MAS HOLDINGS

Telephone 4796444 | Email info@masholdings.com
Website www.masholdings.com

Sid Amalean
Head of Sustainable Business

Q: What does sustainability mean for MAS Holdings?
A: When our founders began this business, they were stepping into an industry with a poor reputation due to its association with sweatshops and human rights issues. They wanted to ensure that the business they were building helped change these perceptions.

Long before doing the right thing was consi-dered the popular thing to do, they set up faci-lities with air conditioning, and offered benefits such as meals, lodging, transport and training. They believed that the long-term success of MAS depended on the success of our emplo-yees and the communities around us.

This founding ethos is at the heart of how we look at sustainability and what it means to build a truly sustainable business – one that can thrive for generations, and sustain its people, communities and the planet we call ‘home.’

As we grow, our responsibility grows too. Some could argue that simply ‘making less’ is the answer. But the reality is that the apparel industry employs and supports the livelihoods of millions of people across the globe, most often in rural areas where there are no alternative forms of consistent income.

At MAS, we employ more than 100,000 people. Yes, simply halting operations would mean an instant reduction in environmental impacts but the long-term effects of lost liveli-hoods would be catastrophic. This is why making less is not a sustainable solution.

We need to make clothing in ways that support our planet and uplift humanity – a challenge but not an impossible one.

Q: Could you outline the group’s commitment to a sustainable future?
A: MAS has been on a journey of creating sustainable change for more than three decades and we have been working on formal key performance indicator (KPI) driven sustainability initiatives for over a decade.

In 2020 – a year that redefined our world – we also redefined our efforts in sustaina-bility, bringing years of work in social and environmental sustainability together with those in creating sustainable products for cus—tomers.

We knew that to make a tangible impact, we needed a plan. So we combined our efforts in product, social and environmental sustainability to create the MAS Plan for Change.

The Plan for Change is our commitment to inspiring sustainable change within our business; among customers, people and communities; and for our planet. It focusses on the three areas of product, lives and planet, and has 12 commitments for 2025.

Q: How do these commitments help make MAS a sustainable business?
A: We see sustainability as being holistic, encompassing the future readiness of our business, the overall wellbeing of our people and communities, and the health of our planet. We believe that simply looking after our people or solely focussing on our environmental impact cannot create a truly sustainable business.

In an industry like apparel, a significant part of our value chain impact is in sourcing, using and disposing of products; which means we must also ensure that the products we manufacture are produced with sustainably sour——-ced raw materials and have the potential to be recycled after use to create a circular model.

This is why we are committed to making our products more sustainable, as well as continuing our work to uplift the lives we touch and reduce our impact on the planet.

These efforts require systemic change dri-ven by collaboration through sharing know-ledge and skills. And the Plan for Change -outlines our combined strategic efforts to achieve a holistic sustainable business model for MAS. This plan is very much work in progress, and we’ll continue to learn and improve as we go along.

Q: How do you measure performance in meeting these commitments?
A: Each of these commitments is tied to measurable and time bound targets, which help us track our performance and progress. These targets are embedded into our performance management systems across all levels of the business, from CEOs to executives.

Performance is measured through internal and external audits, and tracked through internal systems, which enables teams to use information to make timely and data driven decisions across the business.

Many of our targets are also aligned with stringent external standards to ensure that progress can be measured in an objective and transparent manner.

For example, the work we do to reduce our carbon footprint is measured by KPIs linked to the Science Based Targets initiative (SBTi), which is based on what the latest climate scie-nce considers necessary to meet the Paris Agreement’s goals.

This means our emission targets contribute to the pathway limiting global warming to below 1.5°C above pre-industrial levels.

We believe that to create true impact, we need to make sustainable fashion inclusive, affordable and accessible to all. This is an ambitious goal, and requires innovation, collaboration and alignment among our businesses, customers, partners and supply chain.

Over the years, we have made good progress but this is an ever evolving journey that requires continuous improvement. We know that the road ahead will be challen-ging but much like our founders were, we’re committed to staying the course to do the right thing.

Surath Chandrasena
Director – Corporate Finance,
Strategy and Treasury

Q: How does investing in sustainability make business sense?
A: A growing body of evidence is proving what we at MAS have known for a long time – investments in sustainability lead to better business opportunities and financial results.

These investments range from funds invested in physical infrastructure such as ‘green plants’ to resources dedicated to researching and developing the next generation of sustainable products.

Sustainability is integral to our business stra-tegy and investments in this area must provide tangible returns. Sustainability practices can create business opportunities, lead to better margins and support risk management.

Q: Could you elaborate on why this is impor-tant?
A: Fashion retailers have always been cons-cious of reputational risk due to manufacturers’ poor environmental and social practices.

Heightened consumer calls for environmental and social justice have led to fashion retailers viewing superior environmental, social and governance (ESG) practices and products as sources of competitive advantages.

At MAS, we‘ve observed an influx of new customers for our sustainable product offering. We continue to invest in the R&D of sustai-nable products and processes, sustainable infras-tructure, and relevant knowledge and capabilities.

