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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
CONTENTS
HOW WE ANCHOR SUSTAINABILITY
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1. Our commitment to drive sustainable manufacturing
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2. Our business model
3
3. Statement from our sustainability steering committee
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4. Sustainability governance
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THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
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1. Our definition of sustainability in 4 areas
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2. Engaging our stakeholders
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3. Our 4 sustainability commitments
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2021 RESULTS
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1. Looking back at 2021 targets
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2. Performance on 2021 targets
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2022 TARGETS
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1. Care for People
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2. Embrace Durability & Circularity
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3. Fight for Climate
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4. Unlock Transparency
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RISK AND COMPLIANCE
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APPENDIX 1: CERTIFICATIONS
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APPENDIX 2: COMPLIANCE REPORTS
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APPENDIX 3: REPORTING PRACTICES
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APPENDIX 4: GRI INDEX TABLE
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LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
OUR COMMITMENT TO DRIVE SUSTAINABLE MANUFACTURING
LTP Group started its sustainability journey several years ago with an initial focus on social and environmental certifications for our factories, the materials used in the manufacturing processes, and packaging for manufactured products. This year we took important steps to further integrate sustainability by developing a new governance model and framework (the sustainability ladder). By establishing a sustainability governance model we make sustainability a topic of strategic importance, on the same level than business matters. We commit to significantly improve LTP Group’s overall sustainability performance and to drive positive change across our industries. We define our vision with two simple words: Consciously Crafted R . Reporting practices are detailed in Appendix 3 of this report.
LTP Group is pleased to present a Sustainability Performance Report for 2021.
It is the first year we chose to separate the annual reporting for sustainability from the annual financial reporting. It enables us to widen the scope of disclosure and provide greater insight into our sustainability performance. The report summarises our 2021 sustainability performance and presents our new defined 2025 sustainability strategy. This strategy is ambitious and integrated into our corporate strategy. This report aims to provide all stakeholders with our objectives, successes and challenges. It will also guide us to stay true to our commitment and influence others to define their own journey towards more sustainable industries.
Consciously crafted is our commitment to drive sustainable manufacturing, with environmental and ethical accountability determining our choices in producing durable, functional, premium products.
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
OUR BUSINESS MODEL
SUPPLY CHAIN
Furniture division
LTP Group is a manufacturer serving premium sport & outdoor and furniture brands with global reach. LTP Group is a specialist in handling textiles. LTP Group is composed of a garment division and a furniture division. Our group functions and our strategic functions, including sustainability, are located in Den- mark. Garment division The Garment division serve its customers by operating from fully owned factories and third-party production partners. LTP Garment, consists of a regional hub in Europe and in Asia. The European hub is located in Lithuania with a local management team, who are managing factories in 3 European countries. The Asia hub is located in Ho Chi Minh City. LTP Garment operates in 6 product categories: Active Sport, Cycling, Outdoor, Athleisure, Urban Performance and Sustainable Fashion & Lifestyle.
LTP Group’s position in the supply chain for both garment and furniture divisions is between material suppliers and brands. We play a critical role from the ideation stage to the delivery of the final product. Our customers, garment and furniture brands are designing the products and sending us technical specifications for the product development, construction and manufacturing. Most of the material suppliers we source from are nominated by our customers.
LTP Furniture offers a total supply chain solution including full assembly, packaging, and logistics. LTP Furniture, has each of its 4 European factories in Lithuania. In late 2021, LTP Furniture opened a new furniture factory in Mexico to support existing customers in serving the North American market. 2)
Note: 1) Countries with fully owned factories in 2021 are Lithuania, Ukraine, Belarus, Vietnam and Mexico: The full list of factories with details on location can be found on LTP website; 2) This factory in Mexico will not be fully operational before March 2022 and is not included in the 2021 results reporting.
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
STATEMENT FROM OUR SUSTAINABILITY STEERING COMMITTEE
‘LTP became LTP Consciously Crafted. Sustainability is a fundamental part of our corporate strategy and include ambitious goals. For this to be our everyday reality, it is essential that sustainability becomes integrated in our operations, values and culture. We have designed a framework and governance model that ensures a delegation of responsibilities locally in the factories. Designated sustainability ambassadors are spreading knowledge and mindset to our local teams, ensuring that our priority actions will be implemented, and targets will be met. It is our pleasure to share this information with you in this report.’
Jeannett, Camilla, Henrik and Karin
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
SUSTAINABILITY GOVERNANCE
The Sustainability Audit & Certification Committee is comprised of the core sustainability team. This team sets sustainability standards, supports the execution of the strategic initiatives, organises and follow up on audits and ensures the training and education of employees.
