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FOND OFCorporate Responsibility Booklet 2019/20

»On the way since 2010«

FOND OF CR Booklet 2019/20

1. Who we are and what drives us 2. Why a CR booklet instead of a report: What does it deliver and what does it not 3. Sustainable Development Goals and FOND OF CR Framework 4. Experience CR – The Seven Examples 4.1 Bringing Light into Darkness: Transparency as a constant challenge 4.2 Textiles are handmade: Leader Status of the Fair Wear Foundation 4.3 Breaking new ground: Measuring the job satisfaction of Vietnamese seamstresses 4.4 Chemicals in Focus: PFC Exit and bluesign Partnership 4.5 Most Responsible Products: pinqponq’s MRPs 4.6 THE SHIP: Our New Green Home 4.7 FOND OF Climate Neutrality – Our CO₂ footprint and how we approach it 5. Outlook 5.1 FOND OF Apparel 5.2 An Open Book in CR: Areas of Improvement

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FOND OF CR Booklet 2019/20 3

1. Who we are and what drives us


Who We Are

2010 was the year FOND OF revolutionized the school-bag market with its brand ergobag. Since then, six kids, lifestyle, and business brands, as well as a fashion label, belong to the FOND OF universe. All brands and initiatives of the globally operating company are characterized by uniqueness in design, functionality in its products, and responsibility in manufacturing. THE SHIP, the headquarter in Cologne Ehrenfeld, was also built according to the Gold Standard of the German Sustainable Building Council (DGNB). The starting point of the now successful sustainability strategy began nine years ago with the use of materials from recycled PET bottles. To date, more than 147 million bottles have been recycled to produce fabric for FOND OF-wide. In recognition of its efforts to promote social responsibility in its production facilities, the Fair Wear Foundation has awarded FOND OF with the prestigious » Leader Status « and, once again, confirms the status in 2019.

Inspired by its founding history, today FOND OF sees itself as a platform for collective growth and potential development - whether in the area of developing new ideas and products or discovering and developing the individual potential of the now 300 team players.By launching the Startup-Accelerator xdeck, the FOND OF founders demonstrates their commitment to up-and-coming start-ups, which are supported along their growth journey.

What Drives Us

It has never been our goal to revolutionize the back-pack or fashion industry concerning sustainability. But we quickly realized that we hold a great deal of responsibility for our actions in the complex textile industry. In a nutshell, four major issues concern us, and these are the areas where we want to create a positive impact:1:

Every consumption and every product leaves an ecological footprint. Since we as a company put products into circulation, we cannot claim to be sustainable. However, we are aware of our influence and know the massive role our » corporate responsibility « plays within society. We strive to live up to this responsibility bit by bit by questioning our actions daily and looking for more sustainable alternatives. Hence, we view our efforts towards corporate responsibility as a never-ending process. We aim to become a little better every day.

• Climate Change

• Water

• Chemicals

• People

1 Source: German Federal Ministry for Economic Development and Cooperation; Sustainable textiles: A question of responsibility! (2018)


* State of the recycled PET bottles (0.5L) since 2010 until 31.07.2019

PET Recycling and Savings Since 2010*

Since 2010, 147,000,000 bottles 0.5 l (20g) were recycled for our products.

By this mean, 11,550 barrels of oil (1,84 Million L)… … 331,236 m3 bathtubs of water and …

… 1,200 hot air balloons filled with CO2 (7,200 tons) were saved.


2. Why a CR booklet instead of a report: What does it deliver and what does it not?


Reporting on corporate responsibility, or rather sustain-ability, has become a standard, particularly for larger companies. We also want to report transparency on our CR activities, so that we can inform and sensitize our stakeholders such as suppliers, employees, retailers, customers, and the public. In our opinion, there is a fine line between overly technical details and compre-hensible information.

