SUSTAINABILITY REPORT 2017

SUSTAINABILITY REPORT 20172 3

4WELCOME

6SUSTAINABILITY IN BRIEF 8

OUR BUSINESS

10SUSTAINABILITY STRATEGY 14

MANAGEMENT APPROACH 20

HEADLINE ACHIEVEMENTS

CONTENTS

This, our fourth sustainability report, covers information and performance data on the operations of the Swarovski Crystal Business during the preceding two calendar years (2015–16) . Swarovski Crystal Business includes those parts of the Swarovski Group that design, manufacture and sell high-quality crystals, genuine gemstones and created stones as well as finished products such as jewelry, accessories and lighting. From here on, where Swarovski is mentioned, it refers only to the Swarovski Crystal Business.

In this report, we provide detail about the evolving nature of our strategic approach to sustainability, which represents the beginning of a new phase in Swarovski’s sustainability journey. Since we are now embarking on this new phase, we have focused our progress updates on the headline activities and achievements in 2015–16.

We have increased the scope of reported quantitative data in 2015–16, expanding the number of major sites we report on from nine to ten. This includes all of our own manufacturing and production locations: Wattens in Austria; Subotica in Serbia; Triesen in Liechtenstein; three sites in Bangkok in Thailand; Plattsburgh in the USA; Pune in India; Bien Hoa in Vietnam and our corporate offices in Männedorf in Switzerland.

We have also produced a detailed index, guided by the Global Reporting Initiative G4 Guidelines, as a supplement to this report. The index is available to download at www.swarovskigroup.com/sustainabilityreport2017

We welcome stakeholder feedback on any aspect of our report. Please contact us at [email protected].

ABOUT THIS REPORT

http://www.swarovskigroup.com/sustainabilityreport2017

mailto:sustainability%40swarovski.com?subject=Swarovski%20Sustainability%20Report%202017%20feedback


Dear Readers,

In this sustainability report we look to the next phase of our sustainability journey, by outlining our revised strategy. Daniel Swarovski’s founding vision, and his commitment to responsible ways of working, continue to guide our purpose, decisions and actions. With this renewed approach, we honor his legacy while also recognizing that today’s global challenges need new, contemporary solutions.

Climate change, water crises, gender inequality, economic disparity, forced labor, and the over-consumption of natural resources require the private sector to step up. We accept we have a role to play in tackling many of these challenges and supporting delivery of the United Nations’ Sustainable Development Goals.

To this end, we have updated our sustainability strategy and refreshed our priorities around where we believe we can have the greatest impact across our value chain by employing the unique strengths of our business and brand. We also continually strive to work collaboratively with others across the fashion, jewelry and design industries to improve commitments across our sector.

The past two years have seen steady developments in our ongoing sustainability journey. Many certifications secured in 2015–16 provide external validation of our efforts to continually manage the social and environmental impacts of our operations, which form the bedrock of our strategy.

“TODAY’S GLOBAL CHALLENGES NEED NEW, CONTEMPORARY SOLUTIONS.

WELCOME TO THE SWAROVSKI SUSTAINABILITY REPORT 2017

ABOVE Swarovski Executive Board

OPPOSITE TOP Aurora Borealis crystal

OPPOSITE BOTTOM Daniel Swarovski

In this report, we summarize these and other highlights of our activities and achievements during 2015–16. We also take this opportunity to restate our commitment to the United Nations Global Compact, the Women’s Empowerment Principles and the recently signed World Economic Forum’s Compact for Responsive and Responsible Leadership.

As a company that thinks in generations, not quarters, we maintain a long- term outlook towards driving positive change, viewing it as an integral part of securing the future success of our business.

Sincerely,

THE EXECUTIVE BOARD OF THE SWAROVSKI CRYSTAL BUSINESS

7SUSTAINABILITY REPORT 20176

Certifications ♦ ISO 50001: Wattens, Austria

♦ ISO 14001: Swarovski Gemstones, Thailand

♦ SA8000: Pune, India

♦ OHSAS 18001: Swarovski Gemstones, Thailand

♦ SMETA: Subotica, Serbia

♦ Responsible Jewellery Council : Atelier Swarovski

Conscious design projects – initiatives promoting sustainability – were piloted at three top international design schools:

♦ Central Saint Martins in London

♦ Condé Nast Center of Fashion and Design in Shanghai

♦ École supérieure de mode ESG UQAM in Montreal

28 Swarovski Foundation charitable partnerships: 4 Conserving Natural Resources 11 Fostering Culture and Creativity 13 Promoting Wellbeing

The Swarovski Integrity Charter, endorsed by the Executive Board in 2016, formally defines and reconfirms our values, principles and commitment to acting responsibly

Sustainable paper guidelines (e.g. recycled content and responsibly sourced) integrated into new brand standards

100% of Swarovski crystals are produced using our pioneering Advanced Crystal lead-free formula†

Scope 1 emissions decreased by 59% at our main crystal manufacturing site in Wattens since 2010

Of our new or refurbished mono-brand stores 88% meet our Swarovski Sustainable Stores (Triple S) standard

Atelier Swarovski launched an exclusive UN Women charity bracelet in support of the Safe Cities Global Initiative

70% of our total water demand is met with recycled water across our manufacturing and production locations

Over 80,000 crystals have been upcycled through conscious design initiatives

SCOPE 1

59%

SUSTAINABILITY IN BRIEF 2015–2016*

Swarovski Waterschool has expanded to two new locations (with pilots at the Ping River, Thailand and Mississippi River, USA) taking the total to seven locations globally

Under our CLEAR program, our finished products and those

components across our entire supply chain meet the strictest regulations on hazardous substances

26% reduction in total energy consumption since 2010 across our manufacturing and production locations

33% of our energy comes from renewable sources at our manufacturing and production locations

*Quantitative data refers to 2016†Containing 0.009% lead or less

PbLead

88% Swarovski

Sustainable Stores

70%


VALUE CHAIN

We seek to understand and respond to sustainability issues across our value chain, from sourcing materials to designing pieces to engaging customers. The table below shows a simplified representation of our value chain, with a summary of some of the most significant sustainability issues that we continuously strive to understand better and address at each stage.

