SUPPLY CHAIN DUE DILIGENCE
In 2022, we developed comprehensive Supply Chain Due Diligence Guidelines and conducted a detailed social and environmental risk screening based on the OECD Due Diligence Guidance for responsible business conduct.
Each of our suppliers throughout the supply chain, from tier-1 garment factories, to tier-2 fabric suppliers and tier-4 raw material suppliers, is assigned a risk categorisation. Each risk categorisation has an applicable assessment and monitoring scheme. Our tier-1 suppliers are based in high risk countries. We cannot rely on the local governance institutions sufficiently supporting compliance with our social, environmental and ethical principles. Independent regular social audits and environmental compliance assessments are therefore mandatory. Broader environmental impact assessments should be conducted as soon as possible and no later than 2025. Action plans should be defined with every tier1 supplier. For all indirect suppliers, an assessment and monitoring scheme has equally been defined containing transparency reporting requirements, audits or certifications.
Risk categorisation
Based on the Guidelines, we conducted a rigorous risk screening. Our risk screening is two dimensional and combines risks in the country of production with product and sector specific risks. Our country risk screening is based on various sources like the World Bank Governance Indicators. Our product and sector specific risks are based on the OECD sources and a broad collection of industry research. Every product and sector specific risk like forced labour, excessive overtime or wastewater is defined according to its likelihood and its severity in terms of scale, scope and irremediable character.
