The Blue Book - 4th Edition

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WELCOME TO THE BLUE BOOK This is the fourth edition of the Blue Book, a condensed guide to sustainability at Nilorn. Since the last version, our practices, ambitions and achievements have developed, and are reflected on the following pages. The focus of the book has also expanded to cover not just materials, but a holistic view of how we work with sustainability. It is meant as a handbook to understand our focus areas, the standards we use and how we help our clients. You can also refer to our annual sustainability report, More Fit for Future, for more detailed information about our targets and improvements.

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Why blue and not green?

6 ADDING VALUE TO YOUR BRAND 8 SUSTAINABILITY AT NILORN A history of sustainability at Nilorn Meet the CSR & sustainability advisory team Nilorn value chain Aligning with external knowledge United Nations Global Compact United Nations Sustainable Development Goals Svensk Miljöbas RISE Swedish Chemicals Group Miljöpack American Apparel & Footwear Association Certifications, standards and ecolabels

24 FOCUS AREA 1: CLIENTS Helping our clients make sustainable choices Designing and product development Digitalisation / Retail Information Service Sales Material Team Nilorn approach to materials

32 FOCUS AREA 2: PRODUCTION & SUPPLY CHAIN Key issues Resource efficiency (water, energy, waste) CO2 emissions Chemical management Supplier requirements Supplier evaluations External auditing tools and organisations Nilorn’s in-house production facilities Bangladesh in focus

38 FOCUS AREA 3: EMPLOYEES HR policy Code of Ethics Anti-corruption Whistleblowing function

CONTENTS

3 WELCOME TO THE BLUE BOOK


WHY BLUE AND NOT GREEN? You might be wondering why we call this publication the Blue Book and not the (more obvious) Green Book. “Green” is an easy synonym for the environment, invoking forests and natural terrain. But landmass accounts for just 29% of the earth’s surface, the remaining 71% being oceans and freshwater. Simply put, we live on a blue planet. Further, as we are part of the textiles industry, water is one of the main resources used in production, and therefore something we feel a responsibility for protecting. So for us, the blue part is as important as the green.

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ADDING VALUE TO YOUR BRAND

WHAT WE DO Nilorn is a leader in visualising and strengthening brands through labels, packaging, trims and accessories. Founded in Sweden in 1977, Nilorn now has an international reach. We strive to be future-focused in everything we do, from our design process to how our products reach

our

clients.

We

continuously

innovate to meet our business and sustainability ambitions and provide better choices and solutions for clients.

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OUR BUSINESS RESTS ON SIX PILLARS:

• • • • • •

Sustainability Design Product Development Production Logistics Global Presence

With these building blocks, we provide a comprehensive offer to enable our clients and their brands to develop. In short, we add value to your brand.

A GLOBAL PRESENCE -18 COUNTRIES

Offices: Belgium, China, Denmark, India, Japan, Italy, Netherlands, Pakistan, Spain, Sweden, Switzerland, USA West and USA East

Offices/Manufacturing bases: Bangladesh, Germany, Hong Kong, Portugal, Turkey and UK

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SUSTAINABILITY AT NILORN As a global company with an international supply chain and clients in multiple countries, our responsibility transcends borders. Nilorn’s initiatives are driven by a combination of proven best practice and innovation. We engage with key stakeholders on sustainability topics and use our knowledge and influence to advocate for positive change. To lay the foundation, we have built our sustainability strategy around three focus areas: Clients, Production and Supply Chains, and Employees. We aim to firmly embed sustainability into our organisation and we monitor the progress of these focus areas using indicators to meet our targets. Read more about the three focus areas on pages 24-39.

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Encouraging clients to choose more sustainable materials Traceability of products and Anticounterfeit RFID

Sustainable raw materials and end-of-life of products

CL I E NTS

EMP

D U PP CTI LY O N CHAI N

Development and growth

LO

E

Y

Work environment, health and safety

ES

O PR SU D AN

Diversity and equality in the workplace

Resource efficiency (water, energy, waste, transportation)

CO2 emissions

Chemical management

Requirements on suppliers Business ethics and anticorruption

Human rights

P O LI C I E S In order to ensure the proper implementation of our sustainability strategy, we have developed a number of internal policies that support our vision and values. • Animal welfare policy • Anti-corruption policy • Code of ethics and business conduct • Corporate responsibility and sustainability policy • Human resource policy • Human rights policy • Supplier code of conduct

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A HISTORY OF SUSTAINABILITY AT NILORN Since integrating our code of conduct in 2004, we have been implementing and developing sustainability initiatives and practices year on year. Here are some of the highlights.