Thus, this booklet aims to provide a basic overview of our CR activities and to make them more tangible through practical examples. Technical details and precise figures such as those presented in traditional CR reports - for example, on electricity consumption and supplier databases - will, in the future, be accessible at:fondofbags.com/fond-of-corporate-responsibility

https://www.fondofbags.com/fond-of-corporate-responsibility/


3. Sustainable Development Goals and FOND OF CR Framework


The member states of the United Nations (UN) adopted the Agenda 2030 for sustainable development in 2015. This agenda aims to achieve economic prosperity and progress in line with social justice and the ecological limits of our planet.

The Sustainable Development Goals (SDGs) are the heart of Agenda 2030, which are the goals for sustainable development. Since its adoption in 2016, these not only form the basis of many political and social discussions but are also emerging more and more into the foreground of private businesses. In recent years, we have also taken a closer look at SDGs and try to put them into the focus of our daily actions and measure ourselves against the benchmarks. For this reason, we have aligned our company-wide CR goals in such a way that they simulta-neously aim to fulfill the SDGs.

Figure: »Sustainable Development Goals of the United Nations«

Sustainable Development Goals


In this respect, we want to align the following key issues of the textile industry with the SGDs:

Climate ChangeThe challenge of our time. At 1.2 trillion tons of CO₂ emissions per year, the production of textiles causes more greenhouse gases than all international flights and all marine traffic combined. The clothing and footwear sector accounts for approximately 8 percent of global greenhouse gas emissions.

WaterThe dyeing and finishing of textiles cause 20 % of global water pollution. 80 to 120 liters of water are used per kilo of textile fabric. The textile industry uses the most water compared to other industries despite the severe water shortage in many regions of the world.

ChemicalsOn average, 2,500 kilograms of chemicals (e.g., for dyeing) are used in a textile factory every day. Without strict standards for water purification, this can have devastating effects on people and nature.

PeopleGlobally, more than 60 million people work in the textile and clothing industry, most of them in developing and emerging countries. Social standards and labor safety are poorly enforced, and international standards are often overlooked. High working hours and low wages are common practices in the textile industry.

With the following SDGs, we can count on the greatest leverage:

. No Poverty

. Clean Water and Sanitation

. Decent Work and Economic Growth

Responsible Consumption and Production

Climate Action

Partnerships for the Goals

We will use seven concrete examples to illustrate how we address these SDGs at FOND OF. The examples can be embedded in the FOND OF CR Framework, with which we structure our everyday CR work. This framework is aligned along the entire value chain - from our office to the End-of-Life of our products. We believe that the greatest risks and, at the same time, levers for SDGs are found within our supply chain. As a result, our CR reporting initially focuses on examples from this area even if we are also active in other areas of the product life cycle (e.g., packaging, transport logistics).

2 Ellen MacArthur Foundation (2017). A New Textiles Economy: Redesigning fashion’s future.

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DESIGN

PRODUCT LIFE CYCLE

Bringing Light into Darkness:Transparency as a constant challenge

SOURCING PRODUCTION TRANSPORT STORAGE + SHIPPING USE END OF LIFE

Textiles are handmade: Leader Status of the

Fair Wear Foundation

Measuring Job Satisfaction

Chemicals in Focus: PFC withdrawal and bluesign partnership

Most Responsible Products: ergobag and pinqponq MRPs

Our CO2

Footprint and how we approach it

Our New Green Home

SOCIAL RESPONSIBILITY

ENVIRONMENTAL RESPONSIBILITY

TRANSPARENCY

FOND OF CR Framework und the Seven Example Projects

The seven examples of our CR work


4. Experience CR – The Seven Examples


The textile supply chain is very twisted. Our goal is to know exactly where our products come from to improve the conditions and implications of production. Currently, we focus on two tiers.

Tier 1Our first level (Tier 1) consists of our primary sewing factories where our products are manufactured. Even though we know exactly which sewing factories we work with at this level, we sometimes still lack complete transparency over the rest of the supply chain. This main reason is that these primary suppliers outsource the production of small parts (e.g., wallets) and simple sewing steps to commissioned subcon-tractors. Achieving transparency on subcontracting is challenging. In the meantime, we have been able to convince our main suppliers to share this information with us so that we can systematically check the working conditions here as well (see below).

