An Aditya Birla Group Commitment 39 03 Responsible Stewardship “Vita sectiist dolore offictotam, acia nobis nusciis qui quatusam aut adit rehenes vent aut minctem re vollabo. Et prem quo ea quam sed ex enis dipis dolorepernam quam dellut aliquias parciis nim lacitatem reiume illentis etur, suntem inis aut occa” BUILDING A SUSTAINABLE SUPPLY CHAIN Insider View Insider View The environmental footprint of the fashion industry is huge. The production process involves extensive use of chemicals, large amounts of water and often uses pesticides. Given the increasing scarcity of resources on one hand and rising environmental consciousness on the other, it is apparent that control over the value chain and building a resilient supply chain will be of utmost importance in order to ensure the longevity of our business. As part of achieving this, we have developed and rolled-out our Vendor Code of Conduct, Laundry Audit System and are in the process of formulating a Chemical Management System that will result in substituting chemicals that are harmful to humans by those that are safe to use and also have a lower environmental footprint. Managing our supply chains Sustainable fashion supply chains call for the use of more sustainable raw materials, efficient manufacturing and distribution processes, and involving consumers to reduce the environmental footprint of the product during its usage. This requires us to work actively with upstream suppliers with regard to good agricultural practices, use less water/ pesticides/ energy across the cotton production process and also manage the way we achieve the finished product through our factories and distribution networks. We are adopting a Life Cycle Approach (LCA) for designing new products. This helps us understand better the environmental footprint of our products and to proactively work towards mitigating and reducing their impact. Adopting the use of organic cotton, ensuring fair wages and decent working conditions for workers, keeping abreast of the latest advances in technology and making use of these to make our supply chain more agile and responsive, to building strategic partnerships with key suppliers – each stage is crucial to us achieving a sustainable supply chain and securing the future of our business. Primarily due to the unsustainable farming practices and irrigation requirements for cotton, the main raw material used in the apparel business, the fashion industry is one of the largest consumers of water. We are engaging with the Better Cotton Initiative (BCI), an organisation committed to reducing the environmental footprint of cotton through better farming techniques that use significantly lower quantities of water and pesticides. We intend to source an increasing percentage of our cotton requirements from more sustainable sources over the next few years. Being prepared for the future Through workshops and scenario planning we are looking at the trends and innovations that may potentially disrupt our business so that we can proactively plan our responses now. Digital innovations are changing not only the way in which we produce and consume fashion, but also the way in which fashion functions in our daily lives. The implications on our supply chain management systems, our operations and the future of our business are significant. For example, 3D Printing is shortening lead times for producing items and also considerably lowers the wastage of raw materials. Fabric for clothing no longer needs to be rolled out by the meter, then cut and stitched but is rather printed and ready to wear. While 3D printing of fabric has not yet been commercialised, if successful, it would lead to potentially huge reductions in shipping and transportation needs, our material and resource usage, waste production and our supplier portfolios. In order to understand the possible impacts to our business we have formed alliances with product innovators and are strengthening our initiatives in this space. We have partnered with Strategies and have been successful in prototyping and testing at this stage. To manage our commitment to be a leading sustainable business, we have identified “no-regret” actions that we will take immediately to position ourselves to deal with possible scenarios that may unfold in the years ahead. Many of these initiatives have already commenced and are at various stages of implementation. Securing and sustaining our supply chain is crucial to our business and I am confident that we are on our way, through our innovations and our partnerships, to managing the risks and opportunities accordingly. Ashish Dikshit, CEO Retail