Materiality Analysis

Inditex has carried out an analysis and prioritized relevant issues for the fourth consecutive year. The result of this year is a materiality matrix which has the double function of defining the aspects to be developed in this Annual Report as well as aligning the organization's strategy and practices with the concerns and expectations of those it relates to.

The dialogue with stakeholders is essential to evaluate Inditex's economic, environmental and social impact and influences its evaluations and decisions. To produce the 2014 materiality matrix, the Group consulted non-profit organizations, employees, customers and companies in the communication sector among others.

Further information at Balance of material issues

Process of drafting Inditex's materiality matrix

Identification

Analysis of mega trends which affect the business model and topics of relevant areas which affect value creation.

Evaluation of the boundaries (internal and external) of each relevant area.

Definition of priorities

Presentation of relevant aspects to internal and external stakeholders to evaluate their importance for economic, social and environmental impact and the influence of these matters on decisions and expectations.

Validation

Validation of the result of the materiality matrix to ensure that it is a reasonable and balanced reflection of the issues relevant to the organization.

Internal validation by Inditex’s directors and external validation via the Social Council.

Review

The conclusions from the internal and external review of the materiality matrix of the previous year have been applied during the year.

Company relations with stakeholders

Dialogue with stakeholders groups is crucial to ensuring the sustainability of Inditex’s business model

MILESTONES OF 2014
Customers
  • Extension of product health and safety control to include more than just direct suppliers, encompassing the entire supply chain
  • Introduction of new (RFID) technologies in store to improve customer service
Suppliers
  • Promotion of production audits
  • Classroom training for over 1,100 suppliers
  • Renewal of the Framework Agreement with IndustriALL
  • Strengthening of the management systems for the traceability of the supply chain
  • Implementation of the Strategic Plan for Stable and Sustainable Supply Chain 2014-2018
Employees
  • 1,3 billion training hours for employees
  • Opening of a new for&from store (Massimo Dutti)
Community
  • Participation in the London Benchmarking Group (LBG) task force
  • Support for 351 social organizations
  • 70% of investment focused on Inditex cluster countries
Shareholders
  • Consolidation on the FTSE4Good and DJSI indices
Environment
  • New environmental sustainability standard for wet process factories
  • Evaluation and audit of over one hundred wet process factories
  • Opening of over 300 eco-efficient stores and a new certified technological centre and a new certified logistics centre
Materiality matrix

Material issues
1 Corporate governance
2 Code of Conduct and Responsible Practices
3 Corruption
4 Customer relations and satisfaction
5 Product quality, health and safety
6 Green Design
7 Changes in consumption habits
8 New sales channels
9 Volatility of raw material prices
10 Changes in regulation
11 Logistics model
12 Expansion in new markets and in emerging markets
13 Exposure in mature markets
14 Working practices
15 Attraction and retention of talent
16 Development of human capital
17 Energy consumption and GHG
18 Traceability of the supply chain
19 Capacity building of the supply chain
20 Water consumption
21 Control of discharges
22 Human rights and working practices in the supply chain
23 Health and safety in manufacturers and suppliers
24 Animal welfare
25 Responsible purchasing practices
26 Waste management
27 Recycling systems and management of the product end of life
28 Protection of biodiversity
29 Social action and local community development
30 Dialogue with and commitment to stakeholders