The Swarovski Crystal Business delivers a diverse portfolio of unmatched quality, craftsmanship and creativity, designing, manufacturing and selling high-quality crystals, genuine gemstones and created stones, as well as finished products such as jewelry, home accessories and design and lighting solutions. The Swarovski Crystal Business and its sister companies Swarovski Optik (optical devices) and Tyrolit (abrasives) form the Swarovski Group.

Founded in 1895 by Daniel Swarovski in Wattens, Austria, the company is now run by the fif th generation of family members, with 27,000 dedicated colleagues across the world responsible for adding sparkle to everyday life and maintaining the company’s position at the forefront of design, creativity and innovation. Swarovski’s products are sold in approximately 2,800 stores in 170 countries globally, with production sites in Austria, India, Liechtenstein, Thailand, Vietnam, Serbia, and the USA.

PRODUCT DESIGN AND DEVELOPMENT

♦ Product safety

♦ Product responsibility

SOURCING

♦ Supply chain assessment and management

♦ Human rights and working conditions

♦ Ethics and anti-corruption

PRODUCTION

♦ Labor practices

♦ Environmental management – energy, emissions, water and waste

DISTRIBUTION AND LOGISTICS

♦ Environmental management – energy, emissions, water and waste

CUSTOMERS AND COLLABORATION

♦ Disposal and/ or end of life

♦ Inspiring and promoting sustainability

OUR PRODUCTION LOCATIONS

♦ Austria: Wattens

♦ Liechtenstein: Triesen

♦ Serbia: Subotica

♦ India: Pune

♦ Thailand: Ayutthaya, Bangpoo and Bangplee

♦ USA: Plattsburgh

♦ Vietnam: Bien Hoa

USA Plattsburgh

LIECHTENSTEIN Triesen

AUSTRIA Wattens

SERBIA Subotica

INDIA Pune

THAILAND Ayutthaya Bangpoo

Bangplee

VIETNAM Bien Hoa

NORTH AND SOUTH AMERICA

EUROPE

MIDDLE EAST

ASIA-PACIFIC

TYROLIT SWAROVSKI CRYSTAL BUSINESS SWAROVSKI OPTIK

SWAROVSKI BEIRAT / BOARD OF DIRECTORS

CONSUMER GOODS BUSINESS

ROBERT BUCHBAUERCHAIRMAN

GEMSTONES BUSINESSLIGHTING BUSINESS

SWAREFLEXDIRECT SELLING

CHAMILIA

DANIEL COHEN

FINANCE & ADMINISTRATION

MATHIAS MARGREITER

NADJA SWAROVSKI

CORPORATE BRANDING &

COMMUNICATION

ATELIER SWAROVSKI

SUSTAINABILITY

SWAROVSKI FOUNDATION

MARKUS LANGES-SWAROVSKI

SWAROVSKI PROFESSIONAL

SWAROVSKI TOURISM SERVICES

This diagram shows the structure of the Swarovski Group.

EXECUTIVE BOARD

ABOVE Entrance to the Swarovski exhibition at Baselworld

OUR BUSINESS

SUSTAINABILITY REPORT 201710 11SUSTAINABILITY REPORT 201710 11

OUR SUSTAINABILITY STRATEGY

For more than 120 years, we have strived to stay true to Daniel Swarovski’s founding principles of doing business in a way that respects the social and natural capital on which we all depend.

Since 2010 we have taken a more formal approach, which led to the publication of our first sustainability report. We have consciously integrated sustainability into the operations of the Swarovski business, while building on our key strengths and achievements, such as our lead-free* Advanced Crystal formula.

Now, we recognize that Daniel Swarovski’s legacy can live on through Swarovski playing a deeper role in society and tackling some of the global challenges faced by the world today.

ABOVE Crystal production, Wattens, Austria

*Containing 0.009% lead or less

“WE HAVE CONSCIOUSLY INTEGRATED SUSTAINABILITY INTO THE OPERATIONS OF SWAROVSKI.

OPERATIONAL SUSTAINABILITY

Ongoing improvement of social and environmental governance and systems across the business units, production sites and external supply chain

OUR GOALS

OUR THEMES

To protect the people and the natural environment touched by

our supply chain

To inspire and enable our designers, collaborators

and customers to be more sustainable

To work towards sustainable production and consumption

WATER STEWARDSHIP

WOMEN’S EMPOWERMENT

FAIR PARTNERSHIPS

CONSCIOUS DESIGN

SUSTAINABLE INNOVATION

OUR VISION

Swarovski drives positive change, so when you buy Swarovski you are contributing to a better world

We are now embarking on the next phase of our sustainability journey. Through discussions with our stakeholders, and further analysis, we have developed our thinking around our most pertinent impacts, dependencies and opportunities.

The main tenets of our strategy are summarized in our vision and goals, and through five priority themes that define the areas of particular focus where we believe that Swarovski can have the greatest positive impact across our value chain. This framework runs alongside the continual work required to manage the broad range of sustainability risks, issues and opportunities across our business.

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WATER STEWARDSHIP Water has always been central to the Swarovski story, with our 120-year history of crystal production partly generated by small-scale hydro-power from the beginning. We now see the most significant risks and opportunities around our production sites and in some key regions in our supply chain where there is water pollution, water scarcity, and flooding. The aim now is to better understand the fresh water challenges and the potential context -based and collaborative interventions we can make.