Tier 2The second level (Tier 2) involves our suppliers of all fabrics and components of our products. Suppliers for our crucial components such as fabrics and buckles are appointed in advance at our main sewing factories – so here we can provide full transparency. Other smaller parts (e.g., straps) are often covered locally with fabric, which we also know who the suppliers are.

A complete list of the primary sewing factories, subcon-

tractors, and fabric and material suppliers is available

for download on our CR homepage.

fondofbags.com/fond-of-corporate-responsibility

4.1 Bringing Light into Darkness: Transparency as a constant challenge

http://fondofbags.com/fond-of-corporate-responsibility


Overview of our Sewing Factories by CountryChina3 Tier 14 Tier 1 Subcontractor

Italy2 Tier 1

Vietnam6 Tier 16 Tier 1 Subcontractor

Myanmar1 Tier 1

Portugal2 Tier 1

Tier 1Main Sewing Factories 14

Tier 1Subcontractors 10

Tier 2Suppliers of fabrics and materials

124


4.2 Textiles are handmade: Leader Status of the Fair Wear Foundation

SDGs related to this example:

Code of Labour Practices

1 Employment is freely chosen

2 Freedom of association and the right to collective bargaining

3 No discrimination in employment

4 No exploitation of child labor

5 Payment of a living wage

6 Reasonable hours of work

7 Safe and healthy working conditions

8 A legally binding employment relationship

Despite constant technological progress, textiles require still extensive manual work. Alone in the factories with whom we work with, more than 8,000 seamstresses are employed. There are even more than 60,000,000 employed worldwide. Our products are mainly manufac-tured in Vietnam, China, and Myanmar. Large factories that specialize in technically demanding textiles such as backpacks are in these countries.

Due to political and social structures, compliance with all our labor guidelines cannot be guaranteed. But in order not to have to make any compromises here, we have joined forces with Fair Wear.

This independent » multi-stakeholder initiative « regularly checks in. They perform so-called social audits that monitor to what extent all labor standards are observed (refer to the image on labor standards). Documents are regularly audited at intervals of no more than three years, the workplace is inspected, and the manage-ment and workers are extensively interviewed.


In addition to the suppliers, a significant degree of responsibility for improving working conditions lies with the brands - in other words with us. For this reason, Fair Wear not only audits our suppliers, but also us once a year in what they call a Brand Performance Check. They observe how closely we follow the impro-vement measures after the social audits or whether the workers receive a living wage based on what we pay for our products. Fair Wear also looks at how much time we give our suppliers to manufacture our products. Overtime often results from Western companies not placing their orders on time and then putting pressure on their suppliers to finish their orders on tight deadlines.

Following the Brand Performance Check, Fair Wear evaluates how we as a company meet our social responsibility in the supply chain. In the last two years we have received the » Leader Status « award. However, not everything is perfect, and we still have a long way to go before we can finally talk about fair working conditions.

Further information on our measures at the sewing factories can also be found in the Social Report:fondofbags.com/wp-content/uploads/2020/01/FOND-OF_Social-Report_2018-2019-1.pdf

Posters of the Fair Wear » Complaint Helpline « hang – in local language – in all sewing factories where our products are manufactured. Seamstresses can make an anonymous complaint if they feel they are being treated unfairly or if the code of labor conditions in the factories is violated.


fondofbags.com/wp-content/uploads/2020/01/FOND-OF_Social-Report_2018-2019-1.pdf

fondofbags.com/wp-content/uploads/2020/01/FOND-OF_Social-Report_2018-2019-1.pdf


4.3 Breaking new ground: Measuring the job satisfaction of Vietnamese seamstresses

Are audits – i.e., the examination of conditions within a factory according to specified processes and international standards – really the best way to impro-ve working conditions and do these improvements also reach the workers?

This question has been in the focus of the textile industry for several years and we have also asked ourselves this question. In order to get to the bottom of the issue, we conducted a survey on this last year together with three other companies (VAUDE, Ortovox and Fenix Outdoor).

