Associated British Foods plc (LON:ABF)

ESG Update

← View all transcripts

Sep 17, 2021

Hello, everyone, and thank you for joining our ESG investor briefing focused on Primark and its sustainability strategy. I hope everyone saw the announcement of the Primark Cares program earlier this week. The team you'll hear from today has been hard at work developing that program for almost 2 years. They'll provide you with detailed insights into the thinking behind the company's approach. I hope they will persuade you of the scale of our ambition in making more sustainable fashion affordable for all. And I hope you will get a sense of our excitement about the opportunity that Primark Cares presents to engage a new generation of consumers who are passionate about planet and people and to lead the transformation of the industry as a whole. Let me give you some context from ABF Group perspective. If you joined us for our 1st ESG investor event in early March, you'll remember we said we look forward to a deeper level of engagement with all of you as we continue to integrate ESG factors into the ABF financial calendar. This session is the next step in that engagement. We will then hold a 3rd ESG briefing in early March next year focused on environmental factors across the group as a whole. That's what lies ahead. Today is all about Primark. And before I hand over to John and the team to begin the session, Here's a quick overview of Primark for the benefit of anyone who's not familiar with the business. Primark is one of the largest fashion retailers in Europe and has a growing presence in the U. S. The business now has 3 98 stores, more than 70,000 employees, serves millions of customers a week and sells more than 1,000,000,000 items a year. The business model differs from that of many other fashion retailers as does the customer proposition. Primark is built on scale as a buyer. The business procures very large volumes of goods months in advance and from multiple suppliers. It's also built on a highly efficient cost model, selling products in store without the overheads of online fulfillment systems and marketing through social media and the Primark website instead of advertising. And it's built on value for the customer using scale and an efficient cost model to ensure low prices for goods and desirable clothing worn every day by millions of people. Primark's mission is to make high quality and affordable fashion accessible to everyone. As we explained when we spoke to you last and will expand on today. That mission is also underpinned by a longstanding commitment to ethical trade and environmental sustainability. There are 3 points I'd like to make at the outset. My first point is that Primark's sustainability journey did not begin this week. At our first ESG briefing back in March, we provided you with an overview of the Primark Ethical Trade and Environmental Sustainability Program established more than a decade ago and now considered to be industry leading in several respects. The Primark Cares program has strong foundations And the people who shaped it have deep hands on experience within the fashion industry supply chain. My second point is that some of what the Primark team will outline today will push the boundaries of the industry. And the best outcomes will only be achieved If all parties involved from governments and industry bodies to suppliers, brands and other retailers collaborate effectively. Primark has a clear vision for the future but cannot achieve all of it alone. My final point relates to ABF's broader perspective on ESG. In our first session back in March, we explained that we do not consider ESG to be a separate and parallel discipline. Instead, we consider ESG factors within our overall risk management framework. We also believe that focusing intently on those factors yields opportunities to strengthen our business. Our guiding principle is not simply the mitigation of risk. It is also the creation of opportunity and value over time as a consequence of our ESG program. When we were asked together, I also mentioned the culture and values of the group. We believe in giving people scope and authority to create and run the best businesses they can and to take accountability for their actions. This means setting objectives from the bottom up rather than the top down with programs defined by the people in the business who are closest to suppliers and customers. It also means targets that are actionable and measurable with outcomes clearly visible in the short term. Everything you'll hear today has been informed by that broader perspective. Primark's sustainability strategy has been developed within the business and is led by the business and with a focus on actions today, not just 10 years from now. So thank you for your attention. And as always, we welcome your insights and questions. Over to John to open the session. Hello, everyone. Welcome to our regular followers and also welcome to those of you who are new to ABF and Primark. George has set out the context From a group perspective, the commercial rationale behind Primark Cares is strong. This is the right strategy for planet and people And it makes good business sense. Primark's commitment to make more sustainable fashion affordable for all aligned strongly with the generational shift in consumer attitudes that we believe will reshape the market as a whole. Our announcement this week represents a critical moment in Primark's history. Primark's plans will have a major positive impact from an environmental perspective and they'll improve the lives of the many people in our supply chain. These plans will require investment. However, there will only be a modest increase in costs in some areas of the business net of mitigating actions over the period to 2030. I will demonstrate that the business has a long experience of anticipating fluctuations in a number of input costs without changes to its fundamental business model. If you've followed us for some time, you'll know that Primark has a strong track record in cost optimization. The execution of this strategy will develop over the next 9 years to 2,030. There will be plenty of opportunity to mitigate these costs as they arise. We are confident that there will be no material impact on Primark's operating profit margin in the short term and no significant movements in the margin over the longer term. And Primark Cares also has a great opportunity for growth of the business. We believe that both existing and new customers will respond positively. Primark Cares is a compelling proposition for the increasing proportion of consumers whose purchasing decisions are motivated by sustainability factors and who to date have been reluctant to shop with Primark. We see the potential for an uplift in sales over time, strengthening our ability to generate returns over the longer term. More on all of this later in the presentation. Let me turn first to our agenda for today. In a moment, I'll hand over to Paul Marchant, Primark's Chief Executive, who will set out the strategy including the strategic and commercial context. Paul will also explain how the Primark Cares strategy will shape the company's overall customer proposition and commercial execution in future. We'll then hear from the Director of Primark Cares, Lynne Walker, who will take you through the detail of the first pillar of the strategy, product. We'll then be joined by Paul Lister, the ABF Group Director of Legal Services and Company Secretary, who leads the Primark Ethical Trade and environmental sustainability team. Paul will cover the 2nd pillar of the strategy, planet. Next, we'll hear from the ABF Group Director of Corporate Responsibility, Catherine Stewart. As you may remember from our session in March, Paul Lister and Catherine Stewart have a long history with Primark including founding roles in the creation of the Primark Ethical Trade and environmental sustainability program. Catherine will take us through the 3rd pillar of the strategy, people. I will then provide you with some broader context of the business case that underpins Primark Cares, picking up on my points earlier about the commercial and financial aspects. Paul Marchwick will then return for some concluding remarks. We will then take a short break. We'll return for Q and A with investors and analysts before ending the session probably around 3 pm UK time. Before I hand over to Paul Marchant, a brief introduction for those of you who don't know his background. Paul is one of the most experienced leaders in the international fashion retail industry and has led Primark for the last 12 years. The company has expanded significantly under his tenure including entering the U. S. Market. He has many years of commercial and operational experience with deep insights gained at all points of the industry value chain. He's also a strong advocate for sustainability, pushing his business and the wider industry to accelerate the pace of change. Paul, over to you. Thank you, John. Hello, everyone, and thanks for joining us. I'm really proud to work for Primark And I'm pleased to be here today to have the opportunity to share with you what is one of the most important and exciting initiatives for Primark in all of my time in the business. Primark Cares is the next evolution of the Primark brand and goes to the very heart of what we do. I'm going to talk about why we are so focused on this initiative, why Primark Cares matters so much to us and why what it represents matters so much to many of our customers. I'll talk about what it means, what changes and importantly, what won't change. There's something very special about the Primark brand that we need to always protect. We know that our customers love Primark for the products we sell, they love the stores we sell them in, and they absolutely love our amazing prices. Our core purpose is the democratization of fashion, offering amazing fashion at amazing prices that everyone can afford. It's now about thinking differently about how we do business. There are real challenges ahead. There are even greater opportunities. It's also really important for me to say upfront that Primark Cares isn't a sudden awakening for us here at Primark. As George mentioned, we've been on this journey for more than 10 years. What we haven't always done is talk enough about what we have achieved to date, and we know that has to change. We've got a really good story to tell about the step change in our ambitions. Perhaps we've been worried that we're not perfect, but our industry continues to evolve and there is no finish line. We also need to be open and transparent about the obstacles we face because we know the only way we'll achieve our ambitions is through broader collaboration across the fashion retail industry. Primark Cares is all about offering the same great products we currently sell at the prices our customers love, but made in a way that is more sustainable. Sustainability cannot just be the preserve of boutiques and niche brands with products priced at a premium that only a minority can afford. We firmly believe that more sustainable fashion should be affordable for all. We know that's what our customers want from us, and that's our commercial opportunity. Customers shouldn't have to choose between affordability and sustainability. If you ask them, they'll tell you they want both and they're absolutely right to do so, and Primark Cares meets that need. This is sustainability built in as a standard benchmark, not an optional extra that costs the customer more. I'm going to talk about how we're going to do this, what we'll be doing to bring Primark Cares to life for our customers and how we reach the people who don't currently shop with us because maybe they don't trust us to act sustainably. We are already doing far more than those reluctant consumers realize. So let's recap on the overall Primark Care strategy communicated on Wednesday. There are 3 pillars to this strategy: product, planet and people, each of which has a clear ambition and supporting targets. The first pillar is importantly focused on what the customers see in our stores, the products we sell. We want our clothes to last longer, We want to move towards a truly circular model with full recyclability and the use of recycled or sustainably sourced materials. The second pillar focuses on cutting the carbon impact of our business by 50% by the end of the decade. We also want to eliminate single use plastic packaging and all non clothing waste. And we'll take action to restore biodiversity by driving the adoption of regenerative agriculture techniques in our Primark Sustainable Cotton Program. The 3rd pillar focuses on the people in our supply chain. Our ambition is to improve the lives of the people who make our clothes and we will pursue a living wage for all supply chain workers by 2,030. We'll also take action to support greater opportunities for women in the supply chain and to improve health and well-being. These ambitions address all of Primark's most material issues, and they recognize that sustainability is about social impact as well as environmental impact. So what are we trying to achieve at a strategic level? Well, essentially three things. First, to offer the customers the same great products they love at the same great prices, but made in a way that is more sustainable. We will use Primark's scale for good to accelerate our own sustainability transition, and we hope to stimulate a wider shift across the industry away from the extremes of so called throwaway fashion. We want to make products that last so they can be worn loved for even longer by our customers or handed down, resold or recycled. 