Esprit : Sustainability report FY2023

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2023

Hong Kong Stock Code 00330

Esprit Holdings Limited

Incorporated in Bermuda with limited liability

CONTENTS

1			4
ABOUT ESPRIT	3	OUR EMPLOYEES	55
Letter from the Group / About this Report / Our Business			Our Approach / Our Employees / Diversity, Equality
and Product / Our ESG Approach / Governance			and Inclusion / Talent Development / Human Rights /
			Health and Safety / Employee Engagement
2			5
ENVIRONMENT AND	16	COMMUNITY	64
PRODUCT RESPONSIBILITY			Our Approach
Our Approach / Climate Change and Carbon Footprint /
Embracing Circularity / Waste Management /
Water and Chemical Management / Biodiversity and
Forest Protection / Sustainable Materials / Product
Safety and Quality			6
3
SUPPLIER AND VENDOR	41	APPENDIX	66
MANAGEMENT			HKEX ESG Reporting Guide Content Index /
Our Approach / Our Supplier / Responsible Purchasing			SASB Content Index

Practices / Social Compliance Monitoring in Supply

Chain / Human Rights in Supply Chain / Wages /

Supplier Health and Safety

1

ABOUT ESPRIT

Material topics addressed in this section:

• Business Ethics and Integrity
• Business Performance
• Data Privacy
• Responsible Marketing

1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

LETTER FROM  THE GROUP

Dear Readers,

We are pleased to present the environmental, social and governance report (the "ESG Report" or the "Report") of Esprit Holdings Limited (the "Company", "ESPRIT", "our" or "we") and share with you our latest progress on environmental and social responsibility.

Our vision is to create authentic fashion with mindfully designed and responsibly produced collections. ESPRIT was founded in California by environmentalists Susie and Doug Tompkins in 1968, and we have continuously strived to create authentic fashion with mindfully designed collections. One of the most important aspects of sustainability is the pursuit of positive change, to people and the planet. We believe that the future of sustainable fashion must be one of openness to innovative ideas, to ever-changing market conditions, and to consumer needs. We will continue to communicate with our employees, customers, suppliers, wholesale partners, and other business partners to limit and reduce our overall carbon emissions and energy consumption.

The brand's sustainability strategy regarding our products is based on circularity principles, factoring in variables such as how ESPRIT designs and manufactures, materials selection, and valuing resources along the supply chain. We aim to be part of a circular fashion system and to achieve this, we are transitioning towards sustainable materials and exploring innovative ways to reduce negative impacts to the environment in our production processes. Whenever possible, the Company chooses fibers and materials that are recyclable or regenerative to the environment.

In 2023, fabric material from sustainable sources accounted for approximately 55% and the Company aims to maintain a 60% usage of sustainable fibers by 2030.

ESPRIT also participates in various multi-stakeholder industry initiatives and organisations around the world that fosters closer dialogue with governments and civil society. Topics covered include due diligence, workers' participation, training and awareness, assessments, audits and verifications, and occupational health and safety.

We are proud to announce that in December 2023, ESPRIT agreed to support the Denim Deal 2.0, an initiative bringing together stakeholders from the garment industry, creating an exclusive network of denim specialists, aiming to share knowledge and be at the forefront of sustainable practices and innovation. Participating brands are able to produce their denim products more sustainably and circular, but also allows ESPRIT to better prepare for the upcoming EU Extended Producer Responsibility (ERP) legislation, which comes into effect in the Netherlands starting 2025 and is already effective in France.

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

Supply chain transparency is key to our business. ESPRIT has been publishing its supplier list since 2016 which includes factory names, locations, types of goods produced, and numbers of workers. In addition, it covers our place of fabrication and master suppliers (Tier 1), wet-processing facilities and other secondary processing facilities (Tier 2) and raw material providers (Tier 3). This is in alignment with the Human Rights Watch Transparency Pledge as well as our Greenpeace Detox and Changing Markets commitments. To uphold transparency, we update our supplier list every six months with the information received from our mapping process.