WOMEN’S EMPOWERMENT As a brand for which women are a significant part of our consumer base and workforce, we strive to champion women’s empowerment. Our aim is to empower women across our value chain from those who craft our products to those who wear them.

FAIR PARTNERSHIPS We aim for colleagues in our production sites and across our supply chain to enjoy good conditions, benefits and opportunities in their working life and we endeavor to have a positive impact on the wider local communities.

CONSCIOUS DESIGN The breadth and depth of our industry design collaborations is one of the key reasons for our success as a global brand. We aim to become known for endorsing sustainable materials and products, and inspiring conscious collections by harnessing our networks and championing conscious design.

SUSTAINABLE INNOVATION Swarovski has always been at the forefront of innovation, and we want to channel this pioneering spirit in pursuit of sustainable innovation. We will pursue innovative uses and applications for our crystals, seek to influence the materials used with our products, research innovative services that contribute to the circular economy and link up with smart devices.


STRATEGY

“WE AIM TO BECOME KNOWN FOR ENDORSING SUSTAINABLE MATERIALS AND PRODUCTS.

UNITED NATIONS’ SUSTAINABLE DEVELOPMENT GOALS

We seek to align ourselves with the United Nations’ Sustainable Development Goals (SDGs) through our priority themes. The themes map across to the SDGs highlighted below and we have begun to consult with colleagues and NGOs to explore local development challenges and opportunities in our production locations.

ABOVE LEFT Jewelry production lines in our facility in Thailand

ABOVE RIGHT Employees in our Swarovski Gemstones production facility in Thailand

15

As discussed earlier in this report, our strategy is now defined by five themes that represent the areas in which we believe Swarovski can have the greatest positive impact. These will become an integral part of our ongoing stakeholder engagements.

Our work within these themes sits on a bedrock of continual activities to manage our fundamental social and environmental impacts at an operational level. Progress across these areas is summarized in more detail in a separate index, guided by the Global Reporting Initiative.

Periodic materiality assessments are also carried out through internal and external consultations and by gathering industry intelligence.


“SUSTAINABILITY IS ENDORSED AND GUIDED AT THE HIGHEST LEVEL.

MANAGEMENT APPROACHAt Swarovski, sustainability is endorsed and guided at the highest level. As with other major corporate decisions, strategic sustainability decisions are made collectively by the Executive Board to maintain alignment with the commercial strategy whilst engaging senior management on the direction and progress of the sustainability agenda. Executive Board member Nadja Swarovski represents sustainability at the executive level, and, reporting to her, the Global Vice President of Corporate Sustainability and Social Responsibility manages the development and implementation of our sustainability program across the company’s business units and cross - functional departments.

MANAGING OPERATIONS

We maintain a program around the ongoing improvement of social and environmental governance, systems, standards and certifications across our business units, our production sites and our external supply chain.

GOVERNANCE

In addition to the overarching governance of the Executive Board and the management of sustainability by a global internal team, we are also making progress with tailoring sustainability governance to specific requirements across the business. Business units (BU) such as the Swarovski Gemstones Business and Swarovski Professional have identified and appointed relevant BU stakeholders to implement formal structures to manage sustainability issues within their operations. This approach enables them to better address their unique business requirements and stakeholder expectations. The process of strengthening governance by making it more attuned to BU needs and stakeholder expectations is ongoing while we seek strong alignment across the Swarovski Crystal Business. ABOVE Tyrol, Austria

OPPOSITE Swarovski plant, Wattens, Austria

“WE ARE MAKING PROGRESS WITH TAILORING SUSTAINABILITY GOVERNANCE TO SPECIFIC REQUIREMENTS ACROSS OUR BUSINESS.

http://www.swarovskigroup.com/sustainabilityreport2017


MANAGEMENT

16 17

“WE TAKE A RIGOROUS APPROACH TO MANAGING AND REDUCING WASTE MATERIALS.

“OUR RESPONSIBLE SOURCING INITIATIVE IS A KEY PART OF OUR RESPONSIBLE APPROACH TO SUPPLY-CHAIN ISSUES.

ENVIRONMENTAL MANAGEMENT

As a responsible business with global manufacturing facilities, sustainable resource management is integral to Swarovski maintaining its long-term ability to operate successfully.

We continually seek new opportunities to reduce our energy consumption and lower emissions by adopting innovative energy efficiency measures and identifying opportunities to use renewable energy. In response to these ongoing challenges, our colleagues across production and process engineering collaborate regularly to develop new solutions and improve our performance. An important focal point for these efforts is our main crystal manufacturing site in Wattens, Austria, where we use significantly more

energy than at any of our other facilities. Here, we achieved the ISO 50001 energy management certification in 2016.

We take a proactive approach to managing water in our manufacturing operations throughout the cutting, grinding and polishing stages of creating crystals. Our Central Water Circulation Systems, a closed-loop water recycling process for grinding and polishing have been in operation since 1990 and reduce the need to draw water from the public water supply. We also take a rigorous approach to managing and reducing waste materials. Our consistent focus on waste reduction has helped us to achieve important breakthroughs, such as being able to recycle 90% of the rare earths used in the polishing process.

RESPONSIBLE SOURCING INITIATIVE

Our supply chain comprises a significant proportion of our own factories, together with external suppliers. Our Responsible Sourcing Initiative was established in 2014 to help us and our suppliers address environmental and social risks throughout our supply chain. It is a key part of our responsible approach to supply chain issues and is founded on a systematic, risk-based approach to monitoring suppliers’ adherence to our Supplier Code of Conduct.

