
                                                                                    Norway

                                                                                       Denmark
                                                                        UK
                                                          Scotland
                                                                                           Germany

       Canada                                           Ireland                           Poland
                                                                                Netherlands
                                                                              Belgium
                                                                  France                Austria
                                                                    Switzerland                                                                                                                                                            OPER ATIONS
                                                                                                        Macedonia                                             China
                                                                                                                                                                                                                                            New Zealand
                                                                                   Italy              Greece                                                                                                                                   47 stores
                   USA
                                                                                                                                                                   South Korea                 Japan                                    1 distribution centre
                                                                                              Malta
                                                                                                                      Iraq                                                                                                                      1 office
                                                                         Algeria                                  Israel      Afghanistan         Nepal

                                                                                                        Egypt                                                                                                                                 Australia
            Mexico                                                                                                            Pakistan        Thailand                      Taiwan
                                                                                                                                                            Laos                                                                              116 stores
                                                                                                                Yemen
                                                                                                                                                                                                                                        1 distribution centre
                                                                                                                                          Myanmar
                                                                                                                                              Cambodia                                                                                          1 office
                                                                                                                             India                             Vietnam
                                                                                                                                                                                 Philippines
                                                                                                          Ethiopia                                                                                                                            America
                                                                                    Nigeria                                               Sri Lanka                                                                                            1 office
                                                                                                                                                          Malaysia
                                                                                                                Somalia                                                      Indonesia
                                                                                                                                                                                                                                         United Kingdom
                                                                                              Rwanda                                                                                                                                          1 store
                                               Brazil

                                                                                                                                                                                                               Fiji        Samoa
                                                                                            Zambia

                              Chile
                                                                                                                                                                                               Australia                                   COMMUNITY
                                                                                                        South Africa
                                                                                                                                                                                                                                          PARTNERSHIPS
                                        Argentina                                                                                                                                                                                     13 Adventure Sponsorship
                                                                                                                                                                                                                                         winners travelled to:
                                                                                                                                                                                                                                         Antarctica, Iceland,
                                                                                                                                                                                                                      New Zealand
                                                                                                                                                                                                                                       Egypt, Brazil, Australia,
                                                                                                                                                                                                                                    Arctic, Norway, New Zealand,
                                                                                                                                                                                                                                          Ethiopia, Thailand.

                                                                                                                                                                                                                                     214 adventure sponsorship
                                                                                                                                                                                                                                             recipients

                                                                                                                                     Antarctica                                                                                         46 NATIONALITIES
                                                                                                                                                                                                                                        ACROSS OUR TEAM
18                                SUSTAINABILITY REPORT 2018   OUR SUPPLIERS   SUSTAINABILITY REPORT 2018   19

“We are not
 about ticking boxes.
 We are about
 making change.”

                                                                                              Suppliers.
GARY SHAW
CORPORATE SOCIAL
RESPONSIBILITY MANAGER

                                                                                              Our
This year’s Christmas gifts for
good are hand-crafted by
women in Nepal.
20                                      SUSTAINABILITY REPORT 2018                                                         OUR SUPPLIERS                         SUSTAINABILITY REPORT 2018                                                        21

We’re learning to
use audits as a step
towards change.
Sustainability is about people,         RESPONSIBLE PURCHASING                  CODE OF CONDUCT
especially when it comes to
                                        We’ve used responsible purchasing to    For more information about our
protecting human rights in our
                                        make sure we’re not putting pressure    Supplier Code of Conduct, visit
supply chain.
                                        on our factories that would make it     www.kathmandu.co.nz/corporate-
Over the last 18 months, our            harder for them to keep excessive       responsibility/reports-and-policies .
approach to looking after people        overtime in check.
all the way down our supply chain
                                        And we’ve put more weight on
has evolved. We’ve put values and
                                        improvement than on perfection.
transparency front and centre,
                                        Auditing helps us find areas that
which means our suppliers are
                                        need improvement, but working
clear about how we expect them
                                        closely with factories to make change
to look after their workers, but they
                                        is when we have a real opportunity
also understand why this is important
                                        to improve conditions for workers.
to us and to our customers.

                                                                                                                                           OUR SUPPLIERS 2018

                                                                                                                                                               150                  Kathmandu
                                                                                                                                                                                    and branded
                                                                                                                                                                                    suppliers
                                                                                                                                                                                                        8.6
                                                                                                                                                                                                    YEARS AVERAGE TENURE
                                                                                                                                                                                                       WITH SUPPLIERS

                                                                                                                                                                             40                    0      Unannounced
                                                                                                                                                                                                          Audits

                                                                                                                                           100                                   TOTAL AUDITS     12       Corrective
                                                                                                                                                                                                           Action Plans

                                                                                                                                            % NEW SUPPLIERS
                                                                                                                                             SCREENED USING
                                                                                                                                             SOCIAL CRITERIA
                                                                                                                                                                         13Exits                  200
                                                                                                                                                                                                  Hours training office staff

                                                                                                                                                  Support office employees trained = CSR Specialist based in China

                                                                                            DriFill down jackets being                                                                                                  A worker fabricates jackets at
                                                                                            produced in Shenzhen, China.                                                                                                a factory in Shenzhen, China.
22                                         SUSTAINABILITY REPORT 2018                                          OUR SUPPLIERS                                SUSTAINABILITY REPORT 2018                 23

