SUSTAINABILITY REPORT 2014 / 2015
SUSTAINABILITY REPORT 2014 / 2015 CONTENT
Foreword 5
ABOUT ODLO
8
The Brand The Company Facts & Figures
8 8 11
CORPORATE SOCIAL RESPONSIBILITY
12
CSR Vision CSR Strategy Overview Odlo’s Code of Conduct CSR Overall Responsibility Goals and Achievements 2014 / 2015 Odlo CSR Initiatives
12 12 14 15 18 19
SOURCING AND PRODUCTION
23
Sourcing Strategy Production
23 24
MONITORING
27
Monitoring Instruments Monitoring by Country
27 28
CORPORATE ENVIRONMENTAL RESPONSIBILITY
32
Materials & Technology Transport
34 34
Conclusions and Outlook 35
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About Odlo
Foreword by Daniel Mulvie
We see sustainability as an opportunity. If we can deliver great products that combine sustainability, function, design and value then we will succeed. The world is in the middle of a revolution with many people realizing that the products that we create can help us to perform in our active lives and be sustainable. As a business we believe that sustainability will lead to long term profitability and ultimately a better Odlo and a more satisfied customer. We want to have a positive impact on the world. We also want to act responsibly to encourage businesses who work in developing countries to learn from our mistakes, so they have the possibility to create their own clean industrial revolutions using renewable energy and resources from the beginning. At Odlo we see that sustainability can help to reduce our overall cost structure, we want to offer better products at a lower price whilst still keeping our commitment to move toward the payment of a living wage. Odlo is about creating a better active life for our consumers and also those people within our supply chain. We have been part of the FWF for the last 7 years and we have shown a commitment to move towards the payment of a living wage and improving the conditions of the workers in our factories. We do not underestimate our social impact: we employ over 400 people in our own factories in Portugal and Romania and influence the lives of hundreds others at our partners and suppliers around the world. We want to ensure that the workers who make our products can move towards a life where they have the same opportunities as the people buying our products. In
the future we want to increase our impact on the lives of those people within our supply chain by integrating our CSR goals throughout our network. All brands face the challenge of sustainability and their responsibility to the planet. We are looking for new ways to be resource and energy efficient and to deliver something new to the market. By bringing our seamless underwear into a new dimension we have managed to win a Gold ISPO award last winter which recognized our commitment to sustainability and innovation. We are very proud of these developments and we will use this success as a foundation for the future. The sustainable journey moves on! Daniel Mulvie Head of Sourcing & Product Development
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About Odlo
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About Odlo
ABOUT ODLO The Brand
The Company
Brand Philosophy Odlo is recognised as the inventor of functional sports underwear and the three-layer principle. The company has over 70 years of experience as a leader in technical innovation and is committed to producing the very best in performance sportswear for people who love sport – at all levels and in all weather conditions. The brand inspires people to get out and enjoy sport and to constantly set themselves new challenges. Odlo is uncompromising in its pursuit of the highest standards of performance, comfort and quality.
Always one step ahead The Odlo brand stands for high-performance, high-quality sportswear. What started out as a small business in 1946, with two sewing machines and a vision of manfacturing top-quality sportswear, has gone on to become one of today’s major success stories. As a Swiss company with Norwegian roots, Odlo is fully committed to the principle of layering and to the use of new, innovative fabrics and fibres developed using the very latest in processing technology.
In Europe, Odlo is the undisputed market leader in the area of sports underwear and has also been very successful with its Highline (Outdoor), Running, X-Country, Bike and Tec Shirt ranges as well as its children’s clothing and accessories. Odlo currently has wholly-owned subsidiaries in Switzerland, Germany, France, Austria, Belgium/Holland, Norway, the UK and China. Odlo’s products are also sold in 25 countries around the world.
As an organisation, Odlo combines a passion for sport with technical expertise and a thirst for innovation. Our collections have been developed and continuously improved by working in close collaboration with top athletes such as Dario Cologna (cross-country skiing), the Swiss-Ski Nordic Ski Team with Olympic Champion Selina Gasparin (biathlon), Simon Ammann (ski jumping), mountain bike World Champion Nino Schurter and the Scott-Odlo MTB Racing Team. History Odd Roar Lofterød senior, a keen sportsman, founded the Odlo company in Norway in 1946. It began by manufacturing underwear, but Odd Lofterød also developed some special training tights for his son, who was a member of a youth speed skating team. These tights were made from Helanca fibre and offered exceptional protection against the cold. In 1963, Odd Roar launched an improved prototype made of Helanca fabric – the very first high-performance stretch outfit specifically designed for cross-country skiers and speed skaters. By the time the Winter Olympics in Sapporo came around in 1972, 25 national teams were already competing in clothing made by Odlo. In 1973, the company launched Odlo Termic, the first fully synthetic performance sports underwear. In 1979, Odd Roar junior, who had grown up in this creative, entrepreneurial atmosphere, took over the reins of Odlo from his father. In 1986, Odd Roar Lofterød junior, together with the company’s Swiss business partners, set up Odlo International AG in Hünen-
berg near Zug (Switzerland). This became the new headquarters of the Odlo brand. One year later, the company launched its innovative new “Athletic Clothing System”, based on the threelayer principle. Over the next 20 years, Odlo continued to launch new product lines onto the market. In the mid 1990s, Odlo was ahead of its time when it introduced a programme that allowed its customers to return used Odlo products for recycling. At the turn of the millennium, Odlo achieved an major breakthrough in the area of performance fibres with the development of the “Effect” fibre. This allowed the launch of the first underwear to incorporate odour-reducing silver ions. Further innovations followed, including the universal, high-performance “Just One” T-shirt and the new “Cubic” all-season underwear. Odlo makes a point of continuously investing in the sustainability of its supply chain. Odlo Portugal, the company’s own manufacturing facility, is constantly improving and updating its technology. In 2003, the company opened a new highlyefficient distribution centre in Brüggen, Germany. In 2004, Odlo opened another manufacturing facility in Romania. As a result of the expansion of available capacity in Romania, Odlo Portugal was restructured in 2006 to act as a centre of excellence and innovation. In 2008, Odlo joined the Fair Wear Foundation, an international non-profit organisation set up to help improve working conditions in the textile industry. In the same year, Odlo also launched its high-performance, close-fitting Evolution sports underwear line and a new sports bra range. In 2011, a wide-ranging CSR development project resulted in the launch of “Evolution Greentec”, an integrated, sustainable fabric concept. It is the first seamless underwear range to be made from 100% recycled polyester that in turn can be totally recycled. In 2012, Odlo’s Supervisory Board of appointed the Swede Jonas Ottosson as the new Group’s new Chief Executive. In 2014, the new logistics centre in Brüggen was opened. For Autumn-Winter 2014 / 2015, Odlo is introducing “The new Odlo”: a contemporary, modern, high-performance sportswear and underwear collection for active people who demand the very best.
