Sustainability Report

Foreword

Progress accompanied by new problems characterized the processes of the past reporting year with regard to the sustainability of our company. No sooner had the direct impact of the Covid 19 pandemic been overcome than the problems that arose along many supply chains proved to be longer-term. Production and transport capacities remained scarce and inflation picked up noticeably for the first time.
The Russian war of aggression against Ukraine then caused energy and commodity prices to rise at a rate not seen since the 1970s, and inflation accelerated again across the economy.

In the winter of 2021/22, we already invested in additional production capacity and were able to win new manufacturers in order to counter the inevitable supply backlogs. The fact that liquid funds were available for this despite the pandemic-related drop in profitability is thanks to our shareholders.
A particular challenge naturally arose at our sites in Ukraine. Details of this can be found below. At this point, however, we would like to express our respect and deep gratitude to our own and other employees in Ukraine for their tireless and enormously courageous efforts.
The development of new production capacities in Uzbekistan requires great attention. With the progressive development of a political and economic network, we are optimistic that we will be able to build up effective capacities quickly.
Training sessions with our own technicians at third-party manufacturers have optimized the work processes there in a spirit of partnership and led to reduced consumption of resources. Above all, they lead to increased effectiveness in the interests of the sewing workforce.

We also continued to promote the Fairtrade initiative. The combination of Fairtrade, the Green Button and our own Code of Conduct again led to improved measures at all our own and contracted operations.
Meanwhile, our pursuit of climate neutrality and resource conservation has not abated. Successful audits were carried out for all certifications. Energy and ergonomic improvements were also made at several sites.

Again, the foresighted thinking and commitment of the teamdress group's employees has been able to overcome many of the problems mentioned. At the same time, communication along the Group was significantly strengthened and synergy effects were promoted through the closer connection of the teamdress® and DeBerkel® brands, also in terms of sustainability.

Hamburg, 22.11.2022

COMPANY

Since 1920 Teamdress has been a creative and reliable garment manufacturer with a focus on textile service and laundry supply in the German-speaking, Benelux and Polish markets.

As before, the complete product development process is carried out in-house. Our many years of experience as well as our competence in product design, consulting, and joint project implementation form the basis of trust for our customers. For this we have various certifications and pursue different commitments:

ISO 9001:2015
Cat. 3 PPE certification
OEKO-TEX® STANDARD 100
Member of the Fair Wear Foundation
Member of the Alliance for Sustainable Textiles
Fair Trade Seal
Meta-Seal of the Green Button

The Teamdress Group continues to produce at locations in Europe or its border region, partly in its own plants in Poland and Ukraine, partly via contract manufacturing in Moldova, Ukraine, Bosnia, Bulgaria, Albania and recently also Uzbekistan. Our guidelines for development, planning and production are consistently aligned with the following elements:

Conservation of resources
Highest demands on quality and therefore strict focus on durability
Optimization of production according to
„mini/max“ figures
- Order-related production.
- No trend or fast fashion, thus no overproduction and no product disposal.
- Continuous production; standard items are produced as stock items when the order situation is lower.
Sustainable management in the production plants, both ecologically and in the working environment of the employees

This approach is not only geared to ecological goals, but also pursues a high level of customer satisfaction. Very low complaint rates and long durability of our products successfully ensure both goals.

FAIR WEAR - Link: Teamdress-BRAND PERFORMANCE CHECK

Bündnis für nachhaltige Textilien - Link: Teamdress-MEMBER REPORT

Product policy

The guiding principle presented in the last reports regarding the durability, and thus resource conservation, of Teamdress products continues to be fully valid. The focus and the achievement of our ecological goals remain unchanged on the combination of high quality, durability and wearing comfort.

The high quality requirements for all stages of product development are continuously implemented in our quality management and documented accordingly. Since 1993, this has been certified by DEKRA in accordance with DIN EN ISO 9001.

In addition to using fabrics with a high polyester content and durable raw materials and ingredients, our workwear is always designed so that repairs can be carried out easily. For all collections, repair materials can be obtained from us by our customers.

The reduction in the need for new purchases accordingly ensures ongoing reduced production emissions and conserves resources.

Regular training and detailed agreements with our suppliers ensure that sources of error in development, raw material procurement and production are identified in good time, thus further reducing product risks.

Use of raw materials

The use of recycled polyester was expanded, as planned in the previous year's report. This recycled material continues to be used primarily in Teamdress' EcoRover collection. There, for example, around 30 shredded PET bottles are used in a corresponding waist jacket. Two projects are currently underway with major customers in which sustainable fabrics (recycled polyester and stretch) are used.

