Eurolinx Sustainability Report: 2023-2024

EUROLINX

Sustainability Report

EXECUTIVE SUMMARY

Sustainability Strategy and Goals

Eurolinx engaged Cress Consulting to develop a sustainability strategy to guide the continued growth and success of Eurolinx in a sustainable way. A sustainability analysis was completed, including a materiality and stakeholder analysis, peer and competitor benchmarking to develop a sustainability roadmap with key three focus areas: energy use and efficiency, packaging and waste management. Goals were defined:

1. Reduce energy use and carbon emissions across the business

2. Improve visibility over modern slavery risk present in the value chain

3. Transition away from petroleum based plastic packaging wherever possible

4. Divert waste away from landfill through increased recycling

Carbon emissions and reduction opportunities

We found that the majority of direct emissions are related to the fuel consumption of owned vehicles, and indirect emissions coming from purchased electricity and the value chain, particularly with regards to general waste sent to landfill. There are opportunities to increase further energy efficiency, achieve 100% renewable electricity and improve the waste management and packaging at operations for public reporting.

Modern Slavery risks and statement

Preliminary modern slavery risks were identified for Eurolinx operations and supply chains, particularly regarding the type of employment arrangements and suppliers in manufacturing, transport, cleaning, and recycling sector. Manufacturing in China and Turkey represents the highest exposure to modern slavery. The next step is for Eurolinx to complete a comprehensive modern slavery risk assessment and engage suppliers with a Modern Slavery and Trafficking Supplier Questionnaire.

SUSTAINABILITY CONTEXT

An effective sustainability strategy will help Eurolinx sustain purposeful commercial activity. Detailing the why, what, and how of your strategy addresses risk management, articulates company value to stakeholders, and strengthens business continuity.

An opportunity to communicate:

• Formal and informal sustainability expectations are moving quickly

• Stakeholders seek integration of sustainability strategy into core business strategy & risk

• Focus on the issues that the business has a material impact on, and those issues with a material impact on it

• Material to enterprise value

Vision, values Targets (short, medium, long)

Clear baselines

Collaboration

Integration with core strategy

Environmental & social initiatives

Resourcing

SUSTAINABILITY AT EUROLINX

Meeting customer requirements and growing customer base

Long term security of social licence to operate

Meeting expectations for growth into new markets

Drivers for change

Shaping the public image of Eurolinx

Eurolinx’s current initiatives

Market Trends

• LED lighting

• Stainless steel recycling for damaged/returned goods

• Refurbished item resale

• Cardboard reuse

• Carbon neutral paper

• E-flyer advertisement

Cost reduction

Insulating Eurolinx from regulatory risk

• Minimising Printing costs

• Reducing transportation and double handling of products where possible

MATERIALITY ASSESSMENT

Potentially relevant issues were identified referring to international frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

Focus topics

Material sustainability issues Driver

Supplier

Screening

Sustainable materials sourcing, resource efficiency

Greenhouse gas emissions

Energy use, energy efficiency of products, energy source, logistics

Reasonably estimable economic and social impacts, reputational risk, disruption risk.

Energy efficiency and source of energy represent a cost saving opportunity for the business, contribute to sustainable development. Carbon neutrality is also a business opportunity to stay ahead peers and competitors.

Employees

Human & labour rights, OHS, diversity & inclusion, innovation

Packaging, waste, and circularity

Packaging materials, waste streams, recycling procedures, e-waste

Modern slavery

Fair pay, labour rights

Critical for internal problem-solving, motivation, and ideation. Loss of talented workforce represent an operational risk for the business and a challenge for business continuity.

Changes in practice to pre-empt legislative requirements and customer expectations.

Reputational risk, regulatory imposition threaten enterprise value and business continuity.

STAKEHOLDER ANALYSIS AND ISSUES

Climate change action

Description of efforts to mitigate climate change such as emissions reduction through efficient product sales, sustainable procurement policies, emissions offsetting, supply chain compliance with environmental laws.

Modern slavery risk

Evidence of integration of responsible procurement into supplier screening to avoid modern slavery and uphold human and labour rights and working conditions. A robust modern slavery statement should be in place.

Product circularity

Particular emphasis on regeneration of natural resources and transparency of strategies and policies in place to ensure avoidance of resource depletion, including virgin materials use and downstream product recycling capacity.