2nd, we want to further develop the relationships with our strategic suppliers to accelerate the pace of change in both carbon reduction and circularity. We want to play a prominent role in driving industry level system transformation. And we want to build on our well established Ethical Trade and Environmental Sustainability Program to continue to improve the livelihoods of the people working in our supply chain. We have three objectives from a commercial perspective. We must always maintain our position of price leadership. This is in the DNA of the Primark brand. It always has been and it always will be. Great value for our customers is central to everything we do. We see the opportunity to drive further growth By winning over consumers, we're currently reluctant to shop at Primark on sustainability grounds, but who we believe will respond positively to Primark Cares. We want to earn their trust, and we also want our existing customers to feel even more positive and motivated about shopping at Primark. We also see Primark Cares as a means of derisking the business. We believe the transition to a more sustainable business model will provide us with greater certainty over time and it's key to ensuring supply chain resilience in the future. It's also important to reduce our exposure to carbon prices and extended producer responsibility charges on textiles and plastics. But we're not doing this from a standing start. We've been bringing Primark Care's products to our customers as the strategy has evolved over the last 2 years. As you can see, there's been a rapid increase in the proportion of clothes we sell under the Primark Cares label that contain more sustainably sourced or recycled materials. For this autumn, we're forecasting that almost onethree of all the clothes we'll sell will be under Primark Cares. Our strategy isn't theoretical or aspirational. It's already becoming a commercial reality in store and in our customers' shopping bags. I'd like to turn now to why we are doing this and the headline here is that the market dynamics are changing rapidly. For a significant proportion of consumers, sustainability has moved from niche to mainstream, and it's determining where and how they shop. Here's a consumer research snapshot across all of our major markets. It's striking that more than 4 in 10 consumers in Germany And more than 1 in 3 in France say that sustainability factors determine their shopping habits. These consumers don't just want value. They want value from companies that operate with values they recognize and respect. Here's another snapshot that sets out our challenge, but also our opportunity. When we look at consumers who say they're shopping less with Primark, specifically on sustainability grounds, What is most striking is the variation between generations. Sustainability is becoming the baseline expectation for many younger consumers. It's become essential, not aspirational. And we're not an outlier in this research when you compare the data for Primark against the data for all retailers on the previous chart I just showed you. On a plain reading of the numbers, Primark's performance is better than the market as a whole, but that isn't the key insight we draw from this. The important point here is that the younger the consumer, the more likely they are to walk away from any retailer if they think that retailer falls short on sustainability. The decisions that 16 to 24 year olds make today will shape how retail evolves over the next decade. Reaching these younger consumers and convincing them that our sustainability ambitions will make a positive difference is key to the future of Primark. If we're successful in doing so, there's good potential for future growth as a result. We've tested the main Primark Care's propositions with consumers across different age brackets. And as you'll see from this chart, there's a marked uplift in stated intention to purchase. To be clear, this is only a consumer research sample and a moment in time, and stated intentions don't always translate into actions. But even with those caveats, this data is really encouraging. It aligns with what we see in our own interactions with our customers and with our own colleagues. It also aligns with what we see in the industry research and we hear from our stakeholders. There's a strong desire to buy clothes at amazing prices that have been sourced and manufactured by a company that truly respects people and planet. Now I've worked in fashion retail since the day I left school, and I've seen the industry and the high street change beyond recognition. And right now, It feels like there's a revolution underway in our industry and the data we see backs that up. There's a fantastic opportunity here for companies that get moving quickly and get on that right side of history. So I've covered the what and I've covered the why. Now let me turn to the how. We will do more. Our clothes will be recyclable by design by 2027. We will do less. Carbon emissions halved by 2,030. We will do better. All the cotton in our clothing will be recycled, organic or sourced from sustainable cotton program by 2027, standing as 1, looking as many. This It's how change really looks. Our Primark Cares customer proposition is simple but powerful. We want to make more sustainable fashion affordable for all. It is our commitment to make more sustainable choices available at the prices we are famous for. That's what sets us apart, and it's our scale that makes that possible. The focus is on change, the change we will make and the change the world needs. And how change looks is our campaign platform, and it also frames the language we will use from now on when we talk about sustainability. As already said, on Wednesday, we launched our Primark Care strategy, which included a fully integrated communications and marketing campaign across multiple channels, targeting multiple audiences from the informed activist to our own Primark colleagues and, of course, our customers. We have significant reach and impact through our own channels. We serve millions of customers a week We have 24,000,000 loyal and active followers on our social channels. We also have new storytelling content on the Primark website, and we're working with influencers to amplify the product story through both earned and social media. The major challenge will be to persuade consumers that there's genuine depth and substance behind our ambitions and do so in a tone of voice that feels authentically Primark using language that works for our customers. There's a lot of greenwashing noise out there, and we need to prove that Primark Cares is real and a very big step forward for everyone who cares about sustainability. Wherever possible, we want to bring our messaging to life through the products we sell, not just our communications. You will see Primark Cares marketed in the windows of every one of our 3 98 Primark stores worldwide, including our new store in downtown Philadelphia, which successfully opened yesterday. Every piece of marketing combines a commitment from Primark with a positive outcome for the consumer substantiated by a headline ambition in the Primark Care strategy and a QR code with more information available on our website. And every ad set showcases our autumn and winter product ranges with amazing prices front and center in line with the Primark our customers know and love. But this isn't just a 6 week campaign. It's a permanent shift in how we think about Primark, how we talk about Primark and brand to our customers and the wider world. We are transforming the entire store estate from in store point of sale and light boxes and new displays to inform our customers about sustainability at Primark. Primark Cares will live across all of our stores, our website and our social channels from now on and for many years to come. I hope you can now see why Primark Cares is so important for all of us. And I hope you can see how our sustainability transition can accelerate growth and create even greater value in the business over time. We're now going to take you through the detail of the 3 pillars: product, planet and people. In a moment, I'll hand over to Lynne Walker, our Director of Primark Cares. Lynne is one of our former Product Trading Directors and has a wealth of experience in commercial and operating environment. She's been with the business for more than 10 years, and over the course of her career, she has led product teams and implemented commercial strategy across almost every product category we sell. As you well know, in the fashion industry and indeed many others, ESG strategies don't always translate to the shop floor. We're confident that with the commercial leader of Lynne's caliber leading this strategy, what we are showing you today will quickly become the daily operating reality in all areas of the Primark business and across our entire supply chain. Lynne, over to you. Thanks, Paul. I'm going to talk about the first of the three pillars of the Primark Care's strategy and that's Product. We want to give our products a longer life and we want our business to become more sustainable. So three targets will underpin that ambition: durability, clothes that are stronger and designed to last Circularity, so moving towards a closed loop in which new clothes are made from old clothes. We're also focused on sustainable sourcing And the use of recycled fibres. I'll now take you through the details of each of the targets, starting with durability. So when any of us find a piece of clothing that we love, we want it to look good for as long as possible. And we know from consumer research The people assume that if something's good value and it's affordable, it will probably have a limited lifespan. Primark sells products at amazing prices and there's always the risk that consumers think low price means low quality. Strengthening the durability of our clothes is a critically important aspect of Primark Cares and the driving force here isn't just consumer sentiment. When clothes wear out and are discarded, there are significant environmental impacts. So over the last 2 decades, there's been a marked reduction in clothing utilization rates. In other words, how often is a garment worn Or how long is it owned before it's disposed of? If those utilization rates continue, the Ellen MacArthur Foundation Estimate that around 150,000,000 tonnes of used clothing from all retailers will end up In landfill worldwide by 2,050. And as you know well, reuse sits above recycle in the waste hierarchy. Getting more wear out of the clothes you love is therefore essential. So some brief context to start with. From the customer's perspective, durability means 2 things. There's physical durability. Does the garments still look good? And are the buttons and trims still in place? And there's emotional durability. Is it still fashionable? Does the garment They look good and feel good when I'm wearing, even if the item is quite old. Our goal is to align physical Emotional durability. We want to sell clothes that keep on looking good for as long as our customers love wearing them. And there's another important point of context. Around half of our clothes we sell are staple items that are timeless and enduring. They're reliable. They come out of the wardrobe day after day or season after season. They have a high level of emotional durability. So we're in the final stages of creating an enhanced Primark durability standard. It includes repeated wash requirements That are aligned with the wrap sustainable clothing action plan and we'll develop the standard further in future as the wrap textiles 2,030 initiative evolves. Durability through numerous washing cycles translates into an extensive lifespan for garments. So bear in mind, these are the minimum wash cycle standards. Many garments will last much longer than this. And in the average customer's wardrobe with many choices of clothing, these numbers equate to years of looking good and wearing those garments. And from a physical perspective, we're looking at the fabric used, the quality of the weave and the strength of the yarn. And we're looking at how the garment is constructed. We're looking at shrinkage. We're looking at colorfastness. And we're looking at the functionality of the garment. Does everything still work? And in terms of emotional durability, we're looking at the comfort of the garment. How easy is it for the garment to be adjusted Letting out those seams and those hems, for example, and this is very important for childrenswear. Also is the garment timeless and an example of that is a classic white shirt and we're looking at fabrics that are durable and feel good to touch. All of this builds on our current testing methods to make sure our garments are even more robust. The enhanced durability standard will apply across a wide range of product categories. These are the most loved garments that account for very high volumes products sold in our stores. That's around a third of our total garment sales overall. And this is a significant program That will enhance the quality of 100 of millions of garments we sell in the future. So, what does this mean for our suppliers? And the first and most important point here is that these changes do not involve significant supply chain disruption. Suppliers will not need to make wholesale changes to their processes and the changes needed are relatively minor. For example, is changing some of the yarns they use or better use of dye stuff to improve color penetration? It's worth noting that in some product lines, we're already at or very close to our wrap aligned wash requirements. And for example, when we tested a sample of our denim ranges, 68% of items met the standard requirements for wash, for shrinkage And for color. Now, in many industries, increasing product lifespan would mean longer product replacement cycles And a lower revenue over time. That's not the case here. And our research shows that a significant proportion of consumers Are more likely to shop at Primark if they're persuaded our clothes are more durable. It's also important to remember that Parents with school age kids are one of our most important customer segments. And as every parent knows, kids outgrow their clothes in the blink of an eye. And that's certainly what I experienced with my own children. So every parent would love it if their kids' clothes was more durable, easier to adjust And lasted long enough to be handed down to other children. And we think our focus on durability represents a good example of responsible growth Tuncity for Primark. Durability matters to customers and getting this right will make a big difference. One other point I'd highlight, our plans help to mitigate Primark's overall extended producer responsibility exposure, And that's by keeping products in use for longer and, of course, reducing textile waste. Now, let me turn to the 2nd target under our product pillar, Circularity. The principle is simple and it's common to many industries. The fashion industry today is based on a linear production model From feedstock to manufacture, from store to consumer, consumer to landfill, it's a one way trip. It's wasteful And of course, it cannot continue like this. Under Primark Cares, we're moving our business towards the model on the right of the slide. Circularity means extending use and reuse through enhanced durability, and it means ensuring recyclability at the end of a garment's life So that fibers from old clothes return to the system as feedstock for new clothes, working towards a true closed loop, All of which is in line with the Make Fashion Circular initiative led by the Ellen MacArthur Foundation. And we've participated in the initiative for 3 years now and we've extended our partnership to continue collaborating with the EMF network. So