FLA accreditation                                                                                              Scoring an 'A'
shows collaboration                                                                                            in the Ethical
and transparency.                                                                                              Fashion Report.
After a four-year journey, Kathmandu
became the first in the Southern
                                           Today, the non-profit helps around
                                           5.5 million workers across the world to
                                                                                      “We commend              Each year, the Baptist World Aid and
                                                                                                               Tear Fund rate apparel brands in
Hemisphere to have its compliance          have a voice in their own futures and       Kathmandu for           Australia and New Zealand on their
programme accredited by the Fair           feel safer at work.                                                 supply chain practices. In the 2018
Labor Association (FLA).                                                               its strong              report, Kathmandu received an 'A'
There are just 43 brands to have           LEARNING CONTINUES                          commitment to           score for the first time.
received this accreditation. It comes
after lengthy reviews, assessments
                                           “Working with the FLA has really            transparency.”          “This score shows they have confidence
                                                                                                                that our systems are robust and follow
                                            helped us understand what good
and audits designed to make sure                                                                                best practices,” says Corporate Social
                                            corporate social responsibility (CSR)
companies fulfil the principles of fair                                                SHARON WAXMAN            Responsibility Manager Gary Shaw.
                                            looks like,” Gary says.
labour and responsible sourcing.                                                       FLA PRESIDENT AND CEO
                                           FLA President and CEO Sharon
                                                                                                               VALUES DRIVE IMPROVEMENT
                                           Waxman says, “We commend
IN LEAGUE WITH GIANTS
                                           Kathmandu for its collaboration                                      Gary attributes the increase from
“This puts us alongside companies like     with other brands and civil society                                 'B+' in 2017 to 'A' in 2018 to a number of
 Patagonia, Adidas and Nike,”              to remediate labour rights violations,                               changes. “We partnered with ELEVATE,
 says Corporate Social Responsibility      along with the company’s strong                                      a company that better reflects our
 Manager Gary Shaw.                        commitment to transparency in                                        values,” Gary says. “We started using
                                           publishing its supplier list and results                             a technology platform called RizePoint,
The FLA grew out of a group of
                                           of FLA factory assessments online.”                                  which helps us manage audit scores so
multinational companies and NGOs
                                                                                                                that we can see trends and measure
brought together by President Clinton
                                                                                                                ourselves against best practice. The
in 1996 to improve working conditions
                                                                                                                focus is not just on policing the supply
in the apparel and footwear industries
                                                                                                                chain but improving it. The software
after a series of high-profile incidents
                                                                                                                delivers e-learning modules to suppliers
exposing sweatshop labour.
                                                                                                                in their own language so that that
                                                                                                                they can learn how to make changes
                                                                                                                and why those changes are important.”

                                                                                                               CONNECTING DIGITALLY
                                                                                                               Other improvements this year include
                                                                                                               the introduction of a grievance
                                                                                                               mechanism that utilises the popular
                                                                                                               Chinese social media platform
                                                                                                               WeChat. Gary says the next range
                                                                                                               of improvements will be about
                                                                                                               going beyond compliance towards
                                                                                                               proactive supply-chain capacity
                                                                                                               building and development.
                                                                                                               “We are not about ticking boxes. We
                                                                                                                are about making change,” Gary says.

                                                                                                                                                                                         Sewing jackets in
                                                                                                                                                                                         Shenzhen, China.
24                                        SUSTAINABILITY REPORT 2018                                                     OUR SUPPLIERS                             SUSTAINABILITY REPORT 2018                                                       25

CASE STUDY

WeChat complaint
opens doors for
improvement.
For years, the official grievance         COLLABORATING FOR IMPACT
channel for workers in our supplier
                                          The grievance was sent to Kathmandu
factories sat dormant. Even if workers
                                          and to MEC in Canada. Kathmandu
had access to email,
                                          approached four other brands with
they would have struggled with
                                          production at the same factory.
the English email address.
                                          Together, the six companies made up
Last year, we introduced a new            almost all the factory’s business.
method through the ubiquitous
                                          “We knew that, through collaboration
Chinese social media platform
                                           and joint problem solving, our efforts
WeChat that worked by scanning a
                                           would have greater impact due to our
QR code. The hope was that workers
                                           group influence at the facility,”
would be able to contact us if they
                                           Gary says.
weren’t being treated fairly in their
                                                                                         A Kathmandu employee runs
workplace, even though it can             Initially, the factory denied the charge,      training to help build better      Workers from TGI, a supplier outside
sometimes go against traditional          but eventually conceded they had               grievance mechanisms.              Ho Chi Minh City, Vietnam.

Chinese culture to make such a            covered up subcontracting.
complaint.
There are signs that these cultural
                                          “In the end, they were very apologetic,”
                                           Gary says. “They seemed surprised          “CSR and human
norms are shifting. This year, we          that we genuinely wanted to know            rights relies on us               SUPPLIER SPOTLIGHT

                                                                                                                         Women-run factory
received our first grievance from          about their problems so we could help
workers in our supply chain. It            them improve. I think they assumed          being able to inspect
became an opportunity to test our          that we only cared about having our
                                                                                       and do audits so
                                                                                                                         recycles water to feed
systems and drive real improvements        boxes ticked at audit time. They have
for workers.                               said they didn’t understand the value
                                           we placed on transparency.”
                                                                                       we can say with
The workers reported various
                                                                                       confidence that the
                                                                                                                         workers fresh vegetables.
health and safety breaches and
that the factory was subcontracting       ELEVATING STANDARDS                          people are being
work to other factories without our
knowledge or approval.
                                          The factory is now working with
                                          our ethical sourcing partner
                                                                                       treated well.”
                                          ELEVATE on a six-month improvement
                                                                                       GARY SHAW                         Outside Ho Chi Minh City, TGI’s           Kathmandu Sourcing Manager Phil         The company also rewards employees’
RELYING ON TRANSPARENCY                   programme. Kathmandu’s China-
                                          based CSR specialist is also running         CORPORATE SOCIAL                  two factories make fleece and             Bailey says, “I have been to more       children with money for each year of
“CSR and human rights relies on us                                                     RESPONSIBILITY MANAGER            woven garments for Kathmandu.             than 1000 factories in my career, and   school they complete. In 2018, they
                                          training to help the company build
 being able to inspect and do audits so                                                                                                                            only a handful of those are run by      gave financial prizes to 218 children of
                                          more robust internal grievance                                                 TGI CEO is Ms Nguyen Bao Tran,
 we can say with confidence that the                                                                                                                               women."                                 workers. TGI also gives university
                                          mechanisms for the factory.                                                    who was trained by the Chairman,
 people are being treated well,” says                                                                                                                                                                      scholarships to rural children.
 Corporate Social Responsibility          “It starts with us having to explain                                           Mr Vu Duc Giang, to take this role.       TGI has taken other initiatives
 Manager Gary Shaw. “It relies on          to them why we care about their                                               Mr Giang says his philosophy with         to look after workers. It uses          Phil says the TGI factories rate
 transparency. That’s why our terms        workers and why our customers care,”                                          rural factories is to find local talent   mindset training to help workers        highly for quality, delivery and
 of trade don’t allow outsourcing          Gary says. “They have gone on a                                               and train them through to senior          set goals and to help them grow         corporate responsibility. As a result,
 without asking our permission first.”     journey of improvement, which all the                                         management. Along with the CEO,           into management roles.                  Kathmandu has increased its orders
                                           brands will be watching closely. We                                           six of the seven senior management                                                through the factory.
                                                                                                                                                                   Both factories have water recycling
                                           will keep working with them as long                                           are women.
                                                                                                                                                                   systems. At one, the water supplies
                                           as they are willing to improve.                                                                                         a small farm that helps to feed the
                                           Working together on these problems                                                                                      workers, who are split between
                                           is where the real opportunity for                                                                                       their two factories according to
                                           change exists.”                                                                                                         their food preferences.
26                                          SUSTAINABILITY REPORT 2018                OUR SUPPLIERS   SUSTAINABILITY REPORT 2018                            27