The representatives from shared services are responsible for supporting legal and contractual compliance as well as integrating sustainability in existing corporate culture and performance reporting.
The local directors are accountable for local sustainability performance, ensuring execution of the defined actions, and implementing mitigation actions from audit observations.
As of 2022, LTP Group has defined an organisation and governance structure that provides the global and local management teams with the necessary exchange of information and delegation of responsibility to anchor and drive sustainability initiatives across the group. 1) LTP Group’s Board of Directors sets the functions and duties of the sustainability steering committee. It provides the steering committee with the mandate to make strategic decisions and approves the overall sustainability strategy and budget. The Sustainability Steering Committee is comprised of LTP Group’s management team and the global sustainability manager. The committee sets strategic direction and priorities, and monitors execution of the sustainability strategy for 2022-2025. The Sustainability Management Committee is composed of the global sustainability manager, 6 local directors, and representatives from the shared services group.
SUSTAINABILITY COMMITTEES
Note: 1) Lines of reporting are made visible in LTP Group organisational charts
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
OUR DEFINITION OF SUSTAINABILITY IN 4 AREAS
SUSTAINABILITY LADDER LTP Groups work with sustainability is composed of 4 key areas, illustrated in the below figure. To successful ascend the ladder we have built out a team of sustainability professionals, each with dedicated competencies and responsibilities, all of whom collaborate and work in parallel to achieve our strategic goals.
At LTP Group we visualise our sustainability journey as a 4-step ladder. Notably, we have determined that at each step it is of equal importance to work with sustainability on operational, tactical and strategic levels. We also believe that each of the 4 steps requires continuous improvement over time. Compliance and corporate values is the base of the ladder since it is a foundation which is essential to successfully build sustainability initiatives and monitor risk. It requires continuous work to maintain awareness and knowledge across the organisation. It also must be regularly updated to be aligned with regulatory changes.
Certifications are a useful tool to monitor sustainability progress and challenges in our different locations. It also provides us with continuous expertise from third party organisations specialised in social, OHS and environmental best practices. The Strategic priorities defined by end 2025 are the result of a materiality assessment and are regularly reviewed by the continuous involvement of our stakeholders. Each strategic priority is detailed further in this report where relevant Performance based metrics and targets can be found. These metrics and targets will be followed- up on in the coming years. You can find details about LTP Garment and LTP Furniture certifications and compliance reports in the appendices of this document.
1) B Corp Certification Link
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
ENGAGING OUR STAKEHOLDERS
The details of our approach and the prioritized sustainability material topics are described in an article publicly available: 9 priority sustainability topics for garment and upholstery manufacturers. ” “Sustainability insights:
Between May and August 2021, LTP Group conducted a materiality assessment to identify the sustainability topics which are most material and important for our business and stakeholders. The assessment engaged with 80 stakeholders, and as such formed the foundation of our 2025 sustainability strategy.
LTP Group stakeholders are employees, management team, members of the board of directors, suppliers, customers, industry experts and representatives of the civil society. Out of this collective input we identified 9 sustainability priorities which were grouped into 4 distinct areas. These 4 areas became our 4 sustainability commitments.
The sustainability commitments describe our sustainability priorities towards 2025 and the specific initiatives we commit to. For each of the 4 commitments we have identified the underlying sustainability priorities together with their related 2022 actions and measurable targets.
Materiality assessment
Strategic priority topics
Notes: 1) Design for circularity is a design process which considers how the choice of the materials and the product construction will enable repair and maintenance of the product and recycling and reuse of parts of the product 2) Identified by looking at overlaps at the target level based on the GRI IN SDGs linkage resource
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
OUR 4 SUSTAINABILITY COMMITMENTS BY END 2025
As a manufacturer for multiple garment and furniture brands, LTP takes the responsibility to collaborate with brands and suppliers on materials substitution, product development and innovation for design for durability and design for disassembly. We will promote knowledge sharing and sustainability standards to drive industry transformations. We also commit to minimise production waste and optimise recycling of waste.
It is essential for LTP to provide opportunities for our employees to develop their skills and continuously improve working, social and living conditions. We are committed to assure we have a high work safety on all factories. No one must get hurt on our shift. We also commit to involve business partners to meet high social industry standards for their own employees.
Given the urgency of the climate change situation we will invest in renewable energy and tree planting locally and we will aim to reach emission reduction targets in alignment with the Science-based Target Initiative 1). We also commit to share the carbon footprint of our product's full lifecycle.
