Sustainable development at Inditex

Inditex has strengthened its sustainability commitments to protecting human rights in all of its activities by embracing the route to sustainability proposed by the United Nations in its seventeen Sustainable Development Goals.

During the historic summit on 25 September 2015, the United Nations member States approved the 2030 Agenda for Sustainable Development with 17 Sustainable Development Goals (SDGs) to transform the world. With these new universal goals, countries, companies and other organizations will intensify their efforts to end all forms of poverty , reduce inequality and fight climate change, to ensure that no one is left behind.

The 17 Sustainable Development Goals and their accompanying 169 targets build on the success and milestones achieved by the Millennium Development Goals (MDG) set in 2000, which until 2015 focused on reducing hunger, poverty, disease and gender inequality, among other issues. Building on this momentum, the SDGs are broader in scope and go further towards addressing the underlying causes of poverty and the universal need of achieving development that benefits all people. The goals encompass the three elements of sustainable development: economic growth, social inclusion and environmental protection. The SDGs acknowledge companies as key players in achieving these goals.

In light of these new developments, Inditex has strengthened its commitment to sustainability throughout its value chain, in all of its activities and therefore the impact those activities have on the Group’s stakeholders. Inditex now undertakes a new commitment to the 17 Sustainable Development Goals, embracing the route to sustainability chartered by these goals.

This commitment extends to the entire company and includes all 17 SDGs and their targets, although certain principles are especially relevant to the company given its industry, context and business model.

In its Annual Report, Inditex has linked each of its priorities to the SDGs it impacts. Furthermore, all relevant issues identified in the materiality analysis have been grouped together according to the themes targeted by the United Nations in the SDGs: people, prosperity, peace, planet and partnerships. This Annual Report is, therefore, an exercise in identifying Inditex’s practices and aligning them with the commitment to working towards the agenda set by the SDGs for 2030.

The company has also instituted sustainability policies that are integrated with value creation in its business model and represent another step toward achieving the SDGs and their targets.

The Sustainable Development Goals and Inditex

(Chapters of the Annual Report related to each SDG)

Inditex and human rights

Inditex has always had a strong commitment to protecting human rights in all of its activities and in the impact these activities can have on the Group’s stakeholders. Based on this, Inditex can now undertake a new commitment to the 17 Sustainable Development Goals, embracing the route to sustainability charted by these goals.

As part of a process of ongoing review of the way the Group tackles human rights, Inditex refers to its Code of Conduct and Responsible Practices, which “allows gaining awareness and enforcing Inditex’s business culture, deeply rooted in respecting human and labour rights and in the effective inclusion within the company of the whole group of employees, respecting their diversity”. The Code of Conduct is developed by policies approved by Inditex’s Board of Directors, such as the Corporate Social Responsibility policy which establishes the principles of Inditex’s relationships with its stakeholders, and is based on the United Nations Universal Declaration of Human Rights, the principles of the Global Compact, and the Guiding Principles on Business and Human Rights, and so forth. The Code of Conduct for Manufacturers and Suppliers which was approved by the Board of Directors in 2001 and amended most recently in 2012, establishes the Group’s principles for its supply chain.

The application of these policies and codes extends to the whole company and its stakeholders, and is fully integrated into our value creation. Collaboration is key, and at Inditex it takes the shape of ongoing dialogue with all stakeholders, as well as initiatives such as Framework Agreements with the international trade union federations IndustriALL Global Union and UNI Global Union, participating in platform such as Better Work and Better Factories, and the Ethical Trading Initiative, the International Labour Organization, Sustainable Apparel Coalition and Better Cotton Initiative, among others. Additionally, Inditex has been a member of the UN Global Compact since 2001 and participates in the Supply Chain Advisory Group and the Human Rights Group of the Spain Network.

Stakeholder relations

In its stakeholder relations, Inditex aims to forge strong partnerships as another step towards achieving the Sustainable Development Goals. Goal 17 emphasizes the need to “revitalize the global partnership for sustainable development”. Through different commitments to each stakeholder and by forming and participating in dialogue forums, Inditex builds partnerships that, in one way or another, help put into practice the sustainable development guidelines established by the United Nations.

Commitments to our stakeholders

Motivated by:
Fair and decent treatment Integration into the business model Promotion and protection of human rights, fundamental labour rights and international standards Contribution to development Social interests and the interests of all shareholders Respect for the environment
Taking the form of:
  • Open communication
  • Teamwork
  • Upholding the highest standards
  • Responsible clothing design
  • Meeting the most demanding product health and safety standards
  • Ethical and responsible product manufacturing
  • Strategic Plan for a stable and sustainable supply chain (2014-2018)
  • Investment in the community
  • Transparency principles
  • Encouraging informed participation
  • Protecting biodiversity
  • Sustainable management of natural resources

Materiality analysis

In line with its sustainability policy, Inditex’s stakeholder relations are based on ongoing dialogue and transparency. Inditex engages in dialogue to identify the most important issues for those parties linked with the Group. For example, we use the materiality analysis to ensure that our strategy is aligned with the concerns and expectations of those associated with the company or affected by our activities, as well as to decide on the content of Inditex’s Annual Report. These concerns and expectations, along with sustainable value creation, give the programmes run by Inditex purpose and allow the company to deal with the challenges and opportunities it faces in the course of its activities.

This is the fifth consecutive year that Inditex has gone through the exercise of analysing and prioritizing issues relevant to the Group.

For this materiality analysis, Inditex followed the GRI - G4 guidelines and the Integrated Reporting Framework. This year, the Group also reviewed the list of relevant issues in light of the current state of the industry, and expanded the list of stakeholders consulted.

Inditex also has at its disposal a Social Council that advises the Group on sustainability issues. The Council’s members are external individuals or institutions independent from the Group. Its purpose is to formalize and institutionalize dialogue with key actors in the civil society within which Inditex develops its business model. The Social Council played an active role in preparing the materiality matrix.

Process of preparing the Inditex materiality matrix

Protocol of the GRI –G4 “Sustainability Reporting Guidelines” IDENTIFICATION PRIORITIZATION VALIDATION REVIEW Analysis of overachingtrends andidentificationof relevant issuesat any point inthe value chain Presentation ofrelevant issuesto internaland externalstakeholders in order to validate andprioritize them Internal validationby Inditex’smanagement andexternal validationvia the SocialCouncil Stakeholder’sconclusionsregarding processes andresults are takeninto consideration

The material issues were categorized according to the five areas identified by the United Nations, which encompass the 17 Sustainable Development Goals, in order to align the strategies and programmes for addressing these issues with the SDGs and their targets