As a result, 93% of our Category A and B suppliers, who supply our finished goods, components and raw materials and represent 95% of our annual procurement spend, have signed our Supplier Code of Conduct. Within our Consumer Goods Business, the largest business unit within the Swarovski Crystal Business, 97% of the Category A and B suppliers who supply finished jewelry, homeware, watches and packaging are routinely audited as part of the Responsible Sourcing Initiative.

We make targeted use of third-party assessments (e.g. SMETA, Responsible Jewellery Council and SA8000) and our own internal labor assessment (based on SMETA and SA8000) to monitor supplier performance. In recognition of the often complex issues in factories, we take a consultative approach to helping factory owners with remediation activities.

ABOVE Water treatment facility at Swarovski plant in Wattens, Austria

OPPOSITE TOP Wax mould-making in our production facility, Thailand

OPPOSITE BOTTOM Raw materials


MANAGEMENT

18 19

EMPLOYEES

Our people play a vital role in the ongoing success of our company and we recognize that diversity brings real commercial value to our business. We seek to build a diverse workforce and leverage an inclusive work environment by building leadership capability and organizational capacity. In order to realize our vision to be a truly attractive employer, we strive to empower our people with equal learning and development opportunities, ensure they are happy at work and have the tools and resources they need to give their best.

PRODUCT SAFETY

With a long-standing commitment to creating safe, responsible products, Swarovski continuously strives to innovate to be ahead of current legislation in the area of product safety. Our focus on product safety will continue to bring competitive advantages as consumer interest in transparency grows.

Our rigorous approach to optimizing the chemical content of our products through our Restricted Substance Policy Program (CLEAR) forms part of our broader Product Compliance Program, established by the Executive Board in 2009.

CLEAR acts as a mandatory standard for all our product development activities relating to hazardous substances. We have also implemented an online information portal for suppliers that provides advice on how to reduce the cost and complexity of compliance topics.

COMMUNITY INVESTMENT

Established in 2000, our flagship community investment program, Swarovski Waterschool, continues to deliver an inspiring educational program that enables young people to understand and practice sustainable water use. These schools are located near seven key water courses around the globe and work with local NGO partners to engage students and their communities to ensure the long- term availability of clean water for all.


The Swarovski Foundation was established in 2013 to build on Swarovski’s rich heritage of philanthropy, upheld by five generations of the Swarovski family. Its three focus areas are: fostering culture and creativity, promoting wellbeing and conserving natural resources. The Swarovski Foundation is governed by an external Board of Trustees, chaired by Nadja Swarovski.

“OUR FOCUS ON PRODUCT SAFETY WILL CONTINUE TO BRING COMPETITIVE ADVANTAGES AS CONSUMER INTEREST IN TRANSPARENCY GROWS.

“WE WORK WITH LOCAL NGO PARTNERS TO ENSURE THE LONG-TERM AVAILABILITY OF CLEAN WATER FOR ALL.

OPPOSITE TOP Packing finished pieces of jewelry in Thailand

OPPOSITE BOTTOM Employee in Wattens, Austria

ABOVE Ugandan girl using a Tippy Tap to wash hands

LEFT Students of Room to Read’s Girl’s Education Program in India


CASE STUDY: RESPONSIBLE JEWELLERY COUNCIL

The Responsible Jewellery Council (RJC) is an international not - for-profit standards and certification organization established to reinforce consumer confidence in the jewelry industry. Its 900+ members span the jewelry supply chain from mine to store and commit to being independently audited against the RJC Code of Practices, defining responsible business practices.

In November 2016, Atelier Swarovski achieved certification following the successful verification of the brand’s sustainability standards by an international third-party auditing company accredited by the RJC. Certification confirms that Atelier Swarovski is compliant with the industry standards of sustainability, including the areas of business ethics, human rights, and social and environmental management. Atelier Swarovski follows the Swarovski Gemstones Business and Chamilia, which both achieved RJC certification in 2015. Swarovski Professional is currently in the process of preparing for RJC certification after becoming a member in 2016.

THIRD PARTY AUDITS AND CERTIFICATIONS

In 2015 and 2016, we continued to strengthen our social and environmental management systems. Our progress has been formally recognized against the following standards:

Responsible Jewellery Council ♦ Atelier Swarovski : certification 2016

♦ Swarovski Professional: certification 2017

♦ Swarovski Gemstones Business: certification 2015

♦ Chamilia: certification 2015

SA8000

♦ Pune, India: certified 2016

SMETA ♦ Subotica, Serbia: audits passed 2015 and 2016

OHSAS 18001 ♦ Swarovski Gemstones Thailand: certified 2016

ISO 14001 ♦ Swarovski Gemstones Thailand: certified 2016

ISO 50001 ♦ Wattens, Austria: certified 2016

2015–2016 HEADLINE ACHIEVEMENTS AND ACTIVITIES

Nadja Swarovski, member of the Swarovski Executive Board commented: “We are proud that Atelier Swarovski has become a certified member of the Responsible Jewellery Council. This certification is a testament to the work that Swarovski undertakes to ensure our business has a responsible relationship with people and the planet and a positive impact in the future.”

OPPOSITE Austrian employee inspecting crystals

LEFT Swarovski Gemstones Spring/Summer 2017 marketing campaign

COLORED GEMSTONES RESPONSIBLE MINING STANDARD

As part of multi-stakeholder collaboration, the Swarovski Gemstones Business has been actively engaged in efforts to establish the first colored gemstones responsible mining standard in the industry. We are pleased to see that, in 2016, the RJC announced that it will expand its certification scope to include colored gemstones.

