Corporate and Social Responsibility in the Björn Borg Group

CORPORATE RESPONSIBILITY

BJÖRN BORG’S VIEW OF ITS RESPONSIBILITY
Björn Borg is a Swedish company operating in an international market, who wants to be a good corporate citizen with the motivation of ensuring that the Björn Borg brand stands for something positive. One of Björn Borg’s fundamental corporate values is taking responsibility. This is why corporate responsibility issues are so important to the company. This means, for example, that products must be of high quality and sustainable, that individuals that directly or indirectly works for Björn Borg must be treated with respect and work under reasonable conditions, and that operations must not impact the environment more than necessary. This should be reflected in business decisions and the way in which operations are conducted. Corporate social responsibility involves not only how the company itself acts but also, ultimately, encouraging partners such as suppliers to also do the right thing.

Björn Borg is trying to work in a more conscious, structured way with corporate social responsibility issues and to be more transparent about the work it is doing in this area. By reporting openly on the company’s corporate social responsibility work, including which areas need improvement and the goals that the company is working towards, Björn Borg hopes to meet the expectations of its employees, consumers, the public, partners, organizations and the financial market. Björn Borg also tries to learn from successful examples of measures and approaches in the corporate social responsibility area.

ORGANIZATION AND TRAINING
The President has the overall responsibility for corporate social responsibility issues. The Group also has a person responsible for managing these issues at an operating level. This includes enforcing and revising the company’s code of conduct, monitoring that manufacturers, licensees and others follow the requirements, and providing information and training internally and for outside partners. To increase the impact of corporate social responsibility issues in a broader sense, Björn Borg plans to deepen its cooperations with licensees and, where applicable, with outside partners. The aim is to increase knowledge and understanding of corporate social responsibility issues in the wider network of partners, including through various types of training and follow-ups.

QUALITY AND SUSTAINABILITY
Ensuring the quality of the products and production processes is an important part of Björn Borg’s corporate social responsibility work. When a con-sumer buys a product of high quality, it will last. If the product is something the buyer values highly and enjoys, they will typically use it more often and for longer. A longer product life cycle can help to reduce environmental impacts. Björn Borg strives to maintain consistently high quality in its products. Specialists within each product area work continuously to improve every step of the manufacturing process, from design and choice of materials to production, in order to reach the right level of quality. The aim is that the customer will be able, and want, to use Björn Borg’s products for a long time. The company’s surveys show that this is the case.

Björn Borg has evaluated products over their life cycle in order to get a better understanding of their environmental impact and as a basis for further environmental work. The results show that it is the washing of the underwear by the customer that has the greatest impact. Because of this, Björn Borg will add a text on its packaging to encourage customers to think about the environment when using, and especially washing, the product. Other factors that affect the environment during the lifecycle of an undergarment are the manufacturing and processing of the material and, of course, the manufacturing and the subsequent transport of the product itself.

The production of cotton for underwear uses a considerable amount of water and chemicals. In early 2011 Björn Borg therefore started working with a new collection of underwear for men and women made from organic cotton for launch in spring 2012. A growing share of Björn Borg’s products are also made with other, generally less environmentally harmful materials such as polyester and polyamide, a trend which is expected to continue.

SOCIAL RESPONSIBILITY

CHANGES BY MANUFACTURERS
Björn Borg, like its licensees, relies on outside manufacturers to produce its products, primarily in Asia, but also to some extent in Europe. The company normally maintains close, longstanding relationships with its suppliers, which provides good insight into production conditions and creates opportunities for a constructive dialogue on corporate social responsibility issues. The number of principal suppliers is purposely kept low to facilitate control and follow-up. Björn Borg wants to take responsibility for ensuring that the people who produce Björn Borg products do so in a safe environment and under reason-able conditions, even if they are employed by third party manufacturers, not the Björn Borg Group. The requirements that Björn Borg places on its manufacturers in this respect are spelled out in manufacturing agreements, codes of conduct and chemical restrictions. A key success factor in implementing these types of requirements, is a close cooperation with the manufacturers in question and to allocate time and resources to support them as far as possible in making their own, internal improvements.