LTP Group 2021 Sustainability performance report
Note: 1) SBTi is the most ambitious corporate climate action framework for setting carbon equivalent reduction target
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
LOOKING BACK AT 2021 TARGETS
For LTP Group, 2021 has been a busy year and a year of extremes - both good and challenging. We were fortunate to experience rapid growth but were also met with considerable challenges due to COVID- 19. Despite the turbulent conditions in the world, LTP Group managed to maintain the focus on achieving the defined targets and are pleased to be able to disclose a solid progress: 14 targets achieved; 5 targets on track; and 3 targets not achieved.
We have faced the most challenges in Vietnam. Our factory in Ho Chi Minh has been impacted by a nearly 3-month lock- down. The LTP factory has been able to partly maintain operations. Production employees working under the lock-down have been selected on a voluntary basis. Employees who decided not to work under the lock-down have received their basic salary. As part of our commitment, we involve business partners to meet high social industry standards for their own employees. We have prioritised to provide LTP’s Code of Conduct to our production partners, which has not brought a satisfactory result for LTP Garment Vietnam. Our production partners plays a central role in conducting business ethically and responsibly, and we will maintain a strong focus to ensure that they adhere to LTP’s Code of Conduct. In 2022 LTP Group will strengthen the management of our production partners portfolio by widening the assessment framework to all production partners. Further detail on this assessment is provided in the next section under the Care for People commitment and related targets for 2022.
What have we done in 2021?
Care for people
The health and safety of our employees are of highest priority. The established procedures for ensuring safe working environments and compliance with national legislation in each of our locations are met. Throughout the COVID-19 crisis, health and safety of our employees has been no one priority. We have established procedures for ensuring safe working environments and compliance with COVID-19 related local legislation in each of our locations.
LTP Group 2021 Sustainability performance report
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
LOOKING BACK AT 2021 TARGETS
Embrace durability and circularity Decreasing the environmental footprint arising from our production will continuously be a priority. It includes the selection of certified and lower environmental impact materials used in the manufacturing processes and in packaging. In 2021 our focus has been to reduce the use of non-recyclable and non-recycled plastic and to phase out solvent-based glue in furniture production. The aim to replace traditional plastic bags with recycled and recyclable plastic bags has been part of LTP’s sustainability strategy for several years. The targets for 2021 was met for all locations except LTP Garment Vietnam. The use of solvent-based glue has negative impact on biodiversity and is a potential threat to human health. In 2021 LTP Group succeeded to entirely exclude its usage. Fight for climate In 2021 we have worked on reducing CO 2 e emissions with two initiatives. The sourcing of renewable electricity in Lithuania, and the alignment of our carbon accounting and carbon reduction target setting with global leading standards.
We have achieved our targets for 2021 and committed to the Science Based Target Initiative. In the coming years we will reduce further our emissions in alignment with the SBTi target setting methodology below 1.5 ° C. The reported CO 2 e emissions included scope 1 and 2 which is composed of company vehicles, and energy consumption in our
factories and offices. Unlock transparency
As a manufacturer we believe that we also have a responsibility to share information about the value chain behind the garment and furniture products we manufacture. The various steps in the production of a product are in most cases unknown by consumers but also by value chain players. Without knowledge of those steps, it is impossible to understand the product’s impact and to make the right decisions to reduce this impact. In 2021 we focused on opening up communication towards consumers, providing insights to the product purchased and the manufacture behind it. We also organised 3 webinars on the topic of Circularity, inviting industry experts to share insights to other supply chain players.