2009

Nilorn launches ​​Earth folder, our first design collection with a focus on sustainability.

2016

Nilorn becomes a member of Sedex, a not-for-profit membership

organisation

dedicated to driving improvements in responsible and ethical business practices.

2021

Nilorn Sweden is certified by the Svensk Miljöbas (The Swedish Environmental Base) for aspects including reduced

environmental

impact,

resource efficiency, long term sustainability and open environmental reporting.

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2021

2020 Higg Facility Environmental Module Nilorn Shanghai and Portugal SMETA audit Global employee survey

2018 Nilorn A/B member of Sedex Designer Checklist

2016 Nilorn B member of Sedex

GRS certificate at Nilorn East Asia, Shanghai and Bangladesh Svensk Miljöbas, environmental certification Nilorn Sweden Chemsec’s No to PFAS movement Supplier handbook update AAFA member Nilorn UK, Turkey and Pakistan FSC™ certification

2019 Stakeholder dialogue CSR & Sustainability training Biolyftet training GRS certificate at Nilorn Portugal Solar panels at Nilorn Portugal factory

2017 1st Sustainability Report Nilorn Dhaka factory established Member of RISE Chemical Group Supplier handbook and policies updated Nilorn East Asia bluesign® system partner Signs Global Compact Nilorn Bangladesh FSC™ certification

2014 Nilorn East Asia SMETA audit

2013 Blue book launched Nilorn East Asia FSC™ certification

2012 Nilorn Portugal bluesign® system partner

2010 STANDARD 100 by OEKO-TEX®

2009 2004

Earth folder Earth - Nilorn's first design collection with focus on sustainability

Nilorn Code of Conduct

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MEET THE CSR & SUSTAINABILITY ADVISORY TEAM Our CSR and Sustainability Advisory Team (CSAT) was established in 2018. The group aims to further integrate CSR and sustainability into the organisation’s daily operations, to spread knowledge and share experiences. It is a tool for anchoring the objectives throughout the organisation. The team is led by our Sustainability Manager and consists of staff from different Nilorn offices, representing the design department, product development, production, purchasing, sales and CSR. Nilorn’s Sustainability Manager is based at our Head Office in Sweden. CSR staff are located in Europe and Asia to strengthen our competence and provide support at a regional level. The team supports Nilorn’s sustainability work alongside local staff in our sourcing countries.

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CLIENT

MANUFACTURING

We work closely with our clients to find the most sustainable solutions to meet their needs.

Our products are a part of other products, so our key role in this area is to deliver the correct product on time to minimise potential disruption and waste.

DESIGN

Circular thinking is designed into our products from the drawing board, read more on page 25-27.

PRODUCT DEVELOPMENT

NILORN VALUE CHAIN We integrate a sustainability perspective in every part of our value chain, whether directly or by influencing our partners and spreading best practice.

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We strive to ensure the client’s ambitions and our interpretation and design result in products that have as low environmental impact as possible.


CONSUMER

We help our clients use our products as a platform to provide consumers with transparent sustainability information.

LOGISTICS

END OF LIFE

We have less influence in this area but where we can, we work close to our client’s production sites to minimise distances and therefore transport emissions and focus on fill rate and joint loading to create efficient solutions.

End of life starts at the beginning, by designing for less waste and with possibilities for re-use and recycling, as well as responsible waste handling in our production.

PRODUCTION

We monitor and improve the production conditions, including factory environmental performance, occupational health and safety and other labour conditions for the workers. Read more on page 32-37.

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ALIGNING WITH EXTERNAL KNOWLEDGE When it comes to the fast-developing world of environmental and social impact mitigation, there is no underestimating the importance of guidance and accountability. We have a great deal of internal expertise, but we are always keen to learn and develop. By working with several external organisations, we can actively participate in future sustainable development by both learning and contributing.

United Nations Global Compact We joined the UN Global Compact in 2017 and consolidated their ten principles into our sustainability strategy. The UN Global Compact is the largest corporate sustainability initiative with more than 12,000 participating companies in over 160 countries. The principles provide requirements around human rights, labour, the environment and anti-corruption. These are based on the United Nations Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the UN Convention Against Corruption. As a participant, we submit

an

annual

report outlining how we implement the principles.

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United Nations Sustainable Development Goals (SDGs) Based on a stakeholder dialogue, where we considered the challenges and opportunities faced by the fashion/textiles industry in relation to the SDGs, we identified six goals and targets of relevance for Nilorn. We are committed to promoting them throughout our value chain. The six goals/targets are:

Goal 5: ACHIEVE GENDER EQUALITY AND EMPOWER ALL WOMEN AND GIRLS - Our focus is on raising awareness and addressing gender equality throughout the supply chain.

