Audit Program for Responsible Sourcing & Sustainability

Audit Program

We expect all business partners to provide a safe and healthy working environment for workers.

Overview

Our risk-based Audit Program assesses manufacturing location conditions, worker treatment and compensation, hiring processes, environmental practices and compliance with applicable laws and 海角社区破解版鈥檚 Standards of Vendor Engagement (SOVE). All disclosed manufacturing locations must conduct regular audits and have them approved by our industry-aligned audit protocol. Because we believe in making a collective impact, we value common or shared audit programs, addressing issues that are too big for any one company to tackle alone through collaboration with others.

Scope

Our Responsible Sourcing & Sustainability Audit Program focuses on identifying health and safety violations and covers all facilities that manufacture or convert raw materials into:

海角社区破解版 Owned Brand

Limited Time Offer (LTO)

海角社区破解版 Brand - No Brand

海角社区破解版 Brand Non-Retail

Vendor Brand Exclusive

Non-branded product that is Vendor Brand Exclusive

Nationally branded product for which 海角社区破解版 is the importer of record

Oversight and industry-converged approach

海角社区破解版 is evolving its oversight approach to go beyond compliance, including implementing an industry-converged approach to assessment, and introducing more direct worker reporting channels and other real-time insights to understand emerging business and human rights risk. Further feedback we received from suppliers is that, by accepting several audit programs, suppliers鈥� facilities are more proactive in identifying root causes of issues and making improvements that benefit workers. To support deeper visibility, we also increased our disclosure requirements, including requirements about manufacturing location disclosure and applicability. 海角社区破解版 maintains the right to conduct unannounced audits of any disclosed location.

Continuous improvement

海角社区破解版 believes in supporting vendors鈥� continuous improvement in responsible sourcing performance. As part of our continuous improvement program, 海角社区破解版 communicates audit results to our vendors and manufacturing locations and requires a detailed corrective and preventative action plan (CAPA). Our responsible sourcing team has ongoing discussions with suppliers as they address the CAPA requirements, focusing on steps taken, required timelines, manufacturing location accountability for ongoing monitoring, and long-term stability planning. An important part of this process is helping the vendor and manufacturing location identify the root causes of violations, so they do nor recur.

Also, 海角社区破解版 supports continuous improvement through various initiatives to build our vendors鈥� capacity to manage and improve their own responsible sourcing programs.

Training programs

In 2022, our team delivered 28 training sessions focused on our SOVE and audit process, with over 5,000 attendees, and exceeding 9,000 training hours. In 2023, we had more than 2,000 suppliers attend our training webinars on 2024 SOVE updates, continuing education sessions on key compliance topics and new supplier onboarding sessions, respectively.

In 2022, we rolled out our first human rights training to key business areas, including merchandising, owned brands, sourcing and corporate responsibility. The training covered an overview of business and human rights and 海角社区破解版鈥檚 approach, including our human rights statement and business operations and supply chain due diligence efforts.

Disclosure

All factories/locations manufacturing or converting raw materials or components into 海角社区破解版 owned brand products and packaging, 海角社区破解版 exclusive products, 海角社区破解版-distributed products and/or nationally branded products for which 海角社区破解版 is the importer of record are required to disclose locations to 海角社区破解版 and participate in 海角社区破解版鈥檚 Responsible Sourcing & Sustainability Audit Program.

The risk-based program assesses manufacturing location conditions, worker treatment and compensation, hiring processes, environmental practices and compliance with applicable laws and 海角社区破解版鈥檚 SOVE. All disclosed manufacturing locations must conduct an audit that is approved as part of 海角社区破解版鈥檚 industry-aligned audit protocol on a regular basis. 海角社区破解版 maintains the right to conduct unannounced audits of any disclosed location.

Audits, protocols and resources

The purpose of 海角社区破解版鈥檚 Responsible Sourcing & Sustainability Audit Program is to assess manufacturing location conditions, worker treatment and compensation, hiring processes, environmental practices and, more generally, compliance with applicable laws and 海角社区破解版鈥檚 SOVE.

