Page 1

Sustainability Report FY2020


TABLE OF CONTENT 6 9

RECAPS AND HIGHLIGHTS OF 2020

61

Product disposal

62

Responsible marketing and

LETTER FROM CEO

consumer education

10

SUSTAINABILITY APPROACH

12

Challenges

66

Company

14

Stakeholders

68

Employee demographics

16

Materiality

71

Employee benefits

18

Sustainability strategy 2023 73

20

64

PEOPLE AT IDEAL OF SWEDEN

Career development

74

Ethics

IDEAL OF SWEDEN ORGANISATION 75

Illness

23

Company profile

24

Sustainability governance

28

Code of Ethics

28

81 Code of Conduct for Business Partners

28

Risk management

30

PRODUCT

32

85 Product design and development

Climate

87

Energy

76

PHILANTHROPY

79

La Escuela IDEAL

36

Responsible sourcing

40

Responsible manufacturing

Village upliftment programme

82

Pink Difference

84

PLANET

43

Compliance

88

CRISIS MITIGATION

44

Due diligence

90

Covid-19 mitigation

46

Product safety

Sustainable packaging and distribution

93

AUDITOR REPORT

48

50

Global distribution

52

Packaging

95

APPENDIX 1

56

Parcels

98

APPENDIX 2

59

Local logistics

99

APPENDIX 3

60

Product use-phase



IDEAL OF SWEDEN’S 2020 SUSTAINABILITY AND CORPORATE RESPONSIBILITY REPORT


This report describes IDEAL OF SWEDEN’s sustainability strategy 2023 based on our four focus areas: People, Product, Climate and Compliance. Additionally, it summarises our goals and activities and provides an overview of the company’s performance during the fiscal year 2020. This report aims to provide an honest overview of our performance and progress and illustrate the challenges and risks we encounter on our sustainability journey. The effects of the COVID-19 pandemic as well as the actions that we have taken to protect our colleagues and partners are described in a separate chapter. The 2020 Sustainability Report, together with the IDEAL OF SWEDEN Annual Report 2020 fulfils the requirements of the Swedish Annual Accounts Act. The Board of Directors of IDEAL OF SWEDEN bears the responsibility of the annual Sustainability report. The data presented in this report has been collected during the calendar year 2020. The document has been prepared in accordance with the GRI Standards: Core option. Additional information and our GRI Content Index can be found as Appendix 1 of this report. Contact: If you would like to provide feedback or have any further questions, please email us at sustainability@idealofsweden.com 5


RECAPS AND HIGHLIGHTS OF 2020


114

Bags & Accessories

Number of employees

New product categories

309 631 928

240 000

Number of website visitors

Number of pictures under #idealofsweden

7

800 551 000 SEK

Number of retail stores

Total revenue

11 000

200 000

Number of wholesale doors

Number of influencer collaborations


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LETTER FROM CEO 2020 has been a year of unexpected events that have affected every one of us and have forced us to respond to the ever-changing environment with urgency. At IDEAL OF SWEDEN, we are highly focused on protecting our employees and continuing to ensure that our operations are crisis-resilient as we proceed to face a time of unprecedented uncertainty. The global pandemic crisis has shown that tackling environmental and societal issues is now more important than ever so that we all come back with a strong mindset of innovation and resilience. I want to emphasise that being socially responsible has always been a vital and indispensable part of IDEAL OF SWEDEN’s corporate strategy; however it is time to fully embed sustainability into our business strategies. Operating sustainability, thinking, and acting on environmental, social, and governance concerns in a proactive way can safeguard the company’s long-term success and bring many benefits to our stakeholders. Furthermore, driving both positive financial outcomes and environmental benefits in synergy could be part of how we can contribute to overcoming the global economic recession. As part of our sustainability journey, our initial focus will be on decarbonising our value chain, adopting circular economy principles, and creating a work environment that promotes social equality and celebrates diversity. Driving transformational systemic changes within our company will require a collective effort and the ability to push through the limits at all levels, from the individuals to the whole organisation. Achieving long-term success is undoubtedly having the courage to continually challenge the way things are done. Additionally, IDEAL OF SWEDEN sees establishing collaborations as a significant business opportunity. We will continue to develop strategic alliances that will drive our organisation forward and create a positive collective impact on the e-commerce industry. In closing, I would like to thank our employees for the year they have delivered, for their energy and sharp focus! I genuinely believe that the strong culture and the commitment of the people working at IDEAL OF SWEDEN will certainly ensure that we will not stand still and continue to grow and show that consistency goes beyond the product itself.

Joachim Angelton Chief Executive Officer IDEAL OF SWEDEN

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SUSTAINABILITY APPROACH

10


We believe that having a holistic approach towards establishing our new sustainability strategy is crucial to achieving long-term business success. Our ambition is to continuously explore new solutions for sustainable development while shaping our business responsibly and increasing our economic success. This ambition encompasses all of our company’s activities – along the entire value chain. IDEAL OF SWEDEN’s Corporate Responsibility and Sustainability Policy contributes to achieving IDEAL OF SWEDEN 2023 Sustainability Strategy. Our core values are embedded in our sustainability guiding principles: 1. Integrate sustainability into the corporate strategy Integration of sustainability considerations into all our business decision-making 2. Build a culture of compliance Compliance with applicable legislation, governance regulations and codes of practice

6. Engage with our stakeholders Engage with IDEAL OF SWEDEN’s stakeholders and establish partnerships that are instrumental to the success of IDEAL OF SWEDEN sustainability efforts 7. Ensure effective corporate reporting Report publicly on IDEAL OF SWEDEN’s sustainability performance in conjunction with the Annual Report In 2020, we carried out an extensive analysis of global trends and drivers to determine material topics (see pages 16-17) that were significant for our business and relevant stakeholders. We also integrated the outcomes of our risk management analysis while shaping our strategy. As a result, the new sustainability strategy provides an agreed framework to guide investment focus and drive performance, as well as engage internal and external stakeholders.

3. Cultivate a culture of transparency Ensure transparency in the company’s sustainability efforts 4. Identify and manage sustainability-related risks Manage risks throughout the company’s total value chain related to environmental, social and governance aspects 5. Identify and pursue sustainability opportunities Manage initiatives to continuously improve social, environmental and economic impact with a special focus on climate, resource efficiency and social inclusion

Alina Klaseva Sustainability Manager IDEAL OF SWEDEN

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CHALLENGES We have explored trends that might shape the sustainable future of our company and have identified six key challenges. 1. Climate Change Companies with a global presence risk facing more disruptions in their global supply chains due to extreme weather events, depleting raw materials, migrating workforce along with infrastructures in need of a retrofit. Pressure is felt from different stakeholders - investors are making the climate more central to their activities, plus central banks and other supervisory authorities that are now considering climate change as a direct risk to financial stability. Furthermore, greenhouse gas emissions will also be increasingly scrutinised, regulated, and priced by government authorities. 2. Human rights Adverse human rights impacts may arise from within companies’ supply chains who have extensive global operations and that carry out their business in collaboration with third parties. Besides, financial institutions and private investors are increasingly incorporating human rights issues such as modern slavery, worker health and safety, and freedom of association into the ESG standards that are influencing their investment strategies. Additionally, the COVID-19 pandemic has not only exacerbated existing human rights issues for businesses but has presented companies with new, unprecedented challenges. 3. Changing regulatory landscape The regulatory landscape is shifting. Worldwide, more and more regulations are set forth to address everything from equality considerations to plastic use and greenhouse gas emissions. Requirements differ depending on geographies. Nevertheless, businesses can expect to be directly affected by voluntary and mandatory guidelines.