Goal 6: ENSURE AVAILABILITY AND SUSTAINABLE MANAGEMENT OF WATER AND SANITATION FOR ALL - We work with water issues in our supply chain by improving efficiency in use and ensuring proper waste-water treatment. We also indirectly help make improvements upstream, in projects such as Cotton made in Africa. (See page 22.)

Goal 8: PROMOTE SUSTAINED, INCLUSIVE AND SUSTAINABLE ECONOMIC GROWTH, FULL AND PRODUCTIVE EMPLOYMENT AND DECENT WORK FOR ALL - We commit to implementing social standards, such as a living wage and decent working conditions and requiring and encouraging the same in our supply chain.

Goal 12: ENSURE SUSTAINABLE CONSUMPTION AND PRODUCTION PATTERNS - We have adopted policies to help choose more sustainable materials, increasing the use of recycled content and taking action for sound chemical management.

Goal 13: TAKE URGENT ACTION TO COMBAT CLIMATE CHANGE AND ITS IMPACTS - Encouraging circular use of materials as well as measuring the impact of business travel and energy consumption and increasing our use of renewable energy all contribute to this goal.

Goal 17: STRENGTHEN THE MEANS OF IMPLEMENTATION AND REVITALISE THE GLOBAL PARTNERSHIP FOR SUSTAINABLE DEVELOPMENT - As a small but global player, Nilorn co-operates with and participates in business initiatives and aligns with several global standards and certifications.

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Svensk Miljöbas Svensk Miljöbas (The Swedish Environmental Base) is an association with the purpose to promote sustainable development and reduce environmental impact. Their environmental management system is directed at smaller organisations to enable well-functioning and documented environmental work for clients and other stakeholders. The standard for operations is based on the key elements in ISO 14001, but with simplified documentation requirements, and a focus on actual environmental improvements and transparent reporting.

Nilorn Sweden has received the environmental certificate from Svensk Miljöbas, which helps us to:

• • • • • •

Improve resource efficiency in areas such as energy, purchase and waste collection Create a commitment with employees Be more competitive for clients Increase credibility through an independent review of our environmental work Reduce environmental impact Ensure long-term sustainability work

RISE Chemicals group Nilorn participates in the Chemicals Group for Textile Companies at the Research Institutes of Sweden (RISE). The Chemicals Group exists to disseminate the latest findings related to chemicals and their potential impact on the environment and human health to its member companies. The chemical guidance developed by the initiative helps the members to avoid importing products containing unwanted substances and we use it to inform our Restricted Substance List (RSL).

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Miljöpack Miljöpack is a Swedish trade and industry group that monitors, influences and informs on the development of environmentally-related packaging legislation within Sweden and the EU. Miljöpack promotes packaging’s contribution towards a circular and sustainable society and provides support to member companies.

American Apparel & Footwear Association (AAFA) Nilorn is a member of AAFA, which provides exclusive expertise in supply chain management, trade policy, and brand protection to help its members navigate regulations. Members have access to information and insights on regulation and policy, and opportunities for collaboration.

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CERTIFICATIONS, STANDARDS AND ECOLABELS Certifications, standards and ecolabels that are assessed and provided by third-party organisations, are another way we can ensure our products meet high social and environmental standards throughout our supply chain. They also offer assurance to our clients on our commitment.

Forest Stewardship Council (FSC™)

STANDARD 100 by OEKO-TEX®

Cradle to Cradle Certified®

We offer FSC™ options for

STANDARD 100 has been the

We use a selection of Cradle

paper-based products. FSC™

base for Nilorn’s textile product

to Cradle Certified® materials,

is an international non-profit

offer for many years, and today

including

organisation

to

we offer woven and printed

fibre and stone paper. The Cradle

promoting responsible forestry.

certified labels as well as some

to Cradle Certified® Product

FSC™ certifies forests all over

metal and plastic accessories and

Standard

the world to ensure they meet

heat transfers. STANDARD 100

certification, ensuring product

the highest environmental and

by OEKO-TEX® is a worldwide

safety for both humans and the

social standards, and products

consistent independent testing

environment as well as design

carrying the label help assure

and

promoting

consumers

textile products at all stages

composting of the materials used.

the requirements. The FSC™

of

It is connected to a five-tiered

system also provides a way of

is a comprehensive and strict

assessment:

tracking forest products through

catalogue of measures based on

material reutilization, renewable

independently verified Chain

legal regulations, REACH, CPSIA

energy and carbon management,

of Custody (CoC) certification,

as well as numerous harmful

water stewardship, and social

which verifies that a product

chemicals not yet regulated.

fairness. The certification helps

dedicated

that

they

meet

certification processing.

system The

for

standard

compostable

is

an

international

recycling

material

to

textile

and/or

health,

contains wood from a certified

companies

forest and/or recycled material.

optimise materials and products

innovate

and

according to advanced science based measures.