2015 Winner of Gold Award from ISPO for BLACKCOMB Odlo gives new impulses with EVOLUTION BLACKCOMB The principle of three layers – “The Art of Layering” – is the core competence of the Swiss sportswear manufacturer Odlo. The first layer especially, which is in direct contact with the skin, is crucial for the ideal sports outfit. It provides perfect temperature control, dries fast and offers reliable protection from the cold. As market leader in functional sports underwear, in autumn-winter 2015 Odlo stands out with a new generation of the trusted seamless underwear EVOLUTION. EVOLUTION BLACKCOMB WARM is available in a new, stylish design and provides outstanding functionality. With its modern camouflage and clever animalier all-over jacquard pattern, the underwear blends fashion with sportswear. By integrating Odlo’s own Greentec technology, 38% recycled polyester is used, which constitutes an important contribution to the company’s sustainability. Knitted function zones with flat seams provide additional thermal insulation at the lower back and the knees (thanks to the ribbed structure). The knitted mesh structure with flat seams in the back, under the armpit, the inside of the elbow and of the knee and over the bottom provides optimum ventilation. The new waistband of the EVOLUTION line was designed specifically for skiing. The waistline is lower in the front and cut higher in the back, which not only provides a younger look but also guarantees the perfect fit whatever the activity. As a new style, a facemask has been added to the trusted crew neck of the Odlo seamless range. Vibrant colours such as purple, pink and wine red in a trendy melange look for women and blue, orange and khaki melange for men make the underwear absolutely eye-catching.
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About Odlo
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About Odlo
Facts & Figures Headquarters
Odlo Sports Group AG, Switzerland, 6331 Hünenberg, Bösch 47
Brand established
1946 in Norway
Directors
Jonas Ottosson (CEO), Thomas Spiess (Supply Chain),
Claes Broqvist (Sales), Thomas Rast (CFO)
Employees 2014 / 2015
Total of 752 (FTE), of which 110 are employed at the head office in Hünenberg, Switzerland
Markets
Odlo’s subsidiaries in Germany, Switzerland, France, Austria, Belgium/Holland, Norway and China are responsible for the bulk of the company’s turnover. Odlo’s products are now sold in 25 countries around the world.
Core business
Odlo is a pioneer in the area of functional sports underwear and the three-layer principle and has almost 70 years of experience in the sportswear market. Odlo offers a comprehensive range of premium sportswear for every season.
Product segments
Odlo is the European market leader for sports underwear in the performance sportwear segment. The company has also developed a range of other highly successful collections including Highline (Outdoor), Running, X-Country, Bike, Tec Shirts, Kids and Accessories. Its market share for performance underwear ranges from 20% to 50%, depending on geographic location.
Point of Sale
Odlo products are available in over 4,500 sales outlets around the world, predominantly in specialist sports shops. Over 1,500 store-within-a-store outlets allow customers to enjoy the full Odlo retail experience. The Swiss company also runs its own Odlo stores.
Production
Odlo manufactures almost 68% of its products in Europe and the Middle East, primarily in its own factories. Odlo has modern manufacturing facilities in Portugal and Romania. 32% of Odlo products are produced in Asia.
Odlo philosophy
As a market and technology leader, Odlo is committed to producing the very best in performance sportswear for people who love sport – at all levels and in all weather conditions. Odlo is uncompromising in its pursuit of the highest standards of performance, comfort and quality.
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Corporate Social Responsibility
Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY CSR Vision Sustainable action has been anchored in Odlo’s corporate vision from the beginning: “We act with social and ecological responsibility.”The company’s three core values are responsibility, action and transparency and reflect Odlo’s philosophy.
CSR Strategy Overview The Odlo CSR Strategy defines ambitious goals, responsibilities and milestones. The CSR Strategy is an internal and confidential document, which is evaluated and approved by the Executive Board on an annual basis. The following extract provides an overview of its content.
We care As a high-quality Swiss company with a strong family tradition, sustainability is very important to us. We assume responsibility so that everyone can continue to enjoy sporting activities in nature well into the future.
The CSR strategy for the upcoming years highlights the following areas of focus:
We act We take small, specific steps, because we are fully aware of the fact that we have limited resources and have to be economically successful. Therefore, we have developed a series of sensible measures that we can effectively realise. We share We stand by what we do. We inform our public about the measures we take, about our progress and also communicate any setbacks we encounter, if and when they arise.
