Associated British Foods (ABF), Climate Change, Primark cotton

Details of engagement:

Associated British Foods Plc (ABF) engages in the business of manufacturing and trading of consumer goods. It operates through its grocery, sugar, agriculture, ingredients and retail businesses. EOS began their engagement with the company in 2019, encouraging it to review the level of recycled content in the products sold by Primark, a subsidiary of ABF. The company stated its long-term aspiration to sell products that were 100% made from recycled or sustainable products. We urged the company to set clear, time-bound targets to increase the proportion of sustainable cotton used in its products, while disclosing the proportion of recycled polyester used.

Engaging in further meetings with the company between 2020 and 2023, EOS asked questions at the Primark ESG event, participated in an investor briefing on sustainability with the CEO and most prominently, a live engagement at the EOS March 2023 Client Advisory Council with the group sustainability lead.

Outcomes and next steps:

In 2022, EOS were pleased that the company committed to ensure all clothes were made from recycled or more sustainably sourced materials by 2030. The company improved this target by 2023 publicly committing to a target for 100% of its products to have some recycled, organic or sustainable cotton content by 2027. In addition, the company published a glossary identifying what it meant by ‘sustainable’ for each product type.

In 2023, Primark reported that 46% of clothes met their sustainable cotton target and were confident of progress towards its 2027 target. As a result, we decided to close the engagement.

In further conversations on this topic, we will monitor progress as well as the level of actual recycling of garments and efforts to support customers in repair and reuse to improve circularity.

At time of publication Associated British Foods (ABF) is held in our UK Equity, Passive Developed Equities and Passive UK Equities portfolios.