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The Global Recycled Standard (GRS)

LEATHER STANDARD by OEKO-TEX®

The Global Organic Textile Standard (GOTS)

We provide GRS certified items

LEATHER

by

We provide GOTS-certified cot-

across several product cate-

OEKO-TEX® is an internatio-

ton labels produced in India.

gories including woven labels

nally standardised testing and

GOTS is a standard for natural

and plastic packaging. GRS

certification system for leather

fibres, such as cotton. In order

helps us verify the recycled

and leather goods at all pro-

for a product to become certi-

content of products and to validate

duction levels, including acces-

fied and labelled with the GOTS

responsible social, environmen-

sory materials. The certification

symbol, it must be made from

tal and chemical practices in the

supports companies along the

organically cultivated fibres and

production. The objectives of the

supply chain with the implemen-

managed, throughout the entire

GRS are to define requirements

tation of high human-ecological

production chain, by factories

to ensure accurate content claims

product safety.

that are certified according to

and good working conditions, and

STANDARD

GOTS by an independent party.

to minimise harmful environmental and chemical impacts.

The Recycled Claim Standard (RCS) RCS certification is used to verify recycled material content items in our labels and plastic packaging. RCS is an international standard that sets requirements for third-party certification of recycled input and chain of custody. RCS aim to increase the use of recycled materials and it is intended for use with any product that contains at least 5% recycled material.

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The Good Cashmere Standard® (GCS)

Leather Working Group (LWG)

Cotton made in Africa (CmiA)

Nilorn is proud to be a nomina-

Nilorn sources materials from

Nilorn has been a CmiA partner

ted producer of all GCS labels.

LWG certified tanneries. LWG is

since 2012. CmiA is an interna-

GCS is an independent stan-

a not-for-profit organisation that

tionally recognised standard for

dard for sustainable cashmere,

aims to improve the environmental

sustainable cotton from Africa.

developed by the Aid by Trade

impact of the leather industry by

Since its creation in 2005, CmiA

Foundation (AbTF), that aims to

assessing and certifying leather

has had a goal to protect the

improve the welfare of cashmere

manufacturers. LWG provides

environment and help Sub-Sa-

goats, the lives of farmers and

guidance and auditing tools so

haran African smallholder cotton

farming communities, and the

its members can make informed,

farmers and ginnery workers

environment in which they live.

sustainable choices.

improve their living and working

By using the GCS label, part-

conditions. Instead of collecting

nering brands can communicate

donations, the initiative follows

to consumers that the cashme-

the principle of helping people

re wool in a product has been

help themselves through trade.

produced sustainably.

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Blue Angel

OK Compost

bluesign®

Nilorn applies the Blue Angel

OK Compost is used to certify

Nilorn Portugal has been a

certification for products made

some of our packaging items.

bluesign® SYSTEM PARTNER

of recycled plastics. The Blue

Packaging or products featuring

since 2012 and Nilorn East

Angel is the ecolabel of the fe-

the OK Compost label (based on

Asia since 2017. The bluesign®

deral government of Germany.

European standard EN 13432)

SYSTEM uses strict auditing

The Blue Angel sets high stan-

are guaranteed as biodegradable

and chemical management to

dards for environmentally friend-

and compostable in an industrial

eliminate harmful substances

ly product design and has pro-

composting plant and are applied

throughout the supply chain,

ven itself over the past 40 years

to all components, inks and

including responsible use of

as a reliable guide for more

additives. Any product featuring

resources, production with a

sustainable consumption. The

the OK Compost logo complies

minimum impact on people and

ecolabel requires that plastic re-

with the requirements of the EU

the environment and the highest

cycling follows the EUCertPlast

Packaging Directive.

level of consumer safety.

certification scheme.

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FOCUS AREA 1: CLIENTS Our mission to add value to our clients’ brands means ensuring we collaborate and share knowledge. We work closely with our clients to design and develop products that have a reduced environmental impact. Not only do we hope to support those businesses that have already integrated sustainability; we also wish to encourage and guide clients who are starting out on this journey.

HELPING OUR CLIENTS MAKE SUSTAINABLE CHOICES Sustainability at Nilorn is not just the concern of our CSR & Sustainability Team; it extends to all corners of our company, including design, sourcing, sales, logistics and IT.