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Social responsibility Be a fair and attractive partner to producers and ensure that they correctly apply the Odlo Code of Conduct Be a fair and attractive employer to employees (headquarters, subsidiary companies, internal production plants) Realise the measures stipulated by the Fair Wear Foundation as an outcome of the management system audit Follow up on corrective action plans (CAPs) as the outcome of social audits at the production plants
Ecological responsibility Assume ecological responsibility Ensure stakeholders' health and safety within Odlo’s scope of capabilities Implement the Odlo Climate Initiative with its 3 programmes: - awareness & responsibility - quality & innovation - resources Participate in international working groups & initiatives
Transparency, communication, organisation Increase transparency internally and externally Continuously develop and train management and employees Implement CSR in the management by objectives (MBO) process (annual goals, annual assessment, development of measures)
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Corporate Social Responsibility
The Odlo Code of Conduct As early as the 1990s, Odlo signed a code of conduct with its manufacturers. At the beginning of 2009, Odlo revised its code of conduct in line with the requirements of the Fair Wear Foundation and had it re-signed by each of the manufacturers. This is most restrictive code on the market and is based on the conventions of the International Labour Organisation (ILO) and the Universal Declaration of Human Rights. The key principles of the code are as follows: Employment is freely chosen There shall be no use of forced, including bonded or prison, labour. (ILO Conventions 29 and 105) No discrimination in employment Recruitment, wage policy, admittance to training programmes, employee promotion policy, policies of employment termination, retirement, and any other aspect of the employment relationship shall be based on the principle of equal opportunities, regardless of race, colour, sex, religion, political affiliation, union membership, nationality, social origin, deficiencies or handicaps (ILO Conventions 100 and 111). No exploitation of child labour There shall be no use of child labour. The age for admission to employment shall not be less than the age of completion of compulsory schooling and, in any case, not less than 15 years. (ILO Convention 138) There shall be no forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour. Children (in the age of 15-18) shall not perform work which, by its nature or the circumstances in which it is carried out, is likely to harm their health, safety or morals. (ILO Convention 182) Freedom of association and the right to collective bargaining The right of all workers to form and join trade unions and bargain collectively shall be recognised (ILO Conventions 87 and 98). The company shall, in those situations in which the right to freedom of association and collective bargaining are restricted under law, facilitate parallel means of independent and free association and bargaining for all workers. Workers’ representatives shall not be the subject of discrimination and shall have
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Corporate Social Responsibility
access to all workplaces necessary to carry out their representation functions (ILO Convention 135 and Recommendation 143). Payment of a living wage Wages and benefits paid for a standard working week shall meet at least legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families and to provide some discretionary income (ILO Conventions 26 and 131). Deductions from wages for disciplinary measures shall not be permitted nor shall any deductions from wages not provided for by national law be permitted. Deductions shall never constitute an amount that will lead the employee to receive less than the minimum wage. Employees shall be adequately and clearly informed about the specifications of their wages including wage rates and pay period. No excessive working hours Hours of work shall comply with applicable laws and industry standards. In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every seven-day period. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate (ILO Convention 1). Safe and healthy working conditions A safe and hygienic working environment shall be provided, and best occupational health and safety practice shall be promoted, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Appropriate attention shall be paid to occupational hazards specific to this branch of the industry and assure that a safe and hygienic work environment is provided for. Effective regulations shall be implemented to prevent accidents and minimise health risks as much as possible (following ILO Convention 155). Physical abuse, threats of physical abuse, unusual punishments or discipline, sexual and other harassment, and intimidation by the employer is strictly prohibited. Legally-binding employment relationship Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour-only contracting arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment. Younger workers shall be given the opportunity to participate in education and training programmes. Odlo has committed itself to the correct implementation of this code of conduct.
CSR Overall Responsibility Odlo International’s Executive Board bears overall responsibility for CSR. It defines the company’s CSR strategy and any significant strategic decisions are made by the entire Executive Board. Within the Executive Board itself, the Director of Supply Chain Management, as the CSR delegate, is entrusted with the implementation of CSR strategy. The Director is supported by the CSR team. Odlo CSR Team 2014 / 2015 The CSR team is appointed by Odlo to ensure the implementation of its vision and strategy. The team was composed of the following members up until the end of the 2014 / 2015 reporting period: CSR roles
Team members
CSR Delegate / Manager:
Thomas Spiess
Administrator Sourcing & Production: Ramon Kälin / Andrea Gerber Fabric Development Manager:
Regina Goller
Production Representative:
Joana Araujo
All ODLO employees have an obligation to act with social and ecological responsibility within their particular field of work. All managers at ODLO are responsible for implementing the CSR strategy in their own fields of activity, placing the necessary emphasis on the subject and providing incentives for the continuous development of CSR at ODLO. Management Tools 2014 / 2015 Odlo internally
Odlo externally
∙ CSR vision and strategy ∙ CSR budget ∙ Monthly meeting of CSR team ∙ Report to Executive Board ∙ CSR work plan (annual planning) ∙ CSR contributions to “Odlo Inside” newsletter ∙ International CSR presentations
∙ Code of conduct ∙ CSR questionnaire for producers ∙ Social audits, Fair Wear Foundation ∙ CSR report ∙ Corrective action plans (CAPs)
Communication, Training and Development The following platforms have been implemented and are used by the CSR team: Members
Internal Platforms Timing
CSR team
CSR team meeting
monthly
Executive Board
CSR strategy meeting
yearly
project-specific Executive Board meeting project-specific Odlo headquarters staff
Informational meeting
up to 6 times per year
Odlo international staff
International Marketing & Sales meeting
twice a year
Intranet
several times a year
Target Groups Internal management of production plants (Odlo Portugal & Odlo Romania)
Platforms for informing producers Timing Direct contact (phone, e-mail)
on-going communication
Management meeting
continuously, if required up to 4 times a year
International Marketing & Sales meeting
Twice a year
Employees of inhouse / internal production plants (Odlo Portugal & Odlo Romania)
Intranet
several times a year
Information board
on-going communication
Management of manufacturers
Direct contact (on-site visits, video-conference, phone, e-mail)
on-going communication
Corrective action plan (CAP)
quarterly update
WEP Program
on-going communication
Workers of production Information board plants
information by producer
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Corporate Social Responsibility
Fair Wear Foundation Membership ODLO is a member of the Fair Wear Foundation, which endeavours to improve labour conditions in the textile industry worldwide FWF verifies that producers abide by its code of conduct and make appropriate improvements. FWF’s independence is guaranteed because it is governed by trade unions, NGOs and business associations. Transparency and accountability are key principles of the organisation (www.fairwear.org). FWF members work towards improving the labour conditions in factories that produce sewn textiles all over the world. The basis for the collaboration between FWF and its members is its code of labour practices. Eight labour standards form the core of this code of conduct. FWF members are contractually obliged to comply with these standards. FWF verifies whether companies comply with the code of labour practices through factory audits and complaints procedures, through audits of its members’ management system and through extensive stakeholder consultations in producer countries. FWF shares its knowledge and (local) contacts with its member companies, providing them with access to information on local legislation, labour legislation and culture. Members are required to set up an effective monitoring system, including factory audits, factory training and factory visits. FWF has a complaints procedure that enables factory workers to anonymously report any abuses related to labour conditions.