what needs to change to make this happen? We'll change how our clothes are made to the volumes that can be recycled at the end of life. We'll be creating a simplified palette of materials with less complex fabric blends and fewer trims. And we'll also publish that palette so others can use it. We'll train all of our Primark product teams in circular design Together with our suppliers and also there are important challenges for the recycling sector that need to be addressed. The fashion industry will need a lot more recycling capacity and capability in the future, and the recycling sector will need to follow Clear environmental and social standards. We'll need the recycling sector to accelerate innovation and investment in to process the most common mixed fibre textiles at scale and cost effectively. And we'll need the fabric mills that supply garment manufacturers to transition from virgin feedstock to recycled And at sufficient scale to meet Primark's volume requirements. Much of what I've outlined will involve major system change And not just in the recycling industry. It's all down to consumer behavior. Indeed, our own behaviors, Putting old clothes into recycling bins, not into the dustbin. And here are some of the examples of the design choices we'll make To increase recyclability, we'll focus on a single sustainable mono material for each garment, minimizing the use of Blends of natural and synthetic fibers will minimize the use of embellishments such as beads and sequins and will also work to reduce trims. All trims, including buttons and rivets, will need to be removable and if possible, of course, recyclable. And finally, we'll also ask our suppliers to minimize cutting table waste and to send any offcuts to recycling. There are some limitations. Some garment types won't work without blended fibers. For example, leggings need elastane to keep their shape Some of our clothes would still contain embellishments that cannot easily be removed. And for some clothing categories, it's Difficult to ensure durability if the garment is made from 100% recycled content. That's particularly relevant with Cotton, which needs a high proportion of virgin fibre for garment strength. So, I'll turn now to the recycling sector. For context, it's important to explain the global fibre mix within Primark. We're mainly a cotton business, much more than the industry as a whole, As you can see from this chart, cotton is where we can make the biggest difference from sourcing to recycling. We're already seeing a supply of blended recycled and virgin yarns in some of our supplier markets, but not yet at the scale we need. And consumer collection infrastructure, it's inconsistent with only a small proportion of used clothes sent off for recycling. That said, this is improving over time as the recycling sector responds to growing fashion industry demand. Polyester is more of a challenge. There are proven technologies to recycle synthetic polymer textiles, But they're not operating at the scale that's required. And another uncertainty is price. Recycled feedstock will need compete with virgin polyester on cost and there are many variables in play, but we're optimistic this will change over time. And as the case with the cotton, there's strong industry demand for recycled polyester feedstock. One point to note is that we're already using recycled polyester in some of our ranges, including 45% of all swimwear. These garments contain commercial recycled feedstock, predominantly from plastic bottles. They're not made from old garments. And to be clear, that's not what we mean when we talk about a closed loop. Our ambition is to make new clothes out of old garments. But I mention this example to demonstrate that the transition is already underway. And the next few years are all about Gale and about volumes, not about proving the concept. We already know we can achieve this. We think the changes I've outlined will have a positive impact on customers and we also think our customers will see That these changes will have a positive impact on the world around them. This is an example of using what Paul referred to as Primark's scale for good. We're using our buying power to reshape our product ranges in line with the very best sustainability principles, While we're staying true and committed to our mission to bring affordable fashion to everyone at amazing prices. And I'd like to hand over now to Paul Lister. Paul has shaped Primark's ESG strategy for many years And he'll now take you through the next of the 3 pillars under Primark Cares and that's planet. Thank you, Lynne, and hello, everyone. Thank you for joining us. Our ESG program covers a wide range of environmental factors From water and air pollution to the ecological impact of microplastic fibers from textiles. We have well established programs addressing these and other We'll cover a broad range of environmental themes across the whole of ABF in our next ESG briefing in March. Today, we're focused on the most material environmental impacts for Primark. Carbon, single use plastic waste and restoring biodiversity in the cotton supply chain, all of which we address in the planet pillar for Primark Cares. We've set a target to reduce Primark's total carbon impact by 50% by the end of the decade against the 20 eighteen-twenty 19 baseline, including emissions in our supply chain. This new target goes significantly beyond the UNFCCC commitment we've already signed up to, which is specifically a 30% carbon reduction by 2,030 on a pathway to reach net 0 by 2,050. We also want to reduce eliminate single use plastic and non clothing waste across Primark over the next 6 years. Our 3rd target is focused on biodiversity. We'll lead the industry by accelerating the transition to regenerative agriculture Within Primark's sustainable cotton program, this is an important development. The world is facing a biodiversity crisis As acute and concerning as the climate crisis, we intend to use Primark's position as a major global buyer of cotton to bring about radical positive change as quickly as possible. I'll now take you through each of these areas in detail, beginning with carbon in the supply chain. As you can see at the top of the slide, in the 20 eighteen-twenty 19 benchmark year, The very large majority of Primark's total carbon impact was in Scope 3 upstream, which includes the raw materials used in our products and in the manufacturing process. This is where we have the greatest leverage. This is where we have the greatest leverage. If you follow ABF regularly, You'll realize this is a much more comprehensive view of Primark's total Scope 3 impact than you'll have seen previously. For context, the table at the bottom of the slide shows our most recent reporting for the 2019 2020 period published last autumn. Our Scope 3 benchmarks now extend beyond transportation and distribution emissions, the parameters we set previously and provide a much deeper insight. I'm highlighting this because it's important to consider the scale and significance of Primark's decarbonization plans. They're also an important part of ABF's overall carbon transition at group level. Some context to begin with. While our supply chain is large and complex, about 100 suppliers in 5 major sourcing countries and regions accounts for the large majority of our upstream Scope 3 emissions. Close interaction with these suppliers, most of whom we know well and in many cases have worked with for years will have the largest impact. So how will we do this? We'll require our suppliers to design and implement energy efficiency programs. We'll also encourage them to transition to renewable energy sources, both on grid and off grid wherever feasible. That transition, combined with greater energy efficiency, We'll reduce supplier Scope 1 and 2 emissions over time. We won't expect them to do this alone. We're going to help them get there. We'll be expanding our in house in country environmental sustainability teams to add carbon and energy expertise and provide specialist training and guidance for suppliers. We'll also play an active role to support the renewable energy transition within industry coalitions and in our engagement with 3rd parties including governments. So our first priority is energy efficiency. Many of Primark's suppliers are inefficient in energy terms. They're using more power than they need, which means unnecessary and avoidable emissions and unnecessary costs. Programs that optimize energy consumption and fuel usage have clear benefits for supplier P and Ls as well as a positive impact on emissions. Here's a brief example to illustrate the point. We've been working with the Clean by Design program run by the Apparel Impact Institute. The program models the impact of energy efficiency measures in a sample of supplier mills. The outcomes are encouraging. We've worked with 3 mills in China, each of which implemented energy management plans in line with Natural Resources Defense Council best practice. The mills committed to 29 retrofit projects with a total investment of just over $2,000,000 The outcome was an energy efficiency gain of 5% and more than 11,000 tonnes of emissions averted on an annualized basis. What's more, in investment terms, the average payback period was just 12 months. It's clear that programs like this offer attractive payback periods for suppliers. They will be cost positive for some supplies to a material extent, quite apart from the environmental benefits involved. Our second priority is the transition to renewable energy across the Primark supply chain. We've analyzed projections for the power generation So by market by 2,030. And as you can see from this slide, there's a clear path ahead for many of our suppliers to transition to carbon neutral energy sources. Much of Primark's Scope 3 upstream emissions are a consequence of supplier Scope 2 emissions from purchased energy. There is some supplier Scope 1 in the mix also, For example, where coal or gas is used for heat intensive processes such as yarn dying. But the main focus is on the supply of factories that use electricity from national grids to power their operations. Half of the products we sell are sourced from suppliers in countries where renewable energy is projected to be the dominant source of on grid power by 2,030 with nuclear power also contributing in some markets. The transition in Bangladesh, Cambodia and Vietnam is likely to be slower. On current projections, on grid power generation We'll remain largely hydrocarbon based in 2,030. However, off grid options predominantly rooftop solar PV are increasingly viable from a commercial perspective in those countries and in many others. There's also the option of entering into direct power purchase agreements With renewable energy generators near site, bypassing the utility transmission sector, we believe that more than 15% of Total supply energy demand in Bangladesh could be met with off grid renewable energy or direct PPAs by 2,030 and more than 25% in Cambodia and Vietnam. It's important to note here that renewable energy tariffs Our increasingly cost competitive against tariffs for electricity generated from hydrocarbons. Irene Research demonstrates More than half of all utility scale renewable power generation capacity commissioned in 2019 outperformed the cheapest fossil fuel alternative on a unit cost basis. Meanwhile, average solar PV costs have dropped by more than 80% over the last decade. Solar is ideal for large factories in locations with high levels of average annual sunshine. The technology is available off the shelf with good payback periods and offers a guaranteed source of power in countries where on grid supply can be erratic. There are 2 other important points I'd like to add. Primark's decarbonization program is designed to scale up As the business grows over time, we're confident we can still achieve our 50% carbon reduction target by 2,030 even if Primark is a much larger business than it is today. Furthermore, everything I've outlined will be achieved through substantive reductions in net direct and indirect supplier emissions. We will not need to purchase carbon offsets to meet this target. I'll turn now to the next element of our strategy under the planet pillar, Eliminating waste and single use plastic. First, some context. Primark's clothing and accessories account for 83% of total products sold and it's within those ranges that we see the most material impact in waste and single use plastic. 3 item categories account for the very large majority of all plastic packaging within clothing and accessories hangers, poly bags and hooks. Hangers are the main focus. These make up almost 2 thirds of total plastic volumes in our clothing and accessories business, accounting to around 16,000 tonnes. Primark's approach combines an ambition to eliminate single use plastic where feasible with circular programs to increase reuse. We're making good progress. For example, in the last few years, We switched around 100,000,000 hangers and hooks from plastic to cardboard across the business. However, in some categories, There are currently no viable alternatives to plastic packaging in the market. Wherever that's the case, the business will seek to transition to 100% recycled, recyclable or compostable materials. Here's an overview of how each element will contribute. Primark already has programs underway to mitigate around 45% of all single use plastic packaging within clothing and accessories. To date, we've already removed more than half a 1000000000 units of single use plastic from the business. As you can see from the dark blue bar on the slide, our reuse strategy for hangers will play a central role. Mitigating the remaining 30% of plastic volumes will require further innovation in the future. The main focus here will be on poly bags used to protect garments in transit from factory to store. Our focus with hangers is to move to a circular model with a full reuse cycle from point of sale in store back to supplier factory. Plastic hangers can't be reused indefinitely. They'll break eventually, but they should be good for several iterations. We'll also move to 100% recycled content for all hangers. And we're exploring alternative materials, Although at this point, plastic offers the best combination of lightweight and durability. Poly bags are more challenging. There isn't a viable reuse option for plastic packaging in its current form. Garments and accessories need to be protected from factory to ship and from ship to storeroom through extremes of heat, cold and humidity and potentially over many weeks. There are alternatives to plastic for items in transit, For example, lined cartons to protect garments during shipping. But there aren't yet alternatives