RFID

TRIMS/PACKAGING

SUSTAINABILITY

DESIGN

RIS

LOGISTICS

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Design & product development Sustainability and circular thinking are at the heart of our design process, equally as important as aesthetics and functionality. For example, we use design methods that create as little waste as possible. This can mean removing unnecessary elements, reducing the label size so every millimetre is useful and not just decorative, and creating print layouts that minimise off-cuts. We avoid mixed materials in a single product so that it is easier to recycle and, where reasonable, make products reusable. We also design for better transport, using flat-packs to avoid transporting air. Nilorn designers work closely with our sourcing and product development team to identify and integrate smart materials with a low impact.

Designers´ checklist Our designers´ checklist guides product development with a set of questions to ensure we focus on sustainability and circularity. We ask ourselves:

• • • • • • •

Does the product serve its purpose and is it functional? Could we use recycled or certified materials? Is the material suitable for the product? Will the item be easily recyclable? How can we reduce resource use and create less waste? Is longevity or reuse possible instead of single-use? Will it age with beauty?

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How our products promote circularity Labels, trims and packaging might be small parts of a garment, but they are highly relevant for circularity. These components can help encourage garment longevity by providing information on washing, drying and repairing to minimise damage. Clear instructions can also help ensure items are correctly disposed of or recycled, if possible, at the end of life. We integrate a circular approach into our design and product development by advocating the following principles:

• • •

Keep products and materials in use by choosing recycled and/or recyclable materials and finishes Design out waste and pollution by keeping control of hazardous chemicals Regenerate natural systems by choosing natural, decomposable materials derived from renewable resources

FSC™ certified recycled kraft paper tag, Cradle to Cradle Certified™ ink. Buttons in PLA and Coconut shell. Cork - TENCEL™ patch from our collection COMEBACK 2

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COMPOST

SEED & PLANT

They are manmade inorganic or synthetic materials such as nylon, polyester, plastics and metals. When optimally recycled they can be used many times over without any loss in quality, staying in a continuous cycle.

environment (soil, water, etc.) without negatively affecting it,

providing food for bacteria and microbiological life.

CHEMICAL RECYCLING

SYNTHETIC FIBRE PRODUCTION

REMOVE IMPURITIES

MELTING & EXTRUDING

MECHANICAL RECYCLING

can either be recycled or safely decompose into the natural

DISMANTLING

TECHNICAL CYCLE

FABRICATE YARN

Technical materials originate from non-renewable resources.

COLLECTING & SORTING

USE

REUSE RE-WEAR REPAIR

CONSTRUCT FABRIC

are natural materials like cotton, tencel or viscose. They

REUSE RE-WEAR REPAIR

SELL & DISTRIBUTE

ASSEMBLE GARMENT

DESIGN GARMENT

Technical materials

DISMANTLING

DESIGN GARMENT

Biological materials come from renewable sources. They

CHEMICAL RECYCLING

MECHANICAL RECYCLING

BIOLOGICAL CYCLE

CONSTRUCT FABRIC

Biological materials

REMOVE IMPURITIES

BLENDING & CARDING

CELLULOSIC FIBRE PRODUCTION

FABRICATE YARN

The two material cycles in a circular fashion and textile industry.


Digitalisation / Retail Information Service Nilorn’s Retail Information Service team has developed digital solutions to help our business partners make their products and materials easier to trace and more transparent. With the unique identities used in RFID-tags, NFCtags and QR-codes, detailed information can be stored and shared between companies and with consumers. Information can be provided by scanning the code with a mobile device on materials, emissions, suppliers, care, how to dispose of responsibly and more. These developments help our clients promote circularity and sustainability.

Sales More and more, the role of the sales team is to help our clients choose sustainable options. Our sales team have in-depth knowledge and understanding of the impact of the materials we offer, and we see it as vital to share this expertise to help galvanise change in our clients. And it doesn’t just come from us; increasingly it’s our clients who are the first to ask for this information.

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Material Team Material innovation is fast-moving, with alternatives for more sustainable options constantly emerging. Materials are almost always decided by the client, so our role as experts in advising and guiding towards sustainable options is becoming more and more important. In 2021 we established our Material Team, an internal working group whose purpose is to remain abreast of developments, drive forward material innovation at Nilorn and integrate new materials into our product offering. The team makes this wealth of information available to colleagues and clients so better material choices can easily be made.