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
PERFORMANCE ON 2021 TARGETS
Commitment
Priority topic
2021 Target
2021 Result
2022 Target
Committed Entity
Status
Injuries & accidents Number of near-misses incidents Number of work-related injuries
0 0
5 2
0 0
LTP Furniture LTP Garment
On track On track
Business partners portfolio management
CARE FOR PEOPLE
100% 100%
90% 26% 88%
100% 100% 100%
LTP Garment Lithuania
On track
% production partners signing LTP Code of Conduct and Ethics
LTP Garment Vietnam Not achieved
% sewing production partners assessed on sustainability
N/A
LTP Garment Lithuania
Achieved
Fair wages and benefits
100% 100%
100% 100%
100% 100%
LTP Furniture LTP Garment
Achieved Achieved
% full time production employees, part of the works council or a union
Fair working conditions & Occupational health Workers covered by an OHS management system Production waste management & disposal
100%
100%
100%
LTP Group
Achieved
90% 90% 90% 25% 40% 25%
100% 100%
100% 100%
LTP Furniture
Achieved Achieved
EMBRACE DURABILITY & CIRCULARITY
% of recyclable plastic bags for packaging
LTP Garment Lithuania
15% 26% 41% 37%
50% 50% 75% 50%
LTP Garment Vietnam Not achieved
LTP Furniture
Achieved Achieved
% of plastic bags with min 50% recycled content
LTP Garment Lithuania
LTP Garment Vietnam Achieved
Sustainable material substitution % of water based glue (fully exclude solvent based glue) % of carboard sourced which are FSC certified % of wooden frames sourced which are FSC certified Carbon equivalent emissions scope 1 & scope 2 Carbon eq. emissions for scope 1 and 2
100%
100%
100%
LTP Furniture LTP Furniture LTP Furniture
Achieved Achieved
95% 30%
95% 11%
95% 30%
Not achieved
FIGHT FOR CLIMATE
GHG protocol 1)
2 e / FTE 0 kg CO 2 e / FTE 2)
902 kg CO
LTP Group
Achieved
Renewable energy sourcing
% not covered by the PPA 4) % not covered by the PPA 4)
100% 100%
100%
LTP Garment Lithuania LTP Furniture Lithuania
Achieved On track
% of electricity from renewable sources with Renewable Electricity Certificate 3)
87%
Customers Number of events organized to foster knowledge sharing across players in the industry
UNLOCK TRANSPARENCY
N/A
3 (circularity)
3
LTP Group
Achieved
Product users /consumers Number of new customers to join the transparency web platform called LTP Consciously Crafted N/A
4
5
LTP Garment
On track
Notes: 1) Carbon accounting done according to Greenhouse Gases protocol standards; 2) LTP Group committed to reach carbon equivalent neutrality starting 2022 with offset. According our commitment to SBTi below 1.5 degrees target setting, Link, a CO2e reduction targets for 2025 will be set and disclosed in the 2022 annual sustainability report ; 3) To account for the reduced CO2e emissions from renewable electricity certificates (REC), the GHG Protocol quality criteria must be met, and consequently we cannot claim for this renewable electricity and disclose 0%. In Vietnam, we have not found the possibility yet to source renewable electricity with those certificates; 4) Power Purchasing Agreement to buy renewable energy
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
RISK AND COMPLIANCE
2022 TARGETS
GOING-FORWARD: 2022-2025 STRATEGY
Most priority topics are common to our two business divisions: LTP Garment and LTP Furniture. This enables a group approach that leverages synergies between industries. As illustrated in the above-mentioned sustainability ladder, in addition to those strategic priority topics, LTP work with sustainability covers 2 other areas:
Our new 2025 sustainability strategy sets the new frame for reporting for the coming years, in addition to the GRI Standards. This strategy takes into account upcoming regulations under the new EU Strategy for Sustainable and Circular Textiles. The EU legislative framework under this strategy is addressed trough our 4 sustainability commitments and related priority topics (Corporate Sustainability due diligence directive, digital product passport, green claims, waste framework directive, packaging EPR & eco-design etc..). For these 2022-2025 strategic priority topics (identified by the results of the materiality assessment), we have defined related performance metrics and 2022 targets. For climate we have also set targets for 2025 since agreements or investments started in 2022 to reduce emissions will have impact during 2023. These targets are presented in the following pages under each of the 4 commitments to which they belong.
Certifications
LTP Group factories are audited by third party companies in the context of our social and environmental certifications. The detailed list of our certifications is available in the appendix of this report
Compliance
In addition to following all legal social compliances (e.g. legal minimum wage) in all locations in which we operate, LTP Group has also developed, and regularly reviews, our own internal policies such as our Code of Conduct and Ethics. The detailed list of our internal policies and other compliance documents is available in the appendix of this report
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
CARE FOR PEOPLE
Priority topic
2022 Target
Committed Entity
Injuries & accidents % of employees provided e-learning on OHS 1) % of directors onboarded on new OHS governance model Business partners portfolio management % sewing production partners assessed on sustainability 2) % of production partners reaching “Green” performance level 3) % material suppliers signing LTP Code of Conduct and Ethics Fair wages and benefits Ratios of standard entry level wage man production employee compared to local minimum wage Ratios of standard entry level wage woman production employee compared to local minimum wage % factories involved in living wage assessment 4) % total employees covered by collective bargaining agreements (part of the work council within the factory or a union) Fair working conditions & Occupational health % factories filling in minutes of monthly meetings with workers representatives Workers covered by an occupational health and safety management system
50%
LTP Group – all countries
LTP Group has over 2,000 employees across 10 factories in 5 countries. They are performing a large variety of jobs in production, warehouses and offices. We believe in diversity and inclusion as a driver for a dynamic, supportive and open work environment. All employees across the group are addressed by the sustainability commitment Care for People, which covers their well being including occupational health & safety (OHS), working conditions, and wages & benefits. The topic of OHS is of highest priority. We have established procedures for ensuring safe working environments and compliance with national legislation in each of our locations. In 2021 we have set up a whistleblowing system and reinforced the local complaint mechanism. In 2022 we will roll out trainings with employees at all levels to ensure that they are well known and understood. In addition to LTP Group employees, we have an increasing focus on our supply chain partners and their social responsibility. The focus is on external production partners for the garment business unit.