BSCI
To better be able to systematically monitor and ensure compliance with the requirements placed on manufacturers, the company has joined the Business Social Compliance Initiative, BSCI, and applies its methodologies.

BSCI is a European non-profit organization dedicated to helping a large number of members, mostly retail, brand and import companies, to improve working conditions in their supply chain. BSCI helps members to work more efficiently by applying the same standardized requirements in terms of production conditions, etc., which makes it easier for these companies and their suppliers to make improvements. This includes a system to control and document the results of inspections and corrective actions. Björn Borg became a member of BSCI in January 2008 and has since adapted its Code of Conduct to the organization’s guidelines. BSCI’s Code of Conduct is based on the ILO’s Core Conventions, the UN Declaration of Human Rights, the UN’s Convention on the Rights of the Child and the OECD’s Guidelines for Multinational Enterprises.

BSCI’s Code of Conduct includes the following key elements:
• Legal compliance
• Freedom of association and the right to collective bargaining
• No discrimination is practiced
• Right to reasonable wages and benefits
• Limitations on overtime
• Workplace health and safety
• Prohibition of child labor
• Prohibition of forced labor
• Animal welfare guidelines

All of Björn Borg’s manufacturers have committed to comply with the company’s Code of Conduct, which is based on the BSCI’s Code of Conduct, as noted above. When new manufacturers are contracted, a systematic review is done of working conditions, work environments, chemical handling, etc. in order to verify that the company in question is equipped to meet Björn Borg’s requirements. The largest manufacturers contracted by Björn Borg are audited at least every three years. Any non-compliances that are identified result in a request to manufacturers to implement corrective action plans, after which they are re-audited to confirm that the appropriate measures have been taken. BSCI’s requirement is that production units that supply 70 percent of more of total production volume must comply with the requirements of its code of conduct.

AUDITS AND RE-AUDITS
The BSCI audits that Björn Borg previously conducted, including of its largest manufacturer, have resulted in demands that the manufacturers implement improvements. The most common areas of non-compliance relate to emergency exits, safety equipment, fire safety training, lighting and storage of chemicals. These non-compliances can usually be remidied fairly easily. In April 2010 Björn Borg had an extensive re-audit conducted of the Group’s largest underwear manufacturer, with good results. The facility was classified at the second highest level. The problems that remained primarily involved the amount of overtime. It is not unusual that overtime among manufacturers exceeds the levels allowed in the code of conduct. This issue is generally much more difficult to address. In Björn Borg’s experience, it requires fundamentally changing attitudes, which takes time. In 2010 the company’s largest manufacturer hired an outside consultant to support in implementing the changes in working hours required. The audits and re-audits that have been conducted to date concludes that BSCI’s requirement (of 70 percent or more) is being met, but continuous follow-ups are needed to verify that the manufacturers at least maintain this level and continue to comply with the guidelines. Re-audits of overtime at Björn Borg’s largest manufacturers will be made in 2011.

Björn Borg also tries to monitor its licensees’ corporate social responsibility work, e.g., by controlling which controls they conduct of their manufacturers. Some licensees are active themselves within the BSCI. In 2010, two licensees conducted BSCI audits of their manufacturers, as a result of which these licensees now comply with BSCI’s requirements as indicated above. These licensees also require their manufacturers to abide by BSCI’s Code of Conduct. One of the licensees has terminated its agreement with a manufacturer that failed to meet the requirements. Björn Borg’s goal is to further extend its cooperations with licensees in the area of corporate social responsibility in the future.

WORKSHOPS AND TRAINING
As noted above, the company’s largest manufacturer has hired an outside consultant as support in its improvement efforts. Björn Borg is also planning additional measures to increase awareness and understanding of its code of conduct, BSCI and current rules among its licensees, and eventually among others in its network of partners as well.