In cooperation with Professors Bernd Irlenbusch and Dirk Sliwka from the University of Cologne, we developed a questionnaire with which we surveyed almost 1,800 workers in 18 textile factories about their job satisfaction. At the same time, we conducted an additional survey to collect data on the conditions within the factory in order to identify which factors have the greatest influence on job satisfaction. One result that significantly stands out is the strong

correlation between job satisfaction and the basic elements of a workplace layout, such as lighting or background noise. Even if this fact is not surprising at first sight, there is no sign of this in classic audits. It also offers factory management the opportunity to apply a direct and positive influence on the satisfaction of its employees through simple measures.

Project Initiators: Hannes & Julian, Project Implementers: Luise & Rike



Another important finding from this study is that the job satisfaction of seamstresses is strongly related to how satisfied they are with their direct superiors and how strongly they are given development opportunities.

Based on the results achieved, we now want to deve-lop measures together with our suppliers that will contribute even more specifically to the job satisfac-tion of the local seamstresses. This could include training for managers or development plans for emp-loyees. We will be able to report on this matter in more detail next year.

• Hanoi

Laos

Vietnam

• Ho-Chi-Minh-City

Thailand

Cambodia

Travel route July 2019

Employee interviews in 18 textile factories



4.4 Chemicals in Focus: PFC Exit and bluesign Partnership

3 See detox-outdoor.org/de-CH/science-of-pfc

Bye, Bye PFC

In 2010, Greenpeace launched its major detox campaign with the aim of banning particularly harmful chemicals from the textile and especially the outdoor industry. The focus was strongly placed on per- and poly- fluorinated chemicals (PFCs), which cause the » roll-off or lotus effect « on outer fabrics and prevent the fabric from absorbing water. In previous collections we have used PFCs for the » roll-off effect «. These were so-called C6-PFCs, which are still used very regularly throughout the industry (from backpacks to to-go cups to pizza boxes) and which continue to comply with the law.

It is important to understand that PFCs cannot be absorbed directly through the skin when wearing the product.3 The main issue occurs in the production. PFCs are released into the environment during its application, washing and disposal of products. From this point we intake these particles via water or food, where they can potentially be harmful to human and animal health in the long term.

Three years ago, we set ourselves the goal of no longer using PFCs while finding a solution to retain the functionality of a PFC. After a long search and testing we have succeeded in finding a PFC-free alternative.We trust the eco-friendly treatment of the outer fabric, which we purchase from bluesign® system partners, thus meeting the strictest requirements for chemical management and resource efficiency.

We are proud to announce that since April 2020, the production of our textiles is PFC free.


http://www.detox-outdoor.org/de-CH/science-of-pfc


bluesign® System Partner –»No Shit in, no shit out!«

PFCs are only one chemical that can have negative effects on humans and the environment. But there are many more. The highest risk occurs during the » wet processing «, in other words, when dyeing and treating fabrics. Therefore, more than 95 % of our fabrics or almost all our fabric suppliers are bluesign® system partners.

This means that only certain chemicals may be used in production (especially in dyeing). In addition, bluesign® inspects that the applied chemicals are completely filtered out to prevent its escape into the environment in an uncontrolled manner. For this purpose, bluesign® provides strict rules that far exceed legal requirements. Therefore, the bluesign® system not only pays attention to the end product, but to the entire manufacturing process.

Our fabric…

meet the highest requirements to protect the consumer.

are produced with minimal impact on people and the environment in the supply chain.

consist exclusively of bluesign® certified raw materials and chemicals.