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Corporate Social Responsibility
Goals & Achievements 2014 / 2015 Social and ecological responsibility have been part of Odlo’s core values and thinking since the company was first founded. The company’s standardised CSR Management System was introduced in 2009. The principal measures undertaken to further develop the system during 2014 / 2015 include:
Odlo CSR Initiatives Odlo CSR Initiatives encompasses three areas of focus, each of which contains several measures. These have been implemented and communicated between 2014 and 2015.
• Workplace Gymnastics Our workplace gymnastics program in Portugal has now run for the past 4 years throughout the company. During lunch time employees can participate in specific activities and exercises. The purpose has been to promote employee health, prevent the onset of repetitive stress injuries and to improve the relationship and interaction between employees.
Social responsibility Internal CSR initiatives are initiated by individual members of staff, managers, teams and the HR department.
Some examples of the feedback given by the employees can be seen below
These initiatives include: • Fulfilment of the Odlo CSR Strategy for the years 2012 – 2015 • Brand Performance Check by the Fair Wear Foundation at Odlo International’s headquarters in September 2014 • Improvements to transparency throughout the value chain Social Audits Odlo cultivates long-term partnerships with its manufacturers. During 2014 / 2015, 22 manufacturers worked on behalf of Odlo, not including the company’s own manufacturing facilities in Portugal and Romania (24 manufacturers in total). Extract from the FWF’s “Brand Performance Check 2014”: “During the Brand Performance Check, FWF staff speak to various employees at the affiliate who have important roles to play in the management of supply chains. FWF verifies the actions of affiliates based on several sources including documentation of activities, financial records, the affiliate’s supplier register and staff interviews. Following the Brand Performance Check, FWF summarizes findings in this report, which is made public via www.fairwear.org. The FWF Performance Benchmarking Guide provides more information about the indicators and is available for download.” Management summary of the “Brand Performance Check 2014” Odlo is in the process of implementing the FWF’s Odlo performance last year was poor and saw us loose the leader status that we had worked hard to gain. We were rated as needs improvement. Again we fell short of the 90% of own production under monitoring with a score of 80%. We have worked hard of the last year to remedy the problems that we had with documentation and monitoring activity.
• The “Bike to work” initiative, June 2015 For the 9th consecutive year Odlo International has taken part in the “Bike to work” initiative organised by the umbrella association “Velo Schweiz”. For a whole month employees commute to work by bicycle. In this way, they made a positive contribution to the environment and to their own fitness. (biketowork.ch) • Sports events Odlo supports a variety of internal and external sports events, thus promoting popular sports, employee health and the development of young athletes. • “Feel fit!” – the health and fitness package for Odlo employees The Swiss headquarters in Hünenberg offers its employees access to a variety of activities that are good for their health. The Odlo health package includes a sports facility, nutritional consulting, lectures on health-related topics and workplace ergonomics. • “Lunch with Friends of Odlo” – lunch as an opportunity for discussion In 2014 / 2015 this initiative attracted some interesting people to Hünenberg. Ingalena Heuck offered some personal insights on the topic of running and answered employees’ questions in her typical relaxed and charming manner.
“These lessons helped me learn to adopt correct postures in the workplace and socialize with my co-workers”; “The team games have helped to create mutual support amongst colleagues and moments of joy”; “On the days when we have gymnastics, I feel more motivated for the rest of the day” But more important than the positive feedback from workers, are the improvements in health and well-being of the employees, reaching objectives such as: - Prevention of occupational diseases; - Combating inactivity, anxiety and stress; - Improves flexibility, strength, coordination, rhythm, agility and posture; - Reduction in the sensation of fatigue at the end of the work shift; - Motivation for new routines; - Promotes social and team relationships; - Reduction in spending on removal and replacement of personnel; - Reduction in complaints, medical leaves, accidents and injuries; - Improving the image of the institution by employees and society; - Higher productivity.
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Corporate Social Responsibility
• Workplace Ergonomics The workplace is a space which within employees physically interact, it is essential that it is safe and promotes comfort and well-being. Therefore Odlo in Portugal began a study on the ergonomic conditions of the company. Ergonomics studies the relationship between man and the work he performs, seeking to develop a seamless integration between working conditions, skills, physical limitations, the psychology of the worker and efficiency of the production system. Each job and the attitude of the employees were analyzed, checking for errors at different levels of posture, brightness, noise and space. Our objective was to reduce hazards and prevent accidents and errors. We invested in awareness, information and training so the employees could carry out their tasks using the correct posture, working methods, tools, machinery and furniture. The welfare of employees is imperative in the work of ODLO Portugal. • The volunteer Day The purpose of this day is to instill in people the spirit to help others and promote the practice of voluntary actions in society that increasingly needs this type of support. This year, a team from Odlo Portugal went to a nearby elementary school in town where we transformed two classrooms, the entrance hall, the bathroom, the outdoor garden and all the surrounding space, making this school a welcoming place for the learners when they started in September this year. All staff were motivated and cheerful, making the result of this renovation a great success. Odlo sees a responsibility to society and works alongside others to be a part of the community. Also 4 teams from Odlo Romania visited River Moldova to help to clean it. The teams appeared in the local newspaper which recognized their work. Odlo also supports international charities with a number of initiatives. • Aid for victims in Namibia. Human Plus e. V. has organised several aid shipments. Human Plus Germany ensures victims of war and / or natural disasters receive aid quickly and without excessive red tape. Odlo donated textiles to the relief shipment.
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Corporate Social Responsibility
• Under great life risk we could in the months of January and February, together with our partner Children tears, more than 367 stoves + fuel and over 150 tons of relief supplies – baby milk, baby food, washing – and cleaning products, especially the high-energy peanut paste that we Nov. have shipped in 2014, spread to many children and young people, in Syria.
