Sustainability Report 23/24

In Good Hands

@HESTRAGLOVES

@HESTRAGLOVES

HESTRA GLOVES

Sustainability Report 2023/24

Sustainability is staying true to ourselves. Words from the Magnusson family.

Hestra has been making quality gloves for 88 years. Now in its fourth generation of family ownership, the company remains committed to a sustainability approach based on long-term thinking and a values-based culture.

As we reflect on the past year at Hestra, we are grateful for the progress we have made throughout our value chain. Our mission as a family business, now in its fourth generation, remains clear: to continue the legacy of glove making by constantly improving our products, our knowledge and the way we manufacture and market our gloves.

A cornerstone of our sustainable business philosophy is a focus on product longevity. Our gloves are designed to last, providing our customers with enduring quality no matter where they are or what they do. Making a product that is in use for many years is the best way to minimise the environmental impact of each pair. At the heart of our commitment is the development of gloves with replaceable inner liners, which significantly extend the life of our products and save resources. In 2023/2024, 70 models, or 46.9% of all gloves sold, have this feature. One of our environmental goals is to increase this figure year on year.

Another key aspect of Hestra’s sustainability approach is the decision to produce the majority of our gloves in-house at its own factories. This year, we completed the integration of our fifth factory, a former handbag factory in Cambodia. Here, an experienced team from our Vietnamese factory trained their new colleagues in the art of glove making. This is an example of how we build and transfer knowledge within our businessand how we fulfil our mission to preserve and promote the art of gloves worldwide. Alongside our new Cambodia facility, we are also expanding our production capacity in Vietnam with a second modern factory building that will provide up to 700 jobs from early 2025.

We remain committed to our high standards and values that have defined Hestra for generations.

Owning our own manufacturing facilities gives us direct control over both product quality and the ethical and environmental conditions under which our gloves are made. It is also crucial to our ability to manage production and delivery times, which in turn is a prerequisite for more efficient - and sustainable - logistics. As a direct result, our transport emissions will decrease in 2023/2024.

We are also pleased to see that the long-term investment in our own renewable energy generation is starting to pay off. Our company joined a local wind power cooperative in Hestra, Sweden in 2011, and in 2022 we started installing solar panels on our factories. This financial year we met half of our electricity needs from our own power plants or shares in the cooperative.

Other key sustainability milestones for 2023/2024 include the expansion of our repair services, our work with UNHCR and the positive fact that over 70% of our leather comes from LWG certified tanneries.

As we move forward, we remain committed to our long-term approach and the high standards and values that have defined Hestra for generations. In this sense, sustainability for us means staying true to ourselves.

Anton, Jonas and Niklas Magnusson 4th generation, Magnusson Family

Gloves for every need

Our profile

Hands come first at Hestra. For almost 90 years, we have been developing gloves that provide warmth, protection and dexterity in the most varied conditions.

Martin Magnusson founded the family business in 1936 in the village of Hestra, Sweden. Here, in the midst of Småland’s forests, he converted the storage shed in the grounds of the family home into a workshop.and started making gloves for the local lumberjacks. Today, the company is run by the third and fourth generations of the Magnusson family. Hestra has a global presence and a range comprising of more than 600 different styles.

All products are still designed and developed at our headquarters in the small village of Hestra, Sweden, and

mostly manufactured in our own factories in Hungary, Vietnam, Cambodia and China. All leather, fabric, wool and other materials are sourced by our own organisation. This approach ensures a high level of quality in our products and processes, and allows us to better control the production chain.

In 2023/24, Hestra had a total of 904 employees, of whom 717 were women and 187 men, and a turnover of SEK 840 million. We produced 2.3 million pairs of gloves, sold through subsidiaries in Sweden, the USA, Norway , Denmark and Germany, as well as through distribution partners in more than 40 countries.

However, the focus remains on hands and gloves. And Hestra is still our home.

Our presence

PRODUCTION

GUANGDONG, CHINA

HAI PONG, VIETNAM

PHNOM PENH, CAMBODIA

RAKAMAZ, HUNGARY

SHANGHAI, CHINA

HESTRA HQ, SWEDEN STORES

OFFICES

COPENHAGEN, DENMARK

DENVER, USA

MUNICH, GERMANY

OSLO, NORWAY

COPENHAGEN, DENMARK

GOTHENBURG, SWEDEN

OSLO, NORWAY

STOCKHOLM, SWEDEN

SALES MARKET

EUROPE

JAPAN

NORTH AMERICA

OCEANIA

Our business divisions

Sport

The Hestra Sport collection includes hundreds of glove models. While that may sound like a lot, decades of experience have taught us that every hand, day and activity is different. This collection is designed in collaboration with freeriders, mountain guides, instructors and others who place the highest demands on their gloves.

Sport categories: Alpine skiing, cross country skiing, outdoor, biking, climbing, riding, running, golf

Professional

In 1936, Hestra founder Martin Magnusson designed gloves to help local lumberjacks work through the harsh Scandinavian winters. The guiding principles of quality materials, thoughtful construction and usercentred design remain our focus today. Our workglove range includes gloves for different professions with an emphasis on dexterity, protection and features designed for the task at hand.

Professional categories: Building & construction, garden, indoor/outdoor craftsmanship, electrical work, welding

Dress

In our world, even 0.1 millimetres makes a difference. For four generations, we have been dedicated to one thing: preserving and practicing the rare art of glove making by creating the world’s finest gloves from carefully selected materials. Today, Hestra offers a wide range of classic and on-trend leather gloves for men and women in a variety of styles, colours and price points.

Dress categories: Table cut, collection, sport classic

Table of contents

HESTRA & SUSTAINABILITY.....................10

Governance

Social responsibility

Enviromental responsibility

DESIGN & DEVELOPMENT......................25

Story: Many steps make a good glove

MATERIALS & SUPPLIERS.......................29

Story: Premium elk from Finland

PRODUCTION & LOGISTICS..................33

Our own factories

Story: A joint-venture for better gloves

SALES & COMMUNICATION...................39

Story: Points of reference

CARE & REPAIR.........................................43

Story: Resurrection at hand

APPENDIX...................................................46

Sustainability risks – overview Auditors’ report

About the report

8 out of 10 models carried over to the next season

> READ MORE ON PAGE 25

89% OF OUR GLOVES WERE MANUFACTURED BY FACTORIES AUDITED BY AMFORI BSCI.

> READ MORE ON PAGE 36

Expanding own renewable energy production by solar panels on our facilities.

> READ MORE ON PAGE 21

This sustainability report has been prepared by the Hestra sustainability team, Rebecka Markinger, in accordance with Chapter 6 of the Swedish Annual Accounts Act. It covers the operations and subsidiaries of Hestra, legally known as HESTRA-Handsken AB, in the fiscal year 1 May 2023 to 30 April 2024. The previous sustainability report was published September 2023. The Board has ultimate responsibility for the company’s sustainability reporting process and report. If you have any questions or comments, please contact Rebecka Markinger, Head of Quality and Sustainability, rebecka.markinger@hestragloves.se 89 %

72 %

72% OF OUR LEATHER WAS SOURCED BY SUPPLIERS CERTIFIED BY THE LEATHER WORKING GROUP (LWG).

> READ MORE ON PAGE 30

1,600 gloves were repaired in our repair centres and are ready for new adventures.

24,743 replaceable liners prolonged the life of 24,743 gloves.

> READ MORE ON PAGE 44 > READ MORE ON PAGE 44

A helping hand for refugees: Our cooperation with UNHCR.

> READ MORE ON PAGE 19

Responsible sales: Guiding people to the right gloves

> READ MORE ON PAGE 39

In Good Hands

Hestra’s sustainability framework, In Good Hands, is based on the company’s purpose, values, routines and processes, which have evolved since the company was founded in 1936. Today, it outlines our commitment throughout the value chain.

THE BASIS OF OUR APPROACH

Sustainable corporate governance – Systematic sustainability management, based on values, responsibilities, policies, international standards and partnerships (page 12).

Corporate social responsibility – Good working conditions and well-being both in own factories and among suppliers, fostering competence development, striving for gender equality and social engagement (page 16).

Corporate environmental responsibility – Minimising the environmental and climate impact by producing gloves in a responsible way, switching to renewable energy, consuming less electricity and optimising logistics (page 20).

SUSTAINABILITY FOCUS ALONG THE VALUE CHAIN

Design & development – Developing quality gloves with longevity and functionality, by continuous development and thorough evaluation of materials (page 25).

Materials & suppliers – Long-term collaborations with selected partners, based on our code of conduct and policies for chemicals and animal welfare (page 29).

Production & logistics – Manufacturing in our own factories is regularly audited for quality, environment and working conditions (page 33).

Sales & communication – Honesty, transparency and good guidance for the customer, selling quality gloves for real needs and offering a large number of carry-overs (page 39).

Care & repair – Extending the gloves’ life by providing care guides, offering replaceable inner gloves and liners as well as repair services (page 43).

MATERIALS & SUPPLIERS

HESTRA & SUSTAINABILITY

DESIGN & DEVELOPMENT

IN GOOD HANDS

CORPORATE GOVERNANCE SOCIAL RESPONSIBILITY ENVIRONMENTAL RESPONSIBILITY

PRODUCTION & LOGISTICS

SALES & COMMUNICATION

CARE & REPAIR

Legacy of responsible glove making

Sustainability, particularly in terms of quality, has been a natural part of Hestra’s business from the very beginning. When Martin Magnusson founded the company almost 90 years ago in the deep Swedish forests of Småland around Isaberg Mountain, he focused on a product that was really needed: durable gloves for the local foresters to protect their hands, day after day. Even back then, there was much of a sustainability mindset: the ambition to make a quality product that lasts, the conscious and economical use of resources, a strong responsibility to the family and the local community and, last but not least, the will to build a solid business for future generations by reinvesting in stable growth.