For other components (buckles, zippers etc.) we also try to use bluesign® certified products. Here we are currently at approx. 25 %, but we are far from being at the end of the journey. To learn more, visit our page:

fondofbags.com/fond-of-corporate-responsibility


http://fondofbags.com/fond-of-corporate-responsibility


4.5 Most Responsible Products: pinqponq’s MRP

Two years ago, we gave all seven FOND OF brand teams the task of developing what we call the » Most Responsible Product «. This » MRP « should exceed the already high-set CR standards (bluesign® certified fabrics, Fair Wear, PET recycling, PFC-free, etc.). The MRPs of our pinqponq brand came out to be very impressive:

Fabric Dye Solution The finished fabric is not dyed, but the yarn is dyed during production using color pigments.

→ lower water and energy consumption, less CO₂

Inner fabric from untreated organic cotton (GOTS-Standard)

→ No use of pesticides in cotton cultivation, nor dyeing chemicals, less energy and water consumption than conventional cotton

Straps, zippers and outer fabric made from 100 % recycled PET bottles Total consumption by model: Brik: 5 bottles, Klak: 18 bottles, Kalm: 22 bottles

→ no fossil-based materials, less energy consumption/CO₂ compared to crude oil-based polyester

Foams made of 20 % Bloom Algae Foam: Polluted waters are freed from algae plagues; algae granulate is mixed with standard foam material.

→ less energy consumption and purified water

Mesh and all fabrics are 100 % bluesign®-approved

→ meets the highest standards of consumer protection and are produced with minimal impact on people and the environment

All buckles made of 62 % organic castor oil

→ 70 % less energy consumption compared to standard buckles

Remaining CO₂ footprint offset through a cooperation with ClimatePartner

climatepartner.com/13751-1912-1001


climatepartner.com/13751-1912-1001


KALM

BRIK

KLAK

As a complete product, the pinqponq MRPs all qualify as a bluesign® product. Over 90 % of the fabrics and far more than 20 % of the components are bluesign®-approved!


4.6 THE SHIP: Our New Green Home


After two years of construction, we were able to move into our new home, THE SHIP, in Cologne at the end of 2019. The move not only meant that all FOND OF employees who had previously worked in different locations are finally together under one roof, but it also allows us to decide for ourselves how sustainable we want to make our everyday office life. Therefore, even before construction began, great importance was placed on how the building could be optimally integrated into its environment. The construction itself was aligned with several ecological, economic, socio-cultural, technical, and site-related criteria. The construction resulted in the » most digital office building in Germany «, which was recognized with the Gold Certificate of the DGNB.

In our opinion, sustainable construction is not enough. At least for us, resource-saving and ecological commissioning are just as important. We rely 100 % on green electricity. We have installed modern sensors that control light and heat supply efficiently and automatically.

Furthermore, when we moved into the new office, a group of colleagues from various departments formed a project team. This team meets regularly to exchange ideas on how to make our work even more sustainable. One example that is currently being implemented is a concept that aims to create incentives for colleagues to save energy, for example, by using the stairs instead of the elevator. Other examples are the optimization of waste disposal or employee mobility.

Our company-owned canteen makes a further contri-bution to sustainability. The operator of the canteen is one of the few eco-mentors in the state of NRW. This professional supports our sustainable corporate philosophy through its transparent and regional purchasing of predominantly organic products.



We work daily to make our calculation methodology as exact as possible. Nevertheless, we are aware that not all emission sources have yet been included in our Carbon Footprint calculation.

Although we continuously work to reduce these emissions, unfortunately, there is a part that is unavoi-dable. This case leads us to the best ecological solu-tion, in the foreseen future we will offset company-wide CO₂ emissions via our partner ClimatePartner. The organization uses our donation to finance projects such as reforestation projects in the Amazon forest, which in return compensates the amount of CO₂ that we emit at FOND OF.

Currently, we are experiencing for the first time how we create, calculate, and compensate CO₂ emissions generated during the production of our products. We will be able to share with you more about this in the next year.

4.7 FOND OF Climate Neutrality – Our Corporate Carbon Footprint and how we approach it

Climate change is not only a matter discussed on the media or Friday for Future movements. Climate change and its underlying CO₂ emissions have gained importance for us at FOND OF in recent years. Since a while now, we are striving to transport all our products to our warehouse in Germany without the use of air freight. Moreover, our office in Cologne operates from only renewable energy sources and sends all parcels CO₂-neutral.