to plastic at scale for on product poly packaging. Exploring those alternatives further will be a key priority for the business. In the meantime, we'll move to 100% Recycled content for all on product poly packaging. Hooks are more straightforward. The business will move to 100% recycled plastic over the next few years and in parallel will continue to transition to cardboard alternatives, eventually displacing plastic altogether. All of this is an important transition and the business is important to getting it right. The program will be overseen by a newly established Packaging Center of Excellence team. It's also important to note These changes will help to mitigate our EPR exposure as new legislation takes effect. I'll now turn to our final target under the planet pillar, restoring biodiversity. As Lynne mentioned, Primark is primarily a cotton business. If you joined the ABF ESG event in March, you may remember That we talked about the Primark Sustainable Cotton Program as an important part of the group's overall approach to sustainability. If you missed that presentation, here's a quick overview. We launched 8 years ago in India with a pilot program involving 12 100 female farmers in Gujarat. We did this in partnership with the cotton sustainability experts, CottonConnect. We also worked with a local implementation partner, the Self Employed Women's Association. Sewa represents more than 1,500,000 Low income self employed women workers across India. We've since extended the program to Pakistan and Bangladesh. And by the end of next year, there will be more than 160,000 farmers trained in sustainable cotton growing techniques, the majority of whom are women. To put that in context, that's more than the total number of farmers in the whole of the UK. The program combines best practice in farming methods for cotton with an equal focus on the people who grow the crops. And it's already well established in our business. Around 14% of all cotton clothing we sell is made from fibers sourced from the Primark Sustainable Cotton Program. In addition, around 13% of garments are made with cotton from other sustainable sources such as organic or recycled cotton. In total, more than 1 in 4 cotton garments sold by Primark are made from more sustainably sourced cotton And the proportion is much higher in some ranges. For example, more than half of all cotton nightwear and underwear and around 1 third of cotton womenswear. We don't sell these items at a premium on the basis that the raw materials used are more sustainable. Primark's mission is to make more sustainable clothing affordable for all, not to launch a premium range of sustainable products Specific customer segments. These garments are just as affordably priced as anything else that Primark sells. We now want to do 2 things. 1st, we want to expand the Primark Sustainable Cotton Program with much larger volumes across more product categories. 2nd, to accelerate the adoption of further regenerative agriculture techniques across the program. This is where we can make the biggest difference from a biodiversity perspective and in the process also enhance quality of life for the people working in the cotton fields. Regenerative farming means adopting practices that rehabilitate and enhance The entire ecosystem of a farm. The foundational principles are a focus on soil quality and health, responsible water management and maintaining a high level of plant diversity. We're already running 3 pilot projects in countries where we operate the We're using the insights from those pilots to develop a regenerative agriculture code together with CottonConnect. When the pilot phase is complete, we'll scale these techniques across all farms within the Primark Sustainable Cotton Program by the end of the decade. This will be a multiyear transition implemented across annual crop cycles. We expect these techniques to have a positive effect on the soil, biodiversity and local water resources. And by further lowering water, chemical fertilizer and pesticide use, we'll also reduce cost for the farmer. We'll talk more about this work in March next year when we brief you on ABS wider environmental agenda. Embedding these techniques within a program as substantial and wide ranging as the Primark Sustainable Cotton Program has a radiating effect Across the agricultural community beyond cotton, it's another example of Primark's scale for good and we hope it will serve as a beacon for others to follow, establishing regenerative agriculture as the new industry norm. So that concludes our overview of the planet pillar of the Primark Care strategy. In a moment, I'll hand over to Catherine Stewart to take you through the last of the three pillars. People. As many of you will know, Catherine personally established much of the Primark Ethical Trade and Environmental Sustainability Program over the last 12 years. She has immense At the sharp end of the supply chain in the cotton fields and on the factory floor, interacting with the workers who are the focus of the next part of our presentation. Hello, everyone. I'll begin with a quick recap of our ambition to improve the lives of the people who make our clothes. Our first target is to pursue a living wage for supply chain workers and in parallel, increase financial literacy and access Our second target is to strengthen opportunities for women in our supply chain, including addressing the barriers to their progression. And our 3rd target is to improve overall health and well-being among the people in our supply chain. For the next few minutes, I'm going to focus mainly on our decision to pursue a living wage because this is the most complex and challenging of all these targets. And in large part, it underpins much of what we're trying to achieve overall when we think about supply chain workers. Let me begin with some context. As many of you will know, we don't own any factories and our supplier factories don't just make garments for Primark. Our suppliers manufacture clothes from multiple brands and retailers within the same factory and each of these brands and retailers will have their own separate commercial An individual factory worker could be machining an item for Primark in the morning and then working on another item For another brand or retailer in the afternoon, bringing about real change in workers' wages can only be achieved if suppliers, brands, Trade unions, trade associations, governments and worker representatives collaborate effectively. Primark cannot do this alone. Unilateral action will not work. It's also important to be clear on what we mean by a living wage. We're adopting the definition developed by the Global Living Wage Coalition here on the slide. This is a widely recognized benchmark. For example, it's included in the UN Global Compact Living Wage Implementation Guidance. The intention is to bring about Real wage growth for workers and support greater financial resilience. Our approach will build on what is already a well established Process to monitor the payment of workers' wages. This is a key aspect of the factory audits conducted under the Primark Ethical Trade and environmental sustainability program. Our in country teams have significant expertise In analyzing payroll data for compliance with our supplier code of conduct requirements. So what does pursuit of a living wage mean in practice? We're committed to action in 5 parallel areas. We'll step up our involvement in cross industry initiatives to increase workers' wages with particular emphasis on our work with ACT. As you may know, ACT is a collaboration that brings together global brands and the Industrial Global Union. ACT aims to achieve living wages for workers in the global garment supply chain industry through collective bargaining at industry level. We're a founding member of ACT, so our influence matters and effective collective bargaining plays a critical role in driving up growth In real earnings towards a living wage. We'll also be evolving how Primark procures products From suppliers by aligning with the act commitments on purchasing practices by 2023. Measurement, transparency and Transparency and public reporting are also vital. We'll be working with the Fair Labor Association and the supply chain advisory firm Elevate to track how much workers in our supply chain are actually paid and to monitor progress in real wage growth. We'll have independently verified data about what's really happening to workers' wages and there'll be regular publication of that data. We'll support our suppliers to transition to a living wage. Over time, we will increasingly prefer suppliers Who share our living wage aspirations and will prefer suppliers who actively support ACT where possible And we'll support workers within our product supply chain to gain access to social protection and financial education services, And we'll do the same for the farmers within our sustainable cotton program. Let me now provide you with a little more detail in key areas, beginning with Cross industry collaboration. In countries where ACT has a presence such as Bangladesh, Turkey and Cambodia, Our sourcing and Primark Cares teams will continue to engage with ACT directly to drive greater focus on outcomes. We believe ACT has the right structure in place and has played an active role to date, but the organization has yet to bring about collective bargaining agreements. In countries where ACT does not have a presence or cannot get traction, we'll engage with all relevant stakeholders From other retailers to trades unions and governments to make the case for collaboration increases in the minimum wage. We've done this in Bangladesh And we've worked with the ETI to engage with authorities in other countries such as Cambodia. Purchasing practices have a big impact On our suppliers' ability to pay a living wage, we've offered 30 day standard payment terms for suppliers for many years And with signatories to the U. K. Government prompt payment code. This underpins suppliers' confidence in their cash flows and supports their ability to pay workers' wages. We've already begun aligning our procurement processes to meet ACT best practice requirements. We'll increase our focus on forecasting and planning to provide suppliers with greater certainty on volume commitments so they can plan ahead with confidence. This will play an important role in underpinning the transition to a living wage. We'll provide Primark product teams with enhanced training on responsible sourcing. Our product teams work closely with our suppliers. We'll build on our existing programs to provide clear guidance to our teams On what suppliers need and expect from Primark. And we've worked within ACT to develop new guidelines on terminating a supplier relationship. The guidelines address the potential implications for workers when ending a commercial contract. Best practice approaches include Agreeing a phased exit plan with the supplier and commitments on workers' wages. Getting hold of accurate data on wages is critical. We'll work with Elevate to gather factory wage data in a consistent manner across all our major sourcing countries. We'll then feed data into the fair compensation dashboard developed by the international multi stakeholder initiative, the Fair Labor Association. The dashboard is an open source online wage data platform. It covers hundreds of suppliers to the global fashion industry. It's a powerful resource and we'll use it to track real wage growth and as suppliers progress towards a living wage. As these tracking and measurement systems take shape, in parallel, we'll also develop new reporting processes. We recognize the importance of transparency and will communicate the results as part of Primark's ESG reporting. It will take some time to establish the processes required. This is a complex task, but we commit To report after the 1st full year of data gathering, we'll be clear with our suppliers that it's in their interest to support real wage growth and the transition to a living wage. Over time, we'll change the way we select and work with our suppliers. Suppliers who share our goal To transition to a living wage, we'll be increasingly preferred over those who do not share that goal and we'll also increasingly prefer suppliers Who join us in playing an active role within ACT where it's possible for them to do so. Supplier relationships will evolve In line with the hierarchy in the chart on this slide, over the coming months, we'll be developing a detailed governance and assessment process to underpin this Including through the evolution of our existing supplier scorecard effectiveness program. That's an overview of the process. Now let's look at this from an individual worker's perspective. If you're working in a garment What would real wage growth and the transition to a living wage mean in reality for your pay packet? There are three points of reference here. First, the legal minimum wage in countries where this exists. This is the minimum requirement for compliance on workers' pay And as such, is already assessed through our supplier factory audit process. 