Moving the dial
on human rights.
 AUSTRALIAN MODERN                           WORKER VOICE
 SLAVERY ACT
 The Australian Modern Slavery Act is        Our audit partner ELEVATE has
 currently in the process of being           partnered with Laborlink, an
 legislated . The law is similar to others   award-winning mobile platform
 in the UK and USA, which                    that establishes a two-way
 acknowledge that there are more             communication channel for
 people in slavery today than ever           workers to share their viewpoints
 before in history – 45 million people       in real time and for companies to
 according to estimates from the             have clear visibility of worker
 Global Slavery Index. “A lot of them        wellbeing in their supply chains. From
 are hiding in the global fast fashion       2018, every full audit we conduct will
 industry,” says Kathmandu Corporate         be integrated with Laborlink and
 Social Responsibility Manager Gary          allow us to ask our workers specific
 Shaw. The International Labour              questions about their safety and
 Organisation reports that half of           wellbeing. This tool will facilitate
 modern slaves are in debt bondage,          better detection and risk analysis,
 working to repay impossibly high            enhanced reporting and prevention
 debts. Kathmandu has policies and           by engaging with vulnerable workers
 practices in place to ensure that we        in hard-to-reach places.
 do not allow forced labour in any of
 our production facilities. The
                                             OBOZ
 legislation requires companies with
 more than $80 million in revenue to         With the acquisition of Oboz footwear,
 submit an annual report showing the         Kathmandu will add Vietnamese
 work they are doing to insure there is      footwear factories to its list of
 no forced labour in                         suppliers. These will be transitioned
 their supply chain. “All companies          into the Kathmandu corporate social
 have a role to play,” Gary says.            responsibility programme in the
                                             second half of 2018. “We’ll be learning
                                             from the good work that Oboz has
                                             done in CSR and looking forward to
                                             aligning best practices across our
                                             brands,” says Gary.

“All companies
 have a role to
 play in making
 sure there is no
 forced labour.”
 GARY SHAW
 CORPORATE SOCIAL                                                                                                                   Workers in Shanghai sewing
 RESPONSIBILITY MANAGER                                                                                                             the women’s hooded pullover.
28                              SUSTAINABILITY REPORT 2018   OUR PRODUCTS   SUSTAINABILITY REPORT 2018   29

“Change comes from
 an understanding
 between two humans.”
MANU RASTOGI
RESPONSIBLE MATERIALS MANAGER

                                                                                           Products.
                                                                                           Our
Summit Club member Ben
on location in Kaikoura.
30                                        SUSTAINABILITY REPORT 2018                                                              OUR PRODUCTS       SUSTAINABILITY REPORT 2018                        31

Combining forces
for better material
choices.
Wool or polypropylene? Down or            pollution. Centralising all of this into   END OF LIFE
synthetic? Hemp or cotton?                one index means that everyone is
                                                                                     The Higg MSI measures impacts up to
Consumers are asked to make these         using the same process to arrive at an
                                                                                     finished materials, but of course that
choices every day. We all want to do      impact score. Without this, it would
                                                                                     is only about halfway through the
the right thing, but the answer is        be impossible to make comparisons.
                                                                                     lifecycle of a garment. Turning
rarely clear.
                                          The Higg MSI is constantly being           finished material into a product that
One tool that we use at Kathmandu         improved as more data feeds in.            adapts to your needs and lasts a
is the Higg Materials Sustainability      You might be surprised at some of          lifetime is our job. After that, it’s over
Index (Higg MSI). This online database    the results.                               to our customers to put our products
is available to anyone at msi.higg.org.                                              to good use and to manage the
It has been developed by the                                                         impacts of washing and disposal, so,
                                          SURPRISING IMPACTS
Sustainable Apparel Coalition (SAC),                                                 we’re also building resources to guide
a group of businesses from the            We tend to think of cotton as good         customers on the best ways to care
apparel, footwear and textile             because it’s a natural material and        for our products along with easier
industry who have come together           polyester as bad because it’s made         ways to send products back for repair.
to make it easier for the industry to     from petrochemicals. But the Higg
                                                                                     The journey continues. It’s exciting
measure and reduce impacts.               MSI rates the impact of polypro at
                                                                                     to see solutions emerging and to
                                          39 and the impact of conventional
                                                                                     know that together we can make
                                          cotton at 98 (a lower score equals
LEARNING TOGETHER                                                                    a difference.
                                          lower impact). But the story doesn’t
SAC’s framework for this is called        end there. Diving into the cotton          For our full list of priority of preferred
the Higg Index. It’s an online self-      impacts, you can see that growing          materials, visit
assessment tool that lets companies       the cotton makes up the bulk of the        www.kathmandu.co.nz/corporate-
measure their impacts across the          impact, contributing a whopping 66         responsibility/responsible-materials.
entire business and see how they’re       points. Choosing a more sustainable
doing compared to other companies.        raw material source reduces the
                                          impact dramatically. If a designer can
The Higg Index is an unprecedented
industry collaboration. It’s a resource
                                          swap conventional cotton for recycled      We tend to think                             Recycled cotton
                                          cotton, they can reduce the material
that no single company could ever
have hoped to build on its own.
                                          source impacts to almost zero and          of cotton as good                            has a lower
                                          cut out the dying process completely,
                                                                                     because it’s a                               environmental
                                                                                                                                                           98
By doing all the heavy lifting,
                                          bringing the impact score down to
calculations and assessments in
the background, brands are
                                          just 27 points.                            natural material                             impact on the
empowered to make better choices.         Simple? Not exactly. But it’s a
                                                                                     and polyester                                planet than                                      39         27
                                          valuable tool for our teams to make
The Higg MSI collects data from
the industry, for the industry.
                                          informed decisions based on very           as bad because                               other materials,
                                          detailed assessments of the impacts.
The SAC uses the data to conduct                                                     it’s made from                               bringing the
environmental assessments from            “It’s not perfect,” says Group
raw production through to finishing.       Product Operations Manager                petrochemicals.                              impact score
This produces a measure of how a
material impacts on things like
                                           Tara Strangwick, “but all the world’s
                                           heavyweights have got a better
                                                                                                                                  down to just
climate change, water scarcity and         chance if they’re working together.”                                                   27 points.