CREATING VALUE WITH VALUES

Today, our company is run by the fourth generation, and our mission is still to craft quality gloves – not just for foresters in Småland, but for all kinds of hands and needs in sport, work and everyday life. To this day, the headquarters remain in our home village of Hestra, Sweden while we operate our own factories and sales offices around the world. The local, family-run workshop has gradually evolved into a global family business. And the vision, the mission and the values that guide us today are clearly rooted in our heritage.

Our core value, the commitment to quality in terms of durability and functionality, is our biggest contribution to the environment, ensuring that our gloves last and do not need to be replaced every season. This goes hand in hand with Hestra’s approach to making long-term decisions based on continuity, sense and reason. And as a family business, we feel a strong responsibility to our employees, our stakeholders and the tradition of glove-making. Taken together, these values give us direction and help us make decisions that are both economically and ethically sound.

SYSTEMATIC SUSTAINABILITY WORK

At the same time, there is a systematic way to work with sustainability issues in all parts of the value chain. Responsibilities are integrated in the Board of Directors and the role of the Head of Quality and Sustainability, who is responsible for the implementation. Our Code of Conduct and other policies outline our ethical expectations of suppliers, which are binding. And by working with organisations such as the Leather Working Group (LWG), amfori BSCI, and ISO. Hestra commits to official standards that are regularly audited. Sustainable corporate governance keeps our company productive and impactful for the long term.

THE MAGNUSSON FAMILY

The values our gloves are made of

WE MAKE GLOVES THAT LAST

We design, manufacture and sell high-quality gloves. Over generations, we have refined our glove-making skills, but we still strive to refine our processes and products. It is about finding the right balance between materials, construction, production alternatives and marketing to provide the best products for our customers. We focus on the purpose of the products, ensuring the desired functionality and durability. This durability is also our greatest contribution to the environment and climate, as it reduces the need to replace products each season and the production of new materials. Our range of replaceable liners further extends the life and functionality of the gloves.

WE ARE A FAMILY BUSINESS

Hestra is 100% family owned. This gives us a special responsibility to our employees, business partners and customers, and for our impact on the environment, society and the local communities in which we operate. Hestra has its own factories and subsidiaries in different parts of the world, employing hundreds of men and women. We strive to provide all of them not only with a fair income and good working conditions, but also with a sense of belonging and purpose. Together we carry on the tradition of glove making and the legacy of previous generations. As a business partner, Hestra stands for reliability and integrity.

WE THINK LONG TERM

We seek to make decisions that we know will bring benefits in the longer term. Partnerships with customers, suppliers, business partners and employees are based on trust and are often long term. We are constantly reassessing and reviewing our products, fine-tuning details of styles carried over from previous seasons and adjusting processes to improve our operations. Our commitment to building a solid business for future generations gives us a long-term approach to business, where we make decisions that are financially and ethically sound, while honouring our brand and its legacy.

JONAS MAGNUSSON, PRODUCT MANAGER

ANTON MAGNUSSON, CEO

PINGHU FACTORY, CHINA

ANNETTE LIDÈN, REPAIRS SWEDEN HQ

Managing sustainability

MANAGEMENT GROUP

SUSTAINABILITY GOVERNANCE IS LED BY HESTRA’S CEO AND MANAGEMENT TEAM, WHO REPORT TO THE BOARD OF DIRECTORS. IN RECENT YEARS, SUSTAINABILITY HAS BEEN INTEGRATED INTO THE BOARD’S RESPONSIBILITIES AND IS ADDRESSED AT BOARD MEETINGS. THE APPOINTED HEAD OF QUALITY AND SUSTAINABILITY IS RESPONSIBLE FOR OPERATIONAL SUSTAINABILITY AND BRINGS TOGETHER THE COMPANY’S SUSTAINABILITY TEAM, WHICH INCLUDES REPRESENTATIVES FROM VARIOUS DEPARTMENTS.

Hestra’s stakeholders

Owner – The Magnusson family

Topics: strategic and active sustainability work, economic sustainability, good business ethics Dialogue: board meetings and owner meetings

Employees – Our colleagues worldwide

Topics: health and safety, competence development, anti-corruption, gender equality, employee rights and fair wages

Dialogue: staff appraisal, Hestra-News, intranet, departmental meetings, safety inspections and safety representative, international sales meetings

Legislators – Enforce laws and rules

Topics: situation compliance CSRD/ESRS

Dialogue: authorisation customs, law enforcement, general dialogue with the municipality

Customers – Buy our products

Topics: carry-overs, stable prices, production conditions, chemicals, social responsibility and human rights, climate impact, GHG calculation

Dialogue: meetings, complaints, digital tools, weekly reports, customer feedback, surveys, repurchase

Suppliers – Provide materials and services

Topics: secure and stable customer, long/stable business relationships, good working conditions

Dialogue: regular meetings, assessments, visits and audits (third party), trade fairs

End users – Apply our products

Topics: chemical management, product quality and price, social sustainability (human rights), reduced climate impact, GHG calculation

Dialogue: customer service, social media, events, complaints, website

Ambassadors – Represent/promote our brand

Topics: values-based work, credibility and competence

Dialogue: ongoing meetings, dialogue on product and material development

Nature – The environment we depend on

Topics: utilising the life cycle perspective, reduced resource use, own renewable energy production Dialogue: external monitoring (scientific reports, studies, etc.)

STAKEHOLDER ANALYSIS CONDUCTED IN SPRING 2024 TO IDENTIFY EXPECTATIONS AND DIALOGUES.

THE ICON REPRESENTS THE PRIORITY FROM 1-12.

Ethical business conduct

Our business relationships are built on mutual trust and a commitment to sustainable business practices. Ethical business behaviour is expected of all colleagues, suppliers and business partners, and our expectations are set out in our Code of Conduct, policies and guidelines.

Code of Conduct: Expectations for business partners and suppliers on social issues such as working environment, remuneration, working hours, etc. Based on amfori BSCI’s Code of Conduct and its 11 principles.

Chemical contract/RSL: Restricted Substances List (RSL), compiled by the Swedish Chemicals Group and the Textile Importers, based on REACH and other relevant legislation. Updated twice per year.

Animal welfare policy: Based on the five freedoms of animal welfare: Freedom from hunger and thirst, freedom from discomfort, freedom to express normal behaviour, freedom from disease, pain or suffering and freedom from fear and distress (page 30).

Other policies: Environmental Policy, Work Environment Policy, Employee Handbook including Gifts and Hospitality Policy, Equal Opportunities Policy, Alcohol and Drug Policy, Victimisation and Harassment Policy, Whistleblower policy (EU).

Partners & Standards

Swedish Chemicals Group: Provides knowledge on chemical issues and updates the Restricted Substances List (RSL) and our Chemical Contract.

Research Institutes of Sweden (RISE): Assists us with testing, certification, and research to ensure that we meet ISO standards within quality and environment.

UNHCR, the UN Refugee Agency: Protects and supports refugees worldwide. Our partner for glove donations and financial donations for refugees.

Leather Working Group (LWG): Promotes best practices in leather production. LWG certification is a global environmental and social standard.

Amfori BSCI: Promotes fair working conditions, based on international conventions; conducts regular audits to ensure compliance and improvement.

Swedish Textile Importers industry association: Gives us access to expertise in chemicals, product labelling, classification and more. Updates Restricted Substances List (RSL).

HESTRA MATSUOKA VIETNAM

Our social responsibility as a family business

When Hestra was founded in 1936, it supported the needs of a single family in the small village of Hestra. Today we employ hundreds of women and men around the world, supporting the needs of their families. Indeed, the sense of family remains strong among our colleagues, with many employees in our factories staying within the company for decades.

ATTRACTIVE WORKPLACES IN OWN FACTORIES

We know that our success depends on our ability to retain and recruit talented people with the right skills. Hestra is looking for dedicated, committed and competent people with a passion for gloves who can strengthen the company with their craftsmanship, expertise and enthusiasm. Our responsibility is to offer them challenging and fulfilling work with competitive salaries, attractive and safe workplaces, reasonable working hours and health care. Skills development is another important aspect that leads to both job satisfaction and added value.

In fulfilling our social responsibilities, it is a great advantage that we own the factories where most of our gloves are made. This allows us to have a direct influence on working conditions, build and transfer knowledge within the company and foster our corporate culture and sense of belonging.

Our close, long-term relationships with our suppliers, based on our Code of Conduct and international standards, also help us to ensure that our gloves are produced under safe and fair conditions.

A HELPING HAND

Hestra’s social responsibility goes even beyond our own employees or value chain. For decades, we have supported the community in our home village, donating to the local ski and sports club or charitable church organisations. We are also an official UNHCR-partner, contributing with both glove donations and financial donations to refugee aid work.

904 EMPLOYEES IN 9 COUNTRIES. THE MAJORITY WORKS IN OUR OWN FACTORIES AND AT THE HESTRA HEADQUARTERS IN HESTRA, SWEDEN.

VIETNAM

SWEDEN

CAMBODIA

HUNGARY

NORWAY DENMARK GERMANY

CHINA USA

PINGHU, CHINA

HESTRA HQ, SWEDEN

Fair working conditions

Operating our own factories helps to foster our corporate culture, keep the feeling of belonging and make sure that our gloves are manufactured under good working conditions.