Atelier Swarovski by Christopher Kane, ‘Bolster’ collection


ACHIEVEMENTS & ACTIVITIES

22 23

ENVIRONMENTAL PERFORMANCE

These data refer to the ten major locations listed in ‘About this Report’ (page 1) .

Energy Consumption ♦ 26% decline since 2010 due, in part, to a focus on energy efficiency

Carbon Emissions ♦ 59% decline since 2010 in Scope 1 emissions

Renewable Energy ♦ 33% of the energy we consume is derived from renewable sources

Recycled Water ♦ 70% of the water used in our operations is recycled

Waste Recycling, Reuse or Composting ♦ 37% of the waste generated in our production processes is recycled, reused or composted

♦ All the rare earth minerals used in the crystal polishing process are recycled with a yield of 80% to 95%

GREEN LOGISTICS PILOT

In exploring options for reducing our logistics -related carbon footprint, we piloted the transportation of Swarovski pens by sea. This resulted in a 99% reduction in carbon emissions compared with air freight, and the adoption of sea freight as standard for the products in scope.

PAPER AND PACKAGING

We integrated sustainability guidelines (e.g. Forestry Stewardship Council certified and recycled content) into our revised brand standards, which set out minimum requirements and outline best practice in the use of printed materials for communications.

CASE STUDY: INNOVATION IN CRYSTAL MANUFACTURING OPERATIONS

Technical innovation in production has been part of Swarovski’s DNA since it was founded more than 120 years ago, and this pioneering spirit continues to set us apart from our competitors. At the forefront of our technological progress is our crystal manufacturing facilities in Wattens, Austria, where over the past two years, our technical and production teams have implemented further upgrades to improve efficiencies, minimize our impacts and ensure we remain the world leader in crystal manufacturing.

One example of an upgrade at our manufacturing facilities is that we have adopted best practice ultra violet degradation technology to treat organic solvent – a byproduct of our crystal coating method. This new process eliminates the use of up to 40,000m3 of water per year, which was used in the previous treatment washing system. In addition, unlike standard incineration technology, ultra violet degradation does not require the use of natural gas to burn the waste gas, avoiding the potential emission of 370 tonnes of carbon per year.

Another improvement we have made is in the washing of crystals during the manufacturing process. Our engineers have improved efficiencies by recovering as much energy as possible using heat exchanges that transfer heat from waste water to fresh rinsing water. Now, 90% of the energy used for hot water is from the direct recovery of heat using heat exchange technology. The process also results in 75% less water and 30% less energy being used due to the new heat pump system.

As we discussed in our last report, since 2011 we have adopted the use of oxygen-burner technology in our glass -melting furnaces, which has reduced our consumption of natural gas. This technology was first installed in our continuous-melting furnaces, and achieved 6,230MWh of energy savings in 2016; and after extending this to our six pot furnaces (used for colored glass production) , we achieved another 5,140MWh of energy savings in the same year. Overall, ongoing efforts to reduce our energy consumption and emissions at our crystal manufacturing facilities in Wattens have continued with significant success, cumulatively saving over 41,000MWh of energy in 2016.

ABOVE RIGHT Crystal warehouse, Wattens, Austria

ABOVE LEFT Crystal manufacturing efficiency monitoring, Wattens, Austria

OPPOSITE Crystal inspection, Wattens, Austria



24 25

EXTREME ICE SURVEY

Since 2015, Swarovski employees have participated in a joint project with James Balog, acclaimed nature photographer, to document the diminishment of Austria’s Stubia glacier, as part of his Extreme Ice Survey, which monitors the effect of climate change on glaciers.


The Swarovski Foundation, an independent charity established to honor Daniel Swarovski’s philanthropic spirit, is a major supporter of the Design Museum in London, which officially reopened at its new location in 2016, featuring the new Swarovski Foundation Centre for Learning, expected to welcome up to 60,000 learners annually.

SWAROVSKI WATERSCHOOL

Swarovski Waterschool celebrated its 15th anniversary in 2015. Since our last report, the program has expanded to two new locations (Ping River, Thailand and Mississippi River, USA) taking the total to seven locations globally.

COP21

In December 2015, Swarovski supported an ’Earth to Paris’ event to celebrate the signing of the Paris agreement on climate change by partnering with James Balog to present his acclaimed documentary Chasing Ice.

COP22

In November 2016, Swarovski joined a call to action on the Paris agreement through a digital partnership with ‘Earth to Marrakech’ at the United Nations’ Climate Change Conference.

UN WOMEN SAFE CITIES CAMPAIGN

In 2015, Atelier Swarovski launched an exclusive bracelet in support of the UN Women Safe Cities Global Initiative, donating 30% of the RRP from each sale. Nadja Swarovski, Member of the Swarovski Executive Board, commented: “In support of their tireless campaign to improve women’s safety we have created a selection of bracelets to raise awareness of this important fight.”

ABOVE Swarovski employees monitoring Austrian glaciers for the Extreme Ice Survey

OPPOSITE TOP Swarovski Waterschool, Uganda

OPPOSITE BOTTOM Indigo store, Beijing, China

CASE STUDY: SWAROVSKI SUSTAINABLE STORES

Triple S stands for the Swarovski Sustainable Stores framework, which guides our efforts to create and maintain stores with a low environmental impact. The Triple S Manual is integral to our store development approach and has been integrated into our General Contractor Guidelines. It focuses primarily on mono-brand Swarovski Retail stores (MOB SR) and covers major refurbishments, relocations and new Crystal Forest store design projects worldwide. We refer to the Leadership in Energy and Environmental Design (LEED) guidelines for commercial interiors as our baseline, and we integrate new green building techniques, while addressing important topics such as recycling materials, energy consumption, water use and waste reduction.