Employees

Evidence of clear occupational, health, and safety policies and procedures for all employees. Evidence of training and education programs for employees. Ensuring equality of opportunity for all backgrounds throughout the organisation. Customers must feel they’re engaging with a business that reflects the community in which they live.

Community support

How does the business give back to the community in which it operates to foster growth, equality, and wellbeing? Public disclosure across supported charities and respective figures.

KEY ISSUE MATRIX

PEER AND COMPETITOR BENCHMARKING

Understand the main topics and future challenges across several consumer goods sectors.

An input into material issue identification, determines current position in the market, and reveals potential opportunities.

Key takeaways:

• Varied quality of sustainability reporting

• Very different approaches to priority issues • Environmental issues dominate • Bigger firms focus on more issues

Energy efficient products

Social impact

The following chart was based on Eurolinx’s current sustainability initiatives and targets across multiple market segments.

Modern slavery Climate change

No public reporting of actions/plans in place

Actions in place, some reporting

Leading commitments and formal reporting on actions

TOP FOCUS AREAS AMONG PEERS

ORGANISATION CARBON INVENTORY

Eurolinx carbon emissions breakdown

Scope 1 79 tCO2-e, fuel for owned vehicles

3,546 tCO2-e

Scope 2 203 tCO2-e, purchased electricity.

Scope 3

3,264 tCO2-e, value chain emissions.

emissions equivalent to the electricity consumption of over 8000 Fhiaba 561L refrigerators running for a year.

Freight Waste

Warehousing Electricity

CARBON REDUCTION OPPORTUNITIES

Elements:

• 92% of organisation emissions are in the value chain

• Accuracy will be improved as data is improved (e.g., actual waste quantities and freight data from suppliers)

• Emissions reduction actions should focus on the most significant emission sources to ensure the greatest impact

• Engage suppliers to collect data

Emissions reduction opportunities:

• Installing solar panels at NSW WH/office site

• Purchasing 100% renewable electricity – GreenPower

• Origin Energy (NSW) - $4,180 additional cost (10% increased)

• Synergy Electricity (WA) - $1,460 additional cost (15% increased)

• Up to 10% scope 1 emissions reduction when used E10 for owned vehicles

• Improve waste management at the warehouse and office

SUPPLY CHAIN MODERN SLAVERY RISK

Legislation: The Modern Slavery Act 2018 requires entities with annual consolidated revenue of more than $100 million to report annually on the risks of modern slavery in their operations and supply chains, and actions to address those risks. Other entities based, or operating, in Australia may report voluntarily.

Market expectations exceed the legislative obligations. Stakeholders expect businesses to offer transparency across modern slavery in their supply chain and the mitigating measures in place.

Conducting a modern slavery risk assessment of your suppliers includes coverage of:

Worker protection Worker rights

Physical safety and security

Access to food, water, health care

Vulnerability to migration, displacement, conflict

Adequate payment

Cata Spain (BBB)

Arpa Cooking France (BBB)

Vestel International Turkey (B)

Midea, Jens China (CC)

Freight suppliers International

Fhiaba, ILVE, Galvamet, Meneghetti, Elleci Italy (BBB)

Least risk

Moderate risk

High risk

Source: Global Slavery Index 2018

Simfer Global, Ukinox Turkey (B)

Xing Bang, Qingdao Xinxing China (CC)

Veolia, Signet, COS, Cope Freight, M3 Logistics Australia (BBB)

Shun Xiang China (CC)

MODERN SLAVERY RISK

Risk categories in the Eurolinx operations and value chain

• Direct Eurolinx operational employment

• Manufacturing of appliances and electronics

• Manufacturing of machinery and parts

• Services involved in transport and logistics

• Subcontracted services, such as cleaning & waste

• Raw material extraction & materials manufacturing (e.g. plastics, metals, timber)

Common mitigation strategies

• Modern slavery risk assessment

• Supplier engagement and questioning

• Ethical sourcing training for procurement managers

• Modern Slavery Committee of internal senior leaders

• Development of a supplier code of conduct with minimum requirements for Eurolinx suppliers

Key risks in the Eurolinx value chain

• Exploitation and/or underpayment of workers in transport and logistics

• Inadequate labour rights in offshore services

• OHS conditions in overseas appliance manufacturing

• Forced labour, debt bondage, or poor working conditions in high-risk countries.