Air conditioning, good lighting and daily cleaning routines ensure ideal working environments in all factories. We offer benefits including social security, lunches and performance bonuses. With annual safety inspections, accident routines and health checks every three years, we take care of the staff’s wellbeing.

Working conditions in Hestra’s factories in Hungary, China and Vietnam are audited by amfori BSCI. In 2023, one factory received an A rating (Hungary), and the other factories in Vietnam and China received a C rating. We aim to achieve at least B ratings in all our factories. The BSCI audits are important for us to identify areas for improvement.

One reoccurring challenge we face are seasonal variations, which can lead to overtime during certain periods. We aim to avoid peaks through better planning and regular dialogue between purchasing and factories (more on page 36).

13 PERFORMANCE AREAS ASSESSED VIA THE AMFORI BSCI SYSTEM

Social Management & Workplace Relations

1. social management system & cascade effect

2. workers involvement and protection

3. the right of freedom of association and collective bargaining

4. no discrimination, violence or harassment

Employee Well-being & Fair Practices

5. fair remuneration

6. decent working hours

7. occupational health and safety

Protection of Vulnerable Workers

8. no child labour

9. special protection for young workers

10. no precarious employment

11. no bonded, forced labour or human trafficking

Ethical Practices

12. protection of the environment

13. ethical business behaviour

Gender equality

Diversity is a challenge in the apparel industry and an issue we are committed to addressing. Traditionally, most seamstresses in the countries where our factories are located are female. A risk for our seamstresses is the ability to maintain a manageable workload that can be combined with family responsibilities. In our factories, 83 per cent are women.

Our head office and sales organisation are more gender balanced. Balanced teams with complementary skills and personalities benefit both the teams and the business. Gender pay gaps are reviewed annually and salaries are benchmarked against industry peers. In our head office, sales offices and stores, the ratio of men to women is 45 per cent to 55 per cent.

For the company as a whole, including the factories, the ratio of women to men is 79 per cent to 21 per cent. 7 out of 12 members of the Hestra head office management team are men, while the Hestra board of directors consists of one woman and five men.

EMPLOYEES

MANAGEMENT TEAM HESTRA HQ

Feeling of belonging

As a family business, it is important for us to create and maintain a sense of belonging among our employees. In all our units, local management has a specific mandate to organise team activities tailored to local and cultural conditions. Hestra Matsuka Vietnam, for example, organises annual trips with accommodation and team-building activities for all employees, Hestra Hungary has a family day once a year. Hestra Pinghu in China has inherited and developed welfare policies from the past, including care for retired employees and sick family members, and support for children’s education.

Active health care

The Hestra brand is associated with an active lifestyle and a passion for the outdoors. It makes sense that our head office supports and encourages outdoor activities. Employees are offered an annual contribution towards wellbeing activities and a health check every three years. We support participation in events such as the Blodomloppet running event and organise soup lunches and skiing on our local slopes at Isaberg. Hestra also takes care of the practical arrangements for employees participating in the Vasaloppet, Sweden’s legendary 90 km cross-country skiing event. With more than 7 years, the average length of service at Hesta’s head office is significally higher than the Swedish average of approximately 5 years.

EMPLOYEE ACTIVITY, PINGHU FACTORY

STAFETTVASAN 2024, SWEDEN

A helping hand

We are an international company with strong roots in our home town Hestra, Southern Sweden. Our social commitment extends both globally and locally in our surrounding community. We believe in giving back to society and making a difference where it truly matters.

On a global level, we have had a partnership with UNHCR for several years to support their important work for refugees. Through this collaboration, we have been able to provide support to the most vulnerable. During 2023/24, this partnership was expressed through a winter holiday campaign, where we donated ten per cent of our sales in our Swedish stores and online store to UNHCR during the winter holiday weeks. The campaign was not only a

monetary effort but also a way to raise awareness about the situation of refugees among our customers.

On a local level, our commitment is deeply rooted in the community of Hestra. We collaborate with Hestra SSK, the local ski and sports club, and support other initiatives aimed at enhancing the quality of life in our local area. By sponsoring youth sports, culture, and outdoor activities, we aim to strengthen community, inclusion, and vitality for our local community.

We are proud of our efforts and see social responsibility as a fundamental part of our corporate culture. By continuing our charitable initiatives, both globally and locally, we hope to make a positive impact and inspire more companies to do the same.

Our environmental responsibility

A NATURAL CONNECTION WITH NATURE

As a glove company with its roots in the Swedish forests and its main business in the outdoor sector, Hestra has an inherent connection with nature. Protecting it and minimising our impact on the environment and climate is therefore one of our most important responsibilities.

Above all, our total commitment to quality, which results in gloves for real needs that last for a long time, is the best way to save resources. Additionally, we aim to prolong the total lifetime of our gloves. In particular, we do this by developing more models with replaceable liners and increasing the number of sold liners, as well as by offering repair services and care instructions.

ENVIRONMENTAL STANDARDS AND CHEMICAL POLICIES

Hestra is committed to producing gloves under the best possible environmental conditions. All our own factories are or (in case of newly established facilities) will be ISO 14001 certified and fulfil the highest environmental standards.

When it comes to materials, our chemical contract and restricted substance list for suppliers make sure that none of our products contain substances that might be harmful for the environment. The leather that is processed in Hestra’s gloves comes from tanneries with strict and ordered handling of

chemicals and wastewater. 72 per cent of the leather comes from LWG-certified tanneries (page 30).

SAVING ENERGY & SWITCHING TO RENEWABLE SOURCES

Hestra is part of the fashion industry, which is known to be one of the world’s largest emitters of greenhouse gases. The industry’s supply chains, which involve the production and transport of materials, are a major source of these emissions. As consumers buy and dispose of clothes more quickly, emissions are increasing. This is why our commitment to making gloves that last is also important from a climate perspective.

The part we can directly control and improve is the energy used in our own operations – in our factories, headquarters, stores and subsidiaries, in transports – especially by minimising air transports – and travelling. Every year we take steps to reduce our energy consumption and switch to renewable energy sources that emit fewer greenhouse gases.

At the same time, Hestra is investing in its own production of solar and wind energy. The installation of solar panels is particularly useful for our factories in regions that have a lot of sunshine hours on the one hand, but high electricity consumption for air conditioning on the other, and where renewable sources of supply are often not available (read more on the next page).

ISABERG, HESTRA, SWEDEN

HESTRA & SUSTAINABILITY | ENVIRONMENTAL RESPONSIBILITY

Solar panels on our facilities

Hestra invests into the installation of solar panels. This is particularly useful for our factories in regions with many sun hours and high electricity consumption for air conditioning, and where renewable energy often is not available on the market. But even in Sweden, the solar panels on the newly constructed logistic centre will contribute to a more sustainable energy mix.

In service

Hestra Matsuka, Vietnam: Installed in 2021; produced 134,000 kWh in 2023 (27% of demand)

Hestra Pinghu, China: Installed in 2022; produced 77,000 kWh in 2023 (37% of demand).

Hestra Hungary: Installed in summer 2023; produced 11,000 kWh in 2023 (12% of demand)

Under construction

Hestra Warehouse, Sweden: Installed in spring 2024; will produce approx. 272,000 kWh

Planned

Hestra Vietnam new factory

Windpower investments

In 2010, Hestra joined forces with 30 local companies to form the wind power cooperative Egen Kraft. Today, the company operates three wind farms in southern Sweden and also facilitates the installation of solar panels at some of the partner companies’ sites. The electricity produced is fed into the grid and sold at market prices.

Hestra owns a 2.8 percent share, which corresponds roughly to the electricity consumption of Hestra’s head office and warehouse. Egen Kraft is looking to invest in new wind parks and extends the installation of solar panels to more partner companies. This will increase our contribution of renewable energy to the grid in Sweden.

HESTRA HUNGARY

HESTRA & SUSTAINABILITY | ENVIRONMENTAL RESPONSIBILITY

Energy balance

LOW ENERGY CONSUMPTION

To save electricity in our production, we invest in energy-efficient sewing machines and LED lighting. At Hestra’s head office, for example, we have upgraded the heating system to modern technology that uses less energy. In general, all Hestra facilities are very energy efficient and have low energy consumption.

In 2023/2024, total energy consumption increased by 12.7 per cent to 1,614,705 kWh. This is due to higher energy consumption in our production (+24 per cent) as a result of the integration of the new factory in Cambodia, which is expected to balance out over time. Other energy consumption in headquarters, stores and offices was reduced by 2 per cent.

ENERGY CONSUMPTION VS OWN ENERGY PRODUCTION

75 PER CENT RENEWABLE ENERGY

We are switching more and more to renewable energy wherever this is possible and available. Hestra’s head office already uses 100 per cent renewable electricity and the concept store in Stockholm about 30 per cent. Since this year, the Copenhagen store has also been powered entirely by renewable energy. In total, we have purchased 645,000 kWh of renewable electricity (+5 per cent).

Windpower production according to Hestra’s 2.8% stake in Egen Kraft

Energy production by our solar panels in Hungary, Vietnam and China Energy consumption in our HQ, offices, stores and showrooms

In 2023/2024, we produced a total of 780,259 kWh from our own solar panels and our shares in the wind power cooperative, which is more than half of our total energy consumption. This is an increase of 4 per cent compared to the previous financial year. The total amount of renewable energy produced and purchased is 1,203,772 kWh, which represents 75% of our total energy needs.