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NILORN’S APPROACH TO MATERIALS Materials are at the heart of what we do at Nilorn, and we strive to offer not just a wide and varied choice but also an informed and sustainable one. Our material categories for our trims, labels, packaging and accessories include woven and printed textiles, plastics, natural materials, metals, heat transfers, leathers, leather alternatives and paper. Within each category, we offer various sustainability

options,

certifications

and

standards (see all our standards on page 20-23). The majority of our products are OEKO-TEX® certified and we also offer bluesign® certified products in Europe and Asia. Our goal is to continuously increase the recycled content of our products and introduce bio-based options over fossilbased where possible. Where animal-based products are used, we ensure high animal welfare standards, as well as offering leatherlike alternatives. Our aim is to be a genuinely environmentally-friendly company – not just producing sustainable products if we are asked for them, but moving towards ecofriendly as a default.

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TEXTILES WOVEN & PRINTED We increase the content of recycled yarns and fabrics and introduce bio-based options. Examples are recycled polyester, nylon, organic cotton and TENCEL™.

PLASTIC TRIMS

NATURAL MATERIALS

We increase the content of recycled plastics for trims and introduce bio-based options. Examples are recycled TPU (Thermoplastic Polyurethane), PLA (Polylactic acid), WPC (Wood Plastic Composite).

We supply natural materials for trims as an alternative to plastic: Examples are corozo and coconut.

METALS

HEAT TRANSFERS

LEATHERS

We offer recycled metal and stainless steel as alternative options to conventional metal.

We encourage the use of heat transfers based on recycled ink, glue and carrier material.

We aim to ensure high animal welfare standards and increase the use of LWG leather. We supply recycled leather as an alternative to virgin leather.

LEATHER ALTERNATIVES

PAPER

PACKAGING

We introduce new materials in the area of vegan leather alternatives. Examples are plant based fabrics like Jacron or Pinatex® and imitation leathers with biobased or recycled content.

We increase the use of certified and recycled papers for our products. We introduce paper materials made from alternative and waste fibers. Examples are sugarcane paper, papers made from agriculture waste or waste cotton.

We supply solutions for packaging in both certified or recycled qualities. For polybags and mailers we use recycled LDPE from pre- or post-consumer plastic waste or fiber-based options like Kraft paper, glassine paper or Paptic®.


FOCUS AREA 2: PRODUCTION & SUPPLY CHAIN Engaging in a meaningful way with our entire supply chain is essential to ensuring that both our company and our suppliers hold the highest standards in labour, human rights and environmental impact.

FOUR KEY ISSUES 1. Resource efficiency (water, energy, waste) For the production facilities owned by Nilorn, we oversee and have control over the energy and water consumed and the management of our waste. Our operations in Belgium, Denmark, Germany, Portugal, Sweden and the UK all use renewable energy through agreements.

Approximately 25% of the total energy required in our Nilorn Portugal production comes from solar panels, the rest is sourced from other renewable energy.

2. CO2 emissions We measure our climate impact through both Scope 1 and Scope 2 emissions, as well as parts of Scope 3 emissions. Being part of the global textile and garment industry, the transportation of goods is a key area. We are currently positioned close to the ready-made garment industry and we are working with alternatives such as sea freight and train, to reduce air transportation.

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3. Chemical management The manufacture of our products requires chemicals, especially in the dyeing and printing processes. We continuously phase out chemicals based on legal requirements, as well as requests by authorities and non-governmental organisations. Our operations must be compliant with all regulations relevant to our business. All Nilorn partners are required to sign an agreement stating that they are compliant with the REACH regulation and our Restricted Substances List.

4. Supplier requirements Our goal is to have a fully compliant supply chain and proactively ensure our suppliers adhere to the same high standards we do to achieve a truly sustainable end product. New Nilorn suppliers are reviewed by the CSR department, including reviewing previous social audits as well as production capacity and product quality. New suppliers commit to Nilorn’s policies and guidelines including:

• • • • • •

Supplier Code of Conduct based on the ETI Base Code Corporate Responsibility and Sustainability policy Animal welfare policy Environmental requirements for Nilorn suppliers Nilorn supplier handbook Nilorn agreement to supply according to RSL

Supplier evaluations All our suppliers with a specified volume are evaluated annually. Topics evaluated include delivery reliability, product quality, service, product development, economy and environmental approach. The supplier is graded as a result of the evaluation, and, if necessary, an action plan is developed for required improvements.

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EXTERNAL AUDITING TOOLS AND ORGANISATIONS We are members and participate in several external organisations and auditing platforms so we can have a better overview and accountability throughout our supply chain.

