SUSTAINABLE INVESTMENT, Fast fashion by Raiffeisen Capital Management

December 2020

SUSTAINABLE

INVESTMENT

FAST FASHION & EFFECTS ON THE ENVIRONMENT

PAGE 04 DISCUSSION: “WE NEED A GREENWASHING-CHECK!”

PAGE 12 CORPORATE VOICES ON FAST FASHION

PAGE 20 A marketing communication of Raiffeisen Kapitalanlage GmbH

CONTENTS PUBLICATION INFORMATION Media proprietor: Zentrale Raiffeisen Werbung A-1030 Vienna, Am Stadtpark Published and created by: Raiffeisen Kapitalanlage GmbH Mooslackengasse 12, A-1190 Vienna Responsible for the content: Raiffeisen Kapitalanlage GmbH Mooslackengasse 12, A-1190 Vienna www.investment-zukunft.at www.rcm.at/nachhaltigkeit

EDITORIAL

LEAD ARTICLE

FAST FASHION IN THE TEXTIL INDUSTRY

RESEARCH

MADE IN EMERGING MARKETS

DISCUSSION: “WE NEED A GREENWASHING-CHECK!”

INFO BOX: SDG 12

CORPORATE VOICES ON FAST FASHION

COMPANY SPOTLIGHT

24 24

INSIDE BECOMING A CO2-NEUTRAL INVESTMENT FIRM

CONTENTS

General orientation: Information on the topics of investment funds, securities, capital markets, and investment; additional information pursuant to the Austrian Media Act can be found in the publication information at www.rcm.at. Project coordination: Irene Fragner, Sabine Macha Authors: Klaus Glaser, Pia Oberhauser, Andreas Perauer, Leopold Quell, Wolfgang Pinner Photos: iStockphoto (p. 04 – p. 11, p. 14, p. 18, p. 22), Pia Morpurgo, ISE, Flo Waitzbauer, Axel Hess-Scheuer (p. 12, p. 14), Raiffeisen KAG (p. 03, p. 05, p. 10, p. 12, p. 20, p. 25) Graphic design: [WORX] Multimedia Consulting GmbH Editorial deadline: 7 December 2020 This is a marketing communication of Raiffeisen Kapitalanlage GmbH. Raiffeisen Capital Management ist the umbrella brand of the following companies: Raiffeisen Kapitalanlage GmbH Raiffeisen Immobilien Kapitalanlage GmbH Raiffeisen Salzburg Invest GmbH Disclaimer Investments in funds involve higher risks, up to and including loss of capital. This document was prepared and designed by Raiffeisen Kapitalanlage-Gesellschaft m. b. H., Vienna, Austria (“Raiffeisen Capital Management” or “Raiffeisen KAG”). Despite careful research, the statements contained herein are intended as non-binding information for our customers and are based on the knowledge of the staff responsible for preparing these materials as of the time of preparation and are subject to change by Raiffeisen KAG at any time without further notice. Raiffeisen KAG assumes no liability whatsoever in relation to this document, in particular with regard to its timeliness, accuracy, or completeness. Similarly, any forecasts or simulations of earlier performance presented in this document do not provide a reliable indication of future performance. This document is neither an offer nor a recommendation to buy or sell, nor an investment analysis. It is not intended for use in lieu of investment advice or other consultation. If you are interested in a specific product, we and your bank advisor will be happy to provide you with the complete prospectus or the information for investors pursuant to § 21 AIFMG prior to purchase. No specific investments should be made until after a consultation and discussion, and after having reviewed the prospectus and the information for investors pursuant to § 21 AIFMG. It is expressly noted that securities transactions can involve significant risks and that taxation of such depends on personal circumstances and is subject to change in the future. Reproduction of the information or data, in particular the use of texts, text sections, or graphic material from this document, requires the prior written consent of Raiffeisen Kapitalanlage GmbH.

EDITORIAL

Dieter Aigner Managing Director of Raiffeisen KAG, responsible for fund management and sustainabilty

Dear Readers,

the core business of the major textile firms

This is why it is so important to provide ob-

officials must enact the necessary laws. And

is selling as much clothing as possible and

jective information on the one hand and to

science must push ahead with research

as quickly as possible to as many people as

exert pressure on the textile companies to

into alternative fibres and better recycling

possible. This â&#x20AC;&#x153;fast fashionâ&#x20AC;? business mod-

change their practices on the other. As the

options. The media must create awareness.

el has disastrous consequences for people,

financial avenue is often the most promising

And we need consumers who do not look

animals, and the environment. Because the

approach here, it is our duty as investors to

simply at the price, but also at the sustaina-

articles of clothing are often manufactured

step up. We can redirect capital flows and

bility of clothing. And we of course need re-

under horrendous working conditions and

invest in companies that pay fair wages and

tailers and manufacturers that do not want

using a large quantity of chemicals. The mi-

comply with environmental standards. We

to perpetuate this system.

croplastic that is rinsed out of the polyes-

also have the ability and obligation to ask

ter fibres that our dresses, shirts, and fleece

questions during shareholder engagement

We are most definitely miles away from

pullovers are most frequently made of dur-

activities and at annual general meetings

such a constellation. Over 90 per cent of

ing washing ends up in our water and on our

and to criticise activities that point to pos-

our clothing is currently produced in low-

fields. Mountains of discarded clothing fill il-

sible greenwashing or misconduct in the

wage countries like Bangladesh, India, and

legal dumps, especially in poorer countries.

supply chains.

China. Labour and environmental protection standards are largely ignored. Poison-

Consumers are often entirely unaware of the

But it is also clear that responsible investors

ous chemicals make their way into rivers

destructive systems they support with their

alone will certainly not be able to solve the

and pollute the drinking water of millions of

purchasing decisions when they buy cheaply

manifold problems that fast fashion causes

people and animals.That is the price that we

produced goods. On the contrary, the green-

and that equally relate to all ESG criteria.

actually pay for a T-shirt that is produced on

washing being conducted by some of the ma-

The will and collaboration of all stakehold-

the other side of the world and that we dig

jor retail chains even causes them to believe

ers is necessary if we are to create sustain-

out of the bargain bin and take home for

that they are supporting the right initiatives.

able structures here. Above all, our elected

EUR 3.50 for a two-pack.