HESTRA CONCEPT STORE COPENHAGEN, DENMARK

Logistic challenge

GLOBAL SHIPPING STRATEGY

With production facilities in five different countries, four of which are in Asia, and sales markets all over the world, transport is a major challenge for Hestra, both economically and environmentally. Our international shipping strategy focuses on several key aspects to optimise our operations and minimise our impact on the climate.

Hestra relies heavily on imports from Asia, using both sea and air transport, with a strong preference for sea transport wherever possible due to its cost effectiveness and lower environmental impact. Due to the war in Ukraine, rail transport from Asia through Russia is not currently a viable option. In Europe, we use Euro 6 trucks for both export and import, which meet high environmental standards.

Our operations have seen positive developments in 2023, in particular with a significant reduction in the use of air transport. This results in significantly lower CO2 emissions compared to 2023 (- 46 per cent). Looking ahead to 2024, we anticipate increased shipping costs due to conflicts involving Houthi rebels. This will require us to adapt and find alternative routes or solutions to mitigate these costs.

OPTIMISING PRODUCTION AND LOGISTICS

Efficient production planning remains critical to optimising our transportation logistics and ensuring timely and costeffective shipping. Our key climate target is to minimise air transport, which is only possible if our gloves are produced in a timely and well-planned manner. In this respect, our new factories in Cambodia and Vietnam will enable us to minimise air transport by giving us greater control over production.

Our warehouse in Hestra remains a central hub for our operations in Europe, supporting our policy of operating within Sweden and serving the largest market in Scandinavia. Its proximity to Oslo is a strategic advantage, and maintaining strict quality control is a top priority.

We are collaborating with Geodis to enhance our climate performance. This includes plans for future container transportation using electric trucks, although this initiative will take a few more years to fully implement. The Port of Gothenburg is becoming more restrictive, necessitating strategic planning for our shipments to ensure compliance and efficiency.

NEW WAREHOUSE, HESTRA HQ, SWEDEN

ELLINOR SEDIG, PETRA ARNESSON, CARINA MOLLSJÖ, DESIGNERS, HESTRA HQ, SWEDEN

High-quality gloves that stand the test of time

When creating a new glove, our top priority is to deliver high quality and longevity, while also focusing on comfort and more sustainable manufacturing.

DURABLE GLOVES IN TIMELESS DESIGN

At Hestra, we design gloves of high quality, durability and functionality. Our products are made to meet real needs: to warm and protect peoples hands and to give dexterity in varied environments and activities. We strive to develop gloves that can be used for many years, which includes the selection of highly-durable materials, the repairability of our products and the replaceable inner glove that prolong a glove’s lifetime. Even the aesthetic design including colours and other visual details is intended to be timeless. This long-term philosophy has a significant impact on the environmental footprint of our products and company.

CAREFUL INNOVATION AND INTRODUCTION OF NEW DESIGNS

Design at Hestra is very much about many small steps and improvements. 80 per cent of the range is carried over from one season to the next, and often no more than 2–3 new colours are introduced each year. This has many benefits: Stability for our suppliers, more manageable production, less waste, quality improvements, and less need for our retailers to clear out and replace their stock each season.

THOROUGH EVALUATION OF MATERIALS

In general, we favour leather, wool and proven synthetic materials that can enhance the longevity and performance of a glove. Elements considered in the material selection process include material composition and sustainability performance. Functional performance is tested in laboratories, both in-house and at accredited third-party laboratories. Among other things, we simulate abrasion by rubbing the material against an abrasive surface in the Martindale machine. The sustainability evaluation is based on factors such as water consumption, chemical use and proximity between supplier and factory. We aim to replace materials with more sustainable (e.g. recycled) alternatives. A key requirement is that the quality and durability is better than or at least equivalent to the original material, and that the recycled fibres come from verifiable sources.

When we introduce a new product, it is after careful patternmaking and comprehensive testing. Prototypes are thoroughly scrutinised, both in the design studio and in the field, sometimes with assistance from our network of experts – professional skiers and bikers, mountain guides and other outdoor experts. Field testing is unparalleled when it comes to determining whether gloves will perform in real-life situations and withstand the demands of heavy use.

REPAIRABILITY AND REPLACEABLE INNER GLOVES

With the right care, materials, seams and features, our gloves can last for many years. But in the long run, intensive use inevitably leads to wear and tear, even on the most durable of our products.

That is why we take repairability into account right from the design stage. This makes it easier to replace damaged or worn parts. An important goal is to create more and more models where the inner glove can be replaced while the main glove remains in use (70 models in 2023/2024, read more in the Care & Repair section).

DESIGN & DEVELOPMENT

ODEN NUBUCK

Errors with a purpose

Hestra has had a very low percentage of warranty claims for a long, long time. In 2023/2024, we had 0.47 per cent complaints in relation to the total number of gloves delivered. This figure is representative of the situation over the past years.

Complaints provide valuable insights into how the products are used. Through them, we can also understand weak spots and limitations with certain materials or constructions. If any issues are recurring, we try to address them for future production – often through changes in design or materials. Images of the faulty products are also shared with our suppliers, to spread learning and to ensure that the issue is properly addressed.

Product warranty claims are handled by our claims department in Hestra. The most common complaints relate to seams and materials. When possible, we strive to repair the faulty glove, otherwise, we replace it with a new one for the customer.

Monochrome model - Now also in black

The idea was simple: to take the classic Army Leather Heli Ski glove and produce it as sustainably as possible. From this, Hestra’s design team developed Mono Wool, which reached stores in the fall of 2023 and received a SOA Award for sustainable design during the ISPO Outdoor Show in Munich. Mono Wool is sewn in a new, undyed version of Hestra’s virtually indestructible Triton fabric, now made from recycled polyamide. Additionally, all plastic details are made from recycled nylon. Chrome-free goat leather is used on the palm and fingers, and the removable lining is in undyed wool. This “recipe” gives the glove a monochromatic expression that sets it apart from the crowd. However, the light textile has its limitations. Dirt becomes more visible than on darker fabric, and many appreciate that a glove’s colour contrasts with its white surroundings (a dropped glove is easier

Chromefree leather in skiing favourite

For some ski, outdoor and casual gloves, we are exploring alternative ways of tanning leather without using chromium. While chromium salts efficiently transform raw animal hides into durable leather, they can also pose health risks to workers and the effluent needs to be properly treated.

Ecocuir is tanned using synthetic agents to prepare the hides. These substances play a vital role in preserving the skin’s elasticity and water resistance, preventing any degradation. When done correctly, the result is remarkably similar to that achieved with chrome salts. Chromium-free bovine leather such as Ecocuir shows only a slight reduction in elasticity, which does not compromise the functionality required for the intended use of these gloves.

Ecocuir is used in the Philippe Raoux Classic, named after a legendary French mountain guide we had the pleasure of meeting in the 1990s. It is a long, highly functional glove designed for dedicated skiers, offering a similar level of durability and protection as chrome-tanned ski gloves.

to find, at the very least).

Therefore, we have now also introduced Mono Wool in black. And as our stock of “regular” Triton fabric runs out, we will transition to recycled polyamide in all new Heli Ski models going forward. Considering it is one of our best-selling ski gloves, the proportion of recycled materials in the collection is likely to increase in the future.

PHILIPPE RAOUX CLASSIC

The

Many steps make a really good glove

Ergo Grip Active glove is one of Hestra’s bestsellers, but even great designs have room for improvement. As always, when Hestra develops products, we do it in small steps. Yet the latest update might be described as a double leap.

“Every time I draw, I try to create something better while also respecting what we already have,” says Petra Arnesson, responsible for design of sports gloves at Hestra. The design department at Hestra works with gradual development, known in technical terms as “Incremental Design.” A current example is the Ergo Grip Active model, which was launched in 2013 and has become one of Hestra’s top sellers.

“Ergo Grip Active had a much better fit than many other models. The price was somewhat higher; I remember customers asking about it in the store, but it is also more complicated in construction and sewing,” says Petra Arnesson.

In the outdoors, the newcomer quickly became popular. The fit and features played their part, but a strong visual certainly contributed as well. A sister model launched at the same time, with a waterproof CZone membrane, never achieved the same impact. The basic glove provided sufficient weather protection with impregnated leather and a windproof, water-repellent upper fabric.

MORE SIBLINGS IN THE FAMILY

After a few seasons, Ergo Grip Active was joined by another sister model for riding.

“Ergo Grip Equestrian has the same construction and fit, but a more discreet design in black and brown to suit the equestrian world’s aesthetics.”

Fast forward a few more years, and Hestra released yet another sister model, now with a wool terry lining. “A bit warmer and a bit cozier,” as Petra describes

Ergo Grip Active Wool Terry. THE BESTSELLER GETS A NEW RECIPE

Recently, a change in the actual “recipe” has been brewing in the design department. It concerns the material of the Ergo Grip Active glove’s upper, where Hestra is switching suppliers.

“We have found a material with equivalent functional properties to Infinium but with a PU-based membrane. We want all our materials to be PFAS-free, and unfortunately, Infinium has a PTFE-based membrane,” says Petra, adding that the transition will happen gradually as existing stocks run out.

The second adjustment refines the construction of the fingertips, providing a slightly more streamlined shape.