Member Higg Index

Sedex

The Higg Index was developed

Sedex, the Supplier Ethical Data

by

Apparel

Exchange, is a not-for-profit

We have external suppliers that

Coalition (SAC) in 2012. It has

member ship organisation dedi-

are audited and part of the BSCI.

become the leading module for

cated to driving improvements in

BSCI, an initiative of Amfori, is

the standardised measurement

responsible and ethical business

a common and standardised

of value chain sustainability. The

practices. Sedex has created

approach for monitoring social

Index offers a suite of tools for

the Sedex Members Ethical Tra-

standards in all supplier countri-

different types of businesses.

de Audit (SMETA) – a common

es for all consumer goods. It

At Nilorn we use both the Higg

audit methodology and report

attempts to involve all stake-

Facility Environmental Module

format. At Nilorn, we are audi-

holders in Europe and supplier

(FEM) and the Higg Facility So-

ted against SMETA in our own

countries to ensure that there

cial & Labour Module (FSLM).

facilities in Bangladesh, China,

are no issues of competition

FEM allows us to understand

Hong Kong, Portugal and Turkey.

between

our environmental impact and

The majority of our external supp-

and retailers. BSCI is not a

the causes, decide where de-

liers are also SMETA audited.

certification system; rather it

the

Sustainable

countries,

suppliers

velopments are required and

provides a specific process with

set and follow up on objectives.

uniform

FSLM measures the social im-

ments for members, suppliers,

pact of manufacturing across

auditors and qualifiers.

areas such as wages, working hours, health and safety and employee treatment.

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Business Social Compliance Initiative (BSCI)

management

instru-


ChemSec Nilorn is a member of ChemSec’s corporate PFAS Movement, which informs and assists in the phasing out of toxic PFAS chemicals.

Properties

where

these chemicals occur, such as non-stick, water repellence and anti-grease, are not commonly used in the labels and packaging items Nilorn produces, so their occurrence is rare. However, we still think it’s necessary and important to carry out spotchecks and chemical-use control in our production.

Qarma We

use

Qarma’s

powerful

software and digital checklists for quality control and sustainability audits during internal supplier visits. It enables us to efficiently plan, report, review and improve performance.

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NILORN’S IN-HOUSE PRODUCTION FACILITIES We combine in-house production with partner companies, allowing Nilorn to maintain the highest quality, flexibility and adaptation to customers. We have our own production in Portugal and Bangladesh, where we focus on woven and printed labels. We also have our own production of printed labels in England, Germany, Turkey and Hong Kong and close co-operation with external key suppliers in other countries such as China, Hong Kong, India, Pakistan, Turkey, Italy and others. We are constantly improving our own production units and gaining new sustainability and quality certifications (see our annual sustainability report for the latest). Our focus is on FSC™, Higg, Oeko-Tex® and SMETA, for which the majority of our facilities are certified or audited. Nilorn Portugal has a GRS certificate for woven labels in post-consumer recycled material. Nilorn Bangladesh and Nilorn East Asia have a GRS certificate for woven and printed labels and plastic packaging in postconsumer recycled material.

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Bangladesh in focus We started our Bangladesh factory in 2017. This country is an important textiles hub for production and export and is one of the fastest-growing economies in the world. By starting our own production in Bangladesh, we can more easily oversee, regulate and guarantee a high standard of quality, decent working conditions, human rights commitments and reduced environmental impacts, and consequently offer our customers a better and more credible service.


FOCUS AREA 3: EMPLOYEES For Nilorn, as a multinational company operating globally, diversity is essential. It entails responsibility for safeguarding employees’ health and safety and respecting key human rights, such as freedom of expression, freedom of association and the right to fair working conditions. By developing good workplaces and improving in the countries where we have a presence, we can strengthen the welfare and generate positive effects for our most important asset, our employees.

HR policy The Nilorn Human Resource policy aims to create an efficient and attractive working environment. It regulates what the company expects of its employees and what employees should expect from the company. The HR policy covers the management’s responsibility for developing staff, the information supplied to all employees, annual development talks, remuneration and IT usage.

Nilorn core values We also base our work on a set of core values that form a common platform and strengthen our teamwork. Every Nilorn employee can use them as a daily guide in all work situations:

• • • • • • •

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Passion – encourage those around you Innovation − offer innovative and superior solutions Respect – respect and trust each other Common Sense – learn from experience Responsibility – take ownership Execute – lead by example Teamwork – learn from each other


Code of Ethics This Code provides a guide to the values, behaviours and ways of working for all Nilorn employees; it guides our daily work and covers areas including:

• • • •

Compliance with laws and regulations Respect in the workplace Protection of company property Professionalism

Anti-corruption Nilorn’s Anti-corruption policy outlines the organisation’s mandatory rules and restrictions regarding gifts and other rewards. It also describes the procedures for employees to raise any ethical questions or report any breaches or suspected breaches of the company’s Code of Ethics.

