1. Strategic Analysis and Action

The company declares whether or not it pursues a sustainability strategy. It explains what concrete measures it is undertaking to operate in compliance with key recognised sector-specific, national and international standards.

Fenix Outdoor International AG has established a strategic Sustainability Management. Following political, social and environmental shifts is a core element of the work of the group's Chief Sustainability Officer, who took office in 2012. Regularly the CEO and the CSO meet to discuss relevant strategic adjustments in light of the latest sustainability developments.

Our companies see sustainable growth as a center piece of their economic strategy and strive to achieve this year by year. However, sustainable growth does not mean “growth at all costs”. It is seen much more as a growth inline with the Fenix Way Management Compass's® cardinal directions. Economically, also the margin should be maintained. In consequence, this approach hinders us from focusing on growth or turnover only. To do so, Fenix Outdoor has adopted a two-fold approach: organic growth based on a strong retail network and brands known for high-quality products, as well as expansion through the acquisition of additional outdoor brands. With the purchases of the American aparel brand Rpoyal Robbins we took additional steps towards our goals. With respect to the cardinal direction “nature” the focus lies on the reduction of negative impacts: be it the product per se that has a negative impact (e.g., gas burning stoves) or the way our operation works (e.g., lighting in stores; transportation of goods), or the input materials we source (e.g., organic or conventional cotton; recycled or virgin polyester). However, we are also addressing new challenges, such as micro-plastic, the search for less harmful chemicals used in durable water repellence or new, innovative solutions for membranes and soles. All entities have identified their material aspects and embedded those in their 2020 strategic plan.

When it comes to societal and social impacts, including human and labor rights, the nature of business determines the core material issues: for some it is the question of how to recruit and retain new staff or how to involve them without hampering progress. This is an issue in Europe while the adherence to the FLA and ILO principles is a matter of concern for those brands, operating in global supply chains. In general, all entities and managers address those issues in a way, adjusted and aligned to the local circumstances of their business model.

For more detailed information see CSR Report 2018, pp. 4-10


OPPORTUNITY AND RISK ASSESSMENT

In 2018, Fenix Outdoor profited from various opportunities: Fjällräven still increased global visibility and we extended our network into Latin America, Africa and various new Asian markets. There is still a very high demand for Kånken backpacks. Globetrotter’s house brand FRILUFTS is still very successful. In 2018, our own distribution center in Ludwigslust, Germany started to operate and we will start with a new B2C service center there by the end of 2018 to provide a everything from a single source solution for our customers..

2018 was still a year of political changes and uncertainties. The crises in eastern Europe and the Middle East, and also the trade issues between China and the US still pose high threats to stability and peace on a global scale.

Climate change remains a serious issue, and we see severe risks from the increase in extreme weather events. Those may impact our operations directly (interruption of transportation and communication infrastructure; impact on owned or contracted production sites etc.). With high concern we note the overall long-term changes in climate patterns and expect long-term effects on the functional demands and quality properties of certain product categories. All in all, the general economic outlook seems to be good.

Fenix Outdoor is following The Fenix Way and has signed the UN Global Compact. We are members of the Fair Labor Association (FLA), the Sustainable Apparel Coalition (SAC) and the Textile Exchange (TE). By membership in the European Outdoor Group and the Scandinavian Outdoor Group we align with our industry.

2. Materiality

The company discloses the aspects of its business operations that have a significant impact on sustainability issues and what material impact sustainability issues have on its operations. It analyses the positive and negative effects and provides information as to how these insights are integrated into the company’s processes.

In May 2017, we held our second Fenix Outdoor Stakeholder Roundtable. Experts and interested groups from various countries met in Stockholm to discuss Fenix Outdoor’s sustainability approach and agenda. It was appreciated that Fenix does not try to over-impress or over-communicate and gives a realistic and honest picture of where we stand; there was also acknowledgement of the diversity of areas we cover. Delegates also noted that we tend to extend the limit of what we can do and that we have identified and begun to address hotspots. The participants found that various Fenix Outdoor entities need to improve how certain areas, such as the consumption dilemma, are addressed and it was suggested that we should invest more resources in circular economy. Delegates recommended that we do not rely too much on external partners and develop our own functioning return system for all of our products. We were encouraged to find new business models – from rental via lease to second-hand offerings and to take a leading role in the development of the sustainability agenda. Compared to 2017, the materiality matrix did not change. The identified material aspects remain the same: as a company that has partly business in the textiles and footwear, the hard goods and the retail businesses, we face the typical supply chain challenges (social compliance, fair sourcing and production), climate issues (transportation and shipments; operations of stores), safety and functionality of the products and circularity. As an Outdoor company we have a highly socially and environmental aware customer base, being only loyal but also growing if we adress our material challenges in a transparent and reliable way.   We are planning to organizing another Stakeholder Roundtable in 2019. For more information about our MAteriality Matrix, please refer to the CSR Report 2018 and 2017.