”A customer reached out with a suggestion to improve the feel at the fingertip of his glove, proposing an adjustment that could enhance the design. I had noticed a similar detail myself, and his insight inspired us to refine the construction,” Petra recalls. Together with the factory in Vietnam, Petra came up with a solution where the fingertip gets two new, barely noticeable seams that provide a more rounded fit.

“It’s a so-called silent improvement; an adjustment we don’t make a big deal out of. But it makes a big difference for the feel around the fingertip,” says Petra Arnesson.

ERGO GRIP ACTIVE WOOL TERRY

ERGO GRIP EQUESTRIAN

JONAS MAGNUSSON, PRODUCT MANAGER

ANTON MAGNUSSON, CEO

The best materials, from trusted suppliers

Hestra’s suppliers are an extension of our business. We nurture long-term relationships and work with carefully selected companies that share our values of quality and responsibility.

LONG-TERM COLLABORATIONS

We mainly buy leather, wool and synthetics. In total, Hestra has around 90 suppliers worldwide of which roughly 20 are tanneries that supply us with leather. The range of these companies is wide, both in terms of size and cultural background. But all have one thing in common: the sense of quality and orderliness.

Building up long-term relationships, based on personal contact, mutual respect and reliability, is a crucial part of Hestra’s sustainable business philosophy. Many of our partners have been with us for decades. We meet them regularly, both on-site at their factories and at trade shows, and maintain an ongoing dialogue. New materials and qualities are often developed in close collaboration. This exchange of knowledge is valuable for both sides and strengthens the relationship.

CODE OF CONDUCT

At the same time, there is a systematic basis for our business relationships: Hestra’s Code of Conduct outlines our expectations towards our suppliers. The Code is based on the amfori BSCI Code of Conduct and refers to international conventions such as the Universal Declaration of Human Rights, the Rights of the Child, UN Guiding Principles for Business and Human Rights, OECD Guidelines, UN Global Compact and International Labour Organisation (ILO) Conventions. All business partners are asked to sign and comply to the Code of Conduct. Suppliers of leather and wool must also commit to our animal welfare policy (page 15).

MONITORING OUR CHEMICAL FOOTPRINT

Subcontractors have to comply with the European chemicals legislation REACH and local laws in each country of production.

Our Restricted Substances List (RSL) is compiled by the Swedish Chemicals Group and the Textil importers. It is updated twice a year, and distributed to all suppliers. To ensure that the suppliers comply with the RSL, and to identify potential problems at an early stage, we test the materials at accredited laboratories of our choice. These tests are carried out one to three times a year using standardised methods. Materials used in a larger number of products are tested even more frequently.

SUSTAINABLE LEATHER SOURCING

We aim to source high quality leather with an appropriate sustainability performance. Leather tanning poses specific risks in terms of potential exposure to hazardous chemicals that can affect workers’ respiratory health. These chemicals can also affect local water quality, so we require all leather suppliers to have water treatment plants.

To ensure that we avoid exposure to these risks, we maintain close contact with all our tanneries. This includes on-site visits and verification of the suppliers’ certifications. An important step was to join the Leather Working Group (LWG), which assesses the environmental and social performance of tanneries. In 2023/2024, 72 per cent of the leather supplied came from LWG-certified tanneries (read more on page 30).

CHALLENGE OF COLLECTING CONSISTENT DATA

Hestra systematically assesses quality and delivery accuracy, supplemented by regular material testing at accredited laboratories. Beyond that we are working on routines to collect consistent data from all our suppliers to be able to identify the climate impact and other effects of our materials. In order to comply with the upcoming CSRD requirements, we will prepare for gathering more detailed climate data from our suppliers.

MATERIALS & SUPPLIERS

LWG certification

One of the main certifications for tanneries is the Leather Working Group’s (LWG) audit certification, which assesses the environmental and social performance and compliance of tanneries. Hestra joined LWG in 2020 and we encourage suppliers to do the same. The proportion of leather purchased from LWG-certified suppliers increased from 60 percent in 2021/22 to 72 percent in 2023/24. A success that shows that our close partnerships in the supply chain can make an impact and contribute to a more sustainable leather industry.

Phasing out PFAS

Hestra has been working for several years to phase out PFAS/PFCs, which can be harmful to humans, animals, and the environment. For a long time, the focus has been on removing these from impregnations and, to the greatest extent possible, using shell materials with membranes other than PTFE (Teflon).

WR impregnations: On the textile side, we have been using a PFC-free impregnation – Bionic Finish Eco – for most of our textile materials since 2013. An exception has been some lightweight water-repellent materials, which we are now gradually phasing out (see below).

For leather, we previously encountered challenges in replacing water-repellent impregnations with PFCs at two tanneries. However, these challenges have been resolved, and all leather purchased from the 2023/24 season onwards features PFC-free treatments. As our inventory of traditionally treated leather diminishes, we will transition to the PFC-free leather, which will be fully integrated into production during 2024/25.

Wind and water resistance: We have been using PFC-free alternatives such as CZone in most of our waterproof models for many years. The exception has been with certain fabrics used in specific models within our Alpine Pro and Cross-Country collections. For Cross-Country gloves in particular, we are currently replacing water-repellent materials with PFC-free alternatives and will gradually transition to the new fabric.

Our main supplier of membranes has recently introduced an innovative material known as ePE, which is completely free from PFCs. As soon as it becomes available in the market, we plan to thoroughly evaluate its suitability for integration into our waterproof models.

1 2 3 4 5 5

Freedoms of Animal Welfare

Hestra’s leather and wool suppliers are required to adhere to our animal welfare policy, which is based on the internationally recognised ”Five Freedoms of Animal Welfare”:

Freedom from hunger and thirst: ensured by providing easy access to fresh water and a diet that maintains full health and vigor.

Freedom from discomfort: achieved by providing an appropriate environment, including shelter and a comfortable resting area.

Freedom from pain, injury, or disease: ensured by prevention through rapid diagnosis and treatment.

Freedom to express normal behaviour: provided by offering sufficient space, proper facilities, and companionship with animals of their own kind.

Freedom from fear and distress: guaranteed by ensuring conditions and treatment that avoid causing mental suffering.

All the leather we purchase is either byproducts from the food industry or sourced from wildlife conservation efforts.

WOMENS W.S. BREEZE

Premium elk from thoughtful production

One of Hestra’s suppliers, a Finnish tannery, has demonstrated remarkable dedication in creating a modern and thoughtful system for recovering and processing the hides of culled elk. Despite their efforts, challenges such as a declining elk population and climate change have emerged as new threats.

“Our elk leather is exclusively sourced from the hides of elk that have roamed freely in the wild. Every part of the hide is utilized, leaving nothing to waste,” says Maarit, who is sales director at the tannery. The company is family-owned in several generations. Representing the current owners is Pasi as head of the tannery, while his brother manages an essential side business: treats for dogs.

“At our tannery, we methodically sort the hides upon collection. Those suitable for leather production undergo tanning, while the remainder is repurposed into chew bones and dog treats. Even the hair residue is collected and contributes to biogas production,” he explains.

Reflecting on their journey, Pasi recalls how his mother initiated contact with local hunting clubs in the 1990s, seeking to repurpose elk hides that would otherwise decay in forests.

“Initially, it was on a small scale. The hunters lacked the means to preserve the hides.”

Today, the company collaborates closely with hunting clubs across Finland and Sweden, utilizing a dedicated truck to collect raw hides from all over the Nordic regions.

A CONTROLLED PRODUCTION PROCESS

Despite adhering to high production standards, challenges persist.

“The Nordic elk population has significantly declined. Controlling the number of elks is necessary for keeping the population at a healthy level. In the early 2000s, the Finnish government issued approximately 90,000 hunting licenses annually. Today, that number has decreased to 31,000 in Finland,” explains Pasi.

”Nevertheless, elk leather is truly exceptional.”

Moreover, the warming climate has led to an increase in insect populations, with their habitats expanding further north. Moose flies pose a significant nuisance to elks, their bites penetrating the skin and causing damage, reducing the availability of high-quality leather suitable for gloves.

As a Finnish company, it undergoes regular inspections by government agencies to ensure compliance with stringent occupational health and safety regulations. All chemicals used are REACH compliant, and the tannery operates its own wastewater management system.

To compensate for the diminished access to elk hides, Pasi and his team has initiated production with local wild whitetailed deer skins.

“Nevertheless, elk leather is truly exceptional. With its softness, lightweight yet durable texture, and excellent insulation properties, it provides unparalleled comfort,” adds Maarit.

Good gloves come from good workplaces

Hestra operates five own factories and has a selected number of external manufacturing partners. We aim for quality and high ethical production standards for our gloves. PRODUCTION

MANUFACTURING 70 PER CENT IN OWN FACTORIES

Hestra currently has factories in Hungary, Vietnam, China and Cambodia. It is in these countries that we find the knowledge, craftsmanship tradition and skilled people qualified to sew Hestra gloves to the high quality we strive for. In 2023/24, we focused on integrating the new glove factory in Cambodia (taken over at the end of 2022) into our business and to establish and build up another facility in Vietnam (read more on the next page).

Owning our factories gives us greater control, facilitates production planning and helps us to build up and keep knowledge within the company. Another important aspect is that we are able to directly exert influence on our working conditions, environmental impact and, of course, quality.

This reduces our risk exposure, but it also presents challenges as each employee needs a stable workload. It is therefore important for us to balance workloads throughout the year and between factories.

comprehensive audits. All Hestra factories, except the new one in Cambodia, are members of the organisation and are audited regularly. Our factory in Hungary received an A rating, which means the factory is exemplary, while the factories in Vietnam and China received a C rating. Our target is for all factories to achieve a B rating.