EDITORIAL

FAST FASHIO N IN THE TEXTILE INDUSTRY You can find out more about Sustainable Development Goal 12 on pages 18–19 and at www.investment-zukunft.at/kategorie/

sustainable-development-goals/

A World Bank estimate puts the value of the global textile industry at USD 2.4 trillion. Including the entire value chain of the garment industry, this sector employs around 300 million people. The sector is growing at a rate of around 4% per year according to the most recent statistics, and the production volume of the garment industry has doubled over the last 15 years. The key drivers of this growth aside from the expanding world population are especially the large, up-and-coming economies like China and India, where the members of the burgeoning middle classes are gaining weight as consumers.

The textile industry is a problematic

garments, but only wears them for half as

sector from a number of perspectives.

long as a decade and a half ago. In China,

In terms of environmental impact, high

which is representative of the new con-

water consumption, the extensive use

sumption patterns in the Emerging Mar-

of chemicals, and above-average energy

kets, the time that a garment is used has

and waste intensity are the norm. Social

even fallen by 70% over the past 15 years.

concerns include poor working conditions and low standards for health and

The number of clothing collections rose

safety. Forced labour and child labour

by 100% between 2000 and 2011. For

still abound in the sector.

many consumers, fast fashion is leading

PRODUCTION AND USE

LEAD ARTICLE

to “disposable fashion”. This means that around 50% of all fast fashion garments are

According to a study by the Ellen MacAr-

thrown away after no more than one year

thur Foundation, global textile produc-

to make space for new articles. The Ellen

tion has doubled in the last 15 years while

MacArthur Foundation estimated in 2017

the time that the products are used has

that consumers around the world forgo

decreased by half. In other words, the

USD 460 billion in total every year by

average consumer purchases 60% more

discarding clothing that can still be worn.

Wolfgang Pinner Head of Sustainable and Responsible Investment at Raiffeisen KAG

Figure: How the way we shop has changed in the last 15 years

+100%

Average number of clothing collections have more than doubled in the last 15 years

60% Average consumer buys 60% more clothes and keeps them for half as long vs 15 years ago

FAST FASHION

More than 50% of fast fashion produced is disposed in under a year

>50%

Source: Raiffeisen KAG, 2020 based

The production cycles for fast fashion la-

The growth of the textile industry over

bels are extremely short. Before the fast

the past 20 years has been based pri-

fashion trend was born around 25 years

marily on volume, while price levels

ago, a new collection had a lead time of as

have been falling overall. Consumers

much as two years. This lead time typical-

are demanding more sustainability in

ly consisted of the initial design, the pro-

the garment industry, but often end up

cessing of the required materials, the pro-

buying cheap brands and cheap prod-

duction of the garments, distribution, and

ucts.

on information from the Ellen MacArthurFoundation 7/2018

finally sale in the shop. The fast fashion strategy allowed companies to substan-

A shift in the distribution channels in

tially shorten the supply chains starting

the fast fashion industry also began

in the mid-1990s, including a reduction in

a few years ago. Sales through outlet

the lead times to as little as five weeks or

networks and depar tment store chains

even less. Companies have even been able

are contracting noticeably. By contrast,

to react to customer preferences within a

online sales are growing rapidly, and

single season thanks to flexible and rapid

bargain chains have also captured more

supply chains for around 20 years now.

market share.

LEAD ARTICLE

FAST FASHION

LEAD ARTICLE

SUSTAINABLE INVESTMENT | December 2020

IMPACTS ON THE ENVIRONMENT

If the textile industry continues to grow at

The water consumption in the sector is

the current rate, the International Energy

very high, especially when cotton is used as

Agency (IEA) estimates that 25% of the

a raw material. Some 2,700 litres of water

world CO2 budget could be used in this

are needed to produce a single cotton shirt.

jected population growth on the one hand

An estimated 20% of global industrial wa-

and the expansion and rising standard of liv-

ter pollution stems from chemical dyeing,

ing of the middle class on the other. Today,

bleaching, and other treatment of textiles.

sector by 2050. This is based on the pro-

the textile sector accounts for 8% of greenhouse gas emissions worldwide, and emits

Around 12.8 million tonnes of used cloth-

more than the entire aviation and shipping

ing is thrown away every year. Most of this

industries combined according to IEA esti-

ends up in landfills. The textile industry is

mates. The main emission driver is the pro-

also the greatest source of plastic pollu-

duction of polyester, i.e. synthetic fibre.

tion in the oceans.

Figure: Minimal percentage of recycled material in garment production

98%

100%

13%

material for garment production

98%

comes from nonrenewable resources

1% is recycled and re-used for garment production

only 13% is recycled

ER ! P U E

Source: Circular Fibres Initiative (Ellen MacArthur Foundation)

S AL

LEAD ARTICLE

FAST FASHION

SUPPLY CHAIN

A number of industry initiatives have

of alternative raw materials for the pro-

been launched in recent years to lend

duction of fibres that can be turned

more weight to ESG aspects in the tex-

into clothing. Key alternatives are fruit-,

tile industry. Some address issues such

fungus-, and food-based fibres and lab-

as greater transparency and fairness in

oratory-grown fibres. However, these

the supply chains while other initiatives

initiatives are only a feasible alternative

and joint ventures focus on research.

at a larger scale if they do not result

Research goals include the development

in competition with food production.

Figure: Problems along the supply chain

poor working conditions

THOUSANDS

of sub-contractors

Source: Raiffeisen KAG, 2020

LEAD ARTICLE

low wages

75%

female workers in Asia

SUSTAINABLE INVESTMENT | December 2020

ASSESSMENT OF THE TEXTILE INDUSTRY IN RELATION TO THE INDIVIDUAL SUSTAINABILITY CRITERIA:

characterised by a combination of rela-

ultimately creates problems for the

tively simple production processes and

contracting textile company when it

rather low technological requirements.

comes to monitoring the supply chain.

The fact that the manufacturers at the

Government authorities must ensure

lowest end of the value creation chain

suitable working conditions through

are highly interchangeable puts tremen-

laws and regulations. The monitoring

E (environment):

dous pressure on production costs,

of these regulations by the government

The textile industry has a substantial CO2

which in turn creates intense competi-

and at the company level is also crucial.

footprint when you include the upstream

tion leading to lower wages and other

The problem of corruption, which can

value chain. The high level of water con-

expenditures in the factories.

undermine effective worker protection

sumption and water pollution are per-

policies, is significant in this context.

haps a greater challenge when it comes

G (governance):

to textile finishing. Another important

The production process is often struc-

Conclusion:

issue for the textile industry is the use of

tured in a cascading manner in the

Raiffeisen Capital Management current-

toxic chemicals and the associated man-

textile sector. The entire supply chain

ly invests in selected textile companies

agement of hazardous materials.