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4. Achieving circularity Rapidly increasing pollution problems are causing irreversible damage to the planet’s ecosystems. Population growth combined with uneven economic development is continuously increasing global production, consumption and mobility. Despite declining pollutant levels in some regions, environmental pollution has grown into a global transboundary problem. Given the socioeconomic dependence on environmental processes, companies must implement circular economy activities to ensure sustainable production and waste-flow patterns. 5. Stakeholder expectations Numerous scientific findings identify governments, shareholders, top management, employees and customers as the main stakeholders that influence a business’s CSR approach. It has become an increasing demand that businesses incorporate more environmentally friendly practices into their strategy. 6. Diversity and inclusion A scarcity of a diverse and equal workplace is increasingly recognised as a business issue, and there is a growing view that a lack of such in the workforce is a major strategic business risk, in particular, a reputational risk, rather than just an HR issue. Besides providing the company with a source of valuable input created by fostering cognitive diversity within the organization, a diverse and equal workplace can be a valuable source of competitive advantage in shaping various stakeholders’ views.


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STAKEHOLDERS In our fast-paced world, old assumptions are giving way to new realities. Addressing these new realities is made more difficult by the increasingly interdependent and highly connected nature of today’s society. An issue that is relevant in one part of the world is rapidly magnified as it spreads across the globe. Technological advancement quickens the pace even further and introduces ever new uncertainties that are too big for one organisation to tackle; hence progress can be made only on the basis of collaborative efforts. We know that in order for us to successfully respond to the variety of our stakeholders and create value, we need to be transparent and integrate both internal and external linkages into our operating environment. IDEAL OF SWEDEN continually aims to develop stakeholder networks through meetings, one-on-one interviews, questionnaires, workshops, scoping studies and concept mapping. Furthermore, we regularly update our Sustainability-related information and frequently asked questions (FAQs) and facilitate stakeholder access by establishing relative footers on our web page.

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INTERNAL

EMPLOYEES

MEDIA

EXECUTIVE MANAGEMENT

SUPPLIERS

RATING AGENCIES

INVESTORS

COMPETITORS

OWNERS

GOVERNMENT

CUSTOMERS

EXTERNAL

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MATERIALITY 2020 was the first year that we conducted a materiality assessment to ensure that IDEAL OF SWEDEN focuses on the issues where we have the greatest impact. The identified significant economic, environmental and social topics have provided a foundation for the company’s sustainability and corporate responsibility strategic priorities. The assessment shall be done on an annual basis and will continue to give two perspectives: identification of key topics according to their importance for external and internal stakeholders

as well as their impact on IDEAL OF SWEDEN’s business success. Our materiality methodology is aligned with the Global Reporting Initiative (GRI) Standards. The assessment included surveys and dialogues with our internal and external stakeholders, including IDEAL OF SWEDEN senior managers across different functions, all employees, investors, retailers, NGOs and industry associations. As a result of this analysis, we identified a total of 14 issues, with selected 10 being our most material:

HIGH

IMPORTANCE TO STAKEHOLDERS

11. &r 6. Supply chain transparency

7. Responsible marketin & consumer education

MEDIUM 12. Policy advocacy

10. Charitable donations & commmunity support

LOW

M IMPORTANCE TO BUSINESS

16


1. Business ethics 2. Product eco-design, packaging, and circular economy 3. Sustainable sourcing of raw materials 4. Product safety and quality 5. Transparent product labelling 6. Supply chain transparency 7. Responsible marketing and consumer education

For a list of definitions, please see our Appendix 2.

1. Business ethics 4. Product safety & quality 8. Climate change mitigation

14. Workplace diversity & inclusion 9. Industrial waste management

Energy efficiency renewables 5. Transparent product labeling

2. Product eco-design, packaging, circular ecomony 3. Sustainable sourcing of raw materials

ng n

MEDIUM

8. Climate change mitigation. 9. Industrial waste management 10. Charitable donations and community support. 11. Energy efficiency and renewables. 12. Policy advocacy. 13. Sustainable office. 14. Workplace diversity and inclusion.

13. Sustainable office

HIGH

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SUSTAINABILITY STRATEGY 2023 To create and capture new value and drive not only production but also consumption towards sustainability, we are embedding sustainability into our core operations and making focused organisational changes. Moreover, we are embedding sustainability into every aspect of our organisational structure and culture. The new IDEAL OF SWEDEN sustainability strategy covers four focus areas: People, Product, Climate and Compliance. Each pillar is supported by company-wide policies and initiatives.

goals relevant to the ever-changing world. Some of the set objectives will be continuously evolving, some will be met by 2023 and new objectives might be added along the way. The initiative progress will be measured against our set targets and KPI and shall be overseen through our internal governance mechanisms. We plan to communicate our progress against set objectives annually in our sustainability report and on our website.

The aspirational objectives, commitments and targets we have set under the focus areas were designed to continually challenge us and keep our

IDEAL OF SWEDEN’s corporate responsibility efforts, also aim to support the 2030 Agenda for Sustainable Development, adopted by all United Nations Member states in 2015. At the heart of the agenda are the 17 Sustainable Development Goals (SDGs) - independent yet interconnected and designed to steer governments and businesses towards a more sustainable future for people and the planet.

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Our latest materiality analysis that highlights the most significant sustainability topics for our internal and external stakeholders was used to select the SDGs to which IDEAL OF SWEDEN will contribute through our in-detail designed initiatives. Our contribution corresponds to the following goals: See detailed information of our contribution to the SDGs in Appendix 3.


By 2023 improve Human Rights due diligence practices. By 2022 improve B2B and B2C communication solutions.

PEOPLE

By 2023 engage IDEAL OF SWEDEN employees in relevant training that would cover all functional specialisations. Strive towards creating a diverse, inclusive and equal work environment. By 2023 achieve CO2 emission reduction in IDEAL OF SWEDEN entire value chain from 2020 baseline.

CLIMATE

By 2023 procure most electricity from renewable sources in IDEAL OF SWEDEN entire value chain. By 2023 increase Supply Chain resilience through increased transparency. By 2022 introduce green and sustainable office practices. By 2022 shift towards Design for Sustainability and initiate a pathway towards circularity. By 2023 find innovative solutions to facilitate sustainable product development. By 2023 improve communication by using standardised eco-labels.

PRODUCT

By 2023 improve and optimise material flow and production layout for all IDEAL OF SWEDEN product categories. By 2023 develop LCAs for main product categories to determine products’ environmental impact and create pathways to lower the negative impact. By 2023 create product material declarations to improve resource efficiency and inspire innovation. Accelerate resource recirculation by prioritising sustainable solutions. By 2023 significantly increase the use of recycled input materials both for products and packaging.

COMPLIANCE

By 2022 develop a robust corporate compliance program. By 2023 enhance supplier relationship management.

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IDEAL OF SWEDEN ORGANISATION



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COMPANY PROFILE IDEAL OF SWEDEN AB is a limited liability company registered and incorporated under the laws of Sweden. The company’s shares are, directly or indirectly, owned by equity investors and private investors. Since IDEAL OF SWEDEN’s creation by Joachim Angelton and Filip Ummer in 2013, our philosophy has been to inspire and to produce the most innovative products that stand out due to their design, high quality and function, and to strive to make a positive difference in people’s lives globally. Today, IDEAL OF SWEDEN is a global fashion and lifestyle brand, with headquarters in Norrköping and a local office in Stockholm. Our brand is sold in retail stores in more than 70 countries and with a customer base in more than 200 countries. By creating the perfect synthesis of fashion and tech, IDEAL OF SWEDEN stands for the little luxuries that make your everyday smooth and luxurious. From phone cases, phone wallets, charging cables, power banks to clutches, bags, accessories, and other fashion pieces, our designs are inspired by the latest trends in fashion and interior and merge smart functions with cutting-edge looks. As one of the industry’s pioneers, IDEAL OF SWEDEN is known for its commitments to outstanding quality and high standards. By introducing innovative functions and new ways of thinking, the brand is continuously redesigning the mobile experience. We stand for premium fashion accessories that enhance both style and convenience for today’s connected lifestyles. By continually working to find innovative and functional solutions, we strive to create value in all that we do, from the process of making our handcrafted products to developing our sustainability approach.

