Pvh Corp Assessment for Reaccreditation

PVH CORP. ASSESSMENT FOR REACCREDITATION October 2016

PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

TABLE OF CONTENTS

Introduction ...... 3 Section 1: PVH Company Affiliate Overview ...... 4 Section 2: PVH'S Supply Chain & FLA Due Diligence Activities from 2008-2016 ...... 5 Section 3: Analysis of PVH's Labor Compliance Program for Reaccreditation ...... 6 Reaccreditation ...... Principle 1: Workplace Standards ...... 6 Principle 2: Responsibility & Head Office Training ...... 6 Principle 3: Supplier Training ...... 8 Principle 4: Functioning Grievance Mechanisms ...... 9 Principle 5: Monitoring ...... 10 Principle 6: Collection & Management of Compliance Information ...... 12 Principle 7: Timely & Preventative Remediation ...... 13 Principle 8: Responsible Purchasing Practices ...... 14 Principle 9: Consulting with Civil Society ...... 17 Princple 10: Verification Requirements ...... 19 Section 4: Conclusion and Recommendation to the Board of Directors ...... 20 APPENDIX A: The PVH Code of Conduct ...... 21

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INTRODUCTION On October 7, 2016, the FLA Board of Directors voted to approve the reaccreditation of PVH Corp.'s labor compliance program. When joining the FLA, Participating Companies and Participating Suppliers each commit to implementing the FLA Workplace Code of Conduct, which aim s to ensure “respectful and ethical treatment of workers” and “promotes sustainable conditions through which workers earn fair wages in safe and healthy workplaces.” The Principles of Fair Labor and Responsible Sourcing / Production (“Principles”) serve as the standards upon which Participating Companies and Participating Suppliers are assessed towards an accreditation of their labor compliance program. Participating Companies and Participating Suppliers with accredited compliance programs have demonstrated that they have the systems and procedures in place needed to successfully uphold fair labor standards throughout their supply chains. In assessing for reaccreditation, the FLA looks for continued implementation of the workplace standards and focuses on key components that innovatively support the FLA’s mission to “improve workers’ lives worldwide.”

The FLA accreditation process involves staff conducting due diligence on the performance of a Participating Company or Participating Supplier during the implementation period. To assess an affiliate that has expanded the scope of its affiliation in the FLA since its last accreditation, the FLA will assess the implementation of all Principles to ensure a social compliance program has been implemented to accommodate the supply chain expansion. This assessment involved testing a selection of data points or information sources in order to verify actions by the company. Sources of information may include:

1) Affiliate Headquarter Assessment: Assessments at headquarters and field offices to interview staff involved in compliance and in other functions, and to review documentation, processes, and database capabilities. In some cases, the offices of agents are visited as well. In countries where the FLA is not able to conduct in-person assessments, interviews are conducted by phone with company staff involved in compliance and in other functions. 2) FLA Factory-Level Assessments: Independent External Monitoring (IEM), Independent External Verification (IEV), and Sustainable Compliance Initiative (SCI) assessments are all sources of information on compliance issues and remediation efforts. For reaccreditation, affiliates are subject to Verification Assessments, which verify remediation efforts and may include analysis of the affiliate’s assessment tool. 3) Annual Reports: Affiliate reports for each year of implementation provide data on the evolution of an affiliate’s compliance program in line with FLA Principles. 4) FLA Third-Party Complaints: Where relevant, an affiliate’s involvement in, and responsiveness to, FLA Third-Party Complaints provide additional insight into compliance programs and remediation strategies. 5) FLA Strategic Projects: Where relevant, an affiliate’s participation in FLA Strategic Projects provides opportunities to learn about the affiliate’s compliance strategies for detecting and remediating complex issues. 6) Observation: Wherever possible, FLA staff accompanied affiliate compliance staff on internal audits, training sessions or remediation visits. 7) Routine Interactions: Information on the affiliate’s compliance program has also been collected through discussions and interactions with affiliate compliance staff in the course of each year’s program. Exchanges with civil society organizations and other stakeholders interacting with the affiliate provide additional perspective.

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SECTION 1: PVH COMPANY AFFILIATE OVERVIEW