Reasonable use of resources Odlo strives to use resources responsibly and to re-use them, or continue to use them, whenever possible. Recycling options are carefully considered and implemented (i.e. recycled down).
• The distribution of food and clothing to the homeless in the city of Porto;
• Odlo was also the proud recipient of an ISPO gold award for our Blackcomb Seamless underwear combining design and sustainability by using a combination of fibres which included recycled polyester.
• The collecting of food in various supermarkets for the Food Bank, these being distributed to needy families;
Systematic approach to an organisational set up to use leftover fabrics to generate products for our factory outlet stores.
• The collection of essential goods, food, clothes, shoes, books, toys to be sent to the children of the village of Good Hope in Cape Verde;
• To reduce our carbon footprint we choose to replace all of the bulbs in Portugal with new more energy effiecient LED’s . We will continue this work into our production facility in Romania once the old bulbs need replacing.
Ecological responsibility Quality & innovation of products
• We donated leftover fabric from our supplier Tayeh to the “Wat Suankaew” foundation.
Odlo develops products with a very long lifespan, an important aspect of sustainability. This will remain unchanged in the future. New, eco-friendly materials are continuously examined and – wherever it makes sense – integrated.
• Collect paper waste to use it for notes
• In 2014, we continued to work with suppliers of environmentally-friendly materials, such as Polartec, the market leader in eco-friendly materials, and it is planned to continue in the future
The central distribution centre in Brüggen uses higher pallets. This means they can transport 22% more volume and save 22% on freight costs.
• Change of insulation material to “Primaloft Eco” version (80% recycled PES) • Change from long-chain (C8) to short-chain (C6) DWR finish for all wind-resistant and waterproof materials • Continuation of “Greentech technology”, which contains recycled PES, for seamless underwear such as Blackcomb • General reduction of materials and colours used per season, which helps to avoid minimums • Around 65% of the all fabrics come from Europe • Use of materials made in Switzerland (Schoeller®), Germany, Austria, Italy and Portugal
• Create textile bags from leftover materials to avoid the use of plastic bags
150 shipments could be reduced by 33 shipments. 33 x 2,000 km = 66,000 fewer kilometres of transportation. 66,000 km corresponds to about 20,000 litres of diesel per year. Transparency and communication In 2014 / 2015 Odlo used the following tools for external communications: • Odlo website / CSR website (www.odlo.com) • Odlo Internet newsletter / Intranet platform • CSR Report 2013 / 14 • Press releases / press conferences and product launches Odlo does not publish a CSR flyer for environmental reasons, but it makes all information available digitally on its website.
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Sourcing and Production
SOURCING AND PRODUCTION Sourcing Strategy The Odlo Sourcing Strategy is based on the following principles: Priority 1: In-house/internal production Whenever possible in terms of capacity and know-how, new garments and/or additional production volumes are manufactured in our in-house/internal factories in Portugal and Romania. Priority 2: Long-term partnerships Many other brands use hundreds of different manufacturers, encouraging them to compete with each other and changing them every season. Odlo prefers to follow its motto of “less is more,” so it aims for long-term partnerships with a small number of manufacturers. Odlo’s targeted increase in sales should as far as possible be achieved by working with these partners. New partners are selected according to a strict evaluation procedure. This policy enables the manufacturers to plan for the long term, which increases their stability and job security. Duration of partnership with manufacturers as at 30.06.2014: Co-operation period Number of producers More than 15 years: 3 producers More than 10 years: 5 producers 7 - 10 years: 2 producers 4 – 7 years: 2 producers Less than 4 years: 12 producers
Pricing Policy Odlo calculates its prices using the “open costing principle”. This means that the sales price is calculated individually for every product, taking into consideration the material and work costs, overheads (administration, marketing, etc.) and the profit margin. The prices are negotiated directly with manufacturers. Odlo does not work on the basis of tenders, i.e. no additional competition is created among manufacturers.
Structure of the sourcing team The sourcing, product development and supply planning processes are all within the Operations department. This allows for an efficient internal and external coordination and communication. These teams work closely together with our Product Management and Design team. They all work in the same building at our Swiss headquarters, which promotes flexible, informational exchange and more efficient decision-making routes. Production Cycle
2013 Initial planning with suppliers
Design and development
2014 Final order
Order and placement
2015 Production (3-5 months)
Transport by sea, land or air
Production
Delivery to stores
Picture: Odlo production cycle. Odlo produces 2 collections per year
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Sourcing and Production
Selection of new manufacturers ODLO applies a 7-step plan in the selection of new producers:
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Sourcing and Production
Production For many years, Odlo mainly manufactured its products at its own factory in Portugal. As the company grew and its product range expanded, Odlo found it also needed to expand its production capacity and increase its expertise. After studying the issue in detail, the management decided in favour of building long-term partnerships with a small number of manufacturers.
1st step
Analysis of procurement spend, supplier performance and company strategy
2nd step
Assessment of the supplier market place, country specific risk and supplier specific risks
3rd step
Prepare a supplier survey
4th step
Produce a strategy to help us achieve our goals
5th step
Assess all possible suppliers against the following criteria • Cost • CSR • Lead time • Quality • Reliability • Fit
In 2004, Odlo built a modern factory in Romania, and by 2012 the facility had doubled its capacity. Large quantities of Odlo sports underwear are now manufactured in Romania, while Odlo Portugal has become a centre of excellence and technology.
6th step
Select the supplier • Proposal is made by the head of Sourcing and Development and the final decision is made by the board
In 2014 / 2015, 54% of Odlo’s products were manufactured in Odlo’s own factories – making it quite unique in the textile industry. 68% of all garments were produced in Europe and the Middle East.