                                                                                                                                                      CONVENTIONAL                POLYPRO   RECYCLED
                                                                                                                                                         COTTON                              COTTON
32                   SUSTAINABILITY REPORT 2018                                                         OUR PRODUCTS                       SUSTAINABILITY REPORT 2018                                 33

                      Number two
                      in the world for
                      materials...again.
“This really          The Textile Exchange ranked us
                      second out of 19 global outdoor
                                                                2.16 million 100 watt lightbulbs for
                                                                a year and the CO2 equivalent of
 validates that       brands for our use of sustainable         289 Boeing 747s flying from London
                      materials for the second year in a row.   to Delhi.
 our approach         The Textile Exchange is an industry       In the outdoor and sports category,
 to materials is      platform where brands can                 we maintained our overall position as
                      collaborate on industry challenges.       #2, while the field grew from 14 to 19
 correct.”            Its aim is to support companies           brands. Our total score improved from
                      to transition away from conventional      64.3/100 to 73.85/100.
 TARA STRANGWICK      fibres and materials to ‘preferred’
                                                                Responsible Materials Manager Manu
 GROUP PRODUCT        fibres and materials – or those
                                                                Rastogi says, “The improvement was
 OPERATIONS MANAGER   with less impacts.
                                                                primarily because of our commitment
                                                                to using 100% preferred man-made
                      TRACKING PROGRESS                         cellulosics and because of our uptake
                                                                of recycled cotton.”
                      The Textile Exchange’s Preferred Fiber
                      and Materials Market Report tracks
                      the progress of the textile industry      FUTURE IMPROVEMENTS
                      in its mission to accelerate
                                                                Manu says moving into the top
                      sustainable practices.
                                                                spot might be possible with the
                      The 2017 report included 97 apparel       introduction of Responsible Wool

                                                                                                                               2
                      brands. Preferred cotton and              Standard (RWS) products, more                           GLOBAL SCOREBOARD
                      preferred down were the top               recycled fibres and bio-based
                      performers in the overall index           materials as well as closing in on
                      while the report cited room for           the goal to reach 100% sustainable
                      improvement amongst recycled              cotton.
                      fibres and man-made cellulose.
                                                                “This recognition is huge for us,”

                                                                                                                           #
                                                                 says Group Product Operations                                                 WORLD RANKING IN THE
                                                                                                                                               TEXTILE EXCHANGE PREFERRED
                      MATERIALS MAKE A DIFFERENCE                Manager Tara Strangwick. “The Textile                                         MATERIALS REPORT
                                                                 Exchange is the most recognised
                      By choosing preferred materials, the
                                                                 industry body, and the rankings are

                                                                                                                                     6
                      industry has saved enough to meet

                                                                                                                                                                                     10
                                                                 very detailed.”
                      the needs of everyone on Earth for
                      13 days, enough energy to power
                                                                                                                                    #          by Volume on the Preferred
                                                                                                                                               Down Leaderboard
                                                                                                                                                                                 #
                                                                                                                                                                                 BY VOLUME ON THE

                                                                                                                                    #5
                                                                                                                                                                                 RECYCLED COTTON
                                                                                                                                                                                   LEADERBOARD
                                                                                                                                               by Growth on the Preferred
                                                                                                                                               Down Leaderboard

                                                                                                                                                                                        9
                                                                                                                        100%
                                                                                                                                                  INCLUDED IN THE 100% CLUB
                                                                                                                                                  ON THE PREFERRED DOWN
                                                                                                                                                                                    #
                                                                                                                                                  LEADERBOARD & THE PREFERRED    ON THE RACE-TO-THE-
                                                                                                                                                  MAN-MADE CELLULOSICS          TOP LEADERBOARD FOR
                                                                                                                                                  LEADERBOARD                     PREFERRED COTTON
34                                       SUSTAINABILITY REPORT 2018                           OUR PRODUCTS                   SUSTAINABILITY REPORT 2018                                          35

Manufacturer
gives Kathmandu
the All-In Award.
We thought we had big ambitions          China in March 2018 to learn more
                                                                                                                                                          Microfibre research ramps
for recycling plastic bottles into       about how the plastic bottles are                                                                                up with new study.
garments – starting with a 1 million     transformed into fibre.                                                                                          Last year, the impact of microfibres
bottle goal in 2016 and growing to                                                                                                                        exploded into public consciousness.
                                         “It’s not a fancy process,” Manu says.
a 7.5 million target for 2019. But                                                                                                                        Tiny particles from our clothes are
                                         “They use a mechanical grinder to
REPREVE, who makes most of the                                                                                                                            escaping from washing machines and
                                          break down the bottles into plastic
recycled polyester in our range, are                                                                                                                      into waterways where the chemicals
                                          chips. This means there are less
aiming for 30 billion bottles by 2022                                                                                                                     in those fibres are consumed by fish
                                          chemicals in the process.”
(current count is around 12 billion).                                                                                                                     life and eventually even make it back
                                         Manu also likes the traceability of                                                                              into our food chain.
                                         REPREVE. “All recycled fibres are not
INSPIRING DESIGNERS
                                         alike. REPREVE uses a standard that
                                                                                                                                                          NATURAL FIBRES
REPREVE has created the Champions        means we can trace the material to
                                                                                                                                                          ALSO CONTRIBUTE
of Sustainability Award to inspire       make sure it comes from post-
designers and consumers to choose        consumer waste. REPREVE makes it                                                                                 The focus has been on polyester
sustainable fabrics and ultimately       easy for us to keep track of how many                                                                            fibres, which are essentially tiny pieces
help solve the problem of plastic        bottles we are recycling in our ranges,                                                                          of plastic. But a closer look at the
bottles ending up in the landfill, or    which also helps us to keep improving.”                                                                          data shows that natural fibres are
worse, in the oceans.                                                                                                                                     also heavily treated with chemicals
                                                                                                                                                          and can in some cases be even worse.
At the 2018 awards, Kathmandu            THE UNCOUNTED BOTTLES
was recognised with the All-In Award                                                                                                                      To create solutions, we need to
                                         The Kathmandu recycled polyester
for integrating REPREVE extensively                                                                                                                       understand the issue more clearly.
                                         bottle count only includes numbers
into product lines from the start.                                                                                                                        We’ve undertaken a study to quantify
                                         that have been verified by REPREVE,
                                                                                                                                                          Kathmandu’s impact and set a
REPREVE is now used in 71 products in    but the range includes lots of other
                                                                                                                                                          baseline. The research is being carried
the Kathmandu range, bringing this       recycled polyester too. “We only claim
                                                                                                                                                          out by fabric technologist Georgia
year’s bottle count to 6.7 million.      bottle counts where we can back
                                                                                                                                                          Tangney as part of her postgraduate
                                         those numbers up 100%, every time,
                                                                                                                                                          research with the University of Otago.
                                         with traceable documentation.
LEARNING MORE
                                         I think if we converted all our recycled                                                                         The study is looking at how many
Responsible Materials Manager Manu       plastic use, the number would be                                                                                 microfibres are generated by
Rastogi visited the REPREVE plant in     closer to 20 million,” Manu says.                                                                                Kathmandu products (including
                                                                                                                                                          fleece) and what the impact of
                                                                                                                                                          those fibres might be. It’s also