– starting with manufacturing and con-

with a focus on sustainability at the

tinuing through many stages all the

product level and in terms of strategic

S (social):

way to retailers – lacks transparency

orientation. It generally takes a more

A large share of all labour rights vio-

in many cases. The production that is

critical view of fast fashion, and places

lations around the world occur in the

outsourced to sub-suppliers is passed

particular focus on initiatives that lead

textile industry. The textile industry is

on to lower and lower levels, which

to a more sustainable orientation.

INITIATIVES

A number of industry initiatives have

ment of alternative raw materials for the

been launched in recent years to lend

production of fibres that can be turned

more weight to ESG aspects in the tex-

into clothing. Key alternatives are fruit-,

tile industry. Some address issues such

fungus-, and food-based fibres and lab-

as greater transparency and fairness in

oratory-grown fibres. However, these

in the supply chains

the supply chains while other initiatives

initiatives are only a feasible alternative

– Research and development

and joint ventures focus on research.

at a larger scale if they do not result in

for alternative materials

Research goals include the develop-

competition with food production.

Sources: Ellen MacArthur Foundation, A new textiles economy: Redesigning fashion’s future, (2017, http://www.ellenmacarthurfoundation.org/publications) The World Bank: Consumption (as of November 2020)

OBJECTIVES

– Transparency and fairness

LEAD ARTICLE

Leopold Quell Fund Manager for Emerging Markets equities, Raiffeisen KAG

MADE IN Clothing and especially fast fashion arti-

is by building trust through transparency.

cles are manufactured almost exclusively

Especially the industry leaders H&M and

in Emerging Market countries. This is the

Inditex have made it much easier in recent

only place that the associated labour-in-

years to verify where and under what

tensive production can be completed at

conditions their goods are produced.

competitive costs. It is thus no wonder that two thirds of the 1,300 companies

Average monthly wages (not including

that supply H&M are located in Asia –

overtime) are higher than the local min-

and the Swedish fast fashion pioneer’s

imum wage in factories producing gar-

production chain employs a total of

ments for H&M according to this compa-

1.6 million people. Inditex, H&M’s largest

ny’s sustainability report.

competitor, even has 1,800 suppliers, and two million people are involved in manufacturing the clothing sold in the company’s chains (above all Zara). The Emerging

INSTAGRAM AS A GAMECHANGER

The conditions in the retail garment in-

Markets dominate here, as well (especially

dustry have changed notably. The grow-

Morocco and Turkey alongside Asia).

ing impor tance of social media has even forced major firms to go on the defen-

The collapse of the Rana Plaza building

sive. The times in which the fast fashion

in Bangladesh that cost more than 1,100

labels can drive trends simply by invest-

lives in 2013 dealt a serious blow to the

ing enough in adver tising are over. Cele-

reputation of the garment industry be-

brated head designers were quickly sup-

cause the poor working conditions of the

planted by a crowd of influencers. This

mostly female staff in the factory were

makes it nearly impossible for industry

revealed to the broad public during the

leaders to predict what is or will soon be

investigation of the catastrophe. Major

“in”, let alone influence this. Fast fashion

fast fashion labels are actively countering

labels have to adapt by producing smaller

this poor image and taking steps to pre-

initial lots and then reacting flexibly and

vent their business with cheap suppliers

rapidly to what trends take hold during

from ending in a PR disaster. One step

the season. Thus, production is managed

they take is requiring local companies to

in shor ter time intervals depending on

comply with a detailed code of conduct in

sales levels.

order to qualify as a supplier, ensuring de-

RESEARCH

cent working conditions for the local staff

Local store managers play a very im-

and including regular inspections. Another

por tant role in this because they focus

SUSTAINABLE INVESTMENT | December 2020

EMERGING MARKETS

not only on sales volume but can also

build state-of-the-ar t production meth-

provide qualitative feedback on the di-

ods and facilities that can efficiently fulfil

rection demand is currently moving in.

even the most demanding and complex

It thus comes as no surprise that only

orders. And the trade conflict between

about 25% of the goods sold by Inditex

China and the USA has not hur t the

are now produced in advance according

company. Broad geographical diversifica-

to the investment bank Barclays. The re-

tion (presence in Cambodia and Vietnam

maining 75% are produced and delivered

in addition to China) enabled Shenzhou

during the season based on sales volume

to shift orders from US customers to

and local feedback. The lead times here

sites in countries that are not impacted

can be reduced to less than a month, and

by the trade restrictions.

This allows companies to avoid producing goods that the market does not want, which would force them to sell these garments off at high discounts.

SUPPLIER 2.0

A BIGGER PIECE OF THE PIE FOR THE EMERGING MARKETS

Not only the rising share price shows how successful the company is, but also its market capitalisation of around

The supply chain has to be as efficient

USDÂ 27 billion. This makes the compa-

as possible to be able to react and pro-

ny nearly as large as H&M. Which shows

duce this flexibly. To make this possible,

that the balance of power has shifted.

suppliers have transformed themselves

The dominant fast fashion players were

from pure contract manufacturers into

long in a position of strength versus their

supply chain co-managers. Shenzhou

suppliers in the Emerging Markets. If a

International is at the head of this pack.

producer tried to charge higher prices,

This Chinese company is listed on the

there was a real risk of being replaced

Hong Kong exchange and successfully

by a different company. Shenzhou was

reinvented itself through ver tical inte-

one of the first companies to break out

gration. It now covers nearly every stage

of this pecking order by becoming more

in the supply chain at competitive pric-

of a strategic par tner for its customers,

es and high volumes, thus winning and

guaranteeing the flexibility that is so im-

holding on to customers such as adidas,

por tant at the point of sale. This means

Puma, and Uniqlo. But not only that â&#x20AC;&#x201C;

that Shenzhou is not as easy to replace

substantial investments in research and

and can thus take a much bigger piece

development have allowed Shenzhou to

of the pie.

50 OF % F

even to just two weeks in some cases.