2nd, the average wages that are actually being paid across each Supplier's workforce. In other words, what does the average worker say in his or her pay packet today for a standard working week excluding overtime? The third point of reference is the living wage in each country under the GLWC definition. This is regularly updated and published by the coalition. The delta we need to consider here is between the second and the third reference point. The key focus for any analysis will be the average wages paid. How much do our supply chain workers really earn? We've just begun the process of gathering data on real wages paid across the Primark Supply chain, working with the FLA, Elevate and our suppliers. This is in addition to our existing ethical trade program, which monitors compliance with legal minimum wage Current data from the FLA and Elevate demonstrate that average wages paid are above The legal minimum wage in our top two sourcing countries, China and Bangladesh. For context, in Bangladesh, for example, Higher grade and more skilled garment worker roles are comparatively well paid. A skilled seamstress in a garment factory earns more in an average working week The school teacher or nurse based on publicly available data sources. People in lower grade unskilled roles in a factory such as a cleaner earn less And we'd see a much larger pay increase under a living wage. On the basis of the evidence to date, we're confident that Average garment industry wages are already higher than might be expected. That's an overview of our approach to a living wage. There are also 2 further commitments that I'll summarize briefly. The first is our focus on expanding the programs we're running To improve supply chain workers' financial literacy, which includes household budgeting skills. And we'll also extend our focus on supporting workers' access to social protection, which is vital for people who fall sick or have been injured. We'll collaborate with industry peers and other stakeholders to support the provision of these protections under the ILO garment sector call to action initiative. Let me turn now to another important target, strengthening women's rights within the supply chain. Female equality is a significant challenge across The global garment industry, women account for the majority of our global Tier 1 supplier workforce with around 320,000 women in total, But there's very little opportunity for women to influence practices and behaviors in the workplace. This is a significant challenge for the industry. For example, in our supply chain in Bangladesh, only around 6% of supervisors are women, only 2% of managers and directors. We're already running training programs to enhance workplace skills for thousands of women in our supply chain. We're also Extending our support for female worker career progression and promotion. Our commitment is that these programs will reach more than half of All female workers by 2025 80% by 2,030. Representation is also important. Women should play an active role within democratically elected worker representative bodies. We'll use our influence to encourage and support Greater female participation in the future. The last of our targets under the people pillar is focused on worker health. Grievance processes are an important aspect of welfare in the workplace. We'll help our suppliers develop and evolve their internal grievance mechanisms To reflect international best practice, we'll also support coalitions to establish new industry wide grievance mechanisms And we'll be expanding our existing worker support programs focused on mental health. The ambition set out under the people pillar of Primark Cares We'll have a positive impact on the lives of people who make our clothes. From greater financial resilience to improved well-being and health, these changes will directly benefit 100 of thousands of people in the supply chain. But we can't do this alone. We'll need others to work with us to make this happen, From suppliers and other brands to trade unions and governments, I can assure you though that for our part, we're committed to making a difference. Now back to John. Thanks very much, Catherine. We've taken some time to explain the Primark Care strategy And I hope you'll agree it's both comprehensive and thorough. And I want to take you through the financials. The sustainability transition we've set out today is vital for the future of Primark. It will lead to a modest increase in costs net of mitigating actions in some areas of the business over the period to 2030. But as I'll demonstrate in a moment, these costs are manageable within the context of the Primark business model as a whole. And I'm confident we will be rewarded with higher sales from both existing and new customers. Here's an overview of the product pillar from a cost perspective. Primark's programs focused on durability and circularity will require investment. We anticipate a moderate increase in commodity costs as a result of the increased use of recycled and sustainably sourced fibers. However, we anticipate that these costs will be broadly mitigated as the industry as a whole evolves over the years ahead. For example, recycled polyester prices today are often higher than virgin polyester predominantly as a consequence of limited capability within the recycling sector. We think it's reasonable to assume that recycled feedstock will become increasingly cost competitive as recycling capacity increases. It's also important to remember Primark's scale as a buyer. We are signaling today that recycled fibres will play a big part in the company's future and we'll expect the recycling industry to respond to that opportunity. I'd also like to note that these actions will ultimately reduce our exposure to increased costs arising from the extended producer responsibility charges. We do not expect an increase in costs in Primark as our suppliers decarbonize over the decade ahead. In fact, for many suppliers, enhancing energy efficiency and switching to renewable energy sources will have a positive impact on their operating costs. These plans will also mitigate the effect on Primark of any carbon border adjustment mechanisms in future years. Carbon pricing regimes are not settled and have yet to and are hard to predict. But it's likely that our plans will reduce the company's exposure to carbon pricing to a material extent in future years. The transition to a living wage in the supply chain We'll increase payroll costs for suppliers who take action in support of Primark's goals. That is of course exactly the desired outcome. We want our supply chain workers to benefit from their real increase in wages. There are 3 important mitigating factors to take into account that will help suppliers offset the impact of higher wages. The first relates to Primark's decision to implement the ACT Act Purchasing Practices Commitments by the end of 2023. This will provide suppliers with greater certainty when forecasting future orders and allow them to plan their production accordingly. We expect strategic suppliers to grow as Primark grows with more predictable cash flows and therefore greater scope to increase worker wages. The second mitigating factor is our plan to optimize energy consumption and decarbonize across the supply chain. This will have a positive impact on many suppliers' operating expenditure as a result of lower energy costs. The 3rd mitigating factor is that Primark are in the final stages of developing a supplier effectiveness program, which is designed to help suppliers optimize their operating costs. Primark has long standing relationships with these suppliers. The majority have supplied the company for more than 6 years and the longest standing supplier has worked with Primark for more than 22 years. There is one other point I'd like to emphasize. As Catherine explained, Primark cannot and will not pursue a living wage in the supply chain alone and on its own terms. We will not act on a unilateral basis. The transition to a living wage will depend on multiple parties working together. This includes other retailers and brands who share the same supplier factories of Primark and whose garments are made by the same workers as Primark. There will be no competitive disadvantage for Primark as a consequence of the living wage transition. The intention is to increase wages in real terms for workers who supply numerous companies across the fashion industry. This will lead to a level playing field where the main beneficiaries will be the people who make Primark's clothes and the close of other retailers and brands. That's an overview of the cost aspects of Primark Cares. I'll now turn to the broader context for Primark's business model, which as we've outlined has a number of intrinsic strengths. These include significant economies of scale and a sophisticated supply chain network with mature supplier relationships. The business has a long history of anticipating and mitigating volatility and inflationary effects across a wide range of input costs over the years without undermining its fundamental operating model or compromising its commitment to value for customers. Here are a few quick examples to demonstrate this beginning with exchange rates. Around 75% of all Primark's Inventory is purchased from suppliers in U. S. Dollars and our revenue is roughly split 60% euros 40% sterling. One of Primark's strengths is the ability to procure large volumes of products many months in advance locking in margins and hedging against the impact of currency movements between order placement and the receipt of goods. The business has managed to maintain a relatively consistent profit margin throughout this period despite very significant changes in exchange rates. Cotton is another example. Raw material costs are subject to wide variations depending on multiple factors. If you look at commodity price benchmarks for cotton, there has been significant volatility over the last 10 years even before COVID. This chart shows trading patterns in Cotton Financial Instruments rather than local supply and market trends And it's a reasonable proxy for what we've seen within the business. There have been large swings in fiber costs over the years. Then there are shipping costs. Primark's model relies on containerized marine transportation in huge volumes. We've seen very large movements in global shipping benchmarks over the last 5 years and actually particularly over the last 12 months. I'm sharing these brief examples with you to demonstrate that within the Primark business model There are multiple moving parts that in any point could have an inflationary effect on the total cost of goods, but that the business has been able to mitigate successfully over time. That's a testament to the strength of Primark's sourcing relationships and to the ability of Paul and his team to anticipate and offset these constantly shifting cost inputs year after year. This is a business with a proven level of resilience in adapting to a wide range of input cost factors. We expect only a modest increase in costs in some areas of the business arising from Primark's sustainability transition. And Primark's track record proves that with the confidence provides us with the confidence that these costs will be mitigated effectively. Primark has maintained a healthy net margin throughout all of the volatility I've demonstrated on the previous slides. Remember that the Primark Cares strategy sets out a roadmap to 2,030. It's not an overnight transition. 9 years is a very long time in this business and indeed in this industry. There will be ample scope to optimize further over the years ahead. As I explained in my introduction, we're confident of Primark's ability to mitigate these increased costs without an immaterial impact on its operating profit margin in the short term and without any significant movements in the margin over the longer term. And Primark Cares also represents a great growth opportunity for the business. As Paul Marshall explained earlier, Primark has lower penetration within younger demographics on sustainability grounds. And she shared with you research indicating an increase in propensity to purchase among all consumers when presented with each of the key Primark Cares targets and especially so among younger buyers. Successfully persuading Those reluctant consumers to enter our stores would clearly represent a sales uplift over the years ahead. Obviously, it's difficult to quantify the scale of that upside. We expect other retailers and brands to try to also boost their sustainability credentials and future. Primark will not be alone in this space. And mass market consumer attitudes can take time to reshape. This is a multiyear program and a shift in consumer perception will not be an overnight transformation. But there are good reasons to believe that a new generation of consumers will recognize Primark's commitment to sustainability and will respond positively, driving further sales and growth over time. I hope we've given you a sense of the breadth and depth of our ambition for Primark. We're committed to ensuring the business becomes a true pioneer of more sustainable and affordable fashion for all and a global industry leader taking action today to protect planet and people across the entire value chain. Let me hand you back to Paul now to conclude the session. Thanks again, John. Some of what we've outlined today is new and innovative. Much of it is already underway and all of it matters to a growing number of consumers and many stakeholders and also to the people who work for Primark. Delivering this strategy, making these promises real is a core focus for me personally and the entire team at Primark. Primark Cares is the future of Primark. It's that simple. This business has democratized fashion. Now it's time for us to make more sustainable fashion affordable for all. We'll keep you updated on our progress against these ambitions. You'll see these KPIs in our ESG reporting in future, and of course, We expect to be held to account for our performance. You can also expect us to talk about Primark Cares a lot more in the future, And we look forward to engaging with all of you. Your insights will be important as we progress over the years ahead. Welcome back, everyone. I would now be pleased to answer questions from investors and analysts. And the first question this afternoon comes from Warwick O'Kynes at Exane BNP Paribas. Good afternoon, everybody, and thanks very much for the presentation. Could you give us a sense, please, of the range of potential movements in the operating margin over Time is a result of the higher costs that you've talked about. And also, what specific cost mitigation factors are you taking into account In your assumptions? Thank you. Warrick, thank you very much for that. Maybe why don't I take that myself, first of all. The I think looking at the costs overall, we see a modest increase and that's net of mitigation mitigating actions of the Primark strategy over the years ahead. The thing that is very clear to us is that the mitigating The actions themselves we believe will be very effective. Let me also start with a reminder as well. The strategy is for 9 years. And so you can imagine that there are going to be ebbs and flows of costs and then the benefits of the mitigating actions. But one thing I'm really very clear on is that if we look over the short term, so that's probably over the next 2 or 3 years, Primark Cares will not have a material effect on the Primark operating profit margin. And if we look further out and we look towards, let's say, 8 or 9 years hence, I believe that the effect of it will not be significant on the Primark margin. Let me come to the question about what are the mitigating actions here. Let me start with the first one. Primark's got scale, remember that. And it is our scale we believe that will have A profound effect on the industry around us. I thought Lynne really talked very, very well about recycled fibres and the building up of that industry. The cost of recycled certain recycled fibres is quite expensive now and we'd expect that to fall with greater volumes coming through. The second one is the ACT Purchasing Practices. It's a statement of the office isn't it that if we give Our suppliers vary a clarity over the purchasing over a number of years a number of months rather, Then they can