                                                                                    7.5                                                                   looking at solutions – measuring
                                                                             2019
                                                                            GOAL

                                                                                                                                                          the effectiveness of the Guppy Friend
                                                                                    MILLION                                                               microfibre filter, which is available in
 Our plastic bottle                                                                                                                                       Kathmandu stores.

                                                           6.7
                                                    2018

 recycling journey
                                                           MILLION                                                                                        UNANSWERED QUESTIONS

                                   3.9                                                                                                                    “There are lots of questions
                            2017

                                                                                                                                                          about microfibres that are still
                                   MILLION                                                                                                                unanswered. This study will help

       1.2
2016

                                                                                                                                                          us understand the issue as it applies
                                                                                                                                                          specifically to us so we can look for
       MILLION                                                                                The Cotinga Backpack is made                                ways to manage it,” says Responsible
                                                                                              with REPREVE fabric and
                                                                                              recycles 17 plastic bottles.                                Materials Manager Manu Rastogi.
36                                    SUSTAINABILITY REPORT 2018                                                              OUR PRODUCTS                                      SUSTAINABILITY REPORT 2018                                              37

       We’re on track
       for our sustainable
       cotton goal.
       Sustainable                                  Because we’re narrowing in on our          WORKING WITH SUPPLIERS
                                                    target fast, it wasn’t a huge leap
       cotton breakdown                             when we joined the Sustainable
                                                                                               These changes require suppliers to
                                                                                               come on board.
                                                    Cotton Communique. Driven by
                                                    Prince Charles, as part of the            “One example is our sleeping bag
                                                    Prince of Wales International              stuff sacks. These are made from
                                                    Sustainability Unit, the                   80% polyester and 20% cotton.
                                                    communique asks brands to                  All up, this represented just 0.13%
                                                    commit to using only sustainable           of the cotton we use, but to get it

               78              %
                                                    cotton by 2025. Kathmandu is one           across the line we had to engage
                                                    of 36 brands to sign up so far.            with the supplier, educate them
                                                                                               about why this is important to us,
                                                                                               introduce them to the BCI, and
                                                    GETTING THERE
                                                                                               have all the discussions about
                                                   This year, we increased from 74%            quality and cost that go along
                                                   to 78% sustainable cotton. A mix            with any changes.
                                                   of recycled cotton, Better Cotton
                                                                                              “At the end of the day, the change
                                                   Initiative (BCI) cotton and organic
                                                                                               comes from a face-to-face
                                                   cotton will get us there.
                                                                                               conversation and an
                                                   Responsible Materials Manager
                                                                                               understanding between two
                                                   Manu Rastogi says the final push
                                                                                               humans. It’s never as simple as
       53     %
              BCI        15     %
                                Organic
                                                   to 100% is the most difficult.
                                                   “This is the long tail that is hardest
                                                                                               just swapping out the fabric,
                                                                                               but hopefully the process helps
                                                    to get across the line. When you           shift the needle for the industry

       7    %
            Fairtrade   3      %
                               Recycled
                                                    have a glove or a sock with 5%             as a whole.”

                                                                                                                                                                                                                    11.5
                                                    cotton or a big complex product
                                                    like a child carrier with a bit of
                                                    cotton, we have to find solutions
                                                    for all these last little details to
                                                    reach our goal.”
                                                                                                                         100%
                                                                                                                  2020

       Our sustainable                                                                             78%                                                                                                              MILLION
                                                                                            2018

       cotton journey
                                                                          74%                                                                                                                                       bottles worth of fresh
                                                                   2017

                                                                                                                                                                                                                    water saved in 2018*
        59%                                      59%
                                          2016
2014

                                                                                                                                                                                                                    The United Nations is calling
                                                                                                                                                                                                                    for a “fundamental shift” in

                               38%
                                                                                                                                                                                                                    the way water is managed.
                        2015

                                                                                                                                                                                                                    By using more recycled cotton and
                                                                                                                                                                                                                    solution-dyed polyesters, we have
                                                                                                                                                                                                                    been able to increase our water
                                                                                                                                                                                                                    savings from 8.5 million bottles to
                                                                                                                                                                                                                    11.5 million bottles of water this year.
                                                                                                                                                    Cotton harvesting at a Fairtrade cotton farm
                                                                                                                                                    run by our supplier Pratibha Syntex in India.                   * based on 500ml bottles.
38                                SUSTAINABILITY REPORT 2018                                                      OUR PRODUCTS                          SUSTAINABILITY REPORT 2018                                                        39

Design challenge
delivers most
sustainable
range yet.
                                                                                                                                                         This year, we launched the                 DESIGN TRANSFORMATION
                                                                                                                                                         EarthColors Hoodie. It was a
                                                                                                                                                                                                    “The design process has been about
                                                                                                                                                         challenge thrown down by our
                                                                                                                                                                                                     transforming an ordinary hoodie
                                                                                                                                                         designers – what’s the most
                                                                                                                                                                                                     into a ground-breaking garment.
                                                                                                                                                         sustainable hoodie we can make?
                                                                                                                                                                                                     Every detail has been questioned,”
                                                                                                                                                         The starting point was the                  says Keb. “From eyelets to trims to
                                                                                                                                                         EarthColors dye, a natural organic          packaging – we just keep asking
                                                                                                                                                         dye made by global dye house                ourselves how can we make these
                                                                                                                                                         Archroma from agricultural waste.           more sustainable?”
                                                                                                                                                         The inedible parts of nuts, fruits and
                                                                                                                                                                                                    The trim is a blend of BCI cotton and
                                                                                                                                                         seeds are used to create a
                                                                                                                                                                                                    REPREVE recycled polyester. The logo
                                                                                                                                                         sustainable non-petroleum dye
                                                                                                                                                                                                    print has been done using a low-
                                                                                                                                                         alternative.
                                                                                                                                                                                                    impact dye.