As a start we integrated the SDG's into our overall management guidance - the Fenix Way. For the upcoming year we have to figure out our high impact areas and develop specific action plans for our different entities.

3. Objectives

The company discloses what qualitative and/or quantitative as well as temporally defined sustainability goals have been set and operationalised and how their level of achievement is monitored.

Fenix Outdoor reports the progress on individual indicator sets regularly in the annual CSR Report. The report follows the current GRI Standards criteria set. An index on the different indicators and the reference pages including comments are given in the back of the CSR Report 2018 (pp. 40-42).

The targets set in our report on the respective Fact Sheet pages and in our Fenix Way are on a fairly long-term basis, (2012 to 2020). Many of these targets will be broken down to more short-term goals to manage the timespan until 2020. However, this is done on the basis of individual companies with reasonable priority setting. Also the targets have different relevance for our brands within the Fenix Outdoor Group. Hence, they will be incorporated into each brand`s strategic documents according to each brand`s priority list. Some of the targets are nevertheless to be implemented Fenix Outdoor wide. From a risk assessment perspective, sustainability forms an important aspect in our business development. Climate change may influence market shares and product ranges in the long run. The impacts, however, will not significantly differ from those of our competitors and major other corporate actors. We envisage that through protective efforts and product innovations as well as adaptation strategies the risk can be managed. However, this does not mean that inaction and business as usual are options for the future. In concrete terms, Fenix has compensated and overcompensated  all CO2 emissions from own operations (offices, production, business travel, shipments, commutes), some supply chain operations (supplier's CO2e emissions in Croatia) and products (CO2 neutral cook stoves, gas and gas containers; CO2 neutral backpacks and partly garmetns). We are the only company who ever has done that. For Fenix Outdoor Cliamte Change remains the biggest challenge and it is our intrinsic wish to keep our impact as low as possible. Our materials choice has become more sustainable over the past years (according to the MSI/Higg Index suite) and we are winning awards for this change-over. If we want to protect our planet, we need to get to a circular business model, based on input materials that are renewable or/and recycleable. Our suplly chain is fully controlled regarding extreme labor rights violations (child labor, forced labor and alike). FLA has accreddited our system and we are among the leading companies workld-wide. We continue our path and set even more ambitions goals in the future.

In 2019 an updated version of the Fenix Way will be published, covering our 2020-2025 strategy and goals.

4. Depth of the Value Chain

The company states what significance aspects of sustainability have for added value and how deep in the value chain the sustainability criteria are verified.

In most cases we have long-term direct relations to all partners in the supply chain – from yarn producers via weavers and dye houses to manufacturers. The retail business is very different as they work with brands and hence they are not reflected in this criterion.

The supply chain of the different Fenix Outdoor entities reflects the independence and decentralized structure of our business. In general, all Fenix entities work directly with their suppliers; however, due to historical reasons but also because some entities are rather small, agents and intermediaries are also used. Some of our business lines are currently remodeled and streamlined, as we are working with new suppliers and discontinuing our relationship with others. In the apparel business, we do have a global supply chain (mainly Europe/Asia); as we produce shoes, compasses and stoves in own factories, we source raw materials in the USA, Europe and Asia.

Fenix Outdoor is proud of its long-term relationships with its business partners and will continue to nurture them. Not only do we build on trust and cooperation, we also feel that our partners are increasingly sharing our values and this makes us confident when initiating sustainability project or programs with them. In every relation, we try to improve our work on our high-quality products in terms of reliability, price policy and communication, as well as quality, environmental protection, and social standards. This is included in our evaluation procedure and we regularly check on how much a business partner shares our values and contributes to our sustainability mission. Through our mandatory code of conduct, additional guidelines such as the chemical guideline, regular auditing and our membership in the Fair Labor Association we are aware of potential problems and assist our business partners to approach them.

Please refer to our CSR Report 2018, pp. 27 - 33 for more details.

Key Performance Indicators to criteria 1 to 4