We recognise the importance of social responsibility and strive for open and transparent dialogue to explain challenges in our industry and to communicate how we are tackling them. By disclosing our factories, processing facilities and raw material suppliers, ESPRIT has been recognised as one of the leaders in supply chain traceability disclosure, ranking in the top 8% in overall supply chain traceability in the Fashion Revolution's Fashion Transparency Index 2023 among our peers. We strive for continuous improvement in our performance by investing in accredited tools and methodologies to prove accountability and improved circular fashion efforts.

As part of our commitment on living wage, ESPRIT is a signatory of ACT ("Action, Collaboration, Transformation"), which is a ground-breaking agreement between global brands, retailers, and trade unions to transform the garment and textile industry to achieve living wages for workers through industry-wide collective bargaining linked to purchasing practices. We have developed an interactive engagement tool to assess our own purchasing practices and for suppliers to assess our purchasing practices so that we can act for improvement.

To enhance access to remedies for more workers in the supply chain, ESPRIT has participated in a collaboration project between the Fair Wear Foundation and the German Partnership for Sustainable Textiles (PST) on a joint grievance mechanism and remedy approach in local factories. The project aims to work towards a jointly accessible grievance system in our factories and intended to enable workers to raise complaints and engage with local organizations through existing grievance channels. With the help of our sourcing agency, the project was implemented in five pilot factories that ESPRIT works with - three of them based in Bangladesh, and two in India, from June and October 2023.

With sustainability laws and regulations constantly changing around the world, and especially in Europe, ESPRIT will continue to collaborate closely with its suppliers and industry partners to meet environmental, social compliance and governance standards.

We believe that sustainability and social responsibility are integral to our business operations, and we are committed to doing our part to create a more sustainable future. Thank you for your continued support.

With Kind Regards,

The Board of Directors of Esprit Holdings Limited

April 2024

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

ABOUT THIS  REPORT

How We Report

This report is the environmental, social and governance report (the "ESG Report" or the "Report") of Esprit Holdings Limited ("ESPRIT", the "Company", "we" or "our"), prepared with reference to the Sustainability Accounting Standards Board ("SASB") Apparel, Accessories & Footwear Sustainability and in accordance with the Environmental, Social and Governance Reporting Guide (the "HKEX ESG Reporting Guide") contained in Appendix C2 of the Rules Governing the Listing of Securities on the Hong Kong Exchanges and Clearing Limited.

Our ESG Report is produced on an annual basis, together with our Annual Report covering our financial performance. This ESG Report covers our identified risks, focus areas and material topics (see "Materiality Assessment") focusing on the environmental, social, and governance performance and related policies and management and gives an overview of our new strategy towards circularity, including tools, targets, and progress of ESPRIT and all its subsidiaries (the "Group") covered in our 2023 Annual Report for the reporting period from 1 January 2023 to 31 December 2023 (the "Year") and is published on 29 April 2024.

For any inquiries and feedback about this ESG Report, please contact us via email at [e-mail].

Reporting Principles

To ensure the quality and presentation of the reported ESG disclosures, we follow the reporting principles as outlined in the HKEX ESG Reporting Guide, including:

Materiality: We have carried out stakeholder engagement and materiality assessment, and clarified the report content and scope based on the results of our materiality assessment. For details, please refer to the "Ongoing Dialogue" and "Materiality Assessment" sections in this Report.

Balance: This Report unbiasedly discloses both the positive and negative information to showcase the environmental, social and governance performance of the Company during the Year.

Quantitative: This Report refers to applicable quantitative standards and practices, adopts quantitative methods to disclose applicable key performance indicators ("KPI"), and elaborates relevant quantitative standards, methodologies and/or calculation tools, and the source of the conversion factors used (if applicable) where appropriate.

Consistency: To ensure comparability over time, we maintain consistency in our reporting principles, scope and data disclosure and calculation methodologies. The reporting scope and statistical methodologies applied to this ESG Report were substantially consistent with previous years, and explanations would be provided if there is any change in the scope of disclosure of data or calculation methodologies.