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SUSTAINABILITY GOVERNANCE Decision Initiatives Implementation

Product

24

Finance

E-Commerce

Project Management

Marketing


BOARD OF DIRECTORS

CEO

SENIOR MANAGEMENT

Sales

Supply Chain

Human Resources

Sustainability

Management

Employees

25


26


We recognise the importance of incorporating environmental, social, and governance considerations into the planning and operation of our corporate agenda. The incorporation is executed throughout the company as follows. The Sustainability Manager presents a sustainability strategy and execution agenda directly to the CEO and the Board of Directors (the “Board”). The Board decides on IDEAL OF SWEDEN’s final strategy and sustainability approach. Upon such approval, the Sustainability Manager presents the activities and execution agenda for the corporate sustainability approach to Senior Management. In addition, the Sustainability Manager, together with the Senior Management, creates cross-functional initiative Working Groups that include the company’s key employees from various departments. Each initiative Working Group develops its own management strategy and holds the responsibility for implementing the sustainability principles and

execution on the activities to succeed with IDEAL OF SWEDEN’s sustainability strategy. Furthermore, each initiative Working Group reports directly to the Sustainability Manager through formal reviews on an ongoing basis to stay up-to-date on challenges and opportunities. IDEAL OF SWEDEN believes it is of the highest importance to engage every part of its corporation in order to reach the standards and goals set out. Each business division may report on identified risk factors to the Management or Senior Management. Senior Management responds to the risk factors in an efficient, effective manner with the support of Sustainability Manager. IDEAL OF SWEDEN’s adherence to sustainability principles, policies and strategy is embedded in the Risk Management, and Compliance review and the progress and outcome is reported to the Board in accordance with established routines.

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The Code of Ethics The Code of Ethics summarises IDEAL OF SWEDEN’s core values, fundamental policies and includes guidelines that all Company’s directors, managers and employees are required to comply with. The purpose of the document is to avert wrongdoing and to ensure that the Company’s business is conducted in a consistently legal and ethical manner. The Code of Ethics is based on the UN Guiding Principles on Business and Human Rights and the UN Global Compact. The Code of Ethics is available in English and is one of the most important parts of our Staff Handbook that is available on the Company’s intranet. The document is reviewed on an annual basis, all employees and consultants must acknowledge that they have read and understood it. The Code of Conduct for Business Partners to IDEAL OF SWEDEN The Code applies to the entire value chain and illustrates what we expect of our suppliers and business partners. It shows the requirements and offers guidance about how we should conduct ourselves in relation to our stakeholders and describes the directives and principles we follow as part of our operations. The Code is the most important part of our company’s ethical framework. Besides being an effective document to establish values of our organization it also drives our actions and supports the principles that underlie decision making. The Code assumes compliance with legislation and regulations and is based on international standards such as the UN’s Declaration of Human Rights, the principles of the UN Global Compact and the guidelines of the ILO (International Labour Organization), OECD as well as national legislation. The Code of Conduct for Business Partners to IDEAL OF SWEDEN is reviewed on an annual basis, and is available on the Company’s website.

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Risk management IDEAL OF SWEDEN works proactively to identify both external and internal risk factors causing business uncertainty, including but not limited to legal risks, operational and financial risks, sustainability and environmental risks etc. We seek advice on a variety of risk factors through our network with professional consulting firms, governmental authorities and experts to identify risks in economic, social, regulatory, and environmental aspects. Risk management is carried out in order to ensure regulatory compliance throughout the company as well as to strengthen the company’s commercial and sustainable competitiveness in the market. In line with the Board of Directors’ decisions and commitment to risk management, the company has established a systemised risk identification process followed by implementation and governance throughout the organisation. Each risk management area is monitored by a certain business function within the company and reported on to the Board of Directors by the Head of such department: Operational and strategic risks: CEO Financial risks: CFO Legal and regulatory compliance risks: Legal Counsel During the FY2020 the company has not taken part of any dispute resolutions or received any fines or non-monetary sanctions for non-compliance with environmental laws and regulations. Further, the company has not had any incidents of noncompliance with regulations and/or voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship.


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PRODUCT PRODUCT DESIGN AND DEVELOPMENT

30

IDEAL OF SWEDEN strives to integrate aspects of sustainability into our entire product value chain.

RESPONSIBLE MATERIAL SOURCING

RESPONSIBLE MANUFACTURING


SUSTAINABLE PACKAGING AND DISTRIBUTION

PRODUCT USE-PHASE

PRODUCT DISPOSAL

31


PRODUCT DESIGN A At IDEAL OF SWEDEN, we strive to deliver the highest quality in all that we do. We regularly update our products inspired by current trends and influencers to reimagine the future through sustainable design. Our approach to product development has always been linked with innovative form and functionality, for that reason, our end goals are to have reliable and durable products. We know that the choices that our design and product development teams make when considering, prototyping and finally producing a product have direct environmental and social impacts on our planet. The design stage is the perfect opportunity to find unique and creative ways to create more sustainable and circular goods. Our goal is to continuously challenge ourselves and seek for the best fitting tools and techniques that our product development team can employ to create products in ways that vigorously reduce the adverse effects on people and the planet.

32


AND DEVELOPMENT

33


“WE MUST LEARN TO NATURE THE W BORROW FROM IT” – BARRY COMMONER


HOW TO RESTORE WEALTH THAT WE ”


RESPONSIBLE SOURCING Responsible sourcing is a critical function of our business with a growing importance to our stakeholders, including investors and customers. Our purchasing team is working in line with the IDEAL OF SWEDEN Corporate Responsibility and Sustainability Policy principles and makes sure that our suppliers adhere to strict social and

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environmental responsibility standards, and the raw materials purchased fulfil the necessary quality and safety specifications. The map highlights the origins of our material resources and the location of our manufacturing sites.


Likewise, we are continuously working towards the improvement of the traceability of raw materials both from the perspective of environmental safety and social responsibility. In our procurement of materials process, we also have great consideration for the ethical principles and standards. For example, we are 100% against

animal cruelty, so all of our leather-like products are made of a durable premium PU material identical in appearance to real leather. We strongly believe that ingredient transparency is one of the first steps towards achieving complete supply chain transparency; hence we have decided to be completely honest about all our product material components.