In 2022, we will strengthen the management of our production partners portfolio by widening the assessment framework to all production partners. This assessment is based on social and environmental requirements. Production partners are categorised depending on their performance level according to pre-defined criteria. Any production partner in the lowest performing category has to improve within 1 year partnership to continue collaboration with LTP Group. On the topic of fair wages & benefits, in 2022, we will release and implement a strategy with two objectives: Objective 1: Define yearly the living wages in each of our 10 factories locations by conducting a survey among production employees Objective 2: Assess LTP’s performance compared to those living wages and initiate dialogue with selected supply chain partners where the gap is highest LTP Group provides similar wage levels for men and women in each department for similar type of job functions. In the sewing department we employ a majority of women due to availability of skilled workforce.
100%
LTP Group – all countries
LTP Garment – all countries LTP Garment – all countries
100%
50%
40%
LTP Group – all countries
120 140 120
LTP Furniture – LT
LTP Garment – LT; VN
LTP Furniture – LT
140
LTP Garment – LT; VN
100% 100%
LTP Group – all countries
LTP Furniture – LT
LTP Garment – all countries
100%
100%
LTP Group – all countries
100%
LTP Group – all countries
Notes: 1) Occupational Health & Safety;
2) We are assessing all our production partners based on a list of social and environmental requirements and depending on their final score they are categorised as red, yellow or green. Green being for the best performance. We do not reject production partners in the red category if they are improving and able to become yellow or green after 1 year partnership; 3) After one year partnership, the most important is the ability for the production partner to improve over time, not only its performance in the beginning 4) See main text explanation
LTP Group 2021 Sustainability performance report
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We embrace the health, safety and wellbeing of our employees and production partners through LTP Group’s core values. In 2021 we expanded the health and safety organization with additional dedicated resources with direct reference to the local directors.
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
EMBRACE DURABILITY & CIRCULARITY
Priority topic
2022 Target
Committed Entity
Production waste management & disposal % of leftover textiles technically recyclable Ratio of 3D samples versus physical samples
The widely acknowledged need for scalable and innovative circularity solutions is disrupting our traditional role as a manufacturer. It is clear to us that we must play a larger role in the selection of materials and increasingly challenge those product designs which do not enable the recycling of products parts or repair and/ or reuse of products. Circularity is thus opening new areas for collaboration along the supply chain between manufacturers like us and material suppliers and brands on the design and construction processes as well as the material selection and substitution processes. The main challenges we have identified for those collaborative projects to be successful are: • The lack of transparency fostered by the fear of losing competitive advantage • The cost associated with the additional time for product development • The lack of clarity about where this new responsibility lies, and who is going to cover additional costs
The identified priority topics under this commitment require a high degree of innovation and testing from our side. They will be integrated into the R&D and testing centers in our regional offices. We also need to focus on waste reduction and recycling of waste in our operation which is pre- consumer waste. We do not include in our 2022-2025 strategy handling of post-consumer waste nor systemic take-back schemes. To be scalable, those initiatives must be implemented locally — where the product is located after distribution.
100%
LTP Group – all countries
5%
LTP Furniture – LT LTP Garment – all countries
Ratio of 3D samples versus physical samples
25%
Product manufacturing for circularity 1) Number of projects with solution for disassembly Sustainable material substitution Number of projects with sustainable material as an alternative
5
LTP Furniture – LT
5
LTP Group – all countries
Note: 1) Manufacturing for Circularity is the manufacturing of a product to facilitate integration of sustainable raw materials, the recovery of industrial waste and the EOL recycling, upcycling or downcycling
LTP Group 2021 Sustainability performance report
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We organised 3 webinars on the topic of Circularity, inviting industry experts to share insights on circularity. The focus areas were:
• Describe how to integrate circularity thinking in the design process
• Explain how to measure & report circularity impact
• Present innovative circular materials.