RESEARCH

Virtual round-table discussion Under the moderation of Dieter Aigner, Managing Director of Raiffeisen KAG

about the many facets of sustainability in the textile industry and how they are ignored

Nunu Kaller Austrian publicist, environmental activist, and blogger

The large quantities of clothing that are

more than 1,000 people lost their lives

sold due to cheap production and the short

and 2,400 were injured. And the survi-

time that such garments are worn cause

vors are having a hard time finding new

a host of ecological and social problems.

jobs because they are so traumatised.

The textile industry is sharply criticised

This means that the impacts are very

by environmental activists. What is going

far reaching, and not even the general-

wrong here?

ly accepted minimum labour and social

Nunu Kaller: It star ts with the wages

standards of the ILO (International La-

being paid to workers in the factories.

bour Organization) are complied with in

These people need to receive a living

most cases.

wage. The living wage is calculated for Heike Hess Director of the Berlin office of the Internationaler Verband der Naturtextilwirtschaft (IVN)

each country by independent organisa-

What are the ecological problems?

tions and specifies the amount of money

Nunu Kaller: There are very many, un-

needed each month to maintain a basic

for tunately. For example the materials

but decent standard of living. Many tex-

that the garments are made of. Except

tile companies do not pay such a wage.

for in athletic clothing, where it serves

And there is a lack of transparency.

a functional purpose, I think that pol-

Even if some garment manufacturers

yester is very, very bad. But it is used

try to polish their image by publishing

almost everywhere today in fast fash-

the names of the factories and compa-

ion: summer dresses, blouses, shir ts â&#x20AC;&#x201C;

nies that produce their clothing ar ticles

they are all made of polyester because

in Bangladesh and other places, this says

it is the cheapest material and can be

nothing about their sustainability.

modified in many ways. When polyester products go through the wash,

Leopold Quell Fund Manager for Emerging Markets equities, Raiffeisen KAG

ROUND-TABLE DISCUSSION

Can you explain that?

large amounts of microplastic get rinsed

Nunu Kaller: Aside from the fact that

out and cause one of the greatest en-

these names donâ&#x20AC;&#x2122;t tell the consumer

vironmental problems we have. Be-

anything, nothing is stopping the own-

cause it cannot be removed by sew-

ers of these factories from concluding

age treatment plants and you cannot

contracts with less strict sustainability

get it back out of the water or off the

criteria with other companies. It is very

fields, where it gets deposited with the

impor tant to demand transparency here.

sludge. One study estimates that there

And we need strict, independent audit-

are 14 million tonnes of microplastic in

ing. I remember the collapse of a factory

the oceans, and because it sinks, most

in Bangladesh seven years ago, where

of this is on the sea bed 1. We have to

1 https://www.nau.ch/news/ausland/studie-auf-meeresboden-lagern-14-millionen-tonnen-mikroplastik-65796495

SUSTAINABLE INVESTMENT | December 2020

“WE NEED A GREENWASHING-CHECK!” stop this. We must stop polyester pro-

darned, repaired, dyed a different col-

grown, harvested, spun, and dyed, and

duction, which now accounts for over

our, and passed down so that they could

then the garment has to be knitted or

60 per cent of the total fibre market.

be worn longer. Things are simply dif-

sewn, transpor ted, marketed, and sold.

ferent today. A person with an average

How is this possible at that price? The

So we would achieve a lot by transitioning

income can now afford to buy one or

negative impacts are simply too many

to rayon or cotton…

more new pieces of clothing a week.

to count. We need to be aware of that.

Nunu Kaller: Consumers believe that

And that is exactly what fast fashion is.

We now know most of the sustainabil-

they are doing something good for the

The industry is creating the trend and

ity indicators. We know that we don’t

environment when they buy rayon gar-

tells consumers that it isn’t cool to wear

pay enough. We know that children are

ments. But if this fabric contains a syn-

a garment more than a couple of times.

exploited. We know that buildings col-

thetic fibre – as is often the case in the

As a result, these brands no longer

lapse. We know that chemicals pollute

form of elastane – it can no longer be

launch two collections per year like they

the rivers. We know that species are

recycled, or there are at least no sys-

used to, but 12, 16, or even as many as

being wiped out. We know all of this.

tems for this yet that are ready for mar-

30 collections each year. That is insane!

There are no doubts in anyone’s minds.

ket use. This equates to the direct pro-

And this of course has a negative impact

duction of waste. One hundred per cent

on the sustainability and quality of the

What can we do?

cotton can be recycled. One hundred

products.

Heike Hess: As an industry association

per cent rayon can be recycled. Blended

for dealers and manufacturers of sus-

textiles cannot. At least not right now,

What makes such prices possible?

tainable textiles, IVN represents the

even though a great deal of research is

Heike Hess: In addition to the low wag-

interests of its members and also acts

being conducted into the separation of

es that we already talked about, the raw

as something of a watchdog in the in-

the fibres.

materials are cheaper and less money

dustry. We point out specific problems

is spent on environmental protection.

when companies claim to be sustaina-

Clothing used to have a much higher value.

And then there is transpor t. If I grow,

ble. Because we want to know if that

What role does pricing play in this con-

manufacture, and sell at a location with

is really true, and dig deeper. We try

text?

good wages and high environmental

to communicate this in a clear man-

Heike Hess: We have a fundamental

standards, that is often more expensive

ner with our two quality seals, GOTS

problem on the consumer end of things,

than sending the same product halfway

(Global Organic Textile Standard) and

and that is the decline in the value of

around the world to work under less

the extremely stringent NATURTEX-

garments. If I buy three T-shir ts at a

strict regulations and pay lower wag-

TIL IVN CERTIFIED BEST – in other

bargain store today, I will cost me 10

es. When the consumer prices here

words, we try to make the good com-

euros. If I buy three loaves of bread, it

in Europe are only 10 to 15 per cent

panies easy to recognise. This enables

will also cost 10 euros. This means that

above the cost of the raw materials,

consumers to make the right purchasing

good bread now costs just as much as

that is simply unacceptable. Because the

decisions. But our lawmakers need to

a bad T-shir t.

cotton for a T-shir t has to be planted,

enact regulations for the business deal-

Garments used to be

ROUND-TABLE DISCUSSION

Dieter Aigner conferencing with Nunu Kaller, Heike Hess, and Leopold Quell

ings between the companies operating

companies that have less potential on

the brands and the supplier countries

the market because they are competing

and for corporate responsibility, or for

with these giants. I think that investor

due diligence as the OECD calls it. This

suppor t is a great oppor tunity for these

is still voluntary. This means that we

companies.

have no laws governing supply chains, no mandatory assumption of respon-

Leopold Quell: Just because a textile

sibility, so companies can exer t such

company sets up some recycling boxes

tremendous pressure on their busi-

or has a product line made of organ-

ness par tners in the supplier countries.

ic cotton in its assor tment, it is still far from being a sustainable company.