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Metal sheet 38%

Polyurethane 30%

Polyester-spandex microfiber 15% 3M Sticker 7%

Polyster-spandex microfiber 6%

Metal 10%

Metal logo 4% PET sheet 1% Metal logo 5% Polycarbonate 40%

Polycarbonate 45%

FASHION PRINT

ATELIER CASE

Cotton 13%

Alloy 8% Alloy 4% Cotton 8%

Polyurethane 83%

Polyurethane 84%

LOUVRE COMPUTER SLEEVE

CROCO POUCH

Magnet 24%

PCB board 18%

Stainless steel 21% Plastic surface 13%

Zinc Alloy 20% Plastic back 125

Silicone 5%

MAGNETIC RING MOUNT

38

Polyurethane 3%

Plastic middle 6%

Aluminum 26%

Iron block 51%

QI-CHARGER


Stainless steel 25% ABS 14% Thermoplastic polyurethane 15%

Silicone 8%

Polycarbonate 13%

Magnet 8%

PCB Board 6%

Acrylonitrile butadiene styrene 44%

Battery 5000 mah 67%

MAGNETIC CAR MOUNT

POWER BANK

Polyurethane 41% Alloy 4%

Cotton 2% Polyester 2%

Polyurethane 96% Alloy 54%

LIA BAGUETTE BAG

IDEAL OF SWEDEN is at the beginning of its sustainability journey but with great plans at moving our supply chain towards enhanced sustainability, supported by third-party certifications to increase trust along the whole

SIGNATURE BELT BAG

chain. For 2021 we have set the objectives to review our approach towards the procurement process of raw materials and improve practical measures to define best practices and enhance the traceability of our product supply chain.

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RESPONSIBLE MA As a company with a presence on a global scale, we believe that it is our responsibility to protect the ecosystems in which we conduct our business. From embracing innovative materials and, producing high-quality products to ensuring on-time delivery, we continually reflect on the ways that our operations might impact the environment, human health, and human rights.

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ANUFACTURING

41


42


HUMAN RIGHTS It is our responsibility as a business to respect human rights and diminish all related risks throughout our whole value chain, undertake commitments and follow the guidelines as described in the United Nations Guiding Principles on Business and Human Rights. Currently our approach to human rights management is based on identifying human rights-related risks and the application of our due diligence to all geographies and relevant processes of our value chain. Within the next 3 years we aim to significantly enhance our human rights management approach through an improved due diligence, in-depth training of our employees, and improved incident management approach.

COMPLIANCE At IDEAL OF SWEDEN, we are committed to operating our business with respect to the high standards of business practices, social responsibility, and environmental protection stated in our Code of Business Conduct for Partners to IDEAL OF SWEDEN. We expect for all our suppliers and subcontractors to uphold our core values and principles that are non-negotiable and comprise an important component of our potential supplier selection, as well as current supplier evaluation. Our goal is to work with suppliers that adopt good business ethics and conduct their operations with full compliance to their respective countries’ laws and regulations. Furthermore, we ask our suppliers to replicate the standards described in our Code of Cunduct for Business Partners to IDEAL OF SWEDEN further down their own supply chains. We take zero-tolerance approach to any form of bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealing and relationships. The Code of Conduct for Business Partners to IDEAL OF SWEDEN was built on: • The Universal Declaration of Human Rights • The United Nations Global Compact • The Declaration of the International Labor Organization (ILO) on fundamental rights at work • The Organization for Economic Co-Operation and Development (OECD) guidelines

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DUE DILIGENCE We maintain an effective supplier relationship and conduct due diligence through annual risk assessments, and annual supplier audits executed by third-party auditors. Since our partner factories are located in a high-risk in terms of human rights production country – China, we audit all of our suppliers on an annual basis to mitigate risks of nonconformity with both local and international laws and regulations. We also reserve the right to make unannounced factory visits. Such actions provide us with essential insights to require appropriate corrective actions and motivate our suppliers to show improvements to avoid contract termination. Followed by an initial factory evaluation during previous years, in 2020, we have done customised audits based on our needs of information on the factories. Please see the GRI Glossary (Appendix 1) for a detailed overview of our reporting on social disclosures. Our commitment is to constantly monitor our supply chain partners to make sure we work towards establishing long-term value for all stakeholders.

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PRODUCT SAFETY Safety is an integral part of our sustainability strategy, and we continuously introduce improvement measurements to secure our product standards across the whole value chain. Our aim is to ensure that all of our products are not only customer-focused in terms of functionality but also from the perspective of human health and safety. In order to guarantee that IDEAL OF SWEDEN products comply with legal and regulatory requirements in our sales countries, we continually perform assessments and aim to stay informed on legal developments across the globe. All products released under the IDEAL OF SWEDEN brand follow at least the minimum of the existing product-specific national and international regulations for each market where our brand is present. In markets where lower safety regulations apply, IDEAL OF SWEDEN voluntarily applies higher safety standards as those established by the European Union. For instance, we ensure that our products are compliant with the EU REACH regulation (EC) No 1907/2006 via quarterly testing our products at third-party facilities that report back via a formal declaration. We also enforce that our suppliers only source from sub-suppliers that are EU REACH compliant during the production of our products. Our QI chargers and power banks are compliant with the RoHS Directive (Directive 2011/65/EC) that aims to reduce the risks to human health and the environment by replacing and restricting hazardous chemical substances in electric and electronic equipment. The Directive aims to improve the prospects of sustainable recycling of material waste from such equipment at products’ end-of-life. Our product team also performs in-home user testing (iHUT) and uses the products just the way our customers would in their day-to-day lives. This methodology enables us to get real-time data on how well the products will do when they will be used in the real world, and what are the shortcomings.

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47


SUSTAINABLE PACKAG AND DISTRIBU

48


GING UTION

We know that in order to improve the corporate sustainability of our product value chain, we need to rely on a high performing and reliable logistics system. Achieving sustainability revolves around the optimisation of the IDEAL OF SWEDEN distribution systems and existing transport infrastructure, introduction of reusable packaging and reduction of packaging waste.

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GLOBAL DISTRIBUTION The main aspect of a sustainable sourcing and distribution system includes our whole network from accurate forecasting and production planning, freight forwarding from the factories to warehouses, order processing, packaging, optimisation of vehicle loadings to delivery to the wholesale points or endcustomers, as well as reverse logistics.

LONDON

TORONTO

OHIO

All of our manufacturing sites are situated in China, and once the goods are produced, they are transported to our wholesale purchasers, our own company retail stores and online customers via third-party global warehousing, fulfilment and distribution partner services. Location and capacity of warehouses have been found to have a central influence on the possibilities for reducing the environmental impact, so by carefully forecasting and planning the flow of our goods enables us to plan the correct inventory and allocate the right quantities to the best distribution locations. This year we have adopted an AI-driven supply chain management system RELEX that ensures we optimise our production and distribution with exceptional speed and accuracy.

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STOCKHOLM, NORRKÖPING ÄNGELHOLM

AMSTERDAM

CHINA

TOKYO

MELBOURNE

Another objective is to streamline transportation options through high efficiency means because every kilometre of travel represents additional emissions into the atmosphere. In the next 3 years our emphasis is to considerably increase the use of sea transport rather than air to reduce our carbon footprint through improved fuel efficiency.

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PET sheet 11,85% PET sheet 5,29% Magnet 2,31% Polypropile 2,28% Polyester 0,01%

Magnet 3,46% Polypropile 1,44% Polyester 0,00% Paper 89,80%

Paper 83,55%

PACKAGING Packaging plays an important role in terms of ensuring that it adequately protects the product, achieves marketing goals, and is economically viable. Due to the risk of resource depletion and increasing numbers of the global leakage and unmanaged dumps of material flows, we see a great urgency in seeking opportunities for packaging to be improved. As part of our product development concept reviews, we proceed to research and implement innovative packaging solutions that help us find a balance between bringing the best value to our customers and minimising our environmental footprint. Through dialogues, we have engaged with our various stakeholders to both acquire and share new perspectives to find better ways to develop sustainable innovation projects, so as to reduce our environmental impact, and meet our customer demands as soon as possible.