In 2023/24, 89 per cent of our gloves were produced in factories audited by amfori BSCI and we aim to increase this percentage. Common areas for improvement include working hours, insurance coverage and social management systems.

In addition to our factories, we have a limited network of selected external manufacturing partners that account for around 30 per cent of our production. These relationships are characterised by long-term commitments.

IMPROVING SOCIAL PERFORMANCE WITH AMFORI BSCI

Our membership of amfori BSCI is a crucial part of assessing social conditions, both within partner organisations and in our own factories. Amfori BSCI works to improve social performance in global supply chains and conduct

Some products are made in smaller factories or studios that may not currently have the resources to join amfori BSCI. However, these partners must still meet our supplier requirements. Visiting them regularly, we do also get a picture of the working conditions on-site.

ISO CERTIFICATION AND ENVIRONMENTAL STANDARDS

With our commitment to quality and environmental safety, it is only natural that both our headquarter and Hestra’s factories are ISO 9001 and ISO 14001 certified. Environmental stewardship and compliance are prerequisites for our operations. Hestra adheres to the precautionary principle and we always stay abreast of changes in environmental legislation.

The plan is to have the Cambodia factory BSCI audited in Q4 2024 and ISO certified within the upcoming years.

& LOGISTICS

DEERSKIN PRIMALOFT RIB

Our own factories: A global family company

HESTRA HUNGARY KFT - HUNGARY

Founded by Hestra in 2011

CEO: Krisztián Tenke

Location: Rakamaz, Hungary

Hestra’s share of ownership: 100%

BSCI-rating: A

ISO-certifications: 9001 and 14001

Number of employees: 99

The factory in Rakamaz, Hungary, was founded in 2011 by Hestra. The country has a strong tradition in crafting fine leather gloves and the factory is far ahead in its quality work. Roughly 100 skilled employees produce around 100,000 sports and dress gloves every year.

HESTRA CAMBODIA - CAMBODIA

Founded: 2022

CEO: Mr. Hamamoto Tomoyuki

Location: Phnom Penh, Cambodia

Hestra´s share of ownership: 100%

BSCI-audits: planned Q4 2024

ISO-certifications: planned

Number of employees: 129

Hestra’s newest factory since the turn of the year 2022/23. The staff that previously produced leather handbags was trained in glove sewing by its Vietnamese colleagues. The factory is located in an industrial park with good infrastructure, functioning sewage and, water treatment facilities and energy supply.

EUROGANT UNIVERSAL LTD. - CHINA

Founded in 1993

CEO: Chao Chung Hsi

Location: Guangdong, China

Hestra’s share of ownership: 50%

BSCI-rating: C

ISO-certifications: 9001 and 14001

Number of employees: 34

Hestra’s first factory abroad was established in 1993 in the Guang Zhou area near Hong Kong. Hestra Eurogant i known for its technical know-how. Approximately 34 experienced seamstresses and employees produce around 100,000 alpine ski gloves every year.

ZHEJIANG PINGHU HUASHEN LEATHER CO., LTD - CHINA

Founded in 1981,

CEO: Zhang Gang

Location: Shanghai, China

Hestra’s share of ownership: 50%

BSCI-rating: C

ISO-certifications: 9001 and 14001

Number of employees: 126

The factory was founded in 1981 and established a joint venture with Hestra in 2011. Located near Shanghai, the factory produces around 440,000 sports and fashion gloves every year. With a background in tanning, the factory contributes with important expertise in materials and production techniques.

PRODUCTION & LOGISTICS

Founded by Hestra in 2018; a second factory is established in 2023/2024

CEO: Teruhisa Yamamoto

Location: Hai Phong, Vietnam

Hestra’s share of ownership: 100%

BSCI-rating: C

ISO-certification: 9001 and 14001

Number of employees: 404

The factory in northern Vietnam was inaugurated in 2018 and is one of the world’s most modern glove factories. Over 400 qualified employees manufacture more than one million fashion and technical sports gloves every year. The factory has an excellent training system for staff.

Hestra is now establishing a new factory in Vietnam in the same industrial park, opposite the existing facilities. The construction started in the beginning of 2024 and will be finished by the end of the year. 500-700 new jobs will be created here and the first gloves will be produced in the beginning of 2025.

HESTRA MATSUOKA VIETNAM - VIETNAM

HESTRA MATSOUKA, VIETNAM

HESTRA HUNGARY KFT

HESTRA CAMBODIA

HESTRA MATSUOKA VIETNAM

EUROGANT UNIVERSAL LTD.

ZHEJIANG PINGHU HUASHEN LEATHER CO., LTD

89% of our gloves are produced in BSCI-audited factories

We confidently ensure that our gloves come from good workplaces with regular audits of working conditions and wages. The share of gloves from BSCI-certified factories has risen continuously in recent years, but fell slightly in 2023/2024, mainly due to the production in our new Cambodian factory which is not BSCI-certified yet.

Ramping up production in Cambodia

The start-up of production at Hestra’s factory in Cambodia is proceeding as planned. Glove production began at the end of 2022/23. During 2023/24, the factory has produced approximately 30,000 pairs of gloves with around 135 employees.

So far, the focus has been on 14 simpler models in our sports range. The next step is to expand the product portfolio and to introduce models requiring more advanced sewing techniques.

Our Vietnamese team continues to coach their peers and to fine-tune the process, but the factory is becoming increasingly independent. A BSCI assessment is planned for during 2024.

No. of produced pairs of gloves/month

Handling peaks and overtime

Our business has seasonal variations, with a large share of sales in the winter period. To meet demand and keep our factories busy yearround, we plan carefully and produce for stock in quieter periods. Despite this, overtime still occurs at certain times of the year.

During 2023/24, we have had more consistent production, partly due to increased production capacity and improved material availability. Although we still have peak seasons, we have been able to smooth out the peaks during intensive production periods.

More consistent production has also helped us reduce the proportion of air transport and increase the share of sea transport throughout the year.

FAIR FACT: Overtime is always voluntary. Employees receive full compensation according to their workload and working hours to ensure their legitimate rights and interests are protected. During periods of low production, they can take extended annual leave with 80 percent of their salary.

2023 / 2024

Leather and loyalty - About a collaboration building better gloves

Hestra has been manufacturing quality gloves outside Shanghai for over 40 years. In 2011, we joined forces with our Chinese supplier in a joint venture. Hestra Pinghu is a corporate story that combines Småland entrepreneurialism with Chinese craftsmanship traditions.

It all began when the Chinese economy opened up during the reforms of the 1970s. One of many new, privatized companies was the glove factory that would later be called Pinghu. Hestra was one of its first customers.

“Hestra and Pinghu have shaped each other for over four decades,” says deputy Managing Director Kathy Sun, who has been with the company since 1998.

Before Hestra entered the picture, the factory produced leather fashion gloves. Together with Hestra’s designers, the range was developed. The factory gradually began broadening its expertise within manufacturing of sports gloves, which required an entirely new type of fit and manufacturing method.

MANAGING COMPLEXITY

“Technical sports gloves have less give and are made from thicker material. The shape must therefore match the natural position of the hand, with the fingers always slightly curved,” explains Kathy, demonstrating with her own hand.

VALUABLE EMPLOYEES

Hestra Pinghu currently produces around 500,000 pairs of sports and dress gloves each year with 124 employees. The factory is certified according to ISO 9001 and ISO 14001 standards and is also affiliated with BSCI. Good conditions in the factory overall have contributed to a strong sense of loyalty among the employees. An example of positive measures is a fund that was established when the company was privatized so that the employees could benefit from the company’s profits:

“The fund is used today to support our employees and their families. For example, by helping out in the event of illness or to support children in their education,” Kathy explains.

“This makes production of sport gloves different and, in some aspects, more complex. Dress gloves, on the other hand, are based on a flat hand, with backhand and palm pattern quite similar, using soft, thin leather that moulds to the shape of the fingers.”

Dress gloves pose other challenges, involving a wide range of leathers – so to be able to produce both glove types you really have to be able to master two entirely different sets of skills, explains Kathy. With its deep knowledge of leather and manufacturing, Pinghu has continued to play a key role in Hestra’s product development. Material issues are still discussed with the team in Shanghai, even though the production itself may take place at another Hestra factory.

TIRIL MITT

But everything is not always easy. One challenge that unites many companies in textile production is high workload during certain periods. Overtime is the main reason the factory has received a C rating from BSCI.

”Every year, we have early discussions with Hestra to schedule more production during the off-season, as well as implement other measures to reduce pressure during busy seasons,” says Kathy. It’s an ongoing process, and Kathy herself is happy to be a part of it.

”When I joined the company over twenty years ago, I appreciated the constructive way in which Hestra and Pinghu worked together,” says Kathy.

”Now, I am proud to have been able to contribute to Hestra’s growth. I believe that many of my colleagues feel the same – it’s an honor that stays with you for the rest of your life.”

Guiding people to the right gloves

Hestra’s gloves are available in over 40 countries worldwide, sold by a network of selected retailers, own concept stores and online sales. Our sales strategy is based on personal relationships, continuity and transparent communication.