Relevant legislation and guidelines

• Modern Slavery Act 2018

• UN Guiding Principles of Human Rights

• Ethical Trade Initiative Base Code

• Responsible Business Alliance

• International Labour Organisation

MODERN SLAVERY STATEMENT

Eurolinx’s modern slavery statement should

• Set the intention to identify risks and associated actions/remedies

• Articulate its commitment to preventing modern slavery

• Address organisation and supply chain structure

• Discuss examples of high-risk areas for Eurolinx

• Appoint internal responsibility

• Explain its responsible sourcing ambitions

• Outline supplier code of conduct and screening questions

• Outline supplier screening due diligence process

• Describe auditing processes for high-risk suppliers

Next steps

• Revise the supply chain map

• Complete a robust modern slavery risk assessment

• Review the contractual arrangements of employees and no breach of law

• Formalise contractual arrangements with employees

• Engage suppliers with a modern slavery questionnaire.

• Develop a modern slavery learning module and an action plan to address modern slavery risks

• Monitor supplier modern slavery actions

• Continuous improvement and update the modern slavery statement annually with progress

• Solar PV - cost assessment

• Encourage energy saving behaviour change

• Identify products suitable for carbon offsetting

• Complete LED lighting upgrade

• Capture sales statistics by water & energy star rating

• Outsource warehousing to 3PL

• Measure energy and emissions savings

Packaging

Waste management

• Investigate alternate packaging solutions e.g., cornstarch plastic wrapping

• Engage suppliers/manufacturers to explore packaging alternatives

• Solar PV - installation

• Improve accuracy of emissions data

• Offer carbon offset option for product range

• Purchase renewable energy through GreenPower

• Publicise top rating appliances to guide sales

• Complete a climate risk analysis for operations and supply chain

• Monitor and report energy and emissions savings

Modern slavery

• Identify waste types in offices and WH

• Identify alternate waste providers

• Implement coloured office bins to segregate waste

• Reduce paper use and drive digitalisation

• Develop an employee learning module for sustainability

• Ongoing electronic goods recycling and reselling

• Trial and implement alternate packaging solutions

• Monitor supplier and manufacturer packaging improvements

• Define a waste measurement system

• Monitor and report on waste management improvements

• Use of recycled water – tank installation

• Use 100% recycled paper

• Develop a packaging disposal guidance video for employees

• Establish a system for donation of unsellable products

• Identify all suppliers and add to supply chain map

• Identify suppliers to be assessed of modern slavery risk

• Review contractual arrangements of employees

• Engage suppliers with modern slavery questionnaire

• Develop an employee learning module for modern slavery

• Define assessment criteria of likelihood and consequence

• Complete a comprehensive modern slavery risk assessment to identify risks and mitigating actions to be taken

• Formalise all contractual arrangements with employees

• Develop a Code of Conduct covering OHS requirements

• Develop modern slavery continuous improvement framework

• Update the modern slavery statement annually

CARBON REDUCTION OPPORTUNITIES

Linking sustainability ambitions with existing company vision and purpose

“Sustainability at Eurolinx means maintaining the highest quality product for our customers while reducing carbon emissions and waste in our operations.”

“Eurolinx understands the importance of providing quality and innovative technology, while also ensuring minimal environmental impact.”

“We strive to drive value both internally by maximising energy and resource efficiencies in our operations, and externally by offering customers stylish and quality innovation.”

“Eurolinx approaches sustainability with a ‘do first, report second’ philosophy.”

SUSTAINABLE DISTRIBUTION CENTRES

Sustainable distribution can reduce CO2 emissions, optimise resources, and save costs to make a tangible difference to Eurolinx operations.

Transition to digital – paper free picking with handheld digital devices for faster fulfilment.

Consolidation of shipment packing to improve efficiency

Review electricity sourcing and consumption

Truck idling policies at warehouse and EVs

Eco-friendly packaging –reusable, paper, or corn starch based plastic pallet wrapping

Zero waste and carbon offsetting

ALIGNMENT WITH THE SDGS

How Eurolinx could take action to contribute to the SDGs.

Issue

Packaging and waste

Energy efficiency of products

GHG emissions & air quality

Product circularity

Human & labour rights

OHS

Social impact & community

Business ethics

Supplier screening

Innovation

NEXT STEPS

• Allocate internal responsibility and resourcing to the 2024 initiatives stipulated in the roadmap

• Improve data accuracy of the carbon emissions inventory for the organisation

• Undertake a modern slavery risk assessment for Eurolinx operations and supply chains

• Engage suppliers with modern slavery questions to improve supply chain transparency

• Monitor and report the implementation of both sustainability roadmap and modern slavery actions