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Iron 2,01%

Iron 1,02%

Paper 97,99%

Polyamide 0,01% Paper 98,97%

Plastic waste is a massively growing global issue, not only because it is a persistent environmental pollutant but also for the reason that plastic production requires enormous amounts of energy and resources which in term is a colossal contributor to global warming. Therefore, we are focused on completely eliminating the use of plastics as well as increase the content of post-consumer recycled material use for our packaging. Our aim is to reduce the overall weight and minimise empty space in our packaging, seeing that weight reduction improves the efficient use of energy and other resources used for product manufacture and distribution.

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Additionally, when buying our products at our owned company stores in Sweden, the customer has an opportunity to buy a carrier bag that is 100% climate neutral. By putting a price on the carrier bag, we encourage the customers to think twice whether they really need it and in so we indirectly contribute to the minimisation of waste. Also, during 2020 we have completely switched to e-gift cards. This solution not only offers convenience for our customers but also eliminates the use of plastic and paper components.

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PARCELS During the past year, we have enormously improved the sustainability parameters of our parcels by improving two focus areas: packaging and transportation efficiency. IDEAL OF SWEDEN has contributed to waste minimisation by increasing the amount of recycled material components in our parcel packaging for a wide range of our product assortment. Furthermore, we have teamed up with a packaging supply partner that has the technology that enables them to produce the optimal package size suited for our product, so as to reduce an addition to weight of each individual parcel. In our central warehouses in Sweden and the Netherlands, we operate with one of the most sustainable packing machines in the industry. The machine has an automatic carton packaging system capable of creating dynamic cardboard boxes from a continuous fanfold corrugated. Such

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machines help IDEAL OF SWEDEN pack each order in a sustainable manner, by using a minimum amount of corrugated material, avoid using plastic materials and ensuring that shipped parcels take up minimum space in the transport network. We have placed on-pack recycling labels that help our customers identify how to correctly dispose of the recyclable material in their area. Moreover, we are leveraging sustainable customer behaviours through the reuse of packaging material in the e-commerce returns process by directing them to our website to fill in the return information, to initiate the return and print out a .pdf label on a home printer or at the post office, depending on their country of residence. This method significantly reduces the amount of single-use packaging as well as paper waste because most of the packaging and pre-printed labels simply end up in the waste bin.


PRODUCTS

ON-DEMAND BOXES

Small box 30*21*3,2

SUSTAINABLE ENVELOPE & BAG

E2 22*26*0,5

H5 27*36*0,5

Medium Mail Bag 40*55*0,05

K7 35*47*0,5

Big Mail Bag 75*55*0,05

CONSIST OF 50% RECYCLED MATERIALS

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LOCAL LOGISTICS Seen that most of our products are sold through e-commerce sales channels, we as a company bear a huge responsibility in terms of providing low-carbon delivery solutions. We are continuously working towards the efficiency improvement of the last-mile deliveries. We have partnered up with some of the best service providers in many geographies that help us improve the operational efficiency of in-country parcel delivery. Together we address our sustainability goals through consolidation of shipments that are going to places in close proximity and by selecting the shipping modes that minimise the negative impact on the planet. We have already made great advancements in Sweden, Germany and the Netherlands where we have partnered up with courier services that constantly offset their carbon emissions, use electric vehicles or alternative fuel vans for longer distance in-country deliveries and transport parcels on foot, by e-bike or through non-emissive and shared delivery systems in urban centres. We want to provide our customers with the best delivery experience without compromising the Earth system. As part of our sustainability commitment, we are actively working to find carbon-neutral distribution solutions worldwide.

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PRODUCT USE-PHASE Longevity is one of the primary considerations in developing our product range, from the choice of raw materials to manufacturers, and product actual use. IDEAL OF SWEDEN has a selection of products that can be mixed and matched so that our customers can update the look of their already owned products and by so extend the use-phase of their already previously purchased items. On our website, https://idealofsweden.com/care-guide, we also provide a product care-guide for our customers, in so we hope to inspire our customers to extend the product use and reduce the impact of disposal.

PRODUCT DISPOSAL As reported by the World Bank, without urgent action, global waste might increase by 70% on current levels by 2050. Our ambition is to establish good waste management systems that are essential to building a circular economy. We have a long and complicated way to go; nevertheless, we aspire to find more environmentally and socially responsible ways to reduce operational and consumer waste. IDEAL OF SWEDEN is in accordance with the EU WEEE Directive on waste electrical and electronic equipment (2002/96/EC) and registers with national authorities in accordance with the requirements of Sweden and Germany. All of the products that are subject to the WEEE Directive fulfill the WEEE marking requirements. In cases when our products don’t fulfill our quality and safety requirements, as well as unsold and returned items, our approach is to find the best recycling opportunities for the goods in order to predominantly avoid incineration. We also encourage our customers to contact their local municipalities for details on how their cities handle the proper disposal of various material products and packaging.

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RESPONSIBLE MARKETING AND CONSUMER EDUCATION IDEAL OF SWEDEN is committed to responsible marketing and communication of its products and to be transparent and honest in all its advertising, promotional, and educational campaigns, communications, and messages. IDEAL OF SWEDEN’s marketing and communication strategy is based on both internal and external policies, as well as national, European, and global laws and regulations. Through our inclusive marketing approach to our campaigns, we always aim to embrace diversity, people’s variety, and uniqueness by including individuals from different backgrounds in our campaigns.

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PEOPLE AT IDEA


AL OF SWEDEN


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COMPANY We believe that the most important asset of our business are our employees, after all employees are our unique resources that generate positive company performance and ultimately achieve sustainable success. At IDEAL OF SWEDEN, everybody is treated as a member of the team and by creating a fun, comfortable and productive space, we believe we can meet any challenges and go that extra mile! Our policies and practices outline the behaviour that inspires the highest commitment to each other, the company and our customers. All information is available to our employees in the “Code of Ethics” that provides guidance related to the company’s history, values, policies, procedures and benefits.

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EMPLOYEE DEMOGRAPHICS At IDEAL OF SWEDEN, we continually work to embrace diversity and inclusion, as we strive to foster an environment that allows for innovation, creativity and a variety of perspectives. The company’s recruitment and selection process is properly planned, organised and conducted according to our internal Recruitment Policy. Our aim is to have diversity in our workforce and IDEAL OF SWEDEN´S recruitments is based on respect for the individual no matter the age, gender, marital or parental status, religion, ethnic origin, nationality, disability, sexual orientation or political opinion. We employ candidates from different ethnicities with diverse education, experience and expertise. As of December 31, 2020, IDEAL OF SWEDEN had a total of 114 FTE. Out of these 114 FTE, 101 are full-time employees, and 38 are part-time employees. Furthermore IDEAL OF SWEDEN had 20 Interns during December.

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During 2020 the company has hired 49 new employees, of which 25% men and 75% women, and and 31 employees left the company, of which 16% men and 84% women. The charts demonstrate the breakdown of our employees by employment contract, age group and gender. Almost all full-time employees are employed on a 6-month trial period with a common 2 weeksnotice period during the 6 months time. Upon the completion of the notice period, the notice periods regarding operational changes are: Customer service employees: 1 month All other employees: 3 months Management positions: 4 months Senior management: 6 months


EMPLOYEES BY EMPLOYMENT CONTRACT:

Temporary contract

Women

Permanent contract

Men

Women

Men

EMPLOYEES BY AGE GROUP:

Senior management

<30

30-50

Mid-level

50>

<30

30-50

Junior-level

50>

<30

30-50

50>

EMPLOYEES BY GENDER:

Gender distribution in Senior management

Women 25%

Men 75%

Gender distribution for Mid-level

Women 77%

Men 23%

Gender distribution for Junior-level

Women 74%

Men 26%

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EMPLOYEE BENEFITS IDEAL OF SWEDEN is proud to offer a competitive suite of benefits to our fulltime employees, including: • • • • • • • • •

Medical coverage Retirement planning Flexible working solutions Ergonomic workspaces Access and discounts for sports and fitness Free drinks and snacks Monthly massage Product discounts Employee stock purchase plans

IDEAL OF SWEDEN does not operate under any collective agreements. The employment contract and internal company policies regulate the form of employment, working hours, holidays, period of notice annual pay reviews, overtime pay and supplementary insurance schemes. Each employee is free to be a member of a Swedish trade union of their choice. We give recognition and celebrate our best employees during the IDEAL OF SWEDEN bi-annual internal conferences where we present employee awards to internally nominated colleagues.