Furthermore, Teamdress is developing a completely new collection based on recycled polyester (resource conservation) and stretch (comfort).

The increased use of organic cotton has been a goal of Teamdress for some time, but known problems continue to emerge:

As already highlighted in last year's report, by no means all raw materials labeled as organic cotton meet the requirements of sustainable cultivation. Random checks in our quality assurance again revealed contamination by genetically modified seeds or pre-polluted soils.
The quality of the organic raw material is not always sufficient for our requirements.
Internationally, there is a lack of control procedures for organic cotton. Mostly, only paper certificates are available as proof of origin and inspection documents, which are very susceptible to forgery. Markings and stringent digital proofs are hardly available. There is a need for correction here on the standard-setting side.
The global demand for organic cotton continues to massively exceed the available supply. The quantity of finished products shown differs greatly from the equivalent quantity of raw material available.

Especially with regard to the freshwater balance and the avoidance of pesticide- or genetically contaminated soils, the use of organic cotton is to be strived for and Teamdress will continue to pursue this. The prerequisite, however, is a truly reliable tracking of cultivation and extraction in order not to promote false approaches that ultimately counteract the ecological idea.

Our requirements for all raw materials remain at the highest possible level, taking into account the current general shortage. In addition to the processing described above, this is the only way to really achieve our focus on product longevity.

The TeamCare and TeamChef collections were developed jointly as part of the closer brand ties between teamdress® and DeBerkel® and are also presented jointly at trade fairs. Personnel and resources are thus reduced in order to implement price reductions.

New raw material products in the sense of sustainability are constantly being researched with our suppliers. Much is still under development here, but we are very confident that we will soon be able to present new properties here as well.

It is not uncommon, however, for problems to arise when using recycled products. These are often more expensive than a new product, which then leads to an unintentional trade-off between cost-effectiveness and sustainability.

Duty of care

Disposal

The problem of environmentally friendly disposal at the end of the product life cycle applies to all textiles. In any case, we have agreed with our customers that no worn-out workwear should end up in the natural cycle, i.e. in the sea or on the ground.

Especially textiles with synthetic fibre content are difficult to recycle. The time and energy expenditure hardly justify this procedure.
In the case of thermal recycling, it should be noted that a combustion temperature of well over 900°C must be achieved so that certain pollutants, such as aromatic hydrocarbons, are not produced. Likewise, the filtration of fine dust emissions must be taken into account.

With regard to recycling, the Dutch member of the teamdress Group, De Berkel B.V., based in Varsseveld / NL, continues to maintain an agreement with the Radboud Hospital to take back used workwear. This includes that the clothing is reconditioned and processed into felt rolls.

We are currently examining several processes that take an energetically advantageous and low-emission approach to recycling worn-out workwear.

Employees

We are always aware of our social responsibility and pay attention to fair and safe working conditions along the entire production chain.

In our own production plants in other European countries, we have been ensuring for years that there is no child labor and that there are no restrictions on the formation of and participation in employee interest groups. Furthermore, persons of trust have been established to act as contact persons in the event of any problems. To date, no cases of discrimination or harassment have been reported to us.
In all contracts with contract manufacturers, compliance with social standards and the required safety in the workplace have been incorporated. In doing so, we have not only referred to our own Code of Conduct, but also to the requirements that our various certifications entail.

At all our production sites, but especially at our new site in Uzbekistan, the advisory deployment of our technicians on site, with the primary aim of optimizing work processes, has generally been accompanied by confirmation of appropriate compliance with standards and safety. There were a few exceptions, but these then prompted us to terminate our cooperation with the production sites.

The aforementioned technicians were also able to successfully implement optimizations at contract workplaces in this reporting period. This always resulted in improved working conditions and increased efficiency, which made improved remuneration possible. Our special thanks go to these dedicated technicians.

Furthermore, both the management of the company's own production facilities and the contract manufacturers were prohibited from passing on production orders to subcontractors. On the one hand, this ban had the effect of improving quality control, but on the other, in particular, of circumventing wage and safety standards.

A pilot project was also initiated for the Uzbekistan site, following the example of dual training in Germany. With the help of the GIZ, a basic training program for seamstresses and mechanics is being set up, which will increase work efficiency in the clothing sector through accompanying practical training. In this way, a better professional perspective and at the same time increased earning potential is ensured. Both the government of the Fergana region and the Uzbek Ministry of Education support this pioneering project.

Our own production plants as well as external companies are bound to the principles of the Fair Wear Foundation and the Green Button and are regularly subjected to social audits.
These audits were also positive in the reporting period.

