Environment

The environmental dimension of ESG considers our use of natural resources and how our activities, both directly and via its supply chains, affect the environment. Our key inputs that interact with the environmental dimension are – Fibre, Water, Energy, Chemicals and Waste. An additional layer of environmental risk is added by climate change.

Environment Management Systems

In alignment with our ESG policy, we are committed to operating in a sustainable and responsible manner. This is the evident from the environment management systems we have deployed at our manufacturing facilities based on ISO14001 standard and covers all aspects of your operations, including water management, energy management, waste management, air quality management.

We are committed to continuous improvement of your EMS and regularly review our environmental performance. Our EMS systems are verified through international standards and also audited by specialised third-party verification companies.

Download our ISO 14000 Certificate, Verified Higg FEM certificate.

Decarbonisation

Environment Management Systems alone cannot support in achieving better environmental performance and dealing with the impacts of Climate Change. Decarbonisation is the key to sustainable future.

Climate Change

Climate Change risk has the potential for adverse effects on lives, livelihoods, health status, economic, social and cultural assets, ecosystem services and infrastructure. The impact of the climate risks i.e. physical and transitional risk are felt through micro-economic and macro-economic transmission channels coupled with source of variability.

To be proactive in managing climate change, we undertook a qualitative analysis of two physical scenarios (RCP 2.6, RCP 8.5) and two transition scenarios (IEA 2DS, IEA STEPS) to understand the resilience of our approach to climate change. This enabled us to evaluate our current standing and devise a localized & context specific adaptation plan to proactively respond to the risks and leverage available opportunities.

Physical Climate Risk Adaptation Plan

In the physical scenario, Arvind being a textile player faces risk majorly due to its dependence on raw material, water use, energy efficiency, logistics, etc. Thus our adaptation strategy is focussed on these risks. A key initiative that we are taking as part of this is strategy is strengthening our sustainable raw material portfolio by directly sourcing sustainable cotton from farmers which are practicing BCI, Organic and Regenerative Agricultural practices.

For further details on refer to our Physical Climate Risk Adaptation Plan and for Climate Risk & Opportunities refer the Climate Risk Management chapter in our Sustainability Report.

Energy Consumption

Understanding the energy consumption is the first step towards reducing emissions. The source and quantum of energy we consume significantly determines the sustainability of our organisation. We are relentlessly monitoring our energy use and greenhouse gas emissions to devise strategies to reduce our carbon footprint. The current status of renewable and non-renewable sources in our energy mix is shown below:

Read the assurance statement with Intertek's independent opinion.

We are progressively reducing our dependence on fossil fuels and increasing the proportion of renewable energy in our energy mix to steer our decarbonisation journey.

Highlights

Greenhouse Gas Emissions:

Arvind, being an integral part of the textile & apparel industry, is contributing to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels by reducing our greenhouse gas emissions. We have committed to the Science Based Targets Imitative and are in the process to set our SBTi targets.

The current status of our direct (scope 1) and Indirect (scope 2) greenhouse gas emissions is shown below:

Direct and Indirect Emissions

Year	Unit	2020-21	2021-22	2022-23
Direct GHG Emissions (Scope 1)	MT Co2e	2,87,658	3,63,942	3,66,155.5
Indirect GHG Emissions (Scope 2 - Location based)	MT Co2e	1,93,347	2,83,654	1,68,198.1
Indirect GHG Emissions (Scope 3)	MT Co2e	2,46,196	4,18,569	5,95,291.7

Break up of Indirect GHG emissions from value chain (Scope 3) for FY 2022-23:

Category	Description	FY 2022-23
1	Purchased Goods and Services	4,50,638
2	Capital Goods	567
3	Fuel and energy-related emissions not included in Scope 1 or 2	85,619
4	Upstream Transportation and Distribution	4,195
5	Waste Generated in Operations	5,791.6
6	Business Travel	1,093.64
7	Employee Commuting	32,725
9	Downstream Transportation and Distribution	14,663

Read the assurance statement with Intertek's independent opinion.

Targets

We have set an absolute emission reduction target of 40% reduction of greenhouse gas emissions Scope 1 and 2 by 2025 compared to baseline of 2015. The absolute emissions in 2015 were 856,712 MTCO2e. In FY2022-23, we have reached a reduction of 62% from the base year. While we are in the process to set our SBTi targets, our current targets may be considered as science-based as it aligns to 4.2% annual reduction of emission to align with the 1.5°C pathway.

For more details, refer to our Integrated Annual Report and the Sustainability Report.

Circular Fashion

Designing right products in a ‘fundamentally right’ manner is integral to Arvind’s way of doing business. Our focus on material issues and efforts to integrate sustainability cover the entire life cycle of the product – from raw materials used, product development, and manufacturing, to product use and subsequent recycling.