LTP Group 2021 Sustainability performance report LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
2022 Target
Committed Entity
Priority Topic
2021 Result
2025 Target
FIGHT FOR CLIMATE
Carbon equivalent emissions scope 1 & scope 2 Carbon eq. emissions from company vehicles 76 kg CO 2 e/FTE
LTP Group – all countries LTP Group – all countries LTP Group – all countries LTP Group – all countries LTP Group – all countries LTP Garment – LT LTP Garment – VN LTP Furniture – LT LTP Group – all countries
Carbon eq. emissions from electricity consumption Carbon eq. emissions from heating
0 kg 1) CO 2 e/FTE
544 kg CO 2 e/FTE 282 kg CO 2 e/FTE
According to SBTi 1)
The scientific evidence of the devastating impact of climate change on nature and people is undisputable. As a company with global manufacturing operations we are part of the problem, like any other company or organisation. Today the essential thing for us, is to know how much we should reduce our CO 2 e emissions to prevent increasing temperatures above 1.5 ° C. In parallel we are working on identifying all available solutions to reach this reduction target. The only methodology to calculate this reduction amount is provided by The Science Based Target Initiative. In fall 2021, LTP Group committed to submit its carbon equivalent reduction targets in accordance to the SBTi methodology below — 1.5 ° C. Thus, LTP group is listed on SBTi website as a company taking action. The carbon equivalent emissions targets for 2022 and 2025 will be defined in the fall 2022 once they have been reviewed and approved by SBTi. They will be published in our 2022 Sustainability performance report.
In 2021 and 2022, LTP Group entities in Lithuania are sourcing renewable energy through Renewable Electricity Certificates. Going forward, LTP Group will sign power purchasing agreements whenever possible with local renewable power producers. Our objective is to support the development of additional renewable power capacity in the countries where we operate. Carbon equivalent emissions are reported in conformance with the GHG Protocol Corporate Standard, and accordingly all scope 3 emissions are not included. During 2022, we will also assess our 2021 scope 3 carbon equivalent emissions and reduction targets according to the Science Based Target initiative (SBTi) 1) . The full scope 3 emissions will be reported in our 2022 Sustainability performance report published in 2023.
Renewable energy sourcing Electricity consumption MWh / FTE
Defined by energy efficiency assessment in 2022
2.01
2.00
Gas consumption MWh / FTE
1.38
1.35
100%
100%
% of electricity from renewable sources with REC 2)
% of not covered by PPA 3)
0%
0%
87%
100%
% of electricity from renewable sources with PPA 3)
Maximum allowed 3)
N/A
0%
Inhouse transportation & logistic of goods % of new company vehicles being hybrid, or electric N/A
LTP Group – all countries
100% 100%
Energy efficiency % owned buildings energy efficiency assessment & improvements
LTP Group – all countries
N/A
100% N/A
Product carbon footprint on full lifecycle No of customers with product lifecycle CO2e on product invoice N/A
LTP Group – all countries
10
40
Note: 1) For period 2022-2025 carbon neutrality with carbon offsetting. Will be a large portion in 2022 but will decrease over time when actual reduction happens. LTP committed to the SBTi, Link, and will define CO2e reduction targets for 2025 according to its methodology based on science. Targets will be shared in the 2022 annual sustainability report; 2) To account for the reduced CO2e emissions from renewable electricity certificates (REC) they have to meet GHG Protocol quality criteria. In Vietnam, we have not found the possibility yet to source renewable electricity with those certificates; 3) Power Purchasing Agreement, with local restrictions on the share of consumption a company is allowed to cover as per the national regulation.
LTP Group 2021 Sustainability performance report
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With this signature we commit to reduce our carbon footprint, to keep global warming below 1.5°C above pre-industrial levels. We believe that the SBTi today is the only standard for businesses to set credible targets, to effectively address the climate crisis.