We’ve established earning revenue from sustainable products as a key KPI across the business. While the consensus is that sustainable products can command price premiums, we have also seen products that cost less to produce, leading to improved margins across the value chain.

One such example is dope dyeing, which has a lower environmental footprint and costs less than traditional methods.

Q: Could you shed light on the returns MAS has earned from these investments?
A: We see reductions in operating expenditure as investments in minimising our energy footprint have lowered energy costs.

Efforts to develop technology and resources to improve material utilisation have helped reduce the cost of production and waste processing. We’re presently establishing methods to monetise waste while contributing to circularity.

We have observed that investments in employee training, development and well-being have resulted in better retention and productivity, and lower recruitment costs compared to industry benchmarks.

Managing risk is also a key benefit. For example, the localisation of raw material sourcing has helped us manage supply chain disruptions during the COVID-19 pandemic and provides a cost advantage against increased freight rates.

Q: How would you describe the appetite for sustainable financing?
A: The increased awareness of environmental social issues amplified by the pandemic has accelerated the interest in sustainable finance.

In the past, sustainable financing was largely limited to green loans with funds allocated for projects with environmental benefits. MAS has used such financing in projects like its roof mounted solar power initiative.

There are new sustainable financing products today, ranging from sustainable variants of trade finance to sustainability bonds. A welcome addition has been sustainability linked loans and bonds where pricing is linked to ESG metrics but proceeds can be utilised for general corporate requirements.

While the full range of sustainable financing options is difficult to access as a private entity in Sri Lanka, we’ve been engaging with banking partners on the adoption of sustainability linked trade finance and loans, based on performance against sustainability targets. This will enable MAS to benefit from lower finance costs for improving its ESG performance.

We are fortunate to collaborate with finance partners on improving in this area – specifically improving gender equality in manufacturing – in partnership with the IFC.

Pasindu Samarakkody
Sustainable Product Lead

Q: How do products factor in sustaina-bility?
A: The fashion industry has been known to have a considerable impact in terms of emissions, resource intensity, water and waste. Responsible manufacturers have consistently made efforts to reduce their operational footprints and while these have been impactful, the solutions haven’t added up to the scale of the issue.

Addressing this challenge at scale requires embedding sustainability in the products we make. While doing the right thing by our people, communities and the environment has always been the ethos at MAS, we are now shifting our focus to prioritise manufacturing sustainable products.

This thinking cuts across the group, from design and merchandising, to sourcing, innovation, product development, manufacturing and planning.

 Q: What drives sustainable behaviour change in the apparel industry?
A: The average consumer is much more conscious today, and demands transparency to know how, where and by whom his or her clothes are made.

Access to information has enabled purcha-sing decisions to evolve and enables consumers to make choices they feel good about. This is the most powerful behavioural change that is driving the sustainable fashion movement.

Q: How does MAS view its commitments in creating sustainable products?
A: Under the MAS Plan for Change, the ‘Pro-ducts Changed for Good’ pillar sets an ambitious target of over 50 percent of our revenue being from sustainable products by 2025. We hope to achieve this by sourcing sustainably, disrupting through innovation and closing the loop by pioneering circularity.

We’re focussing on immediate wins such as switching to more sustainable raw materials like recycled synthetics, organic cottons and natural dyes, as well as longer term investments in new technologies and business models that will disrupt the industry.

While reducing our own impacts, we are unlocking solutions for brand partners through the technologies we’ve developed, and enabling them to hold less stock and reduce inventory waste, their per product footprints and most excitingly, transition to and become pioneers of circularity.

Q: What challenges do manufacturers face in achieving sustainability goals?
A: Product adoption is determined by brands and consumers so we don’t always have full control of what is commercialised.

This means our sustainable efforts must be much greater than for conventional products. It’s encouraging to see that based on current trajectories, our efforts seem to be in the right places.

Retail apparel prices have been driven so low over the past two decades that deviations from the existing value chain set up have significant impacts. As such, value chains must collaborate to create sustainable products at scale and consumer behaviour too must adapt to make better informed purchasing decisions.

Amanthi Perera
Head of Social Sustainability

Thanuja Jayawardene
General Manager – Women’s Empowerment, Advocacy and Code of Conduct

Q: Why does MAS consider employees and communities to be such a critical part of its sustainability strategy? And what commitments has the group made in this space?
A: Very early in our journey, we realised that for the business to grow, our ecosystem needed to thrive and develop around us. We believe sustainability must take a holistic approach, encompassing social, economic and environmental factors as one.

Our Plan for Change combines the three areas of product, lives and planet into one cohesive strategy, and we strongly believe that they cannot exist without one another.

The ‘Lives Changed for Good’ pillar has four commitments including empowering women, driving meaningful employment, creating world-class workplaces and supporting thri-ving communities.

These efforts are measured and monitored through internal processes such as the Social Sustainability Data Management System, which provide MAS CEOs with a score based on social parameters. We align ourselves with global targets and standards like the Sustainable Development Goals (SDGs), the United Nations Global Compact principles and UN Women’s Empowerment Principles.

   Q: How has the Women Go Beyond programme evolved over the years?
A: The Women Go Beyond programme began in 2003 as an effort to address gaps in resour-ces, skills, rights and needs of women, who comprise the majority of the MAS workforce.