Initiatives include installing more efficient LED architectural lighting and heating, ventilation and air conditioning systems, sustainable sourcing for ‘greener’ construction sites, the reduction of water consumption, improved storage and collection of recyclables and the use of low-emitting construction materials.

Triple S has seen consistent performance improvements. In 2014 (its first year of implementation) we set a target of 25% of our MOB SR stores in each region to comply with Triple S standards, which was easily exceeded, with 42% of MOB SR store openings and refurbishments meeting the standards. The most recent data show that our stretch target of 80% in 2016 was achieved with over 88% of stores being compliant. As part of the program, we seek LEED certification for one key store each year and are pleased that our new Beijing Indigo store achieved LEED Platinum certification in January 2017.

“WE ARE EXTREMELY PROUD TO SUPPORT UN WOMEN AND ARE COMMITTED TO HELP CREATE A WORLD IN WHICH WOMEN FEEL EMPOWERED.

SWAROVSKI INTEGRITY CHARTER

Endorsed by the Executive Board in 2016, the Charter defines how Swarovski can act responsibly to meet global business opportunities and challenges. It reconfirms our values, principles and commitment to being a responsible business.

LEARNING AND DEVELOPMENT

Swarovski won three awards for its Leadership Academy and Mentoring Programs at the ‘Training Journal Awards 2016.’ At the time, over 350 leaders had taken part in the Leadership Academy since its relaunch less than two years earlier and nearly 200 people had taken part in mentoring conversations.

DIVERSITY

These data refer to 2016 and include the ten major locations listed in ‘About this Report’ (page 1) .

WIN CONFERENCE

In 2016, Swarovski sponsored the Women’s International Networking Conference, which works to increase the critical mass of women in decision-making roles. Through plenary sessions and workshops, the conference looks at options for the

‘World, Work and You.’

TRUST WOMEN

For the third consecutive year, Swarovski sponsored the Trust Women Conference that unites NGOs, corporations and pioneers in the field of women’s rights to take action and forge tangible commitments to empower women and fight modern slavery.

Male Female

Employee

Management

Senior Management



26 27

CASE STUDY: CONSCIOUS DESIGN

At Swarovski, we are aware the increasing social and environmental challenges the design community faces, and we also recognize the role Swarovski can play in finding collaborative solutions in partnership with our professional customers and industry collaborators. To this end, Swarovski strives to pilot and develop creative solutions that promote the responsible use of materials and resources, and have a positive impact on the lives of the people who make, use and wear our products.

We believe in the power of designers – in particular those in the jewelry and fashion industries – to make a positive impact through their creative choices. As part of our long-standing commitment to supporting young talent, we seek to engage in conversations with design institutions and have started to pilot a new format in our product presentations to design schools that incorporates sustainability as a core element of our brand values.

Through our upcycling initiative, we are piloting ideas for how to upcycle end-of-life Swarovski crystals and gemstones and thinking about how we can contribute to a new circular economy. Such programs, which are a challenge but also an opportunity for creative individuals, we have worked with design institutions and organizations

with a social purpose to transform over 80,000 stunning Swarovski crystals and gemstones into beautiful, new creations.

One example of this is our partnership with Cirque du Soleil on a sustainable design project with Fashion Business students at École supérieure de mode ESG UQAM, part of the Université du Québec in Montreal. This project challenged the

students to take Swarovski crystal-embellished costumes that have previously appeared in Cirque du Soleil’s world- famous shows and integrate their end-of-life materials into new products. Through this initiative, both Swarovski and Cirque du Soleil were keen to connect with young talent and engage their skills in a way that promoted sustainable design.

ABOVE LEFT Production staff on a break, Thailand

ABOVE RIGHT Trust Women Conference run by the Thomas Reuters Foundation

OPPOSITE TOP Central Saint Martins’ jewelry project finalist, Talisa Bergsen

OPPOSITE BOTTOM Crystal inspection

27%

60%

73%

73%

40%

27%

SWAROVSKIGROUP.COM

Report writ ten and designed by Swarovski

Indicator Description Principal Location Additional information UN Global Compact

Principles

G4-1 Statement from the most senior decision-maker of the organization ExB letterG4-2 Description of key impacts, risks, and opportunities Strategy Management Approach

G4-3 Name of the organization Our BusinessG4-4 Primary brands, products, and/or services Our BusinessG4-5 Our BusinessG4-6 Operating countries Our BusinessG4-7 Nature of ownership and legal form Our BusinessG4-8 Markets served Our BusinessG4-9 Scale of the organization Our BusinessG4-10 Workforce Our Business See Chart 1 in this GRI Index

G4-11 Percentage of workforce covered by collective bargaining agreements

There are 15993 employees across the ten major locations in focus. All employees from Wattens are covered by collective bargaining agreements. This represents 31% of all employees from the ten locations. Principle 3

G4-12 The supply chain Our Business and Management Approach Principles 4 & 5

G4-13 ownership or supply chain during the reporting period Our Business No signifiicant changes during 2015-2016 G4-14 Use of precautionary principle ExB Letter and Strategy Management Approach

G4-15 Economic, environmental and social charters and principles endorsed ExB Letter

UN Global Compact, UN Sustainable Development Goals, the Women's Empowerment Principles, Davos Compact and Responsible Jewellery Council (Gemstones Business, Atelier Swarovski, Swarovski Professional and Chamilia)

G4-16 Memberships and advocacy organizations ExB Letter

In addition to those noted in the report, Swarovski is actively engaged in the European Domestic Glass Association, the Austrian Industry Association, as well as the US Fashion Jewelry and Accessories Trade Association (FJATA). Swarovski is furthermore a member of the Austrian Chamber of Commerce, and several national jewelry associations.