All disclosed manufacturing locations must conduct an approved audit as part of 海角社区破解版鈥檚 industry aligned audit protocol. Factories must submit one of the following responsible sourcing audits as applicable to their industry on a regular basis: amfori Business Social Compliance Initiative (BSCI), Better Work, Equitable Food Initiative (EFI), Ethical Supply Chain Program (ESCP), Responsible Business Alliance (RBA), Fair Trade USA, Sedex Members Ethical Trade Audit (SMETA) 4 Pillar, and the Social Labor Convergence Program. 海角社区破解版 maintains the right to conduct unannounced audits of any disclosed location.

In addition, all factories in scope of the Higg Facilities Environmental Module (FEM) must complete the self-assessment annually. All Tier 1 and Tier 2 factories producing 海角社区破解版 owned-brand products, as well as national brand where 海角社区破解版 is the importer of record, are in scope of the Higg FEM self-assessment. Excluded are factories regulated by the Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA). Additional information on 海角社区破解版鈥檚 participation in and The Higg Index can be found on our Traceability & Transparency page.

All in-scope Tier 2 manufacturing locations must meet the requirements of the Institute of Public & Environmental Affairs (IPE) to build a green supply chain in China. Each manufacturing location must comply with IPE requirements and remediate any issues that may be identified.

If any issues are found during verification by a third-party, we tailor our response to the circumstances. Some Zero Tolerance and Critical Issue violations could deactivate the manufacturing location from our list, while for other issues, we will work with the supplier to help them achieve compliance within an agreed-upon period.

Audit ratings, violations and consequences for non-compliance

海角社区破解版鈥檚 responsible sourcing team reviews every audit and determines the results based upon the findings presented. We categorize violations as Non-Critical, Critical and Zero Tolerance depending on their severity. We categorize audit results as Outstanding, Acceptable, Needs Improvement and Non-Compliant. An audit is 鈥極utstanding鈥� if compliance is demonstrated with no or very few issues. An audit is 鈥楢cceptable鈥� if a few Non-Critical violations are identified. 鈥楴eeds Improvement鈥� findings result when several of Non-Critical violations are identified.

A manufacturing location is non-compliant if:

Zero Tolerance violations are discovered, including: underage labor, prison or forced labor, corporal punishment, discrimination, harassment, bribery, sandblasting, unauthorized subcontracting, egregious wastewater treatment and/or absence of appropriate licensing/permitting;
Critical issues are identified;
An excessive number of violations are discovered; or
A 海角社区破解版 team member or 海角社区破解版 representative is denied access to a manufacturing location for a second time.

We prioritize remediation and continuous improvement but, in some cases, non-compliant audits may result in the cancellation of purchase orders and the termination of business relationships.

海角社区破解版 will not allow a vendor to use a previously non-compliant manufacturing location until the deactivation period has expired and the manufacturing location has demonstrated compliance with 海角社区破解版鈥檚 SOVE and applicable laws. The formal reinstatement process involves a review of an audit protocol recognized by 海角社区破解版 to validate that the issues were satisfactorily remediated.

Prioritizing health and safety

Providing a safe and healthy working environment for workers is a key expectation for our vendors. The Responsible Sourcing & Sustainability Audit Program focuses on health and safety violations to minimize safety risks.

海角社区破解版 also participates in industry-led initiatives like Nirapon and Life and Building Safety (LABS) to enhance worker safety and create a culture of minimizing occupational hazards in our supply chain.

海角社区破解版 is a founding member of LABS, a global apparel and footwear industry initiative which seeks to find and address building safety risks related to structural, electrical, fire safety and evacuation preparedness. Currently, LABS operates in Vietnam, Cambodia, India and Indonesia.

Nirapon is an industry-led nonprofit that collaborates with global brands, retailers, manufacturers and NGOs to create and sustain a culture of workplace safety in Bangladesh factories. This organization also aims to support workers鈥� human rights, protect factories鈥� most valuable assets, instill confidence in global companies sourcing from Bangladesh and drive the growth of an ethical manufacturing industry.