Name of PVH Corp. Category Participating Company Company Location New York, New York, Product/s Apparel, Footwear, and USA Accessories Total Annual $8.02 Billion USD, 2015 Current Number 918 Revenue of Applicable Facilities FLA Affiliation 1996 (Founding Previous June 2008 Month/Year Member) Reaccreditation Month/Year FLA Reaccreditation Lead: Tiffany Rogers, Business Accountability Program Manager Reaccreditation Reaccreditation Support: Jennifer Caruso, Associate Director of Business Lead/Support Accountability; Kenan Ercel, Associate Director of Workplace Accountability; Joe Shen, Regional Manager of East Asia; Francisco Chicas, Regional Manager of the Americas; Jingwen Peng, Eastern Hemisphere Senior Business Accountability Associate; Sam Myers, Workplace Accountability Associate; Arno Gasteiger, Business Affiliates Program Manager Unique Company 1) Since its 2008 Reaccreditation, PVH acquired Tommy Hilfiger (2010), The Characteristics Warnaco Group (2013), and sold G. H. Bass & Co. (2013) to focus on the Calvin Klein and Tommy Hilfiger businesses. 2) In addition to Calvin Klein and Tommy Hilfiger, PVH business includes its Heritage Brands including: Van Heusen, IZOD, ARROW, Speedo, Warner’s, and Olga. 3) In 2016, PVH was named the third-largest licensor globally1. It has a social compliance program for its licensees. PVH’s licensee business is not within the FLA’s applicable scope. Summary of Key 1) The centralization of the management of Corporate Responsibility program for Strengths the consolidated sourcing divisions for all PVH brands; 2) The Company’s public commitment and accountability to uphold workplace standards in its supply chain; 3) The Company’s resources devoted to social compliance and sourcing data analysis to inform enhancements to the Corporate Responsibility program and purchasing practices; 4) Comprehensive procedures and training to implement the PVH assessment methodology in a global supply chain; and 5) The Company’s leadership and collaboration with CSOs, associations, and other brands to improve workplace conditions. Summary of Key 1) Further implementation of a mechanism to capture the effectiveness of relevant Suggestions for trainings provided to PVH staff, assessors, suppliers, and workers; Strengthening 2) Ensuring the implementation of sustainable and effective remediation at the factory level; 3) Development of a comprehensive responsible purchasing policy articulating the practices incorporated by the Corporate Responsibility Department and sourcing divisions; 4) Further implementation of an accountability mechanism across all sourcing divisions; and 5) Development of a comprehensive and proactive CSO Engagement Strategy that articulates the current relationships and plans for engagement with CSOs in other high-production countries such as Brazil.

1 Reference: Global License Magazine http://www.licensemag.com/license-global/top-150-global-licensors-2 www.fairlabor.org 4 SECTION 2: PVH’S SUPPLY CHAIN & FLA DUE DILIGENCE ACTIVITIES, 2008 - 2016 The above map shows PVH’s sourcing countries in 2016 and the range of factories in each highlighted country. The orange to red color scale shows the new sourcing countries brought into PVH’s scope of FLA affiliation with the acquisitions of Calvin Klein and Tommy Hilfiger. In 2015, prior to the expansion of the scope, FLA had 132 applicable facilities for PVH; after the expansion of scope in 2016, FLA had 918 applicable facilities for PVH. From 2015 to 2016, PVH exited two sourcing countries, which are highlighted in grey on the map: Dominican Republic and Nicaragua. FLA observed the highest growth in number of facilities from the expansion to be in China, Brazil, and India. Due to the scope expansion, PVH received 16 SCI Assessments in 2016, indicated by the pale blue dots on the map. In addition to the 2016 SCIs. PVH received two verification assessments (indicated by yellow triangles), four field observations (indicated by green squares), and one headquarter assessment for reaccreditation. The pale orange dots indicate the SCIs, IEMs, or IEVs conducted by the FLA prior to the expansion of scope from 2008 to 2015.

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SECTION 3: ANALYSIS OF PVH’S LABOR COMPLIANCE PROGRAM FOR ACCREDITATION Information used in this assessment originates from reports submitted by PVH and verified by the FLA through: 1) An assessment at PVH’s headquarters conducted by FLA staff in August 2015; 2) Information gathered in person, via phone interviews, and through email correspondence with PVH staff; 3) Documentation review of supporting evidence submitted by PVH; 4) Field observations of two PVH factory-level assessments in Brazil and China; 5) Field observations of two PVH trainings in Mexico and China; 6) Results of FLA Independent External Assessments at PVH applicable facilities conducted by FLA assessors and accredited service providers; 7) Results of FLA Verification Assessments at PVH applicable facilities conducted by FLA assessors to verify remediation efforts at the factory level; 8) Analysis of PVH’s internal audit tool against the FLA Compliance Benchmarks; and 9) Communication with stakeholders.

PRINCIPLE 1: WORKPLACE STANDARDS2

Workplace Standards & Top Management Commitment PVH has had a code of conduct in place since 199. After the FLA revised its Workplace Code of Conduct in 2011, PVH aligned its Code of Conduct to meet or exceed the FLA’s code in all elements. The current PVH Code of Conduct, in place since 2012, established a basis for operationalization of the company’s compliance benchmarks and revisions of their assessment tool.

PVH publishes an annual CSR Report that articulates the company’s commitment to uphold workplace standards and reinforces top management’s commitment to make a positive impact in the communities in which they operate. The annual report features statements of commitment from and interviews of PVH’s Chairman & CEO, Senior Vice President, Chief Risk Officer, Chief Supply Chain Officer, and the Group Vice President of Corporate Responsibility. Additionally, PVH’s social media presence demonstrates their efforts to communicate their commitment to corporate social responsibility publicly and to share the features of their annual CSR Report.

PRINCIPLE 2: RESPONSIBILITY & HEAD OFFICE TRAINING3

Changes in Business Structure, Leadership, and the Corporate Responsibility Department PVH has experienced the following changes within its business structure, leadership, and corporate responsibility (CR) program since its last reaccreditation in 2008:

• Scope of Affiliation: PVH’s expanded scope of affiliation in the FLA now includes all Tier 1 production facilities, which includes the Tommy Hilfiger and Calvin Klein supply chains. • Leadership: In the last four to six years, PVH experienced turnover in executive leadership. New leadership has placed greater emphasis on developing a best-in-class social compliance program, to continue the work the accredited social compliance program had

2 Principle 1: Company