In the course of a move at the Hamburg headquarters, adjustable desks were installed for significantly improved ergonomics, as well as luminaires in the daylight spectrum for reduced workload.

Fairwear complaints management

Teamdress Holding GmbH is a member of the Fair Wear Foundation (FWF). All our production sites are contractually bound to comply with the FWF Code of Labor Practices.

An information sheet regarding the Code of Labor Practices is posted in all production sites in the respective national language with explanatory pictures. This also describes what to do if violations of these standards occur.

If no solution to the problem can be found within the production facility, the employee can appeal directly to the FWF with his complaint.
The FWF has defined a detailed process, adapted to the explosive nature of the complaint, for how a complaint is examined, forwarded to the responsible member and dealt with by the latter.

We are committed to working with the affected person and the management of the production site to remedy any complaint; this may include atonement.
Each individual case must be considered and clarified individually.
The jointly determined remedial measures are accompanied and monitored by Teamdress Holding GmbH and FWF.

The last complaint was filed and closed in July 2013.

Link to the: Teamdress-BRAND PERFORMANCE CHECK

Fairtrade

Because farmers can sell larger quantities of their cotton through the Fairtrade cotton commodity model, it opens up both fairer trading conditions and new avenues for social change and greater environmental protection.
Learn more at: www.info.fairtrade.net/sourcing

To support the Fairtrade supply chain, Teamdress has committed to procure 30 tons of raw cotton from Fairtrade sources per year, and the trend is increasing. This helps to ensure that farmers who are not optimally connected to the Fairtrade supply chain can continue their activities.

Compared to the previous year, additional collections in the workwear and PPE area are labeled with Fairtrade. We continue to strive to increase this share.

Logistics and disposition

A high demand was placed on the diligence and creativity of our logistics staff in the last two years. The requirement to supply multiple production sites with raw materials and to pick up finished goods there presented a constant challenge, especially as no half-empty trucks were to be sent for cost and environmental reasons. The transport to and from the Ukraine increased this effort again noticeably, but, with praise for all involved, was managed almost throughout.

Not only in the selection of raw materials, but also in the disposition, attention continues to be paid to the reduction of goods weights in order to act in an emission-reducing and resource-saving manner.

New capacity requirements arose for production. Due to the pandemic, there are significantly fewer production facilities available in East Asia, which has prompted fashion clothing manufacturers to seek production locations in Europe again. As a result, we are exposed to predatory competition from contract manufacturers, especially since fashion clothing is generally much easier to produce than workwear. So far, we have been able to counteract this possible crowding out by maintaining intensive contacts over many years. We have made the most of the opportunities for visits that are now available again.

Covid-19

Although the acute threat from Covid-19 has gradually subsided, the Teamdress Group has maintained some measures taken in the past. At the Hamburg headquarters, air purification equipment continues to be used when adequate ventilation cannot be provided due to weather conditions, in line with the GAeF recommendation.

The vaccination rate at our headquarters in Hamburg has been very high for a long time. We thank our employees accordingly for their prudence.

At our other sites, we make recommendations within our means to increase vaccination rates. At some sites where government efforts have not been expanded, we have created our own incentives to further promote vaccination rates.

We would like to take this opportunity to thank all of our employees who have shown great thoughtfulness and calmness in dealing with Covid-19 and, in many cases neglecting their own time off, have made up for the absenteeism and downtime caused by the restrictions.

Energy-Management

The reduction of CO₂ remains the central issue in the area of energy management. The two hydroelectric power plants located in Germany, which were acquired by our shareholders in 1998, make a significant contribution to the ultimate goal of CO₂neutrality.

The energy-related building management at the Poland site was completed in the reporting period.
Our last report already referred to the installation of a PV system at this site.
Technically, just under 25% of the company's own electricity requirements were generated by the PV system in nine months. A further 8% points of the theoretical demand were fed into the public grid. Our German-origin PV system thus delivers an above-average yield per installed kWp.

Since Poland obtains the very largest share of its electricity requirements from coal-fired power plants, the system results in a calculated reduction in CO₂ emissions of approx. 21 tons per year. This corresponds to the emissions of an average petrol car driven 150,000 km per year.

Since Poland obtains most of its electricity from coal-fired power plants, the plant will reduce CO₂ emissions by approximately 21 tonnes per year. This corresponds to the emissions of an average petrol car driving 150,000 km per year.

Teamdress is currently having two bids solicited for an additional 50 MW/h and 100 MW/h, respectively. Bids and the decision on implementation are still pending.