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CAREER DEVELOPMENT IDEAL OF SWEDEN very carefully takes into consideration all competencies of our workforce as well as employees’ motivation to succeed as individuals. During 2020 we have implemented a digitalised HR system that would help us improve the performance review process and support employees to grow within the organisation. In 2020 our full-time employees have completed a performance review. The employee performance program (EPR) consists of an evaluation of previous work and goals, as well as planning and setting up actions to focus on forward. Through a dialogue with the manager, a development plan for both short term and long term development are implemented. The EPR helps our employees to grow, and we can identify high performance that can lead to promotions. The EPRs are scheduled bi-annual with monthly follow up meetings during which employees receive constructive feedback, support and guidance to achieve their goals forward. During 2020 we have implemented a digitalised HR system that would help us improve the performance review process and support employees to grow within the

organisation. In 2020 our full-time employees have completed a performance review. The Employee Performance Review (EPR) consists of an evaluation of previous work and goals, as well as planning and setting up actions to focus on forward. IDEAL OF SWEDEN performing an annual salary mapping to prevent salary differences between men and women on equal positions within the company. An action plan is put together to make the salary structure in the company fair and correct. Due to Covid-19 pandemic, only one leadership training for executive management had taken place during January 2020. No other trainings have been performed during 2020. In 2021 we are introducing internal learning sessions for all of our employees. The purpose is to inspire, motivate and help employees grow by offering talks and courses on a variety of topics. Topics include learning about a specific department or process, improving your skill and gaining knowledge in commonly used tools and methods, to inspirational and motivational talks.

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ETHICS All IDEAL OF SWEDEN decisions and operations are governed by the principles of ethics, integrity and respect for the people. IDEAL OF SWEDEN condemns all form of discrimination and harassment based on sex, gender identity or expression, ethnicity, disability, sexual orientation and age. Our company Code of Ethics and the Code of Conduct for Business Partners set the foundation for our work with ethics, anti-corruption and human rights.

that employees might experience, and regularly follow up on all aspects of the work environment to make sure we have a safe, good and healthy environment. During 2020 no unethical/unlawful issues have been identified.

We constantly keep up with regulation changes to make sure we operate within the law. We do not have a non-retaliation policy; however, our Human resources conducts anonymous surveys on a regular basis and within different areas in order to identify possible problems and issues

All information is available to our employees about how we are handling crises, for example, in terms of harassment in the Code of Ethcis. The senior management team is also responsible for making sure the issues are being addressed and that the right actions are taken.

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Every year a diversity plan is set up with the purpose of identifying areas that need to be addressed in terms of discrimination, equal salary and other unethical/unlawful behaviour.


ILLNESS At IDEAL OF SWEDEN, we give employees incentives, tools, social support, ensure privacy, and strategies to adopt and maintain healthy behaviours. All full-time employees are included in the company health insurance and medical insurance. The medical insurance means that IDEAL OF SWEDEN employees will be first in line to receive private medical care. It also includes other beneficial treatments as conversational therapy sessions and after referral physiotherapy, chiropractic, and naprapathy treatments. There are no set limitations for using the insurance for private matters.

We also recognise that workplace stress is a health issue and acknowledge the importance of identifying any stress factors. We constantly monitor employee stress levels through surveys and discussions to identify and mitigate stressrelated factors. The HR, Sustainability and office department as well as senior management take a crucial role in ensuring all health initiatives are put into action and includes all employees at IDEAL OF SWEDEN. The average hours of sick leave per month per fulltime employee was 2% during 2020.

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PHILANTHROPY

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LA ESCUELA IDEAL According to the International Labour Organization, education is a human right and a key factor in reducing poverty and child labour. Unfortunately, child labour still remains a global challenge, when due to poverty, children are deprived of education and are often forced to take on jobs as part of the family’s survival strategy. At IDEAL OF SWEDEN, we too strongly believe that every child has the right to access quality education in order to have a chance to create a better future for themselves, their families, and their local communities. So, we collaborated with the Swedish charity Ankarstiftelsen and created a foundation through which we built a new school in Northern Columbia. The new ”La Escuela Ideal” is located in Hurraichichon, a small town in the province of La Guajira. The school is inclined in the heart of a very isolated, inaccessible area. Getting to school is a challenge for many children in rural areas, and most schools lack the resources needed to maintain or expand the premises. Therefore, IDEAL OF SWEDEN has chosen to contribute to it and to help ensure that every child in the area has access to an education. In October 2018, the construction was completed, and the school has recently been handed over to the local community and opened its doors to children from the area. ”La Escuela Ideal” has two classrooms and gives 150 children the opportunity to absorb valuable knowledge to help create a better future every year.

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La Escuela iDeal

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VILLAGE UPLIFTMENT PROGRAMME Women represent more than half of the world’s population, yet due to existing gender inequalities, are the most vulnerable part of global societies and are prohibited from reaching their full potential and contributing to their regions’ economic growth. We have collaborated with the Swedish non-profit organisation Hand in Hand and have sponsored the Village Upliftment Programme that has inspired women to realise their potential for entrepreneurship while demonstrating the important social and economic impact these women could have on their families and society as a whole. Hand in Hand bases its business on a self-help model and helps every woman they work with to develop the knowledge and skills required to start and run a business - from finding a business model to managing the company’s finances and marketing. For a year, the women gain knowledge and tools that allow them to launch their businesses and take responsibility for becoming financially independent. By sponsoring the village Kothidal-Kalakudi, Tamil Nadu in India, we support 150 women who create ways out of poverty, and a program that helps launch almost 100 businesses every year!

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PINK DIFFERENCE In October we wear Pink Difference. In collaboration with the Swedish Breast Cancer Foundation (Bröstcancerförbundet), we are celebrating breasts. Breasts that are big and small, breasts that come in one, none and pairs. Breasts that have scars and stretches, young and old. October is Breast Cancer Awareness Month, a worldwide annual campaign helping to raise awareness, knowledge and funds for the fight against breast cancer. Together with the Swedish Breast Cancer Foundation, we want to remove the stigma and are releasing the exclusive, limited-edition ”Pink Difference” case. With every purchase of the case, we are donating 50 SEK to the Swedish Breast Cancer Foundation.

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PLANET

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CLIMATE According to the Intergovernmental Panel on Climate Change Special Report on the impacts of global warming of 1.5 °C (2.7° F), global average temperatures are likely to reach 1.5 °C already between 2030 and 2052. These human-induced changes are affecting life-sustaining systems and are a threat to all in a variety of direct and indirect ways. We are committed to taking steps to limit the increase in global average temperatures by setting targets for CO2 emissions reductions and specifying realistic pathways by which we aim to reach them. During 2020 we have managed to assess our CO2 emissions baseline for Scopes 1, 2 and 3 based on the Greenhouse Gas Protocol standard. This year, we have applied the Spend-based method to obtain an overview of our GHG emissions for all three scopes. The Spendbased method estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary emission factors. The calculation formula for the Spend-based method of the CO2e emissions for purchased goods or services applied was: the sum across purchased goods or services: ∑ (value of purchased good or service ($) × emission factor of purchased good or service per unit of economic value (kg CO2 e/$)). We are currently developing internal processes to improve data quality so that in the future, we could move from the Spend-base method to the more supplier-specific methods of assessing CO2 emissions.