Nunu Kaller: I would like to add that the

There simply is not enough pressure

price you pay for an ar ticle of clothing

from consumers in this regard. Many

says absolutely nothing about how sus-

don’t even know exactly what they are

tainably it was produced. Often, it is all

buying, and others just don’t care. So

just a giant marketing ploy. The price is

some retail chains have a fairly easy time

never an indicator of how sustainable a

of it. I find it interesting that many of the

product is. I have been investigating this

consumers of fast fashion – and I dare

for eight years now and have come to

say that a lot of them are young people

the conclusion that trying to make the

– like to showcase in social media how

bad actors good makes little sense. A

sustainable their lifestyle is, for example

fast fashion company can do so many

in terms of food. But they apparently do

things to look more sustainable. This

not yet have any awareness for clothing.

may sound cynical, but it can reduce the

bad chemicals, transpor t its garments

Nunu Kaller: The one with the mon-

to Europe by horse, and hire deaf-mute

ey has the power. But when you look at

seamstresses. But their core business

the big picture, you have to admit that

remains the same: selling as much cloth-

the power of the individual consumer is

ing as possible and as quickly as possible

finite. The social media are a good ex-

to as many people as possible. As long

ample of this. Because it is a proven fact

as the core business is so unsustaina-

that this technology has shor tened our

ble, anything done to make it look bet-

attention spans. And not just as an iso-

ter is just some green sprigs. There are

lated phenomenon. This makes it very

companies that go about it differently

easy to tell a consumer that something is

from the ground up. But these are the

sustainable. And rarely does anyone ask

“WE NEED A GREENWASHING-CHECK!”

SUSTAINABLE INVESTMENT | December 2020

questions. In a world so full of green-

my membership in this multi-stakehold-

washing and where the consumer is

er project has taught me anything, it is

promised the moon and the stars, I find

that it does not work if you only attack

it difficult to say that consumers do not

from one angle. You need to go at the

know what is going on. I believe that the

big picture. We need our elected offi-

side that has a lot of money is in fact

cials. We need laws. We need the public

shirking its responsibility, and that is not

at large. We need the consumers. We

right.

need the press. We need the manufacturers. And we need the retailers. Only

Greenwashing is something else we should

if all of these stakeholders want to make

talk about. What can we do against that?

a positive change we will actually see

Nunu Kaller: I believe that some indus-

an improvement. Many manufacturers

tries are in desperate need of green-

and retailers want to make things bet-

washing checks. Including the textile in-

ter, but do not know how to reconcile

dustry. Some initiatives that are touted

sustainability and economic efficiency.

as sustainable are pure greenwashing. I

Many now have sustainability depar t-

also call this out in my publications. Farm-

ments and are trying to make genuine

ers are given genetically modified cotton

improvements. But you have to look

seed that is not perennial, meaning they

very carefully for greenwashing. We also

have to buy new seed every year. But

need our lawmakers, and it would be

because they are in a special programme

nice if they would actually take the var-

to “improve” the cotton (but that has

ious stakeholders seriously, aside from

nothing to do with organic farming), this

the conventional textile lobby. And we

cotton is sold as sustainable. Consum-

need a greenwashing check here, as well.

ers are pleased because they think they have made the “right” choice and done

Nunu Kaller: Little can be done here at

something good. But they have not. We

the national level, we need an interna-

need to provide more and better infor-

tional or at least European approach.

mation here.

If you can gain access to these decision-making processes as an external

Many people have no idea how dirty the

player, it is very impor tant to represent a

textile industry is. Do we perhaps need

consistent ecological and social position.

more government control?

And I think that investors have a good

Heike Hess: I am involved in the Par t-

chance at that. When trying to influence

nership for Sustainable Textiles. And if

policy decisions, you must be very wary

ROUND-TABLE DISCUSSION

ROUNDTABLE DISCUSSION

of compromises. I unfor tunately do not

for ts are aimed at optimising raw ma-

see this hard line in European policy. A

terial use in production and reducing

lot could be achieved by not only prohib-

chemical use. And there are some fibre

iting the impor tation of cer tain chemi-

development initiatives that have not yet

cals themselves, but also as par t of a

come along far enough to be interesting

product, for example. This would trigger

for investors. Anyone who wants to in-

a massive reaction along the entire chain.

vest responsibly in the major players and

More simply must be done.

who values sustainability is well advised to take a very close look or to get com-

What is the investor perspective on this

petent advice. Because it is impossible to

topic? Are the sustainable market players

say for all companies which sustainability

interesting for investors at all, given that

parameters make good garments. The

profitability is also a goal alongside sus-

issue is complex and multi-faceted. That

tainability?

is why there are so many quality seals.

Leopold Quell: Major textile retailers

It is very difficult or even impossible for

are unattractive for us as an investment

companies to fully meet all sustainability

at this time. Both because of the lack

criteria and be profitable.

of sustainability and because of the low profitability. Up-and-coming listed com-

Nunu Kaller: The issue of PLA, polylac-

panies that are clean from a sustainabil-

tic acids, is also relevant for the textile

ity perspective can be very interesting

industry. PLA can be produced in a way

for us, however. For example producers

that has a substantial detrimental impact

of new materials such as banana fibre

on the environment, or in a very, very

or mushrooms. However, these oppor-

sustainable manner. And these produc-

tunities are limited because we also re-

tion processes are already being run at a

quire corresponding market capitalisa-

large enough scale that there are invest-

tion and liquidity in order to make an

ment oppor tunities.

investment. I see more than one interesting investment

Heike Hess: I suspect that the truly sus-

theme in our future.

tainable companies are usually not listed

Leopold Quell: We want the good, but

on the exchange because they are simply

also want the profitable. Our power

too small, at least the trading companies.

as a responsible investor is in buying

But there are major spinning groups that

something or intentionally not buying

have sustainability divisions. Current ef-

something. And we want to be able to

â&#x20AC;&#x153;WE NEED A GREENWASHING-CHECK!â&#x20AC;?

SUSTAINABLE INVESTMENT | December 2020

communicate this clearly. Being a little

able companies will be able to offer

bit good is not enough. We are confi-

solutions for pressing problems of our

dent that many sustainability stars will

time. This will hopefully also include the

rise over the next ten years. Sustain-

garment industry.