This index has been guided by Global Reporting Initiative (GRI) G4 standards and reporting criteria. This GRI index contains some supplementary information and performance data, beyond what is included in the main Sustainability Report 2017. Unless otherwise stated, data is from the ten main locations covered by the report: Wattens, Austria; Triesen Liechtenstein; Plattsburgh, USA; Marigot Jewelry Thailand (Ayutthaya & Bangpoo);

Swarovski Gemstones Thailand (Bangplee); Männedorf, Switzerland; Pune, India; Serbia and Vietnam.

SWAROVSKI GRI INDEX 2017

GENERAL STANDARD DISCLOSURES

STRATEGY AND ANALYSIS

ORGANIZATIONAL PROFILE

Page 1


G4-17Entities included in financial statements or equivalent documents, and coverage in the sustainability report About this Report

Corporate Factsheet / websiteAs a private held company, Swarovski does not report financial information.

G4-18 Process for defining report content About this ReportManagement Approach, Stakeholder Enagement and Materality (Sustainability Report 2015)

G4-19 Material aspects Strategy and Management Approach

As reported in our Sustaianbility Report 2015 (Stakeholder Engagement and Materiality) we undertook a detailed assessment to identify our most material issues. Since then, we have continued to engage with our stakeholders to help define our key issues and evolve our strategy; we have carried out a periodic materiality assessment by consulting with our colleagues across the value chain, discussions with our B2B customers, external conversations with a number of NGOs and gathering industry intelligence. As a result, our strategy is now defined by five themes that represent the areas in which we believe Swarovski can have the greatest positive impact.

G4-20 Aspect Boundaries with the organization Strategy and Management Approach

G4-21 Aspect Boundaries outside of the organization Strategy and Management ApproachG4-22 Restatements of information provided in previous reports

G4-23Significant changes in Scope and Aspect Boundaries from previous reports About this Report

G4-24 Stakeholders engaged by the organization StrategyStakeholder Engagement and Materiliaty (Report 2015)

G4-25 Basis for identifying stakeholders StrategyStakeholder Engagement and Materiliaty (Report 2015)

G4-26 Approach to stakeholder engagement StrategyStakeholder Engagement and Materiliaty (Report 2015)

G4-27Key topics and concerns raised through stakeholder engagement, and response Strategy

Stakeholder Engagement and Materiliaty (Report 2015)

G4-28 Reporting period 2015-16G4-29 Date of previous report 2015G4-30 Reporting cycle BiennialG4-31 Contact point About this ReportG4-32 In accordance option About this Report GRI Index

G4-33 Assurance policy N/AWe do not currently seek assurance for our sustainability reporting.


IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

STAKEHOLDER ENGAGEMENT

REPORT PROFILE

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G4-34 Governance structure of the organization Our Business Management Approach

G4-56 behaviour such as codes of conduct and codes of ethics

ExB Letter Management Approach

Swarovski Integrity Charter: Endorsed by the Executive Board in 2016, the Charter defines how Swarovski can act responsibly to meet global business opportunities and challenges. It confirms our values, principles and commitment to responsible business. Principle 10


ASPECT: ENERGYG4-DMA Generic Disclosures on Management Approach Management Approach Principles 7, 8 & 9G4-EN3 Energy consumption within the organization See Chart 2 in this GRI Index Principles 8 & 9ASPECT: WATERG4-DMA Generic Disclosures on Management Approach Management Approach Strategy Principles 7, 8 & 9G4-EN8 Total water withdrawal by source See Chart 3 in this GRI Index Principle 8G4-EN10 Percentage and total volume of water recycled and reused See Chart 4 in this GRI Index Principles 8 & 9ASPECT: EMISSIONSG4-DMA Generic Disclosures on Management Approach Management Approach Principles 7, 8 & 9G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) See Chart 5 in this GRI Index Principle 8G4-EN16 Energy indirect GHG emissions (Scope 2) See Chart 5 in this GRI Index Principle 8ASPECT: EFFLUENTS AND WASTEG4-DMA Generic Disclosures on Management Approach Management Approach Principles 7, 8 & 9G4-EN23 Total weight of waste by type and disposal method See Chart 6 in this GRI Index Principles 8 & 9

ASPECT: EMPLOYMENTG4-DMA Generic Disclosures on Management Approach Management Approach Principle 6

G4-LA1Total number and rates of new employee hires and employee turnover by age group, gender and region See Chart 7 in this GRI Index Principle 6

G4-LA3 Return to work and retention rates after parental leave, by gender See Chart 8 in this GRI Index Principle 6

G4-DMA Generic Disclosures on Management Approach Management Approach

G4-LA5

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

Joint management-worker health and safety committees typically operate at the facility level. This is the case at all our manufacturing and production locations where 100% of the workforce is represented by local health and safety committees.


GOVERNANCE

ETHICS AND INTEGRITY

CATEGORY: ENVIRONMENTAL

ASPECT: OCCUPATIONAL HEALTH AND SAFETY

ASPECT: TRAINING AND EDUCATION


CATEGORY: SOCIAL SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK

SPECIFIC STANDARD DISCLOSURES

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G4-LA10

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings Management Approach

Transitions due to termination of employment are addressed on a local basis in line with the applicable local laws and with due consideration of the context within which the decision to terminate has been taken.

G4-DMA Generic Disclosures on Management Approach Management Approach Strategy

G4-LA12

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity See Chart 9 in this GRI Index Principle 6


G4-LA15Significant actual and potential negative impacts for labor practices in the supply chain and actions taken Management Approach Supply Chain (Sustainability Report 2015) Principles 4 & 5

ASPECT: DIVERSITY AND EQUAL OPPORTUNITY

ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES

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ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENTG4-DMA Generic Disclosures on Management Approach Management Approach Principles 1 & 2

G4-HR11Significant actual and potential negative human rights impacts in the supply chain and actions taken Management Approach Supply Chain (Sustainability Report 2015)


G4-SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs

All of the locations in the report (the ten manufacturing facilities that we have included in the report) have implemented local community engagement initiatives.