As part of our Circular Fashion Initiatives, in order to design Low Carbon Products we are taking a number of initiatives, including:

• 1. Using recycled materials: We uses a variety of recycled materials in its products, including recycled cotton, polyester, and nylon.
• 2. Sourcing sustainable materials: As cotton is our key raw material, we have invested in promoting Regenerative, organic and Better Cotton agriculture. We also uses other sustainable materials, such as Tencel, Hemp, etc.
• 3. Integration of renewables in our electricity mix: We have implemented a number of measures to integrate renewables, such as setting up solar rooftop, wind-solar hybrid, etc.

Low Carbon Products

In addition to these initiatives, we are continuously engaged in developing products that can allow our customers to reduce their Scope 3 footprint and avoid emissions.

Avoided Emissions for Third Parties

We are manufacturer of textiles, and our emissions are mostly covered in the Scope 3 of our customers. Any initiatives that we take to reduce our GHG emissions help our customers to avoid emission. An example of such initiative is increasing the sourcing of renewable electricity in our electricity mix. Electricity is used in various textile process, the integration of renewable help us avoid emissions that would have occurred if we sourced 100% of our electricity from the grid.

In the FY 2022-23, 12% of our sourced electricity was renewable. This has led us to avoid an emission of 38,700 MT CO2e. The CEA emission factor for electricity was used for estimating the avoided emission. Foe estimating, the percentage of revenue, we have considered the percentage of revenue from all the facilities which have integrated renewable energy into the energy mix. This comes out to be 60%. We are exploring father ways to strengthen our estimation.

Avoided Emissions from Low Carbon Products

Cotton is our key raw material and majority of our products are made from Cotton. Cotton grown through organic cultivation practices (Organic Cotton) and Better Cotton Principles (BCI cotton) are the low carbon products in our product portfolio. We conducted an external Life Cycle Assessment to estimate the quantum of environmental impacts of conventional cotton in comparison with organic cotton and BCI cotton (Shah, Bansal, & Singh, 2018).

In the FY 2022-23, 61% of our cotton was sourced from sustainable sources which led to an avoided emission of 14026 MT CO2e. The total avoided emissions are calculated on the basis of emission which would have accoutred if the 61% cotton sources was conventional. The emission factors of (Shah, Bansal, & Singh, 2018) were used for the estimation of avoided emissions. For estimating the percentage of revenue from climate change products, we have considered the percentage of raw material used which is sustainable. We are exploring father ways to strengthen our estimation.

Biodiversity

The effect of the textile industry on climate change has received ongoing attention. Less well recognised is that textile has a tremendous cost to biodiversity. The destruction of soil, alteration of natural ecosystems, and contamination of waterways are all intimately related to the supply chains for textile.

For driving effective governance mechanism, monitoring nature-related risks & opportunities, and integrating biodiversity in Arvind’s businesses strategy we have established the following guiding principles:

• 1. Identification of business-biodiversity nexus for Arvind
• 2. Understanding the impact & dependencies
• 3. Assessing the risks & opportunities
• 4. Responding to the risk & opportunities

Biodiversity Risk Assessment

Biodiversity is a complex and multidimensional landscape, its interaction varies across each part of the textile value chain. Each value chain actor contributes to the five main direct pressures that constitute major threats to biodiversity.

We conducted a biodiversity risk assessment for our own operations and the value chain to understand our impact and dependencies on these five direct pressures. This then guided our identification of risk and opportunities.

From the biodiversity related risk and opportunities, we have devised actions as per the AR3T framework, and some of them are:

• 1. Move to deforestation-free supply chains i.e. raw materials sourced from existing managed landscapes for agriculture or forestry activities.
• 2. Restore the productivity of agricultural land using regenerative agriculture practices, thus reducing the need to expand to newer areas.
• 3. Work with certification standards to include biodiversity-related criteria as part of the standards.

For more details related to indicator used for measurement, description of impacts and their relevance to various pressure drivers refer to our Biodiversity Strategy.

Targets

Indicator	2021-22	2022-23
Proportion of sustainable cotton sourced (%)	40.00%	61%
The proportion of chemicals sourced compliant with ZDHC (%)	78.19%	99%
The proportion of freshwater used compared to total water use (%)	22.71%	44.84%
Proportion of industrial effluent discharged (%)	12.00%	5%
The proportion of low-carbon or renewable energy consumed (%)	20.00%	22%
Reduction in GHG emissions (MTCO2e) compared to the 2015 baseline	24.00%	62%
Hectares of land (ha) using regenerative practices for cultivation	4,362 Ha	15535.45 Ha

Fibre

As a major player in the textile and apparel sector, we are poised to grow with a pace similar to the Indian textile and apparel industry. An uninterrupted transparent and traceable supply of fibres is thus mandatory.

What we plan to ensure is, this smooth supply is of high quality and doesn't come at the cost of the society or environment. At Arvind, our sustainable fibre initiatives include creating a sustainable cotton supply chain from the farms to produce fabric, reducing our dependence on virgin material by sourcing recycled fibres and recycling post-industrial waste, and exploring alternate natural fibres.