Over the last 18 years, the programme has evolved significantly and today, the focus is on empowering women and building gender equality within the business.

The programme is built on a framework of empowerment, addressing career advancement, women’s health and reproductive rights, preventing gender-based violence, childcare support, mentorship and sponsorship for women, leadership development and deve-loping female entrepreneurs. It has provided over 3.7 million training and development opportunities since its inception.

We focus on creating policy change and identifying initiatives to increase gender repre-sentation in management by 2025. These include flexible work arrangements, recruitment policies, gender sensitive communication, reducing unconscious biases, and setting goals and strategies to hold leaders accountable, to improve female representation in management.

Q: What more can corporates like MAS do to support employees in their workplaces?
A: We believe it’s important for corporates to create workplaces that help employees succeed. We dedicate most of our productive hours to work; so as employers, companies have a responsibility to make sure that work is safe and meaningful, and provides employees with the benefits and support they need to thrive.

Our code of conduct – i.e. the MAS DNA – is an example of this in action; it is a robust framework that helps employees understand the guidelines for respectful and ethical enga-gement with internal and external parties, providing a safe and inclusive workplace for all MAS employees and partners.

We provide support infrastructure, such as the 21 company managed childcare facilities and in-house counsellors who are available for employees across work levels.

Additionally, we implement policies such as paternity, adoption and exam leave to support employees in managing and enjoying their lives better. We have seen employees benefit from these efforts but there is much more we want to accomplish in this area.

Q: How does the group contribute to the sustainability of its people and communities?
A: Our relationship with employees and communities is mutually beneficial.

Over the years, this relationship has evolved and we have played different roles: as an emp-loyer, by providing meaningful work, sustainable compensation, and safe and secure workplaces; as an advocate, by empowering our workforce; and as an enabler, by providing equal opportunities, and developing youth and communities.

For example, we presently employ more than 380 persons with disabilities who are assisted by Supported Employment Officers who are trained to provide different levels of support to enable, engage and empower our colleagues.

We approach community development as a catalyst, recognising that the best solutions come from direct stakeholders. An example is the Eco Go Beyond programme through which we raise awareness on sustainability among schoolchildren, enabling them to implement their learnings and take action, creating a network of future sustainability leaders for the nation.

Moreover, we believe in timely interventions. During the pandemic, we responded to the needs of micro and small entrepreneurs in our communities whose businesses were devastated by COVID-19, providing them with grants and training to build back better.

Whether it’s in our business or communities, we believe in empowering stakeholders to support themselves, build skills and capacity, and be held accountable, to become the best versions of themselves.

Sharika Senanayake
Director
Environmental Sustainability

Q: What priorities does MAS consider where environmental sustainability is concerned?
A: The apparel industry has a large footprint across indicators such as water, emissions and waste among others. As manufacturers, we have a critical role to play in addressing these issues.

Over a decade ago, we formalised our environmental sustainability efforts, adopting energy and chemical management systems, and adding targets related to water, waste and biodiversity to our strategy.

It’s important to us to keep pushing boundaries. We reevaluated our performance last year, taking time to check and adjust our targets to better align ourselves with MAS’ overall 2025 strategy, and brought all efforts together under the newly formulated Plan for Change through the ‘Our Planet Changed for Good’ pillar.

We now have measurable and time bound KPIs on emissions, waste, chemicals, water and biodiversity to round up our commitment to reducing our impact on the environment.

 Q: So what global benchmarks influence how the group views sustainable business?
A: We proactively align our work to global benchmarks and standards to provide objective, transparent information on our progress.

For example, we signed up for the SBTi because we felt strongly that climate change is one of the most critical issues that we need to address – not only for the continuity of our business or industry but the survival of our planet.

MAS was one of the earliest members of the Zero Discharge of Hazardous Chemicals (ZDHC) road map, a global industry coalition committed to reducing its chemical footprint. ZDHC not only provides standards and guidelines to follow but also enables stakeholders to work together to create a new way forward.

Committing to these standards can be challenging and costly but we believe it’s our res-ponsibility to transition to low emission, zero toxicity and low impact operations, offering transparency to stakeholders – including customers and consumers.

Q: And what can you share from MAS’ sustainability journey?
A: Building a sustainable business requires commitment and collaboration. The challen-ges we are facing now cannot be addressed alone. In fact, many of our recent efforts have been conducted in partnership with like-min-ded parties.

The Ocean Strainer floating trash trap pilot was launched by MAS last year with the support of stakeholders such as Marine Environment Protection Authority (MEPA), Sri Lanka Land Development Corporation (SLLRDC), the Western Provincial Council and Clean Ocean Force, which help the project’s long-term sustainability. While this was a pilot, we saw quickly that it was effective and affordable, and could be replicated easily.

So many corporates, institutions and indivi-duals reached out to us about this initiative that we decided to make the technology open-source and available to anyone who wants to replicate it.

We’re thrilled to see this kind of interest because it highlights the potential we have as a collective force. The road ahead is long and we want everyone to come along on the journey.