                                                                                                                                                         TRACEABLE DYES
                                                                                                                                                                                                    JUST THE START
                                                                                                                                                          Apparel designer Keb Brabazon says,
                                                                                                                                                                                                    The EarthColors Hoodie was the start
“I love the fact that,                                                                                                                                   “I love the fact that, with EarthColors,
                                                                                                                                                          you can trace it all the way back to
                                                                                                                                                                                                    of our garment dyeing programme.
                                                                                                                                                                                                    This year, the design team will look
 with EarthColors, you                                                                                                                                    the land and that there is a face to
                                                                                                                                                                                                    for more opportunities to incorporate
                                                                                                                                                          the people making this stuff. By
 can trace it all the way                                                                                                                                 investing in these new technologies,
                                                                                                                                                                                                    these sustainable materials and
                                                                                                                                                                                                    processes into the range. A range
 back to the land...”                                                                                                                                     we help build capacity so that
                                                                                                                                                          eventually we can incorporate these
                                                                                                                                                                                                    of shirts, pants and tees will be
                                                                                                                                                                                                    launched later this year.
                                                                                                                                                          things into all of our products.” But
 KEB BRABAZON                                                                                                      Kathmandu team member Jacinta          the design team didn’t stop there.
                                                                                                                   wearing the latest EarthColor range
 APPAREL DESIGNER                                                                                                  on location in Sapa, Vietnam.

 Bio-based synthetics              Biosynthetics are made from           critical to building a more sustainable   Kathmandu Responsible Materials       The EarthColors Hoodie released by
                                   natural, renewable resources.         industry. Unlike petrochemical-based      Manager Manu Rastogi is part of       Kathmandu in 2017 is an example
 will help meet growing
                                   These could be crops like corn or     fibres, biosynthetics can even mitigate   the working group. “The lifecycle     of a second-generation biosynthetic.
 global textile demand.            sugarcane, waste from agriculture     climate change by absorbing CO2           analysis tells us that the first      Agricultural waste replaced fossil-fuel
 As part of our work helping to    or forestry industries or non-food    during the growth phase.                  generation biosynthetics, which       based dyes.
 push the industry needle on       sources like fungi and bacteria.                                                come from crops, compete with the
                                                                         The working group is pulling together
 sustainability with the Textile                                                                                   food industry. We need to work on
                                   With the global demand for textiles   metrics and lifecycle data so that
 Exchange, Kathmandu has joined                                                                                    more alternatives in the second and
                                   expected to more than double by       impacts can be quantified and
 the biosynthetic working group.                                                                                   third generation that are from
                                   2050, these emerging fibres will be   compared.
                                                                                                                   waste and non-food sources.”
40                                 SUSTAINABILITY REPORT 2018   OUR PRODUCTS    SUSTAINABILITY REPORT 2018                                                       41

                                                                                Synthetic down
                                                                                jacket takes home
                                                                                Gold Award.
                                                                                We’ll always argue that there’s no       “This is our first true down alternative,”
                                                                                substitute for down when it comes         says Responsible Materials Manager
                                                                                to performance. That’s why we’ve          Manu Rastogi. “It’s a great alternative
                                                                                worked hard to make sure 100% of          for people who don’t want to buy
                                                                                our down is certified by the              animal products.”
                                                                                Responsible Down Standard.
                                                                                                                         But Manu says that, on performance
                                                                                There will always be a place for down,   and sustainability scores, down still
                                                                                but that doesn’t stop us from looking    wins.
                                                                                at alternatives. ThermoPlume by
                                                                                                                         “The Higgs Materials Sustainability
                                                                                PrimaLoft is the first down-like
                                                                                                                          Index looks at the overall
                                                                                synthetic that has passed our
                                                                                                                          sustainability of a huge list of
                                                                                standards for performance and
                                                                                                                          materials according to a lifecycle
                                                                                production. It is easy to wash,
                                                                                                                          analysis. Down rates number two. I
                                                                                fast to dry and keeps you warm
                                                                                                                          am a vegetarian myself, but as long
                                                                                even when wet.
                                                                                                                          as people in China are eating geese
                                                                                We used ThermoPlume in our                and ducks, down will be an extremely
                                                                                Lawrence travel jacket, which             sustainable by product of that
                                                                                won a Gold Award at the ISPO              industry.”
                                                                                outdoor product fair.

                                                                               “This is the first true
                                                                                down alternative for
                                                                                people who don’t want
                                                                                to buy animal products.”
                                                                                MANU RASTOGI
Summit Club member Hannah
wearing the Lawrence Jacket on
                                                                                RESPONSIBLE
location in Wanaka, New Zealand.                                                MATERIALS MANAGER
42                                        SUSTAINABILITY REPORT 2018                                   OUR PRODUCTS                              SUSTAINABILITY REPORT 2018                                       43