plan their production accordingly and that will have benefits for them. The next one I think is the decarbonization of the supply chain. So I think there will be and Paul really laid this out. I think there will be cost reductions that will come from the energy efficiency projects that various suppliers can actually bring about. And then of course, as they go down the transition to the use of renewable energy. And then finally, it's the Primark supplier effectiveness program, which is really the transfer of best practice across between suppliers. One thing I would want to add and this hasn't been taken into account in the comments that I've made about the margin there is I think as we look ahead, I think we will certainly avoid the inevitability of higher EPR charges. They will come through. But the one that I think will be very significant will be the increase in the costs that will come from increased carbon pricing. So actually reducing that or reducing our exposure to that, I think is a very big positive from this. But I hadn't factored that in to the earlier margin guidance that I've given you there. That's great. Thank you very much. Sorry, if I could just add one thing to that, Warr, That gives me confidence. It's the success we've had in The cotton program, which is firstly is very big now, 160,000 farmers will be trained by the end of 'twenty 2 and already about 15% all the cotton we're using is coming through it. That's a program which as Catherine I think knows better than me, Reduces the inputs fertilizer, pesticides, etcetera and water really very significantly amongst all those farms where we've trained the owner. Secondly, the reduction of those costs In particular, of those inputs has led to a very big increase in the incomes of all those farmers. So environmental benefit and wealth benefit for farmers. And this is really important, we are not paying any more for that cotton than we were We are for cotton that we source from less sustainable sources. The genius really is in the end. This is a program that you all really should pay close attention to. We think it's the only one Really under the control of a single company, it's very big and it's doing everything that we want it to do. 60% of our fabric near enough is cotton And we have this great tool to improve the sustainability of that at no extra cost to ourselves. Thanks, George. Can we have the next question, please? The next question is from Georgina Johanan at JPMorgan. Please go ahead. Hi, everybody. And yes, just to echo Warrick, thank you for the presentation and also all of the tangible sort of examples that you've provided. It's really helpful when you're building your knowledge on this topic. So thank you. I had, well, 1 to 2 questions really. The first one was really just you've talked about Potential sales uplift from the program. What is your sort of sense of the magnitude of that? I know it's a difficult one to But presumably, there's a range of outcomes that you're looking at in your planning. And then just following on from that, I mean, how do we think about that in the context of competitors such as Shein? Because obviously those players are experiencing very strong growth Also from younger customers, and they don't necessarily have such an overt focus on sustainability. And I know that Your own data would also suggest the value and price is really important for the younger consumers as well. So yes, just would like to hear your thoughts on that, please. Okay. Great. Thanks, Georgi. I suppose 2 parts to your question. The first one really is about what's the scale of the sales growth that Potentially, we could be looking at here. And maybe the second one is around the relevance of sustainability to consumers. Let me just start off by saying that as far as the group is concerned, we really do believe that this will be transformational for the Primark brand, Absolutely. And I think it is really is a major opportunity for sales growth that come through. But I think the person who's better So to answer that one is Paul. Thanks, John. And thanks, Georgina, for your question. John, I completely agree. I think this is a great opportunity for us. This Primark business has been built over many, many years of offering great fashion at amazing prices that everyone can afford, and There's no plan for us to move away from that. And George, you talked about sustainable cotton program. I'm wearing one of our 2 pound T shirts today. This will be made from sustainable cotton for autumn winter, but it's still going to be £2 and we're still making the same margin. But Primark Care, as I think, is really exciting from a sales growth perspective because I think it will make our existing customers who love us now, love us even more. And there's a whole raft of customers that I talked about in my presentation that maybe aren't shopping at Primark right now. And I think with an effective communication of this strategy, I think we have an opportunity of converting a lot more New customers to become fans. And in relation to your point about the younger consumer, I think the research that we showed, The conversations we have with our customers, the communication we have internally with a young population, particularly in the buying office and also the conversation I have with my 20 16 year old kids at home, this is really, really important to them. And I think if we can layer on a very credible sustainable story On top of that, the product story and the price story, I think we offer us offer consumers even more compelling proposition than they've ever had before. I also think that as we grow and we're still very much a growth business, we're in 14 countries today. As we said, we opened our 398 store yesterday. As we move into more markets, I think we make that proposition to new consumers more compelling by adding this factor on top. And I think that when you look at the Primark Cares product ranges that we sell, that Lynn was instrumental in developing when she looked after menswear and now represents for autumnwinter 1 in 3 of all the products that we or clothing and items we sell. That's been that's grown because the customers have wanted that and the success we've seen to our sustainable products has been unquestionable. So I think we have a real opportunity of growing our sales through offering product which is more compelling. If you look at the research in terms of markets, We know that in Northern Europe, in particular Germany, where there's a much greater awareness of the sustainability agenda, We are actually over indexing in a number of categories within those markets, things like ladies denim, kids organic cotton outperforming Germany versus the rest of the product That market and the rest of the market. So I think it's good for our existing customers, it's good for all the markets, it's good for new markets And it's good for new customers. I think the thing that I said we've probably not done a good job at is telling the story I'm putting our head above the parapet and today is about a massive step change in the communication. So the How Change Looks campaign that we launched on Wednesday that we feel really proud of. It looks brilliant in store. I was in Westfield, White City yesterday. It looks spectacular. And I just think we've got a really done a really good job at telling the stories in an easy to understand format. And I think that will Spread and the word-of-mouth will spread about what we are doing to improve the quality and improve the sustainable credentials of our product ranges. So I think it answers the question. We feel really excited about this, really positive about this and we see huge opportunities. There's a narrative that in making clothes more sustainable, etcetera, we will sell less and therefore the business will go backwards. I don't believe it for a moment. We only sell one item of clothing in every 6 in the UK, bit more in Ireland, a whole lot less than that in Northern Europe and other new markets. I think we will sell our market share will increase. We're after other people's business. We're not after More items from our existing customer base were often new customers, existing customers buying other ranges. The sustainability story is only part of it. I think what Lynn is going to do, though to the quality of the garments that we're making, which is part of the sustainability program, but also sits on its own. It's going to give some of our mid priced competitors a real headache. Yeah. If we add life beyond that which already exists to some of our close, we are going to attract new customers that might otherwise think that it's while spending a bit more somewhere else. And now they're going to realize it's not. So that's I think this is a really It's going to be, as you say, a transformational change in how in what we do. And it's not just coming from a desire to savor the planet. It's also, I think, strongly going to be driven by the quality of the clothing that we sell. Yes. Great. Okay. Georgina, I hope that was a full answer to your question. Can we take the next question, please? The next question comes from Warren Ackerman at Barclays. Please go ahead. Morning, team. It's Warren here at Barclays. I've also got 2. And the first one is on Primark Cares. You gave some nice numbers saying it's gone 7% in autumn 2019 to 33%, 1 in 3% In autumn 2021, how quickly could we expect that number to scale up? And are there any areas which are lagging behind Or where there's a structural issue in terms of pushing that number up as quickly as you would like. That's the first one. And the second one is around the color On ESG, I mean, very useful to think about it in terms of 3 pillars. So thank you for that. But presumably, all of your competitors are going to be thinking about the same challenges As you are, I know you are relatively humble in terms of the way that you communicate, but How would you say you are differentiated? Where are you ahead of the fashion industry? Which areas would you kind of call out as being something that's quite distinct for Primark on these areas relative to your competition? Thank you. Okay, Warren, thank you. Some great questions there. So I think I'll probably start with you, Lynne, if that's all right, with Just the percentage of the range which is currently Primark airs. I suspect that percentage that you gave for autumn winter It's much higher than people imagine. So maybe start there, but it's how quickly could it scale up? And then we'll move on for the other parts Yes. I mean, it is well, as we've been building the strategy, I think, as Paul said, we've been talking about this a lot more to partners, experts. And People have really said, wow, I didn't realize that Primark Care has had such scale and volume behind it. So we are seeing that grow really quickly. So it is around And 1 in 4 for currencies and 1 in 3 garments for this winter. What I will say is being having Before this role, very much being part of the product team, a very energized team full of Ideas around sustainability, very much great impact from suppliers as well That we're seeing the growth across a very short amount of time. That growth has only really been around 5 seasons and it's jumping dramatically. And I think within the product pillar, that opportunity, as George said, around durability and all of those ideas and partnerships that come with that, we're Being Ellen MacArthur Foundation, our new genes and circularity landing down this autumn. So, we're seeing the scale grow rapidly. And that's why we believe the targets that we've put out there, moving all of our cotton, as George said about sustainable cotton program. We're seeing all of our cotton and the target is by 2027 to more sustainable organic Cotton, we're seeing that move and grow very, very rapidly. So I think in answer, we'll see the scale move quickly. We're seeing innovation come all of Time, we're seeing the input from the suppliers. So, yeah, I think the answer is quickly. Probably the one area that needs more Investment is around recycled polyester, but we've already made our first move there. 1 in 10 of our garments is already with polyester. As Catherine knows, we've got fantastic partnerships with Recover Cotton and we're scaling that out of Europe into Bangladesh. So I think in short, we're seeing innovation, we're seeing passion from the team and we're seeing those numbers move rapidly. And I would say the next sort of Two seasons, we'll see that number jump again. And Paul, I don't know if you've got anything else to add there. Yes. I mean, we communicated this strategy to our top 100 suppliers on Wednesday, as well as the entire business on Tuesday. And actually, the reaction from the suppliers has been really positive. And I think Lynn's point about we have a young, dynamic, enthusiastic product development team from our buyers, designers, merchandisers. Those guys don't need much encouragement to get on with this stuff. And I think then working with a bunch of smart suppliers who are on board and that 100 suppliers represent 85% of everything we sell. And as I said, the feedback has been great. And I'm sure that with momentum and wind in our sails and an industry moving together, I think we'll make great progress. And I think just touching on that second point Well, I was going to say, yes. So go on to that. Yes, I'll go on to that. Yes, I'll go on to that. Yes, please. I think it's important to say that we really applaud Other retailers are making progress because as we've all said, we can't do this alone. We need the industry to come with us So that it's really healthy for us to see the competitors and the rest of the industry making progress. I think what differentiates us, Warren, It's price. I do think that if we could offer customers those more sustainable choices and they don't have to break the bank for them, they can keep The same leading price points from Primark I've already known. We can continue to develop great new product categories across the entire store as we do. And the great thing about This Primark Cares initiative from a product perspective is across all product categories. And I know we're starting with clothing because that's The majority of what we sell, over 8% of what we sell is clothing, but this will go across the entire product proposition over time. And Paul, if I could just So to say a couple of things. The people would say about us in the past that we've done some great things and probably not said enough about it. It seems to me that this It's about a step change in ambition and the communication. I mean, obviously, we're talking to investors today, but It's certainly to our customers. We're really telling them about this. We are and listen, I would really encourage