We always prepare our sites’ CO₂ footprint per financial year. In the 2018/2019 fiscal year, our total emissions sums to 2014.62 t CO₂. This report includes our consumption of heat and electricity, vehicle fleet, business travel, corporate team-building travel, and our logistics in form of air and sea freight.

Transport Logistic 803.2Em

ployee Work Journey 501

Flights 266.3

Vehicle Fleet 201.9

Rental and Private 165O

ther 86.3

Abbildung: CO₂ footprint FOND OF fiscal year 18/19 Emission sources in tons of CO₂



5. Outlook


As opposed to the backpack industry, it is still possible to produce high-quality clothing in Europe. Similar to FUNKTION SCHNITT, AEVOR, pinqponq, and satch also manufacture their clothing lines in Europe, more precisely in Portugal at Olmac (AEVOR and pinqponq) and Marzim (satch). In concern of the working conditi-ons, these countries are considered low-risk countries. However, we still take a close look at these manufactu-rers, both within the framework of our Fair Wear membership and through our GOTS certification.

the entire production chain (from the cotton field to dyeing and final sewing). These standards ensure that both the clothing production process for humans and the environment, as well as the final product, are transparent and safe for the end consumer (inclu-ding the traceability of the GOTS license number).

5.1 FOND OF Apparel

In August 2018, the subsidiary brand FUNKTION SCHNITT was completely integrated as a core brand of FOND OF. This was the kickoff for FOND OF to offer clothing in its product portfolio. The brand offered a new field for FOND OF CR since our expertise lied within bags and backpacks, which mainly consist of synthetic fibers. Since its start in 2016, FUNKTION SCHNITT uses sustainable and durable materials (ex. organic cotton, Tencel®, mulesing-free merino), and production takes place in Europe (Portugal and Italy). Currently, three FOND OF brands, AEVOR, pinqponq, and satch, are expanding their portfolio to include stylish and high-quality clothing (ex. shirts, hoodies). The launch will be in the summer of 2020. Our CR standards are also upheld in the production of our apparel collections: a conscious selection of sustainable materials and control like the transparency of the working conditions.

As for our fabrics made of synthetic fibers, we rely entirely on our bluesign® system partnership (see above). The equivalent of natural fibers is for us the global Organic Textile Standard (abbr.: GOTS). This means that we use 100 % organic cotton, whose compared to the cultivation of conventional cotton and among other things, clearly consumes less water and energy, which leads to saving a significant portion of CO₂ emissions. GOTS sets strict rules along

GOTS-zertifiziert (GOTS organic BCS 35042), natur-gefärbt


Challenge accepted! We are currently working on all points. On the other hand, we are also working at an economically healthy pace since we have only been on the road for ten years and have grown like crazy in this short time. Moreover, our activities must also be profitable, and unfortunately, profitability and sustai-nability do not necessarily go hand in hand. But we are convinced that we are on the right track and we continue to learn every day.

Although we have been involved in the development of FOND OF on the way to integrate sustainability into our decisions, we can be anything but perfect. Can one ever be perfect in the area of sustainability?! There is potential for improvement in various areas along our value chain.

For example, we could:

∙ only use recycled fabrics!∙ have more bluesign®-approved components and bluesign® Products!∙ make sure that all manufacturing sites are paid a higher salary!∙ finally, 100 % recycled poly bags (plastic wrapping)!∙ switch to a fleet with only hybrid and electric cars!∙ have 100 % climate neutral products and be a climate neutral company!∙ install a take-back system and an even better repair service! ∙ offer circular products!

5.2 An Open Book in CR – Areas of Improvement

[email protected] FOND OF GmbHVitalisstraße 6750827 Köln

Hannes WeberFOND OF CR

Our promise: We are staying on the road!

Dr. Julian ConradsFOND OF CR

FOND OF CR TEAM

Philipp SchumacherFOND OF CR

mailto:cr%40fondof.de?subject=