Designing with a                                                                                       Keeping an
sustainability lens.                                                                                   eye on quality.
Kathmandu designers are using
a tool from the Sustainable Apparel
                                          DDM this year as a trial and
                                          we will introduce more products
                                                                                                       To make products with less impact,
                                                                                                       they need to last. To make sure our
                                                                                                                                                 New Zealand and Australia is not the
                                                                                                                                                 answer to improve manufacturing
                                                                                                                                                                                           “We make products
Coalition (SAC) to score and              and designers next year.”                                    products meet quality standards,          quality. To that end, we are working       for activities of
improve the sustainability of                                                                          we carry out planned inspections          on creating and rolling out a
products at the design stage.
                                          Darren says the Higg DDM helps
                                          designers stop and consider impacts
                                                                                                       on high-risk products when they reach     Quality Excellence programme to            consequence,
The Higg Index is a self-assessment       early on. “It’s resetting the way you
                                                                                                       our distribution centres. Reactive
                                                                                                       quality inspections are done when a
                                                                                                                                                 better manage product quality at the
                                                                                                                                                 point of manufacture. As well
                                                                                                                                                                                            and we need to
tool that is used throughout              design. You have to ask, if I choose
Kathmandu to measure sustainability       this product or this trim, what impact
                                                                                                       team member or a customer raises          as reactive inspections, Kathmandu         ensure that our
                                                                                                       a concern about a product. When           has also been working with a third-
and benchmark performance against
others in the industry.
                                          am I going to have?”
                                                                                                       the team receives negative feedback,      party inspection company to verify         gear meets and
                                          IT’S IN OUR DNA
                                                                                                       they investigate the root cause of the
                                                                                                       issue and consider the impact on the
                                                                                                                                                 product quality for high-risk
                                                                                                                                                 products prior to shipment.
                                                                                                                                                                                            exceeds customer
RIGHT DOWN TO THE TRIMS
                                          Sustainability is part of Kathmandu’s
                                                                                                       customer.
                                                                                                                                                 “We can only improve product quality       expectations.”
Designers use the Higg Design             product design DNA. “Whenever a                              “We make products for activities of        by working with our manufacturing
Development Module (Higg DDM) to          designer is starting a new concept,                           consequence, and we need to ensure        partners at a factory level so that       TARA STRANGWICK
score a product by rating the
sustainability of the materials – right
down to trims and tiny details. Once
scored, a product can be
                                          they have to look at the four design
                                          philosophies: original, engineered,
                                          adaptive, sustainable,” Darren says.
                                                                                                                      45k
                                                                                                        that our gear meets and exceeds
                                                                                                        customer expectations” says Group
                                                                                                        Product Operations Manager Tara
                                                                                                        Strangwick. But performing
                                                                                                                                                  they are fully aligned with our
                                                                                                                                                  inspection and quality standards,”
                                                                                                                                                  Tara says. “We look forward to sharing
                                                                                                                                                  more about this programme
                                                                                                                                                                                            GROUP PRODUCT
                                                                                                                                                                                            OPERATIONS MANAGER

benchmarked against
                                          He makes the point that
                                          sustainability cannot override
                                                                                   “Durability          inspections at distribution centres in    as it unfolds.”
other Kathmandu products and those
of competitors, challenging designers
                                          performance. “Durability is key to
                                          sustainability. I think a lot of
                                                                                    is key to
to continually look for ways to
improve the sustainability score.
                                          consumers are pushing back from the       sustainability.”
                                          whole concept of fast fashion and the
“It brings in a sense of competition      throwaway culture. We are offering an     DARREN BARRY
 for our designers – looking at how to    alternative as a stylish technical
                                                                                    KATHMANDU
 beat their score,” says Kathmandu        outdoor brand with strong
                                                                                    HEAD OF DESIGN
 Head of Design Darren Barry. “Two        sustainability principles.”
 designers have gone through the Higg

                                                                                                          CARE AND REPAIR

Customer health
and safety.
Our customers rely on us to keep          The customer received professional
them safe in the outdoors. This is a      medical attention and the retail
big responsibility. This year, we have    general manager worked through and
two safety issues to report. A            resolved the complaint with the
customer reported frostbite when          customer.

                                                                                                               4907                                              0                                270
wearing Kathmandu XT Fitzgerald
                                          In January, a power bank was
Unisex NGX Alpine Mountaineering
                                          reported as exploding and catching
Boots. The boots were being used in
                                          fire in a backpack at Melbourne
conditions outside their intended use
                                          Airport. There were no injuries but it
so the problem was more a problem                                                                                      REPAIRS                              Product Recalls                         Inspections
                                          was investigated and
with the quality of advice given than
                                          a report forwarded to Melbourne
the quality of the product.
                                          Airport Security.
44                                           SUSTAINABILITY REPORT 2018                                 OUR PRODUCTS                                SUSTAINABILITY REPORT 2018                                                      45

Responsible wool
lands in store.
Next January, Kathmandu will
be the first brand in the southern
                                      have been looked after right
                                      through the supply chain. The RWS
                                                                              “That’s how we
hemisphere to have Responsible        prohibits the practice of mulesing,      change the status
Wool Standard (RWS) products on       where strips are cut from the
the shelf.                            sheep’s rear. This is still common in    quo and make
This comes after years of working
                                      Australia but has been phased out
                                      in New Zealand.
                                                                               sustainability stick.”
with farmers and others in the
supply chain to convince them of      “We’ve finally done it,” says
                                                                               MANU RASTOGI
the value of the programme.            Responsible Materials Manager
                                       Manu Rastogi. “It happened by           RESPONSIBLE
The RWS is an animal welfare and                                               MATERIALS MANAGER
                                       engaging deeply with farmers and
land management standard
                                       supply chain partners, helping
developed by the industry under
                                       them understand the vision and
the Textile Exchange umbrella. Like
                                       helping to make it their vision too.
the Responsible Down Standard,
                                       That’s how we change the status
the RWS aims to create a
                                       quo and make sustainability stick.”
traceable certification programme
that ensures animals and land
                                                                                                        Tiber ngx hiking boots are made with
                                                                                                        leather from tanneries that are certified
                                                                                                        by the Leather Working Group.

                                                                                                        FUR-FREE FIRST FOR                          LEATHER WORKING GROUP
                                                                                                        SOUTHERN HEMISPHERE
                                                                                                        Kathmandu has become the first              This year, we signed up to the Leather     “Leather is a bit like down. It’s OK to
                                                                                                        retailer in the southern hemisphere         Working Group, a consortium of              use as long as we address the issues.
                                                                                                        to join the Four Paws Global Fur-Free       around 400 brands who are focusing          Just like down, leather is a byproduct
                                                                                                        Retailer programme.                         on environmental impacts at the             of the meat industry so as long as we
                                                                                                                                                    tannery level.                              manage the chemical and water use
                                                                                                        Four Paws is an international animal
                                                                                                                                                                                                and can trace the source, it can be
                                                                                                        protection group that opposes the           Kathmandu uses leather in footwear
                                                                                                                                                                                                pretty sustainable.”
                                                                                                        fur industry’s treatment of animals.        only. Responsible Materials Manager
                                                                                             First
                                                                                      2019

                                                                                                        The group says the global fur trade         Manu Rastogi visited tanneries this
                                                                                             products   sources 95% of its fur from animals         year to seek answers to some of his
                                                                                             in store   forced to live in small wire cages.         questions.                                 Already, 100% of
Our responsible                                RWS launched and                                                                                                                                leather used in
                                      2016