you to get out to the stores and see what we've done, not only the big store that Westfield and Oxford Street, but small stores as well with a very comprehensive communication program under the How Change Looks campaign. You'd also see it On our new website, which we've launched on social media, where we're very active talking about these stories. So yes, I think communication is absolutely critical, John. I think look, I'm a great fan in collaboration too, fan of collaboration as well. There's an element of competitiveness about me nonetheless. And let me answer the second part of your question. I think the work That Catherine and Paul has led over the last 13 years gives us a level of capability in the supply chains, that is quite frankly all but unmatched globally. We have 130 people in supply chains who know exactly what they're doing. We have an increasing number of people under Linds Charge, you know exactly what they're doing. And that is a resource that I think should give us all confidence, give me confidence that we're building on incredibly this strategy on incredibly strong foundations and we're well on the way. We started 13 years ago. We didn't start couple of weeks ago, we didn't start 2 years ago, we started 13 years ago when Catherine came on board and started to build all this amazing capability we've got. That's number 1, which makes us distinct. Number 2, that makes us distinct, and I don't apologize for repeating it, that sustainable cotton a program no one else has one of them that can deliver scale production, which we can push all the way through the supply chain to our final factories where that cotton is turned into clothes. So we've got traceability all the way through at huge scale and growing scale, at costs which are no greater. I challenge you, Warren, to find anyone else who can do that. Okay. Thank you. Thanks, Warren. Should we go on to the next question, please? The next question comes from Clive Black at Shaw Capital. Please go ahead. Good afternoon, everybody. And again, thank you for your time and all the work going into that. Much appreciated and impressive. Two questions and a comment. First one, a question maybe for George is, in shareholder value terms, what do you think Primark Care is going to bring to your investors? And then building on your last answer from Paul, a lot of chatter about Primark on digitization. I just wonder to what extent Primark Care will be communicated directly to your shoppers as you build your digital capability, particularly in 2022. And then just lastly, a comment. I have to say, I imagine you're going to be at dinner table in the south and pub conversation in the north tonight Along the lines of our young people more sustainable than their parents and grandparents given throwaway culture, fast fashion, Okay. All right. Thanks very much, Clark. George, shareholder value. Look, when you can add capability to an existing company. It's in the shareholders' interest. The thing that makes Primark so brilliant is, it's cheap And it's fashionable and the locations are great. And now we're going to end and the clothing is sustainable. That makes us a better company. It makes us a more robust company, particularly in a world where consumer values customer values are changing. Our job is to give customers in the end, consumers in the end what they want and we think that we're going to do a fantastic job of doing that without losing anything that we've currently got. What will our sales growth be? I have no idea. It will depend on 101 other things, mainly actually the young folk who work for Lynn and other leaders in their fashion choices more than their sustainability choices. But if you have great garments, People will come into our business and that will still dominate decision making in Primark and we'll be we'll either sell stuff or we won't based on our fashionability. I think the cost increase as John said they're going to be there, how big are they are, how are they going to be, Who knows? They're going to be smaller in my view than some naysayers think because the whole of this industry It's changing and it's going to shift. There's going to get scale and recycling, scale and the use of fiber of different fibers and all these other things that are going to happen. And I think we'll personal view is in 10 years' time, 9 years' time, we'll find actually the cost of doing business isn't significantly higher than it is today. And certainly well within the normal fluctuations that we see every year, which John pointed out in whether it's freight or cotton or currency or whatever else it is, I think it's all going to be absorbable within our cost structure. Thanks, George. Digitalization, so this is really about Communication, incredibly important communication channel. Yes. Paul, give us your views on that because it's a great Yes. Thanks, Clive. I'm interested to hear what the chatter you're hearing is. But yes, we are it's meant no secret. We are investing in the digital platforms that we have. If I'm being very candid, I think our website has been under par. We're investing in that. We've got a big piece of work being done. And actually, The Primark Care section of the website, which we relaunched on Wednesday, I think is a dramatic move forward from where we were. But we need to uplift the whole of our website in order to make More products visible to our consumers enable them to make more choices before they come and visit our stores. So you'll see, I think, over the next 6 months, 6 to 9 months in particular, a real change, a step change in the look and feel of our website. And let's be clear, from a digital perspective and social media, social media is so important 24,000,000 followers and growing all the time. We hit 9,000,000 followers on Instagram yesterday on Wednesday rather off the back of the launch. So we're already seeing More customers come to us. I've seen a reaction on that. Yes. So there you go. Yes. So the power of social media, the great thing About the website and the social media, actually probably even more so than the stores, is the ability to get strong messages across to the consumer in a clear, concise way. As we're in the stores, sometimes when you've got the melee of all the stuff that's going on, all the noise and all the thank goodness all the customers, It's more difficult to get those messages across as where on your mobile phone or on your laptop or on your iPad, it's actually really a powerful vehicle for telling some of these very strong Primark, his stories. Thanks, Paul. Next question, please. The next question comes from Simon Irwin at Credit Suisse. Please go ahead. Hi, everyone, and thanks for today. Two questions for you. First, I guess, is mainly for Paul, but What kind of scrutiny are you finding from customers about sustainable ranges when you put them out there? There's a lot of greenwashing going on within the industry. And as these become kind of more Almost ubiquitous across yours and everyone else's ranges. Do people actually look at the details or do they just kind of take it as read? And the second, I guess, is slightly more broader. Is it obviously this is going to require a lot of cooperation with your peers In a very fragmented industry and also with authorities. So can you just give us a bit more color about where you're reaching out to people, So to some of your peers about what cooperation you're getting, and particularly from governments, what kind of government support are you getting? I mean, say, in the UK, we're still waiting for the fixing fast fashion follow-up. Do governments actually care about this to the extent that they're going to Kind of legislation put actions in place. Thanks very much, Simon. So the first one is about what sort of scrutiny and maybe depth that our customers look into when claims are made around product. Let's start with that first part of the question first. Lynne, maybe just if you want to direct some comments on that, and Paul, I'm sure you'll add that to that. Yes. And we do see that. I think with this strategy, it's as George said, it's been built on really, really strong foundations. Catherine and team have done a credible job of that and therefore that has given us those very strong foundations to be able to build The strategy, it's been a huge amount of detail gone into that in terms of the last 2 years' worth of work And really being very clear in terms of what our targets are, what are our ambitions, what's the roadmaps behind that and how we get there. And from that point of view, it gives me huge comfort that the team, the experts and the team and the wider experts have Given us that great depth and clarification that we are making sure that any claims that we make are strong, they're robust and that we can stand over it. And that's really important to me as Director of Primark Cares. That's really key that that's something that's hugely important to me and the team. I think in terms of you can see it behind us. We've worked with the specialist team from an expert point of view, Building the strategy, but also from our internal team to make sure that anything we put out there is very transparent, there's governance behind it, that there's clear Checks and balances against what we say to a customer. And again, it's hugely important and there's a rigor and a governance system behind that. Yes. So I think, yes, of course, when Primark talk to a customer, we do often talk in more simple language. I think that's the way the Strategy is deliberately being structured, but that's also very important because sustainability is a complex subject. It can be seen as greenwashing in some respects. Important that we have been clear, but also transparent and robust around that. Yes, Paul? Yes, I would agree with everything Lynne has just said. I mean, I think that From what we hear from the stores, and let's be clear, Primark Care's product has been with us now for a number of years, is that the customers are genuinely interested in what we're trying to do. I think the secret we are very, very mindful of greenwashing. So therefore, as Lynne said, all the claims we make are substantiated. All of our ticketing has QR codes in store. So you can scan the QR code, go on to the website and get the detail. I think we have to myth bust a lot of this stuff. We have to jargon bust it because You need language, which is easy for consumers to understand. But I think what's going to happen, I mean, we've seen we're not the only retailers we about sustainability at the moment. So I think we're going to see this topic become so much more part of the general vocabulary. And again, I come back to my kids. My kids know more about this than I probably did 5 years ago, let alone I did when I was 16. So I think it's coming through the education system. So I think very quickly the awareness Well, this whole topic will just get greater and greater. Great. Just coming on then to the second part of the question, which is cooperation with other parties. I mean that can be governments to other retailers and so on. Kathleen, what's your perspective on that? I mean, I having sort of been on the journey, as George has said, for some time now, I think in the last sort of 5, 6 years, I think retailers have realized that many of the issues they cannot solve on their own. And The only way that some of the sort of things that we're facing into, like living wages, like emissions, are things that we're going to need to work on together. And equally, we're involved in a huge number of different collaborations, generally speaking, particularly on the environmental side. Each Each seems to have its own particular focus, hence the number. But really trying to sort of constructively work through pragmatic Approaches because for our suppliers as well, it's important that where possible, we can be aligned on what we're trying to achieve. It makes it much easier for them. And I think that is important if we're going to sort of do things that need to be at scale. In terms of government support and sort of conversations, what we're trying to do, at a sort of Wider level, one of the reasons we joined up to the UNFCCC Fashion Charter was really because we knew some of the Work that we're going to have to do would be driving things like renewable access to renewables in some of the countries. There's talk of Kind of industry wide PPAs, for renewables. So some of again, some of these sort of bigger challenges that we can work on together to be more effective. A more local level, we do engage with government on a lot of different areas. I think, again, to sort of make sure That sort of our voice in terms of some of the opportunities and challenges that we face are known. And again, really Pushing some of the areas where we know there might be challenge. I mean recycling, some people might say we were a bit Slow off the blocks with our kind of in store recycling, but it was about making sure the standards, the social standards were there As well as that visibility and transparency, and that took time. So again, being really clear about what some of those challenges are and then equally what The opportunities are. So I think there's more engagement than ever from the government around getting at wanting actually Greater understanding from business about what they are. So I think it's kind of all encouraging, I would say. But Again, incumbent on us, I think, with our scale to really sort of trying to sort of be pushing, I think, in terms of what could be achieved. Okay, great. Thanks. Thanks for the question. Next question, please. The next question comes from Lisa Lang at Hermes Investment. Please go ahead. Hello. Good afternoon. Thank you so much for the presentation. I was particularly interested to hear about your approach To circularity and biodiversity. And I know Lynn mentioned that you're going to improve the recyclability of clothes. And I was just wondering what efforts you're making to really encourage customers to actually recycle those clothes at the end of their use space. And Paul also mentioned that you're planning to increase the and expand the sustainable cotton program, which is great. But Do you see this more of a linear increase? Or will there be a sudden inflection point, a jump at some point in time where that is scalable? And I think the last thing I wanted to ask is, Paul, you talked about biodiversity specifically in the cotton supply chain and your work on developing A regenerative agriculture code. And I was just wondering if you've mapped your current impact on biodiversity in some way And how are you going to track your progress in this regard? Thank you. Thank you very much. Maybe a number of Questions embedded in there. So maybe if we could just deal with