Whistleblowing function In accordance with the 2021 Swedish Whistleblowing Act, we have integrated a whistleblowing function to enable employees to report suspected serious irregularities or misconduct. This will help us maintain our strong values and Code of Ethics.

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HEADQUARTERS NILÖRNGRUPPEN AB Wieslanders väg 3 Box 499 501 13 Borås SWEDEN Tel. +46 33 700 88 88 info@nilorn.com www.nilorn.com

SUBSIDIARIES & PARTNERS NILÖRN AB Wieslanders väg 3 Box 499 501 13 Borås SWEDEN Tel: +46 33 700 88 00 info@nilorn.com BALLY LABELS AG Schachenstrasse 24 5012 Schönenwerd SWITZERLAND Tel: +41 62 855 27 50 info@bally.nilorn.com NILORN BANGLADESH LTD Plot 1361, 5th and 6th fl. Avenue 10 Mirpur DOHS Dhaka -1216 BANGLADESH Tel: +88 02 8835912 info@bd.nilorn.com NILORN BELGIUM NV Brusselsesteenweg 525 9090 Melle BELGIUM Tel: +32 9 210 40 90 info@be.nilorn.com

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NILORN DENMARK A/S Kongensgade 31B 5000 Odense C DENMARK Tel: +45 70 23 16 23 info@dk.nilorn.com

NILORN ITALY Via Enrico Fermi 40 41012 – Carpi (MO) ITALY Tel: +39 3381611351 info@it.nilorn.com

NILORN EAST ASIA LTD Unit 1701, 17/F, Westley Square 48 Hoi Yuen Road, Kwun Tong Kowloon HONG KONG Tel: +852 2 371 2218 info@hk.nilorn.com

NILORN JAPAN 9th floor GranDuo IKEJIRI Bldg. 2-32-9 IKEJIRI, Setagaya-ku, Tokyo 154-0001 JAPAN Tel: +81 3 64455 5290 info@jp.nilorn.com

NILORN GERMANY GMBH Itterpark 7 40724 Hilden GERMANY Tel:. +49 2103 908 16 - 0 info@de.nilorn.com

NILORN THE NETHERLANDS Werfstraat 2 9712 VN Groningen THE NETHERLANDS Tel: +31 592 310 030 info@nl.nilorn.com

NILORN INDIA PVT. LTD 71/1 First Floor, Industrial Area Najafgarh Road Shivaji Marg New Delhi - 110015 INDIA Tel. +91 11 47093583/47091003 info@in.nilorn.com

NILORN PAKISTAN (PVT) LTD 2nd Floor, Yasir Chambers Gulshan –E-Iqbal, Block 13A Main University Road P.O. Box 75300 Karachi PAKISTAN Tel: +92 21 349 92151 info@pk.nilorn.com


Nilorn has been recognised as a Nasdaq ESG Transparency Partner since 2019. To become a partner, companies must display a high level of transparency to their investors regarding Environmental, Social and Governance (ESG) issues.

NILORN PORTUGAL – INDÚSTRIA DE ETIQUETAS, LDA Rua Central de Barrosas, 304 4585 - 902 Recarei – Paredes PORTUGAL Tel: +351 22 411 95 80 info@pt.nilorn.com NILORN SHANGHAI LIMITED Rm 605, No.258, Chengjiaqiao Road Minhang District, Shanghai 201103 CHINA Tel: +86 21 345 512 90 info@sh.nilorn.com NILORN SPAIN Plaça Catalunya No. 1, oficina 442 08002 Barcelona SPAIN Tel: +34 93 545 1188 info@es.nilorn.com

NILORN UK LTD Station Works Greens Mill Court Cononley N Yorks BD20 8FE UNITED KINGDOM Tel: +44 1535 673 500 info@uk.nilorn.com NILORN USA (EAST COAST) Box 365 Macungie, PA 18062 UNITED STATES Tel: +1 201 874 5515 info@us.nilorn.com NILORN USA LLC (WEST COAST) 3499 Meier Street Los Angeles, CA 90066 UNITED STATES Tel: +1 888 315 1875 info@us.nilorn.com

NILORN TURKEY Baglar Manhallesi 49 Sokak No: 50 K:3 Bagcilar/Istanbul TURKEY Tel: +90 212 657 76 76 info@tr.nilorn.com

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Cover - Grey board 300 gr Body - Amber Graphic 120g FSC™ certified Print Stema Specialtryck AB, Borås, Sweden CERTIFIERAD ISO 9001 ISO 14001

Nr XXX

N VA

ENMÄRK

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Ledningssystem för kvalitet och miljö

Trycksak 3041 0234

FOLLOW US ON

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