SCOPE

kg CO2 -eq%

SCOPE 1

0,03%

SCOPE 2

0%

SCOPE 3

99,97%

TOTAL:

100,00%

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ENERGY Energy efficiency is a key step to reducing our impact on the planet’s climate and to creating a sustainable energy future. This year we have achieved to switch to renewable energy sources for both of our office locations as well as or our company owned stores. Share of renewable energy:

SCOPE 2

energy kwh %

OFFICES

68%

STORES

32%

TOTAL:

100,00%

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CRISIS MITIGATION

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COVID-19 MITIGATION IDEAL OF SWEDEN acknowledges the seriousness of the COVID-19 coronavirus and the implications that it might have on our business operations, our employees and the society. We are continually monitoring and following the recommendations from the Public Health Agency of Sweden – Folkshälsomyndigheten. Actions that we have taken to mitigate the risk of the virus spread: – Risk communication We have updated our Office guidelines, where employees are given instructions on good hygiene etiquette and safety practices. We provide continuous updates and communication with all employees on a weekly basis using our internal communication channels, such as e-mail and chat. – Responding to concerns The executive management is responsible for taking action and responding to the employee concerns in an immediate matter. – Encouraging Remote Working We are encouraging all employees to work from home and replace all physical meetings by digital/phone meetings. Our technology infrastructure supports remote work from any global location in a secure way. – Office We have fully equipped our offices with hand sanitizers and face masks, as well as provided clear social distancing guidelines. – Travel We have imposed a temporary travel ban that applies to both domestic and international travel.

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Auditor’s report on the statutory sustainability report To the general meeting of the shareholders in iDeal of Sweden AB, corporate identity number 5568897994.

Engagement and responsibility It is the board of directors who is responsible for the statutory sustainability report for the financial year 2020 and that it has been prepared in accordance with the Annual Accounts Act.

The scope of the audit Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

Opinion A statutory sustainability report has been prepared. Norrköping, June 22, 2021 Öhrlings PricewaterhouseCoopers AB

Robert Söderlund Authorised Public Accountant


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APPENDIX 1 – GRI glossary GRI Standard

Disclosure Title

IDEAL OF SWEDEN Fiscal year 2020 report section

Disclosure (states where to find the listed information, locations of relevant documents, info location on our website)

GENERAL DISCLOSURES 102-1

Name of the organisation

IDEAL OF SWEDEN Introduction

See Page 5 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-14

Statement from senior decisionmaker

IDEAL OF SWEDEN Letter from CEO

See Page 9 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-15

Key impacts, risks, and opportunities

IDEAL OF SWEDEN Sustainability approach

See Page 12 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-2

Activities, brands, products, and services

IDEAL OF SWEDEN Organisation

See Page 23 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-3

Location of headquarters

IDEAL OF SWEDEN Organisation

See Page 23 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-4

Location of operations

IDEAL OF SWEDEN Organisation; Product.

See Page 23, Pages 36-37 Responsible sourcing, Pages 50-51 Global distribution of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-5

Ownership and legal form

IDEAL OF SWEDEN Organisation

See Page 23 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-18

Governance structure

IDEAL OF SWEDEN Organisation

See Pages 24-25 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-6

Markets served

102-7

Scale of the organisation

IDEAL OF SWEDEN Organisation

See Page 23 Company Profile section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-8

Information on employees and other workers

IDEAL OF SWEDEN People

See Pages 67-67 Employee Demographics section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-16

Values, principles, standards, and norms of behaviour

IDEAL OF SWEDEN Sustainability approach

See Pages 10-11 Sustainability Approach section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-17

Mechanisms for advice and concerns about ethics

IDEAL OF SWEDEN People

See Pages 64-65 Company section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-41

Collective bargaining agreements

IDEAL OF SWEDEN People

See Page 69 Employee benefits section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-9

Supply chain

IDEAL OF SWEDEN Product

See the Product section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-10

Significant changes to the organisation and its supply chain

IDEAL OF SWEDEN Product

See Pages 50-51 Global Distribution section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-11

Precautionary principle approach

IDEAL OF SWEDEN Product

See Pages 46-47 Product Safety section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-12

External initiatives

IDEAL OF SWEDEN Philanthropy

See the Plilanthropy section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-13

Membership of associations

IDEAL OF SWEDEN Sustainability approach

See Pages 14-15 Stakeholders section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-40

List of stakeholders

IDEAL OF SWEDEN Sustainability approach

See Pages 14-15 Stakeholders section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-43

Approach to stakeholder engagement

IDEAL OF SWEDEN Sustainability approach

See Pages 14-15 Stakeholders section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-44

Key topics and concerns raised

IDEAL OF SWEDEN Sustainability approach

See Pages 12-13 Challenges of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-45

Entities included in the consolidated financial statements

102-46

Defining report content and topic boundaries

IDEAL OF SWEDEN Introduction

See Page 5 Introduction of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-47

List of Material topics

IDEAL OF SWEDEN Sustainability approach

See Pages 16-17 Materiality of the IDEAL OF SWEDEN Sustainability Report’s 2020.

102-50

Defining report content and topic boundaries

See the IDEAL OF SWEDEN Annual report 2020. For the Annual report related questions, contact finance@idealofsweden.com

For the Annual report related questions, contact finance@idealofsweden.com

IDEAL OF SWEDEN Sustainability report 2020

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GRI Standard

Disclosure Title

IDEAL OF SWEDEN Fiscal year 2020 report section

Disclosure (states where to find the listed information, locations of relevant documents, info location on our website)

GENERAL DISCLOSURES 102-52

Defining report content and topic boundaries

Annual report

102-53

Contact point for questions regarding the report

For sustainability related questions, contact sustainability@idealofsweden.com

102-54

Claims for reporting in accordance with the GRI Standards

102-55

GRI content index

IDEAL OF SWEDEN Introduction

See Page 5 of the IDEAL OF SWEDEN Sustainability Report’s 2020. Appendix 1 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

ENVIRONMENTAL DISCLOSURES 103-1

Materials used by weight and volume

IDEAL OF SWEDEN Product

See Pages 38-39 Responsible sourcing section, Pages 52-53 Packaging section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

301-2

Recycled input materials

IDEAL OF SWEDEN Product

See Pages 38-39 Responsible sourcing section, Page 57 Parcels section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

302-1

Energy consumption within the organization

IDEAL OF SWEDEN Planet

See Page 85 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

305-1

Direct (Scope 1) GHG emissions

IDEAL OF SWEDEN Planet

See Pages 82-83 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

305-2

Energy indirect (Scope 2) GHG emissions

IDEAL OF SWEDEN Planet

See Pages 82-83 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

305-3

Other indirect (Scope 3) GHG emissions

IDEAL OF SWEDEN Planet

See Pages 82-83 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

305-5

Reduction of GHG emissions

IDEAL OF SWEDEN Planet

See Pages 82-83 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

306-2

Management of significant wasterelated impacts

IDEAL OF SWEDEN Product

See Product safety section Page 47, Packaging section Pages 52-55 Parcels section, Product disposal section Page 61 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

306-5

Waste directed to disposal

IDEAL OF SWEDEN Product

See Product safety section Page 47, Packaging section Pages 52-55 Parcels section, Product disposal section Page 61 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

307-1

Non-compliance with environmental laws and regulations

308-1

New suppliers that were screened using environmental criteria

IDEAL OF SWEDEN Product

See Page 44 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

308-2

Negative environmental impacts in the supply chain and actions taken

IDEAL OF SWEDEN Product

See Page 50-51 Global distribution section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

There were no non-compliance findings with environmental laws and regulations in FY20.