the first one, which is really about recycling. There was just an element in there I thought about our customers and encouraging them to recycle. Lynne, could I pass that one to you first? Yes. Just to comment on that. Yes, absolutely. A quick comment. I think It's really important for this strategy for circularity to really educate customers to for them to understand What does circularity mean as well as obviously all our colleagues, we've got nearly 70,000 and also our product teams. So they're understanding how they're designing A garment at the beginning, so it can be recycled at the end of its life. So, I think in terms of our customers, we have an opportunity To really drive that education through, whether that's through our stores with fantastic window displays, through our social media. One of the key ones that myself and the team have been working on and we're just at a small scale trial at the moment, but we've had an incredible reaction is repair workshops And it doesn't matter what garment costs actually. I think it's very important for us to show the customers how to repair and make those garments last for longer. So we've done 2 workshops actually led by one of our customers that contacted Paul actually and then we've got our next one next week. So I think what we're looking for with customers is large scale social media education through stores. We've got nearly 400 stores, but also individual Events that we can educate how to look after garments and what is circularity. And then finally, in terms of our partnerships, We've had fantastic partnerships already with Textile 2,030 and they're all looking at repair and durability. So I think we've got some really fantastic opportunities actually to take responsibility here. So that's what I'd comment on that. Thanks, Liam. Paul, do you want to just take circularity in its wider Sense, if you wanted to make any comments. No. I mean, do you want to answer the I mean, I was going to answer the one on the Biodiversity. Cotton. Oh, cotton, yes. And then biodiversity. Yes. You know, Lisa, that we sort of we started and we said we started in 2013 in relation to The Cotton program. So we've grown it steadily. It needs to be grown steadily And there's a lot of training involved. So that commitment to 160,000 farmers is by the end of next year. So we've got a steady growth in the number of farmers To operate under our auspices. I don't think we're planning on a step change in relation to that. We will have Steady growth in the number of farmers under the scheme. It's a huge number of farmers already, 160,000. We were it's more than the UK Farming based. We need to make sure that we can manage the sustainable cotton program as it is such a unique Element of our sustainability credentials. So, we will do it gently. We will do it in a Sustainable way, we will do it in a way that enables that product to come into store. But we'll also look at other alternatives for So we're looking at recycled cotton. We're looking at organic cotton. And you can see that we started that process as well. So we'll meet our cotton Requirements in a number of different ways, but we won't risk growing something dramatically and letting it fall over. That's absolutely key. In terms of biodiversity, John, if you want me to We've got this is a unique beast, this as I said before, this sustainable Primark Sustainable Cotton Program. It's unique because it gives us access to the farms directly to the farms that make our cotton. And that enables us to look at biodiversity on those farms. And that's something we started. We started projects in relation to biodiversity. As I said, we will roll out that biodiversity code of conduct When we finished working on it with CottonConnect and it's something then that we've got a big marketplace for within those farms. We know the farms. We know where the cotton is And we know the farmers, so we will be able to make real progress once we've built that up. Can I just maybe add to that? So as with everything that you've seen in this new strategy, there's lots of work that's already been going on. So in terms of biodiversity, we've been working With the Cambridge Institute For Sustainable Leadership for a few years now to look at what are the right metrics for my for diversity because Unless you've got the metrics to start measuring the impact, and we've actually done an assessment on the program as it exists To look at biodiversity, so we're already kind of confident that even with some of the practices we've got now, we've now measured are having positive impact So on biodiversity, I've personally seen it. Paul and I went out to India at the start of 2019 and the number of birds, some of which Particularly NEST within the cotton plant are really like evident now in a quite a dramatic way. We're building on what we know is already starting. So it's about furthering more regenerative practices Beyond what's already happening. So as Paul said, it's just an evolution of what we're already doing and at that scale, which I think it's one of the things I'm most proud about because when you see the impact, as George has said, on income, It's not just on 160,000 farmers. It's on the families and it's on the communities, many who are adopting those practices In other produce, so again, this scale can have a hugely positive impact. Thanks, John. Thank you, Catherine. Thank you very much. Can we have the next question please? The next question comes from Richard Chamberlain at RBC Capital Markets. Please go ahead. Thank you. Yes. Happy Friday, team. A couple for me, please. 1st one, will you be providing or encouraging more transparency in training to workers in sourcing markets like China and Bangladesh and so on in terms of how the workers are paid and what they're being paid for. And then the second one is you talked about Cost mitigations to sustainability cost rises. And I wondered if you're seeing suppliers Offsetting cost increases with things like more automation and production efficiencies, new machinery, using RFID, that sort of thing Or apps to plan capacity better in terms of labor minutes worked. I mean, could they be sort of helpful offsets to Cost increases too as well as those factors that you listed earlier. Thanks a lot. Yes. Thanks, Richard. Let's stretch on the first part of that, transparency and particularly around wages in the supply chain. And look, it's got to become a big, big issue this one. We've got to we are committed to reporting on this And to make absolutely sure that the transparency is there. It's going to take time to get some of the data to actually get there, but we're definitely there. Catherine, I think would you like to tackle that one first? Yes. I mean, we are well, we've already started To collect data. So the process by which we're looking at wages and have been through the programs to make sure people are paid properly. But what we're now going to do is start collecting more data on those actual wages. And as I spoke about in the presentation, use the FLA, The new platform that's been set up in the last few months to capture that data because there's a number of brands that are now working with that platform. So again, we can start to sort of have a look at it from an industry wide So again, we can start to sort of have a look at it from an industry wide point of view as well, which I think will be hugely helpful in kind of seeing particularly Over the years, as we start to see the trends and movement, so that is a commitment. We understand that We need to be more transparent and showing you what progress looks like. Great. And we've and just to put, we have been just in terms of transparency, we have been have many courses and the like in market in relation to teaching workers about Their wages, what it means, wage statements and the like. So that financial literacy has been a key component of our solutions for many years, Teaching people, yes, it looks basic, but it's needed in market. So that helps transparency. Richard, you're also asking about, are we seeing currently some changes in the cost base of our suppliers as some of the changes are taking place here. Paul, yes, please. I think it's a great question because it happens already. It is a great question. I think we see Firstly, I think we're working with a smart bunch of suppliers, right? And we've gone through actually a rationalization program over a long period of time to make sure we're working with the right suppliers who want to move forward with us on all fronts, including this whole Primark Cares agenda. I think there's some really tangible actually examples. I'll give you one, which is around digital design. So we're now designing a lot of our products on 3 d design. The technology is quite phenomenal. You actually cannot see the difference on the screen between a model wearing a real life outfit And a 3 d digital model wearing a digital outfit. What that's doing is taking a load of cost out of the process because you're not having expensive sampling. You're not having couriers coming backwards and forwards with samples. And it's making the whole lead time much shorter. So the whole process becomes more efficient. It saves money, it saves time and it's much more efficient and you're not having a load of samples being made in a sample unit, which Cork is more environmental issues. So I think that's a really good live example. We trialed that on women's clothing when they're rolling out into men's clothing and The hungry suppliers, you're saying bring it on. Thanks for the question, Richard. Great. Thanks, guys. If we could yes, thank you, Richard, as well. Could we have the next question? I think it's probably the last question, but if anybody else wants to pull up their hand then please do. So the next question please. And possibly the last question for this live session comes from Adam Cochrane at Deutsche Bank. Go ahead. I better make it 2 if it's the last one. Firstly, would you prefer to see Regulations to ensure a level playing field or an industry solution that's granted. This is maybe true across both living wages and sustainability requirements. And then the second question is, do you think that In your business, having a slightly slower product speed to market maybe than some competitors should actually allow for easier integration Of some of these more sustainable product factors, etcetera? Sure. I may take the second one first, if I may, Adam. So As you say, rather than doesn't sound quite like the slower supply chain, but maybe longer lead supply chain, Are there some benefits of that? Paul, comments on that? Yes. There's a couple of elements to that actually, Adam. First thing is just to remind us all, 50% of the products we sell are what we classify as essentials, okay? So it's socks, underwear, white T shirts, nightwear, towels, bed linen. So we have a good core product base, which by the nature of it means that you can be much more planful with your suppliers. Then a large chunk of what we do is what we call seasonal lines that run for pretty much a whole springsummer season or an autumnwinter season. And then of course, you have the trends, which by the nature of them are evolving all the time. So I think that's one element. I think in terms of then The slower you referred to the slower speed to market. You know that our the big markets which we operate in China, Bangladesh, India, Pakistan Do have a longer lead time than some of the close to home sources. And I think whether that gives us an advantage, I'm not quite sure. What I think is more important than that, I think, is the suppliers that you're working with, whether they're based in any of those manufacturing hubs, that they're wanting to come with you on this journey. I'm not sure if anything you want Is that Lynn? Yes. I think it's more than slower. It's about the scale of those products, as you said, Paul. So it's about them being everyday staples in terms of How do you move them forward in sustainability terms? Because you've got that scale, you're getting it out to more customers that repurchase, so you can do really Strong, durability standards and that's what we're working on. It means that you can put that scale more towards a circular system. We can move at scale back to our target on sustainable fibers. So I think it's more impact and making a difference at scale And they are more core lines. So I guess in terms of ease to a supplier, it means that They're lines that they see time and time again and they're familiar and the teams are really strong with it. So I'd say it's that's the impact in terms of sustainability. Yeah. Great. Okay. Thank you for that. Do we want to see more regulation? And I'm looking at you, Paul. Well, it's not me because I'm a lawyer. Regulation on that to be serious. We've supported regulation in relation to the human rights agenda for many years. So we were a firm supporter of the Modern Slavery Act in the UK. We supported the supply chain legislation proposals in Germany. We believe that actually that provides a firm bench baseline Upon which people can grow. It was never fair to us. It was never a threat. We were way above the Minimum requirements in both of those. So we were comfortable with that. I think in terms of Our straightforward compliance regulation obviously exists already. So there are the employment of certain people, then The workplace health and safety, don't pollute to air, don't pollute to water, all of these sorts of things are already regulated. I think there's a lot of regulation already. I think regulation doesn't necessarily work in things like durability. Of course, it doesn't work in durability and it doesn't work in some of the softer Choices are around sustainable cotton and all the rest of it. So in certain places, we would do support regulation. In other places, I think it's for the it's each brand to determine what they should do. Thank you all very much for your questions. And What I'd like to do now is just hand back to George to conclude the session. George? Thanks, John. Thank you, everyone. I hope we've provided you with The insights into the breadth and depth of Primark's ESG program. And I hope we've persuaded you of the scale of our ambition and the excitement we feel in making more sustainable fashion affordable for all. As we've mentioned, we will be holding a 3rd ESG briefing next March focused the most material and environmental factors across the group as a whole. And details of that session will follow in due course. And of course, we look forward to seeing you all then. So in the meantime, thank you for joining us today. Have a good weekend, starting quite soon, I hope, for many of you and goodbye from all of us. Thank you all. Thanks. Goodbye. Thank you.

• Press Release