7th step
Communicate to the new supplier and start planning the first season
Breakdown of manufacturers by country 2014 / 2015 Country of Production
Number of Producers
Value %
Volume %
ODLO Romania
1
9.54
11.20
ODLO Portugal
1
34.49
42.63
TOTAL own production Europe
2
44.03
53.8
Germany
1
3.09
1.93
Israel
1
10.68
10.78
Romania
1
1.74
0.91
Italy
4
0.27
0.12
TOTAL Europe and Middle East
7
15.78
13.7
China
9
27.90
15.77
Thailand
1
3.19
3.20
Vietnam
3
2.63
1.63
Sri Lanka
1
5.69
5.08
India
1
0.78
6.75
Total Asia
15
40.19
32.40
TOTAL
24
100.00
100.0
Agents and sub-contractors Agents: Agents, as opposed to producers, do not have their own manufacturing facilities but commission third-party companies. Odlo has been working with an agent in China for some years. This agent is listed in the above chart as a producer. All third-party companies working with our agent have been included in our supplier register and are now being continuously integrated in the Odlo monitoring system. Subcontractors: Some Odlo producers outsource certain processes (e.g. the sewing in of parts) to subcontractors. Others place commissions with subcontractors in case of capacity constraints. In any case, the main contractor vouches for its subcontractors. Odlo has expanded its supplier register to include the subcontractors involved in the manufacturing process as well. All these subcontractors are now included in the Odlo monitoring system.
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Monitoring
MONITORING oc i om al A pl ud ai it nt s s
S
it s ud n t a la en rk p t em o or ag l w ep an ua R r M A nn C S
Code of Conduct & FWF Questionnaire All manufacturers are required to sign the Odlo Code of Conduct (see “Code of Conduct” section), confirming that they have filled out the FWF questionnaire accurately and in full and that they are prepared to implement all necessary measures within their company.
Code of Conduct Corrective action plans Inspections
C
Monitoring Instruments Odlo’s current monitoring system comprises the following:
Social audits by the FWF Odlo commissions an external, independent organisation to perform social audits. The majority of the audit teams are trained by the FWF to carry out company audits. Corrective action plans (CAPs) To follow up on these audits, Odlo maintains a corrective action plan (CAP) with all participating producers that lists all of the shortcomings that are found. At regular intervals, producers are required to report any progress made to Odlo by means of these CAPs. Producers have to show evidence of the completion of corrective actions by furnishing photos and through on site visits. Inspections by Odlo staff Odlo staff make regular visits to manufacturers to inspect their working conditions, e.g.: • Quality Assurance team, Asia and Europe • Head of Sourcing and Product Development (3-4 times a year) • Director of Supply Chain Management • Supply Manager • Members of the Product Management team • Executive Board members During their visits, Odlo employees fill out checklists and report their findings to the CSR Team. Complaints A manufacturer’s employees can file complaints concerning their working conditions with an independent authority designated by the FWF. The authority forwards the complaint anonymously to the FWF which, in turn, informs Odlo.
Brand performance check The FWF also audits Odlo at regular intervals in order to support the FWF process. The results are published on the FWF’s website and are integrated into the CSR work plan and CSR report. CSR work plan Odlo draws up a work plan once a year (annual planning), which is then submitted to the FWF. This confidential document details the activities planned for the following year. The work plan for 2014 / 2015 was submitted to the FWF on time at the end of June 2014. CSR report The present report covers the financial year 2014 / 2015, six months.
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Monitoring Monitoring
Monitoring by country The following audits have been conducted at our manufacturers since Odlo joined the Fair Wear Foundation in 2008:
Corrective Action Plans (CAPs) by category and country 2014 / 2015 The table below groups these findings according to the core elements of the CoC: Area of Reporting
Independent FWF audits by country (as at 30.06.2015)
Management
COMPLETED Country
Product ID
Thailand
3039
China
4926
2010
2011
2013
•
2015 / 16 •
•
•* •
•
Freedom of association
•
4833
•
•*
4835
•
•*
Romania
145
Child labour
• •
3804
•
China
6115
1
Vietnam
5620
3
China
6115
-
Vietnam
5620
-
China
6115
-
Vietnam
5620
-
China
6115
-
Vietnam
5620
-
China
6115
1
5620
1
China
6115
1
Vietnam
5620
2
Overtime
China
6115
3
Vietnam
5620
2
China
6115
1
Vietnam
5620
2
•*
2143
TOTAL
17
New findings emerged during the FWF social audit in 2014 / 2015
Israel
3785
•**
•**
•**
Jordan
5141
•**
•**
•**
Number of findings
Vietnam
Health and safety
•
Producer number
Payment of living wage
•
6115
5620
Discrimination
• •
3803
Vietnam
Forced labour
•
4591
India
2014 / 15
•
3817 3811
2012
PLANNED
Country
Area of Reporting
*-In planning **-Meta Certificate
Closed Findings
Open Findings
during 2014 / 2015
during 2014 / 2015
Management
4
-
Forced labour
-
-
Discrimination
-
-
Child labour
-
-
Freedom of association
1
1
Payment of living wages
-
3
Overtime
4
1
Health and safety
2
1
TOTAL CAP Progress Report as at 30.6.2015 (summary
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Corporate Environmental Responsibility
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Corporate Environmental Responsibility
CORPORATE ENVIRONMENTAL RESPONSIBILITY With Evolution Greentec, Odlo has developed a unique and innovative type of underwear that meets the highest standards of performance and is specifically designed and produced using recycled fibres. This technology is evidence of the company’s commitment to sustainability and protecting the environment. Many years of development work have resulted in a recycling concept that combines function, high-tech materials and sustainability. Panels ready for sewing
After trialling Greentec for three years, Odlo has decided to continue with the technology and develop other underwear garments using Greentec technology. Winter 2015 sees the launch of the Blackcomb range featuring recycled PES. Moving on from where Greentec left off Odlo released Evolution Blackcomb which won a gold award from Ispo for sustainability. Blackcomb combined high performance, great design and sustainability. With its Odlo Zeromiles premium collection, Odlo has created a new, very exclusive collection that is also kind to the environment. In the Odlo Zeromiles collection, the focus is on reducing the number of miles between manufacturer and point of sale. The materials are mainly sourced in Europe, and this is also where the bulk of the garments are manufactured and where the products are sold. Top-quality materials that conform to REACH standards are sourced from Switzerland, Austria and Germany. The green concept is rounded out with recycled down from Spain.
