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1 Trade-offs among various SDGs are unavoidable. Sustainable Consumption and Production the most efficient strategy to mitigate trade-offs... JANEZ POTOČNIK (co-chair IRP / UNEP )

2 To lead the ever-transiting industry by premium quality, environmentally-sustainable leather Products & the unique LITE manufacturing /service system, by continuous INNOVATION, SELF DISRUPTION and COLLABORATION. Be The Agent of Change The Tannery!! 2 nd Vietnam plant in construction and 3 other outsourced facilities in S-Korea, Thailand, Bangladesh.

3 Digitization : Creating value through Digital transformation What will our customer objective be? Our value proposition? include lead generation, customer acquisition, improve customer service, co-creating with customers, grow share of wallet of existing customers? Who are our target customers? Which customers are most relevant for thr initiatives? Do we profit more by making less? Which customer network behavior will we use? what is our digital innovation(s) in our PSS? What are the components to our value network? Who are incumbents? The challengers? Any differentials, Barriers to Imitation, Displacement value? ( Source: Frost & Sullivan and /or WSJ Studios and / or Yokogawa ) How do we measure success?

4 Digitization - Beyond Production Automation & Process Control Phase 1 Human Monitoring Level Phones/Tablets (Remote) HMI (Human Machine Interface) Server Website Control Other Tannery Plants (Offsite) Connection with Macau Server Structure (Onsite) Company Database ERP (Filmmaker/Antara) SCADA (Ignition/Antara) Structure Plan Machine Monitoring Level Temperature Sensor/Control Flow Sensor/Control PLCs Pressure S/C Humidity S/C - In ISA s server structure, the ERP and SCADA programs will be installed where information from the production floor can be gathered, interpreted and distributed to various company departments, i.e. CS, Sales, Customs and Shipping - On the Machine Level, PLCs (Programmable Logic Controllers) will autonomously read out machine parameters and readjust for efficiency, this information is sent to the servers. - Workers can then view and interact with this information via phones, tablets, computers, online or directly at the PLC s display screen

5 2018 Our further approach: From Trade Mark to Patent! From Brand to Co-Branding! From Co-Branding to Consumers! From Waste into income streams!

6 This is how we did it, and there will be more in various models

7 Findings? Granular approach? or systemic design? into circular economy approach? Major Circular-Economy Activities : Mindful 5R s : Refuse, Reduce, Reuse, Repurpose (Redesign), Recycle Loop: Bigger loop? Small Loop? More Loops? *Capital intensive or decentralized? *Where is cluster, Tech-Proximity? What about Policy? Exchange : Process & material flows, longer product life & market expansion Optimize - Resource Decoupling, Impact Decoupling Share Best Practices

8 Integrated Annual Reporting The Industry Value of Sustainability Reporting Harvard Business School & London Business School jointly concluded that high sustainability companies outperform low sustainability companies by stock value and financial accounting measures. Financial reporting Focus on financial and manufacturing capital Historical financial performance and compliance driven Integrated reporting Sustainability reporting Addresses the issues of natural, intellectual, human and social capital Strong focus on reporting non-financial information Integrated reporting combines sustainability reporting with annual financial reporting, and looks at how an entity uses different forms of capital, such as financial, manufacturing, intellectual, human, social and natural capitals Benefits? Enhancing transparency and accountability, making better investment decisions, better stakeholder communication Differentiate: Shareholder: those, who hold the share in the company. Shareholders are always stakeholders Stakeholder: those, who have interest in company s success or failure, and who are affected by its activities What is needed? Preparation Executive Management Strategy Setting up a Sustainability team Liaison officer in each Department to furnish information Process organization Develop Materiality Assessment Develop Stakeholder Engagement Implementation Sustainability team develop internal impact assessment and report Validate with executive Management Strategy Release to Stakeholders Get feedback via financial performance or qualitative press

9 Going Forward Be The Change Agent The Tannery!! Thank you!!