Ongoing Dialogue

We greatly value ongoing stakeholder dialogue and have integrated this in our business processes, informing the priorities and the sustainability targets shared in this Report. As a foundation for dialogue, we have responded to our stakeholders' desire for greater transparency. Participating in the Fashion Transparency Index by Fashion Revolution for 7 consecutive years, we disclose information on our factories, processing facilities and raw material suppliers. ESPRIT has been consistently recognised as one of the leaders in supply chain traceability disclosure, and ranked within the top 8% in the overall supply chain traceability in 2023 among our peers. This is emblematic of the way we work: we strive for open and transparent dialogue to explain challenges in our industry and to communicate how we are tackling them.

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

OUR BUSINESS AND PRODUCT

Our Culture and Brand Story

Clean. Ethical. Sustainable.

Fuelled by a vision of radical positivity, ESPRIT was founded in California by environmentalists Susie and Doug Tompkins in 1968. Since then, ESPRIT has always been more than just clothing. Today, we are on a mission to push the boundaries of authentic and intelligent fashion with mindfully designed collections. With a commitment to pioneering hyper-personalised consumer experiences, ESPRIT opened a global network of innovation headquarters. Design and creative is led out of the brand's Global Creative Hub in New York, with Amsterdam office focused on technology and denim innovation, while Hong Kong is the administrative headquarters office.

Tapping into its innovative brand origins rooted in creativity, community and playfulness, ESPRIT puts forward a confident and current aesthetic centred on its "rules don't apply" brand promise. ESPRIT comes to life through mischievous visual language, cutting-edge retail experiences and collections that confidently mix styles. This also involves setting new standards with a continuous focus on diversity, ethicality and sustainability. ESPRIT is reintroducing the brand's story in a modern context. We believe in a common spirit of a life inspired, thinking outside the box and championing innovative ideas as the catalyst for positive change in the world. It's been in our DNA from the very beginning.

Our Business

ESPRIT is a global company principally engaged in the retail (including e-shops), wholesale distribution, and licensing of quality fashion and non-apparel products designed under its own internationally renowned ESPRIT brand name. The brand sells in more than 30 markets across Europe, Asia and North America as at 31 December 2023, with 147 retail stores, 35 e-shops, and over 3,500 wholesale points of sale. Our customers are mainly individuals and corporates.

Our Products

The brand simplifies wardrobe choices with timeless and consciously sourced pieces for women, men and kids. Our product assortment includes basics, business looks, special occasion styles, accessories, swim and sportswear, and more.

Womenswear		Menswear		Denim

Licence

Shoes

Accessories

3,500

wholesale points

of sale

35

e-shops

147

retail stores

30+

markets

Sportswear

Bodywear

Kids

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

Production Process

01. Design Phase

02. Product Development

03. Risk Assessment

04. Quality Assessment

Our design teams must balance beauty and trends with functionality, sustainable fibre choices, circularity, and durability. We evaluate returns and solicit our customers' thoughts to make sure we are meeting their expectations. The information we gather then flows back into our product development process.

Our Product Development teams work with our designers to ensure that the final materials that compose each garment - including trims, thread and linings, and considering all chemical processes - fit our circular fashion goals. The aim is that they can cleanly biodegrade or be used to make a new product at the end of their first useful life.

Prior to production, our Product Safety team conducts assessments based on internationally recognised norms and our own quality standards. We also evaluate chemicals used in manufacturing. To build their capacity, we help our suppliers establish their own in-house quality control systems, sharing best-practices, guidelines and supporting implementation on site.

ESPRIT has a series of quality control systems running alongside our products every step of the way from sketch to fit prototype to final garment. Our Quality Assurance team works with our direct s u p p l i e r s t o e n s u r e t h e y m e e t o u r technical standards, and we use technical w o r k m a n s h i p a u d i t s t o m a k e s u r e complicated pieces can meet our durability requirements. Quality checks are performed onsite, then prior to shipping at ESPRIT, and finally at our distribution centres.

