Stepping Up: how Colesco is realising impact through Dunlop Protective Footwear - Karin Huizinga & Milan van Hoestenberghe

Colesco’s Responsible Investment Officer Karin Huizinga and Investment Analyst Milan van Hoestenberghe explain how Colesco is realising impact through Dunlop Protective Footwear

At Colesco, our mission is to unite capital and purpose. By investing in companies that provide solutions to important environmental and social challenges, we aim to deliver real-world impact, while simultaneously realising financial returns. We believe that supporting these companies contributes to a more sustainable society. 

One such example is our investment in Dunlop Protective Footwear. Dunlop’s products significantly reduce slip-trip-fall incidents in industrial workplaces, enhancing overall safety. By supporting Dunlop, Colesco contributes to Sustainable Development Goal 8.8: “Protect labour rights and promote safe working environments”.

The Theory of Change approach

When evaluating impact investments, a key question to consider is whether a company's efforts result in outcomes that are materially better than what would have occurred otherwise. To demonstrate the benefits of a company's activities, we define outputs and outcomes using the Theory of Change model. This helps us understand the link between the company’s revenue and impact, enabling an evidence-based approach. 

Quantifying impact

Investors and asset owners demand concrete and quantifiable results from their impact investments. We welcome this. That is why, to achieve meaningful and solid impact, Colesco performs a ‘Five Dimensions of Impact’ assessment for every investment it makes. This framework[1] helps to define the impact that is being created, validates that the outcomes are tangible and quantifiable, and identifies the risks of not achieving the intended outcomes or encountering unintended outcomes. The assessment also helps to inform our company engagement agenda (stewardship) and provides transparency for impact investors who seek to understand the real-world effect of their investments. In practice, reporting on outputs is often relatively straightforward, while reporting on outcomes and ultimately impact, can be challenging. Let’s look at how this works in practice, at Dunlop Protective Footwear. 

Dunlop Protective Footwear: from the number of boots sold to incidents avoided

Ensuring safe working environments is a critical social concern, especially in demanding industries such as food manufacturing, agriculture & fishery, and construction. Workers in these sectors are exposed to various hazards, such as slippery surfaces and harsh conditions like the cold, humidity or chemicals. In the EU and US alone, more than 750,000 incidents caused by slip-trip-fall events on the work floor were reported in 2022[2]^,[3]. 

Dunlop is the global leader in high-performance protective boots for professionals, with an unparalleled commitment to safety. The company produces more than six million pairs of boots annually, sold across 50 countries. This we call the company’s ‘output’. 

The performance of its protective footwear is evaluated in a state-of-the-art slip-trip-fall innovation and test center under real-world conditions. The boots undergo testing on over 15 different surfaces, far exceeding regulatory requirements.  This ensures the boots are tailored for optimal performance on each specific surface. Dunlop’s commitment to safety results in a significant reduction in slip-trip-fall incidents, which is the company’s outcome. 

The ‘occupational incidents avoided’- the outcome of Dunlop’s protective footwear – is measured through independent laboratory testing. In the laboratory, the friction coefficient of the footwear is tested against the ISO norms, which directly relates to slip incidents. Colesco compared the incident rate according to ISO norms with Dunlop’s incident rate, revealing a reduction of over 90% in slipping incidents[4]. This method allows us to calculate the avoided occupational incidents based on externally verified data and report these findings to our investors.

Beyond the commitment to safety

Dunlop is also dedicated to producing safety footwear sustainably. With a gold EcoVadis rating in 2024[5], the Company is ranked in the top 5 percentile for sustainability in the industry. Their efforts include, among other things:

• Journey to become 100% circular: increasing the use of recycled input materials in its production process and scaling the use of bio-based materials.
• Road to Paris: setting carbon reduction targets by joining the Science Based Targets initiative (SBTi)
• Zero waste mindset: recycling waste from their facilities into new boots, wherever they can.

Impact realised through a partnership

Like Dunlop, we at Colesco recognise that impact is realised through strong partnerships. Our investments are typically sustainability-linked and include KPIs that will influence margins when sustainability targets are met. Through active company engagement on sustainability, KPIs are set in collaboration with our portfolio companies and aligned with their strategic ambitions. Our conviction is to have skin in the game – Colesco’s performance is directly linked to realising sustainability commitments.

Please find more information on our approach here: www.colescocapital.com  

[1] https://unsdg.un.org/resources/undaf-guidance-theory-change

[2] US: https://www.bls.gov/iif/nonfatal-injuries-and-illnesses-tables.htm

[3] EU: https://ec.europa.eu/eurostat/databrowser/view/hsw_ph3_06$defaultview/default/table?lang=en

[4] For further reading on the probability of slipping, refer to “The Probability of Slipping During Level Walking”, (KARAHARJU-HUISMAN Tuire-thesis_nosignatures.pdf)

[5] https://www.dunlopboots.com/community/a-better-future/sustainability