Our engagement as of FY 2022-23 with cotton farmers to promote sustainable cotton practices can be seen in the table below:

Better cotton	Organic and In-conversation	Regenerative
		Regenerative Organic	Regen-agri
72,303 Farmers	16,475 Farmers	2,500 Farmers	4,500 Farmers
120,406 Hectare	18,932 Hectare	1,162 Hectare	6,597 Hectare

We are developing a sustainable ecosystem from farm to fabric, for more details refer to our Integrated Annual Report and the Sustainability Report.

Water

Water is a key resource for everyone - individuals, communities and industries like the textile and apparel sector. The cultivation of cotton, or extraction of synthetic fibres uses water. Textiles are processed through variety of steps which require water and uses dyes & chemicals. 54% of India’s total area faces ‘high to extremely high’ stress, with the high use of water in textiles the situation is becoming alarming and complicated.

We are continually engaged in water stewardship activities to maximize the recyclability of water, putting lesser stress on freshwater. Our water stewardship strategy focuses on water awareness and efficiency throughout our value chain. With the appropriate initiatives and policies in place, we have significantly reduced our net freshwater consumption, the details are below:

Water Consumption	Unit	2019-20	2020-21	2021-22	2022-23
A. Withdrawal: Total municipal water supplies (or from other water utilities)	Million cubic meters	0.5	0.62	0.76	1.58
B. Withdrawal: Fresh surface water (lakes, rivers, etc.)	Million cubic meters	0	0	0	0
C. Withdrawal: Fresh groundwater	Million cubic meters	3.56	2.13	1.6	1.16
D. Discharge: Water returned to the source of extraction at similar or higher quality as raw water extracted (only applies to B and C)	Million cubic meters	2.6	2.02	2.21	0.15
E. TOTAL NET FRESH WATER CONSUMPTION (A+B+C-D)	Million cubic meters	1.46	0.73	0.15	2.59

Read the assurance statement with Intertek's independent opinion.

Chemicals

Chemicals are an important element in textile manufacturing. They also serve as an inflection point, where a lot of innovation and technology can be embedded to make the final outcome more palatable to modern sensibilities. We have adopted a lifecycle approach to chemical management, covering the following aspects:

Reducing Consumption

Continuous Improvement

Substitution

Discharge Management and Salt Recovery

Highlights

• 1. An average 99% of the used chemicals in our manufacturing facilities were compliant to ZDHC MRSL.
• 2. We are the first textile mill globally to join the Zero Discharge of Hazardous Chemicals (ZDHC) programme in 2016.
• 3. Adhered to safer chemistry frameworks to eliminate hazardous chemicals
• 4. Denim with minimal synthetic chemicals that uses biobased materials instead of synthetic Indigo dye, pre-wetting chemicals, and auxiliaries. Initial trials have been successful.
• 5. Bio Black: Sustainable black pigment from wood waste for printing/coating. Used in Levi's Well Thread products on white and natural indigo bases.

For more details refer to our Integrated Annual Report and the Sustainability Report.

Waste

A typical textile industry always generates waste either in the form of empty chemical carboouy, sludge at the end of water treatment, comber noil during spinning etc. The waste is generated in various forms at all stages of the textile process. It has been our constant endeavour to measure, assess and minimize our waste creation and maximise recyclability. We have redefined waste as the new era resource by improving our recyclability across our facilities. As quantified in the table below, we are recycling or reusing a major portion of our waste.

	Unit	2019-20	2020-21	2021-22	2022-23
Total waste recycled/reused	MT	16215.93	18009.45	17342.42	25786.54
Total waste disposed	MT	3483	2714.46	4539.58	5603.28
- Waste landfilled	MT	3483	2714.46	4539.58	5603.28
- Waste incinerated with energy recovery	MT	0	0	0	0
- Waste incinerated without energy recovery	MT	0	0	0	0
- Waste otherwise disposed, please specify:	MT	0	0	0	0
- Waste with unknown disposal method	MT	0	0	0	0

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Packaging

Packaging in the textile industry is majorly used to contain, carry, store and protect goods. It has impacts on the environment in all the life cycle phases be it raw material extraction on end-of-life. We are committed to “Reducing the weight of plastic packaging by 5%, by 2025 compared to baseline of 2022”. We endeavour to accelerate the reusability and recyclability of the packaging material through various programs. For details of such programs refer to our Sustainable Packaging Strategy.

The use of various packaging materials for 2022-23 is shown below:

Packaging Materials	Coverage (% of cost of goods sold)	Total Weight (MT)	Recycled or Certified Material %
Wood / Paper / Fiber	100	1711.11	0
Metal	100	98.49	0
Glass	100	0	0

Our performance for plastic packaging used is shown below:

	2019-20	2020-21	2021-22	2022-23
A. Total weight (tonnes) of all plastic packaging	901.877	433.937	625.91	907
B. Percentage of recyclable plastic packaging (as a % of the total weight of all plastic packaging)	0	0	0	0
C. Percentage of compostable plastic packaging (as a % of the total weight of all plastic packaging)	0	0	0	0
D. Percentage of recycled content within your plastic packaging (as a % of the total weight of all plastic packaging)	0.06	0.01	9.28	0.01
Coverage (as a % of cost of goods sold)	100	100	100	100