A SALES ORGANISATION BUILT ON PERSONAL RELATIONSHIPS

When it comes to retailers and distributors, the key to a sustainable sales organisation is to maintain long-term relationships based on trust, reliability and personal contact. We work with our own representatives in Sweden, Norway, Denmark, Germany and the USA, as well as appointed local agents in all relevant countries. Face-to-face meetings at trade fairs, in our showrooms or during personal visits are important for understanding the local market and the stores’ customers.

LARGE NUMBER OF CARRY-OVERS AND STABLE PRICES

Eight out of ten models in Hestra’s range is carried over to the next season and no more than 2-3 new colours are introduced each year.

OWN STORES TO OFFER KNOWLEDGE AND PERSONAL SERVICES

Hestra operates its own concept stores in Stockholm (Sweden), Oslo (Norway), Gothenburg (Sweden) and Copenhagen (Denmark). These give us the opportunity to showcase our wide range, but also to interact with our customers face to face. This is where we offer glove expertise: helping customers make the right choice, giving care and other advice, or finding the right replaceable liners. We deal with damaged gloves, carry out minor repairs on site (where possible) or send them to one of our repair centres. Direct contact in the shops also helps us to understand customers’ needs and get direct feedback on our products.

At the same time, we avoid taking part in initiatives that promote excess-consumption. For example, Hestra does not participate in discount-driven sales events like Black Friday. Instead, we aim to guide our customers to gloves that they really need – or convince them to buy replaceable liners to extend the life of the gloves. This gives retailers a high degree of stability and continuity, making it sensible to stock a glove for next season rather than sell it at a lower price just to replace it with a new model a few months later.

ONLINE SALES: TRANSPARENCY AND GUIDANCE

With our e-commerce platform, we aim to provide guidance and clear information for each product, including facts about the materials and the factory where it is made, care instructions and clarification on which replacement liners are suitable for which products. This transparency helps our customers to make the right choices, reducing the number of returns and extending the life of their gloves. The principle of not promoting excess-consumption also applies to our own stores and Hestra’s e-business.

HELI SKI

New display material easier to recycle

During 2023/24, we introduced a new solution for the small plastic hooks used to hang sports gloves in stores. Previously, the plastic hook was attached to the header card’s cardboard with a metal rivet. In the new solution, both the hook and the rivet are made of 100 per cent recycled material, reducing the dependence on fossilbased resources, and making them easier to recycle.

The implementation of the new hooks began at the end of 2023/24 and will continue over the coming year until the existing stock is depleted.

Beyond communication: How our ambassadors contribute to sustainability

It is one thing to claim that our gloves are long-lasting. It is a completely different thing for our users to understand how diligently we work to achieve that. Laboratory tests are part of the development process, but these might - truth be told - be somewhat difficult to grasp.

This is where our ambassadors come in. Firstly, because they assist us with long-term tests in their everyday lives as climbers, alpine racers, freeskiing profiles, and cyclists. Their feedback is essential for understanding how materials and constructions function in practice. And not only that: it is crucial when we need to communicate the durability of our products.

WARMTH

MOBILITY

Improved online guidance

DURABILITY

WATERPROOF YES

A system of symbols and infographics helps our customers find gloves with the right features in our online store. During 2023/24, we continued our efforts to improve product information to guide customers to the right purchase.

It can be as specific as an ad with Sara Hector telling the story about how a new alpine racing glove came about. Or, in meetings with retailers, we can explain how mountain guides Johanna Stålnacke and Alexander Nordvall work with our climbing gloves. Or simply, a great picture of XC profile Elna Dahlstrand wearing our gloves on the trails around Hestra, Sweden.

If there is anyone who truly puts gloves to the test, it is our ambassadors. We thank them for their support.

VOSS CZONE MITT

ELNA DAHLSTRAND - MTB

JOHANNA STÅLNACKE - MOUNTAINEERING

Points of reference

How can we serve our customers and understand their needs in the best possible way? And how can we share advice that helps extend the life of our gloves? A key here is our Hestra Concept Stores, which serves as both stores, showrooms, and places for service and repairs.

”We tell the customer: if anything happens to your glove, we’ll take care of it,” says Viktor Östrup. He is Retail Operations Manager and responsible for Hestra’s four physical stores.

For Viktor and his colleagues, it is not about selling as many gloves as possible, but helping the customer finding just the right one. With many purchases happening online, the physical store plays an even more crucial role.

”A size 9 in a ski glove isn’t the same as a size 9 in a classic dress glove. That’s why it’s important for our customers to be able to come in, try them on, see our full range, and get help finding a model that matches their needs. If we don’t have the right size in-store, we’re happy to recommend other nearby stores that have it in stock.”

REPAIRS ON-SITE

Once a customer finds the perfect pair, the goal is for the gloves to be used for as long as possible. In this regard, Hestra stores play a crucial role, with in-house seamstresses available at every location to offer smaller repairs that extend the life of

the gloves, except for the store in Copenhagen.

”We repair broken seams at no cost, and we sew in new linings for a fee,” says Viktor Östrup.

Repairs that require more technical equipment are sent to one of Hestra’s service centres, either in Småland or Hungary.

DETACHABLE LININGS ”COOL” AMONG TOURISTS

Today, the stores receive more questions about sustainability compared to a few years ago, Viktor explains. He believes this is partly because awareness has grown generally in society, but also because Hestra consistently emphasizes longevity and replaceable linings.

”Among our foreign customers, detachable linings attract attention; many of them think it’s a cool feature to prolong their Hestra gloves’ life,” says Viktor.

Although many Swedes already know that linings can be replaced, it is still common for customers to come in with wellused ski gloves that they believe are worn out.

”But if the leather looks good, we’re happy to sell a lining instead of a new glove. And I usually ask if the customer has tried washing the lining; that can bring back volume to fibers that have been compressed during use. That often goes a long way if the lining isn’t too worn out.”

HESTRA CONCEPT STORE STOCKHOLM, SWEDEN

ANNETTE LIDÉN, REPAIR SERVICE, HESTRA HQ

Long live the glove

Quality in the form of durable materials, good design and craftmanship is a prerequisite for the longevity of our gloves. But how you care for them is as important. We strive to prolong product life with care advice, repair services and replaceable liners.

MAKING IT EASY TO TAKE CARE OF THE GLOVES

Many of the materials Hestra works with are naturally durable. But weather and wear can dull seams or treatments and dry out leather. We therefore provide clear instructions for our customers on how to treat and wash their different types of gloves or how to replace liners. Guides and tutorials can be found on our website and we regularly conduct clinics with store staff to emphasise the importance of glove care, repairability and replaceable liners.

For outdoor leather gloves, we often include a tube of our own leather balm with each pair of gloves. A simple giveaway that highlights the importance of glove care to extend product life.

REPLACEABLE

LINERS PROLONG THE GLOVE’S LIFETIME

One of our key sustainability efforts is to offer gloves in which the inner part can be replaced and varied. With replaceable liners, the user can easily replace an inner glove when the material (e.g. wool or g-loft) has lost its warming qualities and also vary the insulation of the glove for different activities and temperatures. This extends both durability and functionality, resulting in fewer gloves being purchased (and manufactured).

Even for fashion gloves, a worn-out liner can be replaced. In our concept stores in Stockholm and Gothenburg and in our headquarters in Hestra, we have seamstresses who can sew in a new liner, sometimes while the customer is waiting. In other concept stores and at our retailers, gloves can be handed in for a liner replacement.

HESTRA REPAIR CENTRES AND WARRANTY

Increasing the number of models with replaceable liners is therefore one of our environmental goals. In 2023/24, 21 per cent of our sport gloves models has a replaceable liner, 47 per cent of all gloves sold had replaceable inner parts and we sold 24,743 liners.

Hestra offers a three-year warranty on all gloves. If a glove breaks during this time due to a manufacturing fault, we will repair it free of charge. We also offer a repair service after the warranty period, usually for a reasonable fee. Smaller repairs can often be done directly in our stores.

More advanced repairs are carried out at our repair centres in Hestra and Hestra Hungary. Gloves with technical materials - such as membranes or heated gloves - are sent to the repair centre at our Hungarian factory. Here, we have specialised equipment for opening, re-taping seams and replacing electronics in heating coils, for example. Today, we repair approx. 1.600 gloves a year in the Hestra repair centres.

Demand for repairs is increasing, which we see as a sign that our users are becoming more aware of their consumption habits and moving away from the throw-away attitude of the past. We want to expand our repair service in the future and market it more explicitly than we do today. Our ambition is to make more people aware of the opportunity to extend the life of their gloves.

CARE & REPAIR

ARMY LEATHER TUNDRA

Selling many linings rather than one more glove

Hestra started selling replaceable inner gloves in the 1980s. In 2023/24, 21 per cent of our sport models can be equipped with a new liner when the old one is damaged or has lost its insulating properties. This can extend the life of a glove significally which in turn is the best way to minimise its impact on climate and environment. One of Hestra’s sustainability goals is therefore to increase the number of models with replaceable liners and the amount of sold liners.

Our repair centres

Rakamaz, Hungary: equipped to handle all types of repairs, including those that require opening up the entire glove and working with technical materials. It also has special equipment for repairing membrane gloves and heated gloves. It currently processes approx. 150 gloves per year.

Hestra, Sweden: specialises in handling simpler repairs such as sewing undone seams and repairing holes and damages in materials. The repair centre currently processes approx. 600 gloves per year.

Concept Stores: in our concept stores in Stockholm, Gothenburg and Oslo, smaller repairs and liner replacements can be fixed on site. In 2023/24 634 pairs were repaired.