LTP Group 2021 Sustainability performance report
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HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
UNLOCK TRANSPARENCY
Priority topic
2022 Target
Committed Entity
Employees
One of the conclusions from the materiality assessment we conducted early 2021, and which is described above in this report, is that the need for more transparency in the textile industry requires immediate solutions. The manufacturing industries are complex and global, They have developed in this direction with the main objective of decreasing production costs. Transparency is a strong driver to change direction and improve the social and environmental impact. New requirements from consumers and supported by upcoming regulation are pushing for transparency with the following effects: • Concentration of orders: to reduce the amount of information to be provided and to ensure a high level of control on the information made available, value chain players are reducing the number of upstream partners and rewarding the ones taking sustainability action • Consumers awareness: better understanding of how and where products are made is empowering consumers in making purchasing decisions rewarding the brands improving their sustainability performance and driving positive change • Reshoring: the high share of CO 2 e from transportation on products footprint and the sustainability risk level outside Europe is pushing for bringing production closer to distribution
To support this new direction, we have decided to develop different tools to unlock transparency: Consumer friendly web-based app: we launched a digital tool to unlock external transparency with consumers. This tool is a web platform called LTP Consciously Crafted®. The web platform works like an app and is accessible online by scanning a QR code placed in the products. LTP customers also have a dedicated space in which they can share their own and joint LTP sustainability initiatives. Current content and lay out is available on the app under the following link: Link to the App. The content will be continually updated, with concrete sustainability actions and measurable impact. B2B sustainability platform: in 2021, LTP Furniture developed a customer portal. The ambition is to provide sustainability information specific to the products such as CO2e emissions on the product lifecycle. Digital audit & document management system: late 2021 LTP Group started the development of a digital document management system for sustainability documentation and quality audits execution and follow-up. The objective of the system is to increase LTP transparency and efficiency for compliance as well as certifications documents and processes. This system will be fully developed by the end of 2022.
LTP Group – all countries LTP Group – all countries LTP Group – all countries LTP Group – all countries
% employees provided e-training on sustainability
50%
% directors onboarded on new sustainability governance model Customers Number of events organised to foster knowledge sharing across players in the industry
100%
3
Number of customers presented 2021 sustainability performance report
20
Product users /consumers Number of new customers to join the transparency web platform called LTP Consciously Crafted
LTP Garment – all countries
5
Business partners % of sourced materials in value providing sustainability information
LTP Group – all countries
50%
LTP Group 2021 Sustainability performance report
20
We strongly believe that industry players must come together to address the need for transparency. LTP Group has invested in a web-enabled app opening communication towards consumers, providing insights to the product purchased and the manufacture behind it.
LTP Group 2021 Sustainability performance report
21
HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
RISK AND COMPLIANCE
2022 TARGETS
RISK AND COMPLIANCE
In 2021, LTP Group conducted a business risk assessment which included compliance risks. Those risks are presented in the below table. For each risk we present the mitigation measures implemented across LTP Group during 2021 and the mitigation measures to be implemented in 2022.
Specific LTP Group compliance related policies and documents can be found on LTP website . Those documents will be revised and updated regularly.
IDENTIFIED COMPLIANCE RISK IN 2021
RISK DESCRIPTION
RISK MITIGATION – ALREADY IMPLEMENTED IN 2021
RISK MITIGATION – TO BE IMPLEMENTED IN 2022
• Whistleblowing mechanism • Local complaint system in every factories • Code of Conduct & Ethics presented to production partners and suppliers • Social third-party audits through certifications: see full list in the appendix of this report • Separate risk assessment based on the inherent risk identified with support of Corruption Perception index 1) • Whistleblowing mechanism • Ethical policy for all entities in LTP Group established and signed by all managers • General anticorruption and bribery policy incorporated in factory standard • Code of Conduct & Ethics presented to production partners and suppliers • Review of data in CRM • On-boarding training/ information on employee's rights • Materiality assessment conducted which resulted in circularity identified as a material topic. As such, it has been added in LTP Group 2022-2025 sustainability strategy
• Risk assessment with focus on social and environmental topics and according to OECD guidelines on supply chain due diligence • Establishment of a Sustainability supply chain due diligence policy
Lack of control mechanism to prevent, identify and address breach of human rights among our business partners upstream and/ or downstream in the supply chain
Breach of human rights and working conditions in the global supply chain
• Establishment of a specific anti-corruption and fraud policy • Training modules provided by LTP Group legal manager to all directors and critical functions: e.g. finance, purchase • Tailor-made procedures based on a risk approach
Lack of preventive measures and control mechanism to prevent, identify and address corruption bribery or fraud in the organisation
Risk of corruption, bribery and fraud
• Optimisation of solutions for documents and information storage
Breach of Data Privacy laws
Breach of data privacy and GDPR regulations
Risk of not leading innovative manufacturing solutions enabling circularity such as the ability to disassemble products or increasing use of materials which have recycled content, or which can be recycled
• See commitment Embrace Durability & Circularity under the section “ 2022 TARGETS ” of this report for all details on 2022 priority topics and targets
Lack of focus on circularity
LTP Group 2021 Sustainability performance report
Note: 1) In 2021 CPI, Ukraine ranked 122 out of 180; Belarus ranked 82 out of 180; Vietnam ranked 87 out of 180
22
HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
APPENDIX 1.1 LTP GARMENT CERTIFICATIONS
Description about each of the below mentioned certifications is available on LTP group website.