Back to nature. With the Zeromiles range, Odlo is making a further investment in developing garments using natural fibres.
Z E R O
M I L E S
PREMIUM COLLECTION Inspired by Norwegian roots carried out in Swiss quality
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Corporate Ecological Responsibilty
Materials and Technologies Odlo only uses high performance fibres. Around 70% of the fibres used have been developed exclusively for Odlo. They have excellent moisture wicking? properties and breathability. The development team at Odlo’s headquarters in Switzerland work hard to provide sports enthusiasts with the very best performance fabrics. The Swiss company is in the process of forging close relationships with research institutes. Odlo is continually striving to reduce material consumption, e.g through the use of laser cutting technology or lighter fibres. Odlo uses pure synthetic fibres and blended yarns to ensure the garment provides optimum performance.
Conclusions and Outlook
Transportation Wherever possible, Odlo tries to transport goods by sea, as this is the most economical and environmentally-friendly option. Fortunately the popularity of air freight has begun to decline over recent years. Odlo is pleased to announce that it has once again reduced its air and sea/air transportation to 4%-5%. There are two main reasons for this trend. Firstly, the Asian market is not as tight as it has been over the last two years. Secondly, Odlo’s investment in a sophisticated order tracking system (OSCA from Setlog) has made it possible to optimise the alignment of production and demand. This has had a positive impact on the proportion of goods being transported by air. Modes of transportation 2014 / 2015 (number of cartons in %) 49 % Truck
Oeko-Tex 100 Odlo’s performance sportswear has been awarded the “Confidence in Textiles” label by Oeko-Tex. This certifies that textiles are free from harmful substances according to Oeko-Tex Standard 100. Odlo sportswear complies with current standards on human ecology: it contains no carcinogenic substances, formaldehyde or allergenic dyes and has a skin-compatible pH value. Green Dot All Odlo underwear packaging features the “Green Dot”, meaning that it is totally recyclable. bluesign® system partners Most of Odlo’s fabric suppliers are bluesign® system partners. They include Polartec, the inventors of modern synthetic fleece. Bluesign promotes an independent standard for the textile industry. The bluesign® standard is an input stream management system that covers all environmental, health and safety (EHS) aspects within the textile manufacturing chain. (www.bluesign.com). REACH Odlo’s entire European production is subject to the strict requirements of REACH. REACH stands for Registration, Evaluation and Authorisation of Chemicals. REACH came into force on 1 June 2007 and is the new regulation governing the safe production and use of chemical substances within the European Union (EU).
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13 % LCL
10% FCL 40 22 % Air
6 % FCL 20
Conclusions and Outlook Odlo’s success over almost 70 years has been directly tied to our culture of innovation. We believe that our ability to harness the power of sustainable innovation to benefit our customers, business and planet will help lead to Odlo’s continuing success in the future. Our recognition in this area continues to motivate us. We want to build on the successes of the past where we have seen business growth from using materials that leave the lightest possible ecological mark. We are constantly looking to integrate more sustainable and responsible ways of working across our business, from design to production to logistics and retail. We believe as a brand we should use our leverage to drive positive change across our entire value change. We see we are going to have to climb to new heights as a company and that is why we have decided to set ourselves some tougher challenges for the future. Below I outline some of our major focus areas for the future 1. Odlo’s future success and sustainability are inextricably linked. We see sustainability and responsibility as tools to bring innovation and better products to the market at a great price. 2. For almost 70 years materials have been one of the foundations at the heart of Odlo. Odd Roar Lofterød bought synthetic underwear to the market to deliver innovation and a performance benefit to athletes. New material innovations will have to focus on bringing performance without depleting the earth’s natural resources. 3. Solidarity and transparency. Consumers and brands need to face up to their responsibility to ensuring people further down the supply chain are paid fairly, educated properly and put in a situation where they too can make sustainable decisions about the environments they live in. The current challenges facing our planet requires a shift in our culture and we see it is a major opportunity over the coming years. We hope our next 70 years will be focused on inventing better solutions for a sustainable economy.
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Corporate Environmental Responsibility
In the Life of Alessia, responsible for fabric in Odlo’s factory in Romania
Corporate Environmental Responsibility
the state as taxes. An additional income enter occasionally in her family’s budget from the pictures and videos they make at various events. Alessia pays annually around 3% of her yearly salary on taxes for land, car and apartment and other monthly expenses are incurred by the child's school activities. 1. What do you like most to Romania? First of all, I want to say that for me, Romania is the most beautiful country in the world. Geographically, has beautiful mountains, sea and delta- almost everything for a perfect destination for holidays. Then, the people are generous and friendly. I really think that Romania is a small piece of heaven, and I am very lucky to live here.