SUSTAINABILITY LABELS NATURTEXTIL IVN CERTIFICIED BEST This quality seal is especially known in Europe and applies the most stringent standards for textile sustainability, and is the highest level of quality that can be certified at present. BEST applies the guidelines for natural textiles drafted by Internationaler Verband der Naturtextilwirtschaft e. V. (IVN) in 2000 and covers the entire textile production chain from an ecological and social responsibility perspective. Detailed information on the seal can be found at https://naturtextil.de/qualitaetszeichen/ qualitaetszeichenbest/ GOTS The Global Organic Textile Standard is the minimum standard that natural textiles must fulfil in the opinion of IVN. It is an internationally established standard that benchmarks environmental and social compatibility in textile manufacture. This globally known and prevalent seal is awarded by GOTS gGmbH, which is partially owned by IVN. The requirements for GOTS are somewhat less stringent than those for NATURTEXTIL IVN CERTIFIED BEST. It is the minimum standard that products must meet in order to be recognised by IVN as genuine natural textiles. More information about the differences between the two standards can be found here: https://naturtextil.de/qualitaetszeichen/gots/

Editing: Pia Oberhauser

ROUND-TABLE DISCUSSION

SUSTAINABLE DEVELOPMENT GOAL 12 (SDG 12): Ensuring sustainable consumption and production

SDG 12

Nachhaltig SUSTAINABLE Investieren INVESTMENT | Dezember| December 2019 | Ausg. 2020 26

The economic and social progress achieved over the last

tonnes worth around a trillion dollars. Landing in household

century has also resulted in detrimental effects on the envi-

and supermarket waste bins or spoiling due to poor transport

ronment that are now putting the very systems upon which

and harvest practices.

our future development and even our survival depend at risk. If the world’s population grows to 9.6 billion by 2050,

Sustainable consumption and sustainable production is about

we may need the equivalent of nearly three of our planets

achieving more and better with less. It is also about decou-

to provide the natural resources needed to maintain our

pling economic growth from the destruction of the environ-

lifestyle.

ment, increasing resource efficiency, and promoting sustainable lifestyles. And in this way achieving general development

On the other hand, it is estimated that one third of all food

goals; reducing future economic, ecological, and social costs;

that is produced every year simply goes to waste – 1.3 billion

raising economic competitiveness; and reducing poverty.

THE UN HAS SET THE FOLLOWING RESPONSIBLE PRODUCTION AND CONSUMPTION GOALS FOR 2030, WHICH HAVE ALSO BEEN INCORPORATED INTO THE AUSTRIAN FEDERAL GOVERNMENT’S 2030 AGENDA FOR SUSTAINABLE DEVELOPMENT (SLIGHTLY ABRIDGED):

ü Implement the 10-year framework of programmes on sustainable consumption and production, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries.* ü Sustainable management and efficient use of natural resources. ü Halve per capita global food waste at the retail

and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.

ü By 2020, achieve the environmentally sound

management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water, and soil in order to minimize their adverse impacts on human health and the environment.

ü Substantially reduce waste generation through prevention, reduction, recycling and reuse. ü Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.*

ü Promote public procurement practices that are sustainable, in accordance with national policies and priorities.* ü Ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature. ü Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production.* ü Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products.* ü Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities.*

* No time frame has been defined for these objectives References: un.org/sustainabledevelopment/economic-growth, sustainabledevelopment.un.org, bundeskanzleramt.gv.at/themen/nachhaltige-entwicklung-agenda-2030

SDG 12

Andreas Perauer Member of the Sustainability Team at Raiffeisen KAG

CORPORATE ON The idiom â&#x20AC;&#x153;clothes make the manâ&#x20AC;? is

fashion labels, but less so for the envi-

said to date all the way back to the 16 th

ronment.

century, and still evidences that the impression that a person makes depends

The responses to these questions can

(in par t) on how they are dressed.

be summarised into the following state-

Finding the right dress, the right suit,

ments and results.

or the right pair of shoes for the given occasion was just as impor tant back

1 The par tial digitalisation of the in-

then as it is now. But today in par ticular,

dustry has doubtless made a key con-

consumers would rather have one too

tribution to the accelerated pace in the

many garments to choose from rather

world of fashion. This was confirmed

than one too few. This is good for the

by the Swedish fashion giant Hennes & Mauritz (H&M) and by the German garment manufacturer HUGO BOSS.

The shareholder engagement activities of Raiffeisen Capital Managementâ&#x20AC;&#x2122;s SRI team with regard to the topic of fast fashion include discussions with some of the biggest listed companies in the textile industry. The following questions were asked in this process:

The latter repor ted that around one

1 We have witnessed a trend towards fast fashion over the past ten years. How has this trend impacted your company?

at every stage of the value chain, which

2 The fashion industry has an enormous ecological footprint. Key issues include greenhouse gas emissions, water consumption, and waste generation. What is your strategy for countering this growing footprint?

group can also account for the needs of

3 We see rapidly growing awareness of the impacts that the fashion industry has on the environment among consumers and investors, which is a source of financial risk for your company. What is your perspective on this trend? Are there initiatives in your industry to counter this risk?

third of the designs in the HUGO BOSS collections are now developed entirely digitally. The proprietary electronic workflows allow for greater flexibility means shor ter time to market and more rapid reactions to consumer trends. The its business par tners more flexibly and at lower cost, for example by reducing the pattern costs or offering additional options for the combination of cuts and materials. The French fashion group Kering does not see itself as par t of the fast fashion industry with its brands such as Gucci, Saint Laurent, and Balenciaga. On the contrary, it strives to ensure the durability and long life of its products

RESEARCH

SUSTAINABLE INVESTMENT | December 2020

VOICES FAST FASHIO through strict quality control and stra-

sees a great deal of untapped potential

growing number of enquiries into these

tegic and technical exper tise. The ath-

in the use of sustainable cotton. Less

issues and higher demand for the â&#x20AC;&#x153;Re-

letic wear manufacturer Nike also does

than 1% of the cotton produced around

sponsibleâ&#x20AC;? product line, which consists

not see its products as fast fashion ar ti-

the world is grown organically due to

of ar ticles with at least 60% cer tified

cles, but seeks to provide lasting value

the lower productivity. H&M wants to

more sustainable raw materials. Accord-

through innovation and quality.