Description Focus area
Chemicals,
Organic materials
Chemicals & environment Social
Social (FSLM) Environment (FEM)
BSCI: Business Social Compliance Initiative
Social
OHS
Scope
Production facility Material
Material
Production facility
Production facility
Production facility
Production facility
LTP Coverage Lithuania
Audited
Audited
Comply
Participate
Verified + Production partner self assessed
--
--
Belarus
Audited
--
Comply
Audited
Self assessed
--
--
Ukraine
Audited
Audited
Comply
Audited
Self assessed
--
--
Vietnam
Audited
--
Comply
Audited
Self assessed Verification planned in H1 2022
Audited
Selected production partners audits planned in H1 2022
LTP Group 2021 Sustainability performance report
Note: View as of January 2022
23
HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
APPENDIX 1.2 LTP FURNITURE CERTIFICATIONS
Description about each of the below mentioned certifications is available on LTP group website.
FSC
Description Focus area
Quality
Environment
Environment
Environment
Environment OHS Social Quality
Social
Scope
Quality management system at production facility
Environment management system at production facility
Material
Material
Production facility
Production facility
LTP Coverage Lithuania – furniture
Audited
Conducted in Q1 2022
Self assessed
Audited
--
Lithuania – covers
Audited
Conducted in Q1 2022
Self assessed
Audited
Planned in H1 2022
Mexico
--
--
--
Audit planned for 2022
--
LTP Group 2021 Sustainability performance report
Note: View as of January 2022
24
HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
APPENDIX 2 COMPLIANCE REPORTS
Specific LTP Group compliance related policies and documents can be found on LTP website. Those documents are revised and updated regularly.
Whistleblowing policy and local complaint mechanism
Group Code of Conduct & Ethics
Group Factory Standard
Anticorruption & Antibribery policy
Health & Safety Prevention Measures
Production partners monitoring
Scope
Value Chain: production partners
Own operations
Own operations
Own operations
Own operations
Value Chain: production partners 1)
Content Set the requirements
Yes
Yes
Yes
--
Yes
Yes
Describe monitoring process
--
--
--
Yes
Yes
Yes
Enable reporting of misconduct/ report of concerns
--
--
--
Yes
--
--
Gather information for assessment
--
--
--
Yes
Yes
Yes
Internal audits Local complaint mechanism
Whistleblowing system
Whistleblowing system
• •
• •
• •
Part of commercial contracts
Health & Safety committee
Part of production partners overall assessment
Enforcement
High risk functions training
Local complaint mechanism
LTP Group 2021 Sustainability performance report
Note: View as of January 2022; 1) Only relevant for LTP Garment business division
25
HOW WE ANCHOR SUSTAINABILITY
THE JOURNEY TOWARDS OUR 4 SUSTAINABILITY COMMITMENTS
2021 RESULTS
2022 TARGETS
RISK AND COMPLIANCE
APPENDIX 3 REPORTING PRACTICES
Report content has been defined by: • Ensuring continuity with last year reporting in terms of topics and associated targets for the year 2021 • Presenting the newly defined 2025 strategy, the process to identify the material topics and the ambition level with associated targets for 2022 No external assurance has been conducted for this report. The carbon equivalent emissions data for scope 1 and scope 2 have been reviewed by an expert consultant from Systemize, providing advisory services to LTP Group.
This report has been prepared in accordance with the GRI Standards: Core option. It covers the reporting period calendar year 2021 from January 1 st to December 31 st . We made significant changes in reporting this year. For the period calendar year 2020, sustainability performance and goals were disclosed in our annual report. It is the first time that we publish a separate sustainability report. Topic boundaries are clearly mentioned with the name of the committed entity and the countries next to each result and target listed in the tables. Any legal entity fully controlled by LTP in the mentioned country(ies) is included in the 2021 result reporting and is subject to the set 2022 target. When “all countries” is mentioned, it includes the following countries: • LTP Furniture: Lithuania. The factory in Mexico will not be fully operational before March 2022 and is not included in the 2021 results reporting nor the 2022 target setting. • LTP Garment: Lithuania, Ukraine, Belarus and Vietnam.
The GRI content index, is available on pages 22 to 25 of this report
LTP Group 2021 Sustainability performance report
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