Li & Fung’s Involvement

In Higg Index Adoption

Barry Tang

25 September 2015

Who is Li & Fung (LF) ?

Fung Holdings (1937) Ltd.

A privately held entity and major shareholder of the Fung Group

The Fung Group

Retailing

Global Brands GroupListed on SEHK

DistributionTrading

Li & Fung LimitedListed on SEHK

Logistics

Fung Retailing LimitedPrivately Held Entity

Convenience Retail

Asia Limited

Listed on SEHK

Trinity Limited

Listed on SEHK

Branded Lifestyle Holdings Limited

LiFung Kids (Holdings) Limited

Toys “R” Us (Asia)

Suhyang Networks

UCCAL Fashion Group

Privately Held Entities

Our business today

Trading Logistics

LF

Sourcing

PrincipalAgency

LF

LogisticsLF Asia LF Beauty

LF

Fashion

LF Private

Label

LF

Products

• 109 years of history & evolution

• US$19.28B turnover

• 25,000+ employees

• 100+ acquisitions

• 300+ offices in 40+ countries

• 8,000 customers in 100 countries

• 15,000 vendors in 60 countries

Li & Fung today

Kids

Home furnishing / craft Brands

Department stores & massBeauty

Specialty retail

Key customer base

LF Vendor Compliance and Sustainability (VCS)

VCS Service Evolution

from

Auditing

to

Assessment,

Remediation &

Capacity Building

Value- added services

Our competitive advantage to customers is that we deliver value-added services at every step of their supply chains

that we manage.

Environmental Sustainability

Phase 1 – Foundation and Low-Hanging Fruit

Goal:

Establish environmental sustainability management team, identify quick-win opportunities, build the business case, and prepare to

make use of audit results and technical resources

• Establish the baseline measurement for energy & water usage and

wastes streams at the facilities, which includes product output data

• Identify quick-win opportunities for factory and provide coaching

support on their implementation

• Facility visits by the LF Team, Facilities’ management and/or external

technical expert

• Actively engage in different industrial sustainability programme, such

as SAC

• Help some of customers to monitor their environmental programme • Track progresses and report

Overview Environmental Sustainability Program

Environmental Sustainability Improvement Examples

Increase energy efficiency of

manufacturing process & equipment

Retrofit lighting system Upgrade air-conditioning system Renewable energy

Energy Efficiency & Carbon Reduction

Increase energy efficiency of

steam boilers

Improve piping insulation

Environmental Sustainability Improvement Examples

Wastewater recycling Collection of rainwater

Water Resource Management

Wastewater reuse Proper treatment

Environmental Sustainability - Food Waste Management

Food waste from factory cafeteria is an

opportunity for sustainability improvement.

Such waste is a burden to landfill and may

cause hygiene problems. On the other

hand, if properly handled, this could be a

valuable resource.

Compost

from food waste

Collaboration with SAC & LF Customers

Actively involve and support the development of Higg Index (the FW

working group ).

Participated in the pilot testing of facility modules

Share our training resource with SAC as leader membership

Support some of the translations

Cascade customers’ requirements to relative suppliers

Exchange information on supplier performance

Collect feedback to SAC and customers

Involve with Suppliers Arrange training session for suppliers on

Designate responsible and learn basic knowledge on Facility Module (Environmental and Social/Labor-if needed) and set up their goals

Use Higg Index Web Tool to complete and post their Module and connect with Li Fung and customers.

Provide environmental improvement suggestion in Li Fung website -

Sustainability Resource Center (SRC)

Monitor and ensure module completion of each supplier

Collaborate to make their Higg Index better score

Next Steps

In order provide more value added services to our customers

Work with SAC on internal verification

Support Customer with Higg Index data analysis

17

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Q & A

Thank you