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

Responsible Marketing Guideline

As a responsible company, we believe that our marketing materials reflect our values. To uphold our values of clean, ethical and sustainable, our policies have outlined guidelines and standards of the selection of claims and messages used in our advertisement campaigns. We also aim to celebrate diversity by selecting models who represent various body sizes, skin colours, cultures, ethnicities, and genders, and portraying them in a healthy and appropriate way. We prioritise the health and safety of all our models, adults or children during photo shoots by providing them with nourishing food and maintaining a healthy work / break balance. For our kids campaigns, we adhere to all international and local laws and requirements, ensuring at least one parent is present during shootings and that a representative from ESPRIT is on hand to monitor the process and ensure compliance. We seek expert guidance and rigorously adhere to all international and local regulations and standards for the use of animals in our photo shoots to guarantee proper animal handling and that no animals are harmed during production.

Policy Commitments

ESPRIT is dedicated to ensuring that its policy commitments related to responsible business practices and ESG are effectively communicated to our staff, business partners, and other relevant stakeholders. Staff are informed of the Company's policies through a variety of means, including regular training sessions, Employee Handbook, and other internal communication channels. To ensure all suppliers and business partners are acknowledged and willing to align with our commitments, ESPRIT requires all suppliers to agree to our policies through contractual agreements. In addition, ESPRIT regularly updates ESG-related information and publishes newsletters on our official website. To ensure that potential barriers to communication are identified and addressed, the Company conducts regular assessments of its communication channels and seeks feedback from different stakeholders on their effectiveness. ESPRIT makes every effort to ensure that our policies and communications are accessible and available in languages that are needed.

List of Sustainability Policies:

• Antitrust Policy
• Anti-CorruptionPolicy
• Policy on Raw Materials and Animal Welfare
• Policy on Protecting Forests through Fabric Choices
• Policy on Human Rights
• Responsible Exit Policy
• Sourcing Policy
• Supplier Code of Conduct
• Sustainable Materials Policy
• Worker Code of Conduct
• Whistleblowing Policy

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1 About ESPRIT	2 Environment and Product Responsibility	3 Supplier and Vendor Management	4 Our Employees	5 Community	6 Appendix

OUR ESG  APPROACH

Board Statement

Governance

The Board of Directors of the Company (the "Board") oversees ESG strategies, goals and plans to ensure that ESG considerations and strategies, as well as climate-related risks and opportunities, are included in its business operation processes and investments. The Risk Management Committee of the Board and the Company's internal ESG Taskforce are responsible for sustainability, environmental risks, climate-related risks and opportunities and governance. The Board has delegated day-to-day responsibilities for ESG-related matters to the Sustainability team. The team assists on all ESG related matters, such as but not limited to identifying potential risks on our business model, communicating with suppliers and resolve any issues, staying updated on regulatory requirements, monitoring legislations and due diligence standards, and supervising the Company's assessment on being a responsible and transparent fashion brand throughout the value chain.

Stakeholder Engagement and Strategies

The Company's strategy in ESG management is achieved by applying sustainable practices across various departments, making efficient use of resources, and promoting green awareness within the Group. Climate risks are also mitigated through implementing strategies for greenhouse gas reductions. As an international company, we believe in the development and maintenance of sustainable relationships with all stakeholders, internally and externally. We demonstrate this commitment through consistent outreach in the communities where our employees, business partners and customers live and work. Regarding the process, we have

adopted to evaluate, prioritise, and manage material ESG-related issues. Please refer to the "Ongoing Dialogue" and "Materiality Assessment" sections in this Report.

Reviews

Over the years, we have continued to review our environmental performance and implement initiatives to reduce the ecological footprint of our business. In 2023, we pursued multiple environmentally and socially responsible measures to meet growing expectations of our stakeholders on environmental conservation and support towards our sustainability goals. We will continue to collaborate with our employees, customers, suppliers, other business partners to reach the goal of gradually reducing the carbon emissions and energy consumption of the Company. We are proud of the progress made so far but are committed to doing more to build a better and greener shopping experience for our customers. For more details about our governance structure and composition, please refer to the Corporate Information section in the Annual Report.

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