change this and is collaborating with

ing to HUGO BOSS, joint initiatives are

the organisation Organic Cotton Accel-

impor tant because it is a very complex

2 Next, one of the largest British gar-

erator (OCA), of which H&M itself is a

task for individual companies to work

ment retailers with over 400 outlets,

founding member, to help Indian farmers

directly with raw material suppliers in

still sees climate change as one of the

obtain training, seeds, premium prices,

many cases. The Better Cotton Initiative

greatest global challenges for society and

and above all sales guarantees for their

reaches a large number of cotton farm-

is acting accordingly. The company has

organic harvest. H&M is also one of the

ers directly, for example, thus promot-

reduced its water footprint by 43% and

most impor tant suppor ters of the 2030

ing the sustainable production of cotton.

its carbon footprint by 25% per tonne of

Water Resources Group, a par tnership

Another notable initiative is the Fashion

clothing sold since 2012 by shifting to the

initiated by the World Bank to maintain

Pact unveiled right before the G7 Sum-

procurement of more sustainable and

the groundwater reserves in the greater

mit in 2019, a coalition of fashion com-

recycled fibres such as better cotton,

Dhaka area in Bangladesh. A look to Asia

panies aimed at protecting the climate,

organic cotton, and recycled polyester.

reveals that Fast Retailing, a Japanese

biodiversity, and oceans. The initiative

It also uses dyeing techniques that con-

group that is one of the largest garment

contains a series of common objectives

sume less energy and water. Nike is pur-

retailers in Japan through its subsidiary

and is a milestone in the fashion industry

suing a similar strategy, also focusing on

Uniqlo, is deploying new technologies in

in terms of its scope and the significance

the use of recycled materials, especially

its shops and offices and using renewa-

of the coalition that has been formed.

polyester and sustainable cotton. Over

ble energy to reduce its greenhouse gas

The objectives include the use of 100%

7.5 billion plastic bottles have been di-

emissions. The emissions from the Uniq-

renewable energy at the signatoriesâ&#x20AC;&#x2122;

ver ted from landfills and waterways and

lo shops have declined by close to one

own sites, the complete elimination of

turned into recycled polyester shoes and

third since 2013.

problematic plastic, the use of recycled

garments since 2010. Three quar ters of

plastic for packaging, a stop to deforest-

the shoes and clothing ar ticles from Nike

3 The companies we contacted are very

ation, and the promotion of sustaina-

already contain recycled materials, from

aware of the increasing awareness and

ble forest management. One year after

shoe uppers to entire jerseys. The switch

interest of investors and customers with

being announced, the Pact already has

to sustainable cotton has also saved 53.5

regard to the environmental impacts of

over 60 signatories that together rep-

billion litres of water and reduced the

their business activities. According to

resent more than 200 brands and one

use of pesticides by 200 tonnes. H&M

HUGO BOSS, this can be seen in the

third of the fashion industry.

RESEARCH

ADIDAS AG

adidas AG is one of the worldâ&#x20AC;&#x2122;s leading manufacturers of spor ting goods and offers a wide range of clothing, shoes, spor ts

equipment,

and

accessories

under its two core brands adidas and Reebok. The group has over 59,000 employees and sold more than 1.1 billion ar ticles in 2019, generating revenue of EUR 23.64 billion. The company is headquar tered in Herzogenaurach, Germany.

ECOLOGICAL FOOTPRINT

Water is one of the key resources for the textile industry, making its responsible use all the more impor tant. adidas is aware of this and employs individualised water management solutions at each of its sites. A key difficulty encountered by the company is collecting water consumption statistics. Due to non-standard measurement methodologies at some locations, the collected data may contain water consumed by adidas as well as by other tenants at the same site, for example. adidas is developing sub-metering solutions at such sites to address this problem and to be able to allocate the total consumption accurately among the individual tenants.

RESEARCH

SUSTAINABLE INVESTMENT | December 2020

COMPANY SUSTAINABILITY SPO TLIGHT adidas uses a holistic approach to re-

and to prevent plastic from ending up in

ing conditions at suppliers in low-wage

duce its own water consumption. This

the oceans. One result of this collabo-

countries, especially since the incidents

ranges from increasing the efficiency of

ration is the production of shoes from

at Rana Plaza. adidas applies its own

water use at the various sites and install-

recycled plastic waste from beaches and

workplace standards in this sensitive

ing efficient sanitary facilities to ongo-

coastlines. After producing five million

area, requiring its suppliers to com-

ing employee training in the proper use

pairs of shoes in 2018 and eleven million

ply with what is essentially a code of

of water. This enabled the company to

pairs in 2019, adidas expects to produce

conduct. The standards conform with

surpass its 32% cumulative annual water

15â&#x20AC;&#x201C;20 million pairs this year.

the labour and human rights standards

consumption reduction target for 2019

of the International Labour Organi-

by 5 percentage points, lowering its wa-

In future, products are also not to be

zation (ILO) and the United Nations

ter use per employee by 37% in that year.

disposed of as waste at the end of their

(UN) and are included in the supply

useful life but recycled as a valuable re-

contracts that adidas concludes with

adidas is also striving to reduce its green-

source for new products. adidas recycles

its business par tners. Announced and

house gas emissions. To this end, it is em-

excess pilot versions of products and

unannounced audits are conducted by

ploying efficient and smart technical in-

products that do not meet its quality

specially trained employees and rec-

frastructure such as photovoltaic systems

standards, thus already taking a step in

ognised ex ternal auditors to monitor

and LED lighting and is also obtaining en-

the right direction. Waste flow analy-

compliance with the standards. The

ergy from renewable sources or is pur-

ses were also conducted at the sites in

results are evaluated to determine if

chasing corresponding certificates. These

recent years to reduce the volume of

action must be taken. Such action can

measures have led to a 52% cumulated

non-recyclable refuse through recycling

range from mandator y training or oth-

net reduction in emissions since 2015.

and organic composting. However, the

er improvements in the supplier com-

company has fully exhausted this poten-

panies to warnings or even the termi-

tial at some sites due to insufficient or

nation of the business relationship. A

INNOVATION AND RECYCLING

entirely lacking waste collection in the

total of 1,191 audits were conducted

adidas strives to develop products that

respective countries. Roughly 44% of

in 2019, covering 49% of the supplier

offer high performance and to manu-

the sites currently have a functioning

companies and licensed factories. The

facture them in a sustainable manner.

waste tracking system.

share of audited companies in coun-

A key focus here is innovation. For example, adidas collaborates with the environmental organisation Parley for the Oceans to avoid plastic at its own sites

SUPPLY CHAIN

tries with a high level of risk is close to 100%. Asia, the most impor tant pro-

The tex tile industr y has been subject

curement region for adidas, has 75%

to sharp criticism in terms of the work-

coverage.