Wheat Ridge, Colorado, USA and Sechelt, British Columbia, Canada: the overseas repair services are carried out by expert leather craftsmen from a company with nearly 90 years of experience. Typically handling undone seams, the two centres repaired 250 gloves during the 2023/24 period.

Lotion and care preserve your glove

Ensuring the longevity of our gloves starts with proper care. By drying gloves at appropriate temperatures, you can prevent cracking and preserve their quality. Properly hanging them to dry helps avoid unpleasant odors and mold, while protecting leather from the elements ensures it remains supple and durable over time.

We have long offered a leather care product for our sports gloves, Leather Balm. We include a sample with the purchase with most leather sport gloves. Now, we have also developed a nurturing lotion for our fashion gloves made of fine leathers such as nappa and deer skin. Leather Lotion quickly absorbs to moisturize and preserve the suppleness of the leather.

Meanwhile, we persist in our efforts to educate users, store staff and retailers about glove care. We have been publishing the Glove Guide in print form for many years and also provide it digitally on our website. These simple instructions of love and care significantly extend the lifespan of our products.

CARE & REPAIR

Resurrection at hand

Even when a glove shows signs of heavy use, with holes, bruises, and other forms of abrasion, it may still have life left in it. At Hestra’s repair center, we restore several hundred pairs of gloves each year, including those with damages that seemed irreparable.

”Nearly all gloves can be repaired,” says Krisztián Tenke, managing director at Hestra’s factory in Rakamaz, Hungary, which serves as one of Hestra’s repair centres.

The factory produces some 40+ Hestra glove models, but the repair service team does not limit themselves to these.

“We take pride in our team resolving issues with 57 different models in 2023, with only 19 of them being models we have in our production. This ongoing improvement initiative involves not only repairing gloves but also enhancing our skills in the process.”

Every year, a few hundred pairs pass through the nimble fingers of Hestra’s repair team, either in Hungary or at the Hestra headquarters in Sweden. Whether sports gloves or fashion gloves, all are welcome, says Krisztián:

“Here in Rakamaz we have the equipment to mend Gore-tex and technical materials, and to fix issues with heated gloves, for example.“

“We take pride in our team resolving issues with 57 different models in 2023”

NEW LIFE FOR THE OLD WORKHORSE

A seasoned pair of Fält Guide gloves is a living (or rather, halfdead) example of the types of tasks the repair team takes on.

The gloves have a hole on one thumb and the leather in the grip is heavily worn. Additionally, the seams on the fingers are starting to come apart. The gloves have served in the outdoors for many years, but lately, they’ve mostly been called upon for various heavy-duty tasks.

The gloves are likely manufactured in the factory in Hungary. But this particular pair doesn’t end up with Krisztián Tenke and his team; instead, they find their way to Annette Lidén, who oversees Hestra’s repair service in Sweden.

With a practiced eye, she examines the gloves.

“This won’t be a problem. I’ll stitch up the seams and replace the leather on the torn thumb. There will be a colour difference, of course; the worn leather has its patina, whereas the repair will be white,” she explains, adding:

“The gloves are very worn in the palm as well, but they’ll likely hold up for quite a while longer, so it’ll suffice.”

With Annette’s repairs and a new lining, the gloves are ready for a fresh start.

“It feels great when you notice how satisfied the customer becomes. Usually, the price is not an issue either; people appreciate being able to continue using their gloves.”

Managing sustainability risks

Sustainability risks are business risks. This matrix provides an overview of sustainability related risks. It shows areas and impacts on the company – as well as the policies, guidance documents, monitoring and working routines to handle the different risks.

RISK AREA DESCRIPTION

Based on the different areas of legal requirements Short description of the risk Start from the company’s value chain

ENVIRONMENT & CLIMATE

CHEMICALS Potential harm to the environment/ human beings from harmful chemicals, e.g. due to poor chemical management and/or insufficient wastewater treatment, which may affect local water quality.

x x x HIGH

Including policies/guidance documents and review/monitoring

TRANSPORT Seasonal products affect the possibility of completely abandoning air transport; the continued war in Ukraine reduces the possibility of transport by train. Leads to increased climateimpacting emissions from transport. Other risks related to transport/ freight are logistics disruptions in the form of container shortages, pricing, capacity.

CLIMATE CHANGE Negative impact on our business due to climate change and its consequences.

SERIOUS EVENTS SUCH AS FIRES, NATURAL DISASTERS, ETC.

HUMAN RIGHTS

Can lead to a lack of production capacity in our factories and independent producers.

x x x HIGH

Systematic method for supplier assessment, members of amfori BSCI, sets requirements in terms of REACH + local legislation, self-assessment form for new suppliers, updating/sending of updated RSL and renewed chemical contracts (2 times/year), review of certificates etc., various test methods for testing materials in laboratories (1-3 times/year depending on quantity), procedures if RSL is violated, site visits. Onsite water treatment plant, tools for risk assessment of health and safety risks related to chemicals. Continuous work with LWG (Leather Working Group) with our leather suppliers.

Policy/guidance document: Environmental policy, RSL (Restricted Substances List) covered by REACH, Chemicals Contract, Code of Conduct, Animal Welfare Policy, precautionary principle applied. Certified according to ISO 14001.

GANTT schedule to ensure that all deadlines are met, as well as ongoing contact with freight companies and with factories, and timely booking of shipments. We currently monitor the transport of gloves through emission reports received from our freight forwarders.

Policy/guidance documents: Environmental policy. When planning deliveries, transport by sea is the first choice when planning inbound deliveries.

Work to review the impact of climate change on our activities will be reviewed in the coming years.

x x x LOW

VIOLATIONS OF HUMAN RIGHTS Risk of poor protection of workers' rights in production countries (e.g. migrant workers exploited in some way due to their vulnerability). Risk of discrimination, child labour or sexual harassment x x x

Having several factories in different countries reduces the risk. Safety stocks in place in case something happens. Health and Safety is included in amfori BSCI audits, implying an ongoing process. Fire protection routines and ongoing training initiatives, both in the office and in the factories.

Members of amfori BSCI, regular audits at the factories, systematic work with other suppliers based on the Code of Conduct. Owning our factories gives us greater control and the opportunity to influence aspects such as environmental impact, labour conditions and human rights.

Policy/guidance documents: Code of Conduct

RISK AREA DESCRIPTION

Based on the different areas of legal requirements Short description of the risk Start from the company’s value chain

STAFF

WORK ENVIRONMENT (PHYSICAL AND MENTAL HEALTH)

Risk of incidents and accidents, especially in production, but also of mental health problems among employees due to stress/high workload. x X

OVERTIME IN OUR FACTORIES Risk of overtime during certain periods.

COMPETENCE SHORTAGE Difficulties in retaining and recruiting staff with the right skills.

ANTI-CORRUPTION

CORRUPTION As we operate in several highrisk countries, there is a risk of corruption through, for example, giving/taking bribes. There is also a risk of corruption when establishing new factories, e.g. during the authorisation process. x X X HIGH

OTHER

LEGAL AND CUSTOMER REQUIREMENTS Due to rapid developments in the field of sustainability, there is a risk of missing legislative updates and stakeholder requirements and thus not meeting requirements/ expectations. x x LOW

Including policies/guidance documents and review/monitoring

HR manager appointed, clear job descriptions, leadership training, procedures for incidents and accidents in the operating system. Annual safety rounds where risks are identified and action plans are developed, followed up at management level, interviews, health checks on new employment every 3 years. Whistleblowing system in place within EU.

Policy/guidance documents:

Work environment policy, whistleblowing policy, staff handbook, equality policy, alcohol and drug policy, victimisation and harassment policy.

Planning our activities in the best possible way to avoid unnecessary peaks and long periods of overtime, regular dialogue between the purchasing department and the factories.

Policy/guidance documents: Code of Conduct and audits by amfori BSCI

In all countries, Hestra factories have established their own procedures to maintain a sense of belonging among staff. Benefits: Social insurance, performance bonuses, lunches, family days and excursions.

Training for new employees. Regular training on work environment, health and safety, labour law conditions, amfori BSCI etc., salaries in line with or above national minimum wages. At Hesta HQ, annual performance reviews are conducted to plan employees’ work and development, individual goals monitored and revised.

Members of amfori BSCI, systematic work with suppliers based on requirements and regular audits at the factories. Regular meetings with suppliers, on-site visits. Establishment of new factories in close co-operation with Business Sweden and the Swedish Embassy.

Policy/guidance document:

Code of Conduct, Guidelines on Gifts and Hospitality are included in the Staff Handbook. Whistleblowing policy for EU operations.

Law monitoring. The business system manager updates the legal list and keeps management informed of sustainability risks. Members of the Swedish Chemicals Group to follow developments in chemicals legislation.

Hestra HQ is ISO certified according to ISO 9001 and 14001, the factories have their own certifications.

Auditor’s report on the statutory sustainability report

To the general meeting of the shareholders in HESTRAHandsken AB, corporate identity number 556633-9668

ENGAGEMENT AND RESPONSIBILITY

It is the board of directors who is responsible for the statutory sustainability report for the financial year 2023/24 and that it has been prepared in accordance with the Annual Accounts Act.

THE SCOPE OF THE AUDIT

Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

OPINION

A statutory sustainability report has been prepared.

Jönköping, 19 September 2024

Öhrlings PricewaterhouseCoopers AB

Daniel J. Lützen

Authorized Public Accountant

ABOUT THE REPORT

PHOTOGRAPHERS: Kent Malm, Hestra Gloves and others.