We call her Alessia but her name is SUHANIA DIANA, she is 35 years old and is part of Odlo Romania team since June 2010. She graduated History University and is passionate about travel and photography. On free time she is devoted almost exclusively to the family and she loves the moments when together with her 9 years old daughter, make hand made products. Being also passionate about journalism she worked in local television from Roman city like an editor and moderator. She was not motivated by a proper salary at her last job and she wanted to push her limits and to have a new experience in her professional life, therefore she became a member on Odlo’s family. She lives with her family in a three-room apartment for which pays monthly around 90€ for energy, gas, whater,Tv and internet. Her monthly net income is around twice the minimum wage in Romania. The 26% difference to the gross salary goes to
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2. How is one day in your life? Every morning I wake up with the gratitude of another day from God, beside all the challanges that I am facing both personally and professionally. My work starts around 7 am, with the preparation and inspection of the department, trying to solve the problems, receiving trucks and separate fabrics, working in the system. It is not very easy, because the reponsability is high and unexpected problems can appear any moment, but I am seeing them as challanges, nothing more…steps that can be passed with ability and cooperation with colegues both from Romania and Portugal. In my life I have learned that, if you want to do a good job, you must work both with your heart and mind, to respect the people around you and have faith that tomorrow will be a better day. The second part of the day is dedicated to my great family, the center of the universe being my lovely daughterl. For her I am trying every day to be better, even if I know that the perfect mother can’t exist, I believe that a perfectible mom is possible. Every day I teach her that the world is made by Good and Bad that always challenge us, but, in the end ,the Good wins...only to have faith and ambition. The evening is the moment of balance, good and bad things that happened during the day. And the most important is that
no day can pass without making at least one good thing for the persons around me. 3. What you do to feel appreciated? For me, the best way to relax and feel appreciated is to be with my family. 4. What are your plans for the future? My guide is „ live every day as whould be the last day of your life”. Everything I want is to be healthy, to grow professionally, to learn new things and to do my best both at work and at home. I am very ambitious and I think that a person can accomplish everything if he really wants. No challanges can’t be unbattable, it’s only the price you must pay for a future reward. And many times the financial reward is not the most important. 5. What a responsible of department does? Try to anticipate possible problems that might face in the next day, finding the best solutions to solve them. 6. What problems you face monthly? Even no one wants, every day we face new, and something, unexpected problems, that can influence less or more the activity of the other departmants at Odlo. I am very aware that I am the beginning of a chain that ends in the export department. That’s why, all the time I try to solve the problems in the best way I can – maybe sometimes I make mistake , but only for the desire of solving one issue. The biggest problem in my job is the deffect fabrics that sometimes we receive, that can not be detected till the process of cuttingthe next step is announce the colegue from Portugal and send a claim. A new challange of this year was the new UPODLO program I must work from now on. I know that even it still has problems, I trust the people in charge to solve all the IT problems. 7. What’s representing the work for you? My work is a very important part of my life, with a great impact in my personal life. It is not the issue now to discuss about the financial part, but also the emotional part that has its place in my life. Three years ago appeared a new step in my professional life – I was named responsable of fabrics in Odlo Roma-
nia- new responsabilities, new challanges. I thanks to people that believed in me and gave me this chance, the only thing I want is to be at the level of their expectation, even I am aware that I must learn every day. I really don’t know what the next day will bring, but I am sure that I have the power to face the changes , and, if I will have the moral support of the colegues will be easier. 8. What do you like the most of working at Odlo? When I came came to Odlo first time, I did not know what to expect. It was a new place, new people. I remember that it has not been easy, I had moments when I wanted to abandon, but something kept me here. Even now I don’t know what it was , but now I realise that my decision of staying was the good one. Our factory is really an example of cleanness, organisation and rigurosity- a modern work place , with great people- the perfect combination for a success formula. 9. What is your favourite piece of Odlo and why? Odlo is a successful brand , that won its place thanks to the quality and diversity of the articles. Even we talk about underwear, tec-shirts or running, all the articles provides comfort and utility. If I punctually need to answer at the question, I can say that wool articles have the power of breaking the marketsthey have all the needs for success- fabrics, models- the best quality. And I have the faith that Odlo will not stop here, will surprise us certainly with new and great styles in the future, too.
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Corporate Environmental Responsibility
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Corporate Environmental Responsibility
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Corporate Environmental Responsibility
In the life of Lili, she is a seamstress in Odlo’s factory in Romania
Lives in Roman since 28 years ago, when she moved with her husband. Tiba Ileana has 47 years old, all relatives tell her “Lili”. She lives with her husband and 3 children: two boys and a girl of 16 years old, in a house of 200 square meters with loft, located on the outskirts Roman. She likes to handle chores: caring roses in the garden, take care of solarium with vegetables and fruit trees around the house. She
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Corporate Environmental Responsibility
loves to spend the evenings with kids telling stories and go to picnics on weekends. Ileana is passionate about gardening and agriculture. Every year she goes on holiday at Sovata, but this year she wants to go in Brasov. By profession she’s a ceramist. She had a grocery store for 6 years, but when she got pregnant with her second child, she closed the store. Ileana was a housewife for 9 years during this time she took care of the children. Since 2008 she’s an employee of Odlo Romania. She had no experience in textile industry but on her free time she was making clothes for the kids with the sewing machine that was in home. Like this she developed a passion for this profession. In Odlo Romania she began working in the flat lock machine but over time she learned all kinds of sewing machines. Monthly she has an income of 30% above the minimum wage and pays 26% tax on her salary. Ileana pays 25% of her salary for energy, gas, water, Tv, internet and trash. Annually she spends around 2% of her yearly salary for taxes for the car and house. She feels lucky because the husband has an income of twice the minimum wage and also her sons are working.
1. What do you like most to Romania? Romania is a country full of history and many types of relief. I love that people are special, welcoming, sociable and with a big soul. 2. How is one day in your life? Except weekend, I follow the same routine every day: morning coffee, after that I go at work and in the afternoon I spend time with loved ones at home. 3. What you do to feel appreciated? I gladly cook for my family. 4. What are your plans for the future? Generally most of the plans that I’we had have been achieved. The only remaining unfulfilled desire is to travel abroad but I know that it will happen soon. 5. What makes a professional worker? Knows all types of sewing machines, creating a product from start to the end, knowing all the operations. 6. What problems you face monthly? Financial problems are occurring monthly as paying bills, taxes and contributions which in Romania are not small, in addition also food is very expensive. 7. What’s representing the work for you? It’s a lifestyles. Work enforce a program and keeps you in shape being permanently connected to the daily responsibilities. 8. What do you like the most of working at Odlo? I like the way things are organized, the clean environment, the good working conditions, provided medical services but most, I like the bonus system. 9. What is your favourite piece of Odlo and why? Spot running 3 / 4 pants as they are practical, comfortable and have a trendy look.
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Corporate Environmental Responsibility
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Corporate Environmental Responsibility
Editorial Information Publisher Odlo Sports Group, Bösch 47, CH-6331 Hünenberg, Switzerland www.odlo.com Editors CSR Team, Odlo International: Daniel Mulvie, CSR delegate of the Management Team Ramon Kälin, Regina Goller, Andrea Gerber Joana Araujo For further information about Odlo’s corporate social responsibility, please contact ramon.kaelin@odlo.com