                                                                                                        Now running in more than 20                 “Tanneries use huge amounts of
                                               Kathmandu became
wool journey                                   part of the industry
                                                                                                        countries, Fur-Free Retailer includes        water, chemicals and waste. Only
                                                                                                                                                                                               Kathmandu footwear
                                                                                                        more than 880 major labels.                  20–25% of an animal skin (based
                                               working group                                                                                                                                   comes from tanneries
                                                                                                                                                     on weight) is turned into leather,
                                                                                                        “Caring for the welfare of animals is
                                                                                                                                                     so I wanted to know where the rest
                                                                                                         important to Kathmandu because it is
                                                                                                                                                     goes. I also wanted to know more
                                                                                                                                                                                               that are certified gold
                                                                                                         important to our customers, our team
                                                                                                         members and our shareholders. We
                                                                                                                                                     about what chemicals are used and         or silver by the Leather
                                                                                                                                                     what happens to those chemicals.
                                                                                                         are proud to be considered a leader in
                                                                                                                                                     I’m also interested in the traceability
                                                                                                                                                                                               Working Group.
                                                                                                         this space and encourage other
                                                                                                                                                     of the leather. Do they know where
                                                                                                         retailers to join and make the pledge
                                                                                                                                                     it has come from?” says Manu.
                                                                                                         to eliminate animal fur in any of their
                                                                                                         products,” says Ben Ryan, Kathmandu
                                                                                                         General Manager of Product.
46                     SUSTAINABILITY REPORT 2018   OUR FOOTPRINT                       SUSTAINABILITY REPORT 2018   47

                                                                                                        Footprint.
                                                                                                        Our
“Carbon credits give
 us a land purchase
 fund. That means
 regenerating forest
 and more carbon
 being fixed.”
 HUGH WILSON
                                                     Hugh Wilson uses carbon credit
 BOTANIST AND HINEWAI                                funds to restore native forest on
 RESERVE MANAGER                                     Banks Peninsula.
48                                      SUSTAINABILITY REPORT 2018                 OUR FOOTPRINT   SUSTAINABILITY REPORT 2018                                         49

Smart reductions
make sense to
the bottom line.
 Our environmental footprint is a way    This year, we took steps in both of
 to measure our impact on our planet.    these areas, having our carbon
 Only when armed with an accurate        accounting system certified by a third
 measure can we take meaningful          party and increasing the percentage
 steps towards reducing our footprint.   of our waste diverted from landfills.

 Carbon and waste are our biggest
 impacts as a business. We are guided    DOUBLE BOTTOM LINE
 by the United Nations Sustainable
                                         The good news is that both of
 Development Goals as we look for
                                         these are driven not just by those
 ways to be part of a shift towards
                                         looking after our environmental
 a more circular economy.
                                         impact but also by those looking
                                         after the bottom line.
 PRODUCTION AND CONSUMPTION
                                         “Using and managing resources
 Goal 12 is all about sustainable         responsibly like recycling and reducing
 consumption and production patterns.     energy consumption is a bit like good
 This means using resources more          housekeeping,” says Chief Operating
 efficiently and minimising waste.        and Financial Officer Reuben Casey.
                                         “This is something we can all
                                          contribute to.”

“Recycling and reducing
 energy consumption is a bit
 like good housekeeping.”
 REUBEN CASEY                                                                                                                         Kathmandu’s Christchurch support
                                                                                                                                 office is one of three 5 Green Star rated
 CHIEF OPERATING & FINANCIAL OFFICER                                                                                                    buildings the company operates.
50                                                   SUSTAINABILITY REPORT 2018                                                         OUR FOOTPRINT                                               SUSTAINABILITY REPORT 2018                          51

Over 15 tonnes of soft
plastics now being
recycled each year.
The Ellen MacArthur Foundation                       “A key learning was that clear plastic      We did look at eliminating polybags
estimates that 98% of plastics being                  was our biggest waste to landfill          completely, but nothing else does as
produced today come from virgin                       issue,” Oliver says. “88% of our stores    good a job at getting product to
plastic. This is because most plastic is              are recycling their clear plastics now.”   store undamaged. We figured out
not recycled and a worrying amount                                                               that damaged stock would have
                                                     Another challenge is landlords
is either sent to landfills (40%) or into                                                        more impact on waste than
                                                     who control recycling in many of
the environment (32%).                                                                           recyclable polybags.
                                                     the shopping centres where our
A few years ago, in our eagerness                    stores operate.
to run a more sustainable business,
                                                     “I’m really proud that this year we
we set an ambitious zero waste goal.
                                                      recycled 100% of plastic polybags          “I’m really proud
LEARNING FIRST
                                                      from stores in New Zealand. All up,
                                                      we have saved 15 tonnes of soft             that this year we
“When we set the target, we didn’t
                                                      plastics from landfill,” Oliver says.       recycled 100% of
 even know what waste we were
 producing,” says Kathmandu                          CREATIVE SOLUTIONS
                                                                                                  plastic polybags
 Sustainability Specialist Oliver Milliner.
                                                     To achieve this, we employed some            across stores in                                                                                                               Store waste
“We hadn’t done any waste audits.”
Aspirational goals help us achieve
                                                     new solutions. “We were down to just
                                                     five stores where recycling was not
                                                                                                  New Zealand.”                                                                                                                  breakdown
aspirational results. We started                     available, so we got the stores to
with audits that helped us                           package up all their polybags and           OLIVER MILLINER
understand where our waste                           send them to stores in larger centres       KATHMANDU
comes from. We created waste                         where they could be recycled.”              SUSTAINABILITY SPECIALIST
scorecards for each store so we
can see exactly what is recycled.

Our overall                                                                                                       80 %
                                                                                                           2018

recycling rate

98       % Paper/
            Cardboard
                                                                                                                                                                                                                                 50   % Paper/
                                                                                                                                                                                                                                         Cardboard

88      %P
          olybags and
         shrink wrap
                                                                                   72 %                                                                                                                                          30   % Polybags and
                                                                            2017

                                                        69     %                                                                                                                                                                         shrink wrap
                                              2016

27     % Co-mingled
          recycling
                                                                                                                                                                                                                                 10   % Co-mingled
                                                                                                                                                                                                                                         recycling

                                                                                                                                                                                                                                 10
                                                                                                                                        Sustainability Specialist Oliver Milliner, left, talks to
                                                                                                                                        Hugh MacEwan of Waste Management at the
                                                                                                                                                                                                                                      % Non-recycled
                                                                                                                                        recycling transfer station in Christchurch.                                                      material
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