RESEARCH

BECOMING A CO2- CO2 INVESTMENT Something must be done, and we all must act – governments, companies, and in-

The concept of “CO2 neutrality” is becoming more and more important. Our postal service operates with zero net carbon emissions, making it CO2 neutral; 50 airports in Europe plan to be carbon neutral by 2030; and CO2-neutral fuels are even in development. What does that mean, and what can an investment firm do in this context? The need to act had become evident by the time the Paris Agreement was signed in 2015.

dividuals. A large number of small steps can also lead to great progress, but action must be taken in any case.

WHAT GETS MEASURED GETS DONE

What can a financial services provider The problem is often only considered

emissions from our economic systems

like an investment firm do? First there is

from the perspective of industrial pro-

that are changing the global climate, as

business ecology, in other words the pro-

cesses, frequently called “human emis-

substantiated by the majority of scien-

duction of pollutants in operational pro-

sions” of CO2 . Carbon dioxide is not the

tific research. That there is evidence to

cesses. Or to put it a different way, the

only relevant substance, but the green-

the contrary, even if it usually comes from

documentation of emissions directly on

house gases in general that include meth-

studies financed by interest groups, lies in

the basis of measurements or indirectly

ane (CH4, natural gas), nitrous oxides

the nature of a pluralistic society and is

by derivation from other metrics such

not a problem in and of itself. The empir-

as consumption and allocation to organ-

inated hydrocarbons*. In other words

ical evidence supports clear conclusions:

isational units, processes, products, and

such as N2O (laughing gas), and fluorFigure: Emissions categories

CO2 Employee commuting Purchased goods and services Production facilities/ capital assets Business travel Leasing Operational waste generation Transport and distribution (upstream) Upstream energyrelated emissions

–– –– –– –– –– –– ––

CH4

N4O

–– District heating and cooling –– Steam –– Emissions from the generation of purchased electricity

PFCS

NF3 SF6

NFCS

–– Stationary systems –– Mobile systems –– Volatile gases

SCOPE 1

Franchise operations Investments Use of purchased products Processing of sold intermediate goods –– Leasing –– Transport and distribution (downstream) –– Disposal of sold products –– –– –– ––

––

SCOPE 2

purchased energy

SCOPE 3

upstream value chain

SCOPE 3 downstream

value chain

Source: EnergieAgentur NRW, http://www.ccf.nrw.de/navi/downloads/emissionsquellen/Emissions_Kategorien_Scopes.pdf

INSIDE

* Conversion into CO2 is necessary to express these quantities in CO2.

NEUTRAL FIRM

Klaus Glaser Global Portfolio Advisor and expert for corporate social responsibility at Raiffeisen KAG

services. This “carbon accounting” differ-

calculation based on overall consumption

this into account. One proven reduction

entiates between three emission scopes

in the economy. But this also opens up

method here is the “job ticket”, a free

under the common standards. Scope 1

great potential for discussion.

annual public transpor tation pass. And

emissions stem from sources within the company, such as internal heating and cooling systems or machines. These can clearly be assigned to a company. Scope

AVOID, REDUCE, COMPENSATE – IN THAT O RDER

another positive factor at present is teleworking, though the exact effects must still be evaluated. And the remainder, around 4 tonnes per person and year, is

But back to our company. Our parent

compensated for by a project that is be-

of power by the external suppliers, and

company Raiffeisen Bank International

ing conducted with the scientific suppor t

purchased electricity, heating energy,

has already been using carbon account-

of the University of Natural Resources

and cooling energy quantities are inter-

ing for over ten years and is constant-

and Life Sciences. This “neutralises” not

nalised. Scope 1 and 2 can now be added

ly refining the underlying database. It

only our energy consumption, but also

together and would represent the mini-

serves as the basis for the annual sus-

business travel. Does that mean we are done?

2 emissions occur during the generation

mum published CO2 data, but would not

tainability repor t, and thus for very high

go far enough. An imprecise component

ratings from external auditors. Raiffeisen

of carbon accounting that is certainly dis-

Kapitalanlage-Gesellschaft itself is one

No, we are just at the start of a long pro-

torted by redundant accounting is Scope

element, but a very specific element.

cess because we must also take a look at

3, the other emissions from upstream

As a specialised provider of investment

the emissions inventory of the investment

and downstream processes related to

portfolio. This would also be assigned to

the business activities. These are usually

funds, the operational CO2 footprint is

relatively low with primary sources being

Scope 3, just like the vehicle fleet sold by

emissions from suppliers, service provid-

office buildings and business travel.

an automaker as illustrated above, be-

ers, employees, and the sold products or

cause the assets are not owned by the

services. One clear example: The CO2

The office building is only a few years old

investment firm, but are only adminis-

footprint of the vehicles sold by an auto-

and meets modern environmental stand-

tered by it. We currently calculate such

maker are assigned to Scope 3 while the

ards. District heating and cooling and

footprints for our SRI funds and plan to

actual production activities are assigned

electricity from renewable sources make

roll this out for our complete portfolio of

to Scope 1 and 2. Scope 3 emissions

key contributions to avoidance and re-

around 200 funds. Another approach is

account for over 90% of the total for

duction. Additional improvements come

an externally calculated stress test of the

products such as vehicles and washing

from cutting back shor t-haul flights or

Paris climate goals that was begun very

machines, which opens up great poten-

replacing them with rail travel, and the

recently, but no results are yet available. It

tial for controversies. It is more difficult

increased use of telecommunications.

will not be possible to evaluate measures

to evaluate the CO2 footprint of govern-

Business travel, assigned to Scope 3, is

until such metrics are consistent and have

ments. What belongs to the government?

usually included in company sustainabil-

been proven. But we must tackle this

From a production perspective, the fo-

ity repor ts, but the impact of employee

key challenge. Now, because Raiffeisen

cuses would be on transport, agriculture,

travel to the workplace is often not – but

Capital Management is committed to be-

and industry. An alternative would be a

Raiffeisen Capital Management also takes

coming a credible, CO2-neutral company!

INSIDE