G4-DMA Generic Disclosures on Management Approach Management Approach Principle 10G4-SO5 Confirmed incidents of corruption and actions taken N/A No incidents of corruption were identified.


G4-SO8Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations N/A

There have been no cases of non-compliance with laws or regulations that would have a material adverse impact on our operations

ASPECT: CUSTOMER HEALTH AND SAFETYG4-DMA Generic Disclosures on Management Approach Management Approach

G4-PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes N/A

There have been no cases of non-compliance with laws or regulationsthat would have a material adverse impact on our operations


G4-PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes N/A



G4-PR6 Sale of banned or disputed products N/ASwarovski do not sell any banned or disputed products.

G4-PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes N/A


SUB-CATEGORY: PRODUCT RESPONSIBILITY

SPECIFIC STANDARD DISCLOSURES

SUB-CATEGORY: HUMAN RIGHTS

SUB-CATEGORY: SOCIETYASPECT: LOCAL COMMUNITIES

ASPECT: ANTI-CORRUPTION

ASPECT: COMPLIANCE

ASPECT: PRODUCT AND SERVICE LABELING

ASPECT: MARKETING COMMUNICATIONS

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CHART 1 CHART 2Total SCB employees 2016 Renewables VS. Non-Renewables 2015-16 GRI Indicator reference: G4-10 GRI Indicator reference: G4-EN3

(A) SCB-wide

CHART 3Water Withdrawal 2016 by SourceGRI Indicator reference: G4-EN8

(B) HR Region

NB: Our water consumption and use is monitored at a local level in our operations. Total water withdrawal: 2,347,468NB - Several categories previously reported as separate regions now incorporated into Europe.

0 5000 10000 15000 20000 25000 30000

Total workforce

Externals

Employees

Full time

Part time

Temporary employees

Permanent employees

Male Female

45.1 44.9

45.4 66.9

54.9 55.1

54.6 33.1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016

Non Renewables Renewables

Rivers Lakes Groundwater Public Supply Systems0 2000 4000 6000 8000 10000 12000

Others

Eastern Europe / Africa & VG International

Latin America

North America

Asia Pacific

Europe

International Production Centres

Male Female

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CHART 4 CHART 6Total water consumption: volume of water withdrawn, recycled and reused Total weight of waste generatedGRI Indicator reference: G4-EN10 GRI Indicator reference: G4-EN23

CHART 5Direct greenhouse gas (GHG) emissions (Scope 1) and Indirect GHG emissions (Scope 2)GRI Indicator reference: G4-EN15 and G4-EN16

-

10 000.00

20 000.00

30 000.00

40 000.00

50 000.00

60 000.00

70 000.00

2010 2011 2012 2013 2014 2015 2016

Scope 1 Scope 2

-

5 000.00

10 000.00

15 000.00

20 000.00

25 000.00

30 000.00

2010 2011 2012 2013 2014 2015 2016

Waste Generated (Tn)

Total waste generation

-

2 000 000.00

4 000 000.00

6 000 000.00

8 000 000.00

10 000 000.00

12 000 000.00

2010 2011 2012 2013 2014 2015 2016

Total Water Consumption (m3)

Water withdrawn Water recycled and reused

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CHART 7

GRI Indicator reference: G4-LA1 GENDER2015 2016

Male 807 825Female 3370 2917

AGE GROUP2015 2016

<30 years 2700 254430 to 50 1184 1142>50 years 39 56

REGION2015 2016

Männedorf 99 132Marigot 2024 1465Plattsburgh 265 51Pune 1 1Serbia 468 694SGT 358 78Triesen 58 58Vietnam 497 895Wattens 407 368

OVERALL RATE OF NEW EMPLOYEE HIRES 2015 201627% 47%

Total number and rates of new employee hires and employee turnover by age group, gender and region

Total number and rates of new employee hires and employee turnover by age group, gender and region

0 1 000 2 000 3 000 4 000 5 000

2015

2016

Gender

Male Female

0 1 000 2 000 3 000 4 000 5 000

2015

2016

Age Group

<30 years 30 to 50 >50 years

0 1 000 2 000 3 000 4 000

Männedorf

Marigot

Plattsburgh

Pune

Serbia

SGT

Triesen

Vietnam

Wattens

Region

2015 2016

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CHART 8Return to work and retention rates after parental leave, by gender GRI Indicator reference: G4-LA3

Return to Work Numbers (2016) Retention Numbers (2016)

Male FemaleReturn to work rate1 100% 90%Retention rate2 96% 82%

1 - Employees returning from parental leave in 2016 / Employees expected to return from parental leave in 2016 2 - Employees returning to work in 2015 / Employees still employed 12 months after returning from work in 2015

CHART 9

GRI Indicator reference: G4-LA12

Number of Employees by Employee Category 2015 Number of Employees by Employee Category 2016

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

0 100 200 300 400 500 600

Total number of employeesreturning from parental

leave

Total number of employeesexpected to return from

parental leave

Male Female

0 100 200 300 400 500

Still employed 12 monthsafter returning 2015

Total number returned2015

Male Female

0% 20% 40% 60% 80% 100% 120%

Senior Management

Management

Employee

Male Female

0% 20% 40% 60% 80% 100% 120%

Senior Management

Management

Employee

Male Female

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SUSTAINABILITY REPORT 2017 - Swarovski

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