SOCIAL DISCLOSURES 401-1

New employee hires and employee turnover

IDEAL OF SWEDEN People

See Pages 66-67 Employee demographics section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

IDEAL OF SWEDEN People

See Pages 68-69 Employee benefits section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

402-1

Minimum notice periods regarding operational changes

IDEAL OF SWEDEN People

See Pages 66-67 Employee demographics section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

403-2

Hazard identification, risk assessment, and incident investigation

IDEAL OF SWEDEN People

See Page 73 Illness section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

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GRI Standard

Disclosure Title

IDEAL OF SWEDEN Fiscal year 2020 report section

Disclosure (states where to find the listed information, locations of relevant documents, info location on our website)

SOCIAL DISCLOSURES 403-3

Occupational health services

IDEAL OF SWEDEN People

See Page 73 Illness section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

403-4

Worker participation, consultation, and communication on occupational health and safety

IDEAL OF SWEDEN People

See Page 73 Illness section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

403-6

Promotion of worker health

IDEAL OF SWEDEN People

See Page 73 Illness section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

404-1

Average hours of training per year per employee

IDEAL OF SWEDEN People

See Page 71 Career development section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

404-2

Programs for upgrading employee skills and transition assistance programs

IDEAL OF SWEDEN People

See Page 71 Career development section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

404-3

Percentage of employees receiving regular performance and career development reviews

IDEAL OF SWEDEN People

All full-time employees.

405-1

Diversity of governance bodies and employees

406-1

Incidents of discrimination and corrective actions taken

There were no non-conformances identified in IDEAL OF SWEDEN factory audits.

407-1

Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

There were no non-conformances identified in IDEAL OF SWEDEN factory audits.

408-1

Operations and suppliers at risk for incidents of child labour

There were no non-conformances identified in IDEAL OF SWEDEN factory audits.

409-1

Operations and suppliers at significant risk for incidents of forced or compulsory labour

There were no non-conformances identified in IDEAL OF SWEDEN factory audits.

412-1

Operations that have been subject to human rights reviews or impact assessments

There were no non-conformances identified in IDEAL OF SWEDEN factory audits.

412-2

Employee training on human rights policies or procedures

No internal employee training on human rights and policies has taken place during FY 2020.

412-3

Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

In FY2020, 100% of IDEAL OF SWEDEN’s suppliers had signed the Code of Conduct for Business Partners to IDEAL OF SWEDEN.

413-1

Operations with local community engagement, impact assessments, and development programs

IDEAL OF SWEDEN Philanthropy

See Pages 76-80 of the IDEAL OF SWEDEN Sustainability Report’s 2020.

414-1

New suppliers that were screened using social criteria

IDEAL OF SWEDEN Product

See Page 44 Due diligence section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

414-2

Negative social impacts in the supply chain and actions taken

416-1

Assessment of the health and safety impacts of product and services categories

416-2

Incidents of non-compliance concerning the health and safety impacts of products and services

417-1

Requirements for product and service information and labeling

417-2

Incidents of non-compliance concerning product and service information and labeling

IDEAL OF SWEDEN has not been identified as being in non-compliance with product information and labeling regulations.

417-3

Incidents of non-compliance concerning marketing communications

IDEAL OF SWEDEN has not been identified as being in non-compliance with any marketing communication regulations.

418-1

Customer privacy

IDEAL OF SWEDEN privacy policy describes how we are managing our customer data, detailed information available: https://privacypolicy.trgr.be/ gpp/765251/11/2018-01-23-sv.html

IDEAL OF SWEDEN People SOCIAL DISCLOSURES

HR, where I show % of women in their positions.

In FY 2020, IDEAL OF SWEDEN has not identified any negative social impacts within its supply chain. IDEAL OF SWEDEN Product

See Pages 46-47 Product safety section of the IDEAL OF SWEDEN Sustainability Report’s 2020. IDEAL OF SWEDEN has not been identified as being in non-compliance with product safety regulations.

IDEAL OF SWEDEN Product

See Pages 46-47 Product safety section of the IDEAL OF SWEDEN Sustainability Report’s 2020.

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APPENDIX 2 – IDEAL OF SWEDEN’s material issues Issue Title

Issue Definition

Business ethics

Upholding and implementation across the company’s operations and value chain, e.g., fighting against corruption, fraud, bribery, ensuring data protection).

Product eco-design, packaging and circular economy

Assessing the environmental footprint of products right from the R&D (research & development) stage, minimising product packaging (paper or plastics) and increasing recycled content and recyclability of packaging (such as the use of sustainable packaging that is biodegradable, bio-based or recyclable).

Sustainable sourcing of raw materials

Integration of social, ethical and environmental performance factors into the process of selecting suppliers

Responsible marketing and consumer education

Advertising products to consumer audiences in a way that promotes sustainable and healthy behaviours and enables informed product choices.

Industrial waste management

Striving for zero industrial waste to be sent to landfill by reducing, reusing and recycling waste for beneficial use.

Transparent product labeling

Providing clear and easily accessible information on product ingredients and conditions of production.

Climate change mitigation

Taking measures to reduce and curb greenhouse gas emissions throughout the company’s value chain.

Sustainable facilities

Reduction of the overall ecological footprint of the office through incorporation of operational practices and office design that reduce its negative impact on the employees and the environment.

Charitable donations and community support

Contribute to local communities’ development through charitable donations.

Product safety and quality

Offering safe and quality products that prevent health risks arising from use, consumption, handling, preparation and storage throughout the value chain.

Workplace diversity and inclusion

Ensuring that all employees in the company’s own operations, at all levels regardless of seniority, are treated fairly and without discrimination in recruitment, compensation and benefits and career development (regardless of their gender, age, race, sexual orientation, disability, etc.).

Energy efficiency and renewables

Driving high energy efficiency in the company’s operations and across the supply chain, using renewable or alternative energies and climate-friendly technologies.

Policy advocacy

Policy advocates have an active involvement in strategies to influence decision makers by lobbying the government, taking legal action, and educating the public.

Supply chain transparency

Supply chain transparency refers to the strategy of how to disclose supply chain and sourcing information to stakeholders.

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APPENDIX 3 – Alignment to UN Sustainability Development Goals Materiality

Activity theme

SDGs

SDG target number

4.7. By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development.

Business ethics

Human rights focus

Workplace diversity and inclusion

Employee training programs. Grievance mechanisms.

8.5. By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

Sustainability reporting

12.6. Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.

Renewable energy sourcing

7.2. By 2030, increase substantially the share of renewable energy in the global energy mix.

Recycling

11.6. By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.

Responsible marketing and consumer education

Sustainable facilities

Sustainable sourcing of raw materials

Product eco-design, packaging and circular economy

Product safety and quality

Industrial waste management

Climate change mitigation

Supply chain transparency

Raw materials inventory management

Product environmental impact reduction

Product legal compliance. Supplier relationship management

Move towards a circular business model

Carbon footprint reduction

Supply chain mapping.

12.2. By 2030, achieve the sustainable management and efficient use of natural resources.

12.5. By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.

9.4. By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities. 12.5. By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.

13. Take urgent steps to combat climate change and its impacts.

9.1. Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access. 9.1.2. Passenger and freight volumes, by mode of transport.

“La Escuela Ideal” foundation.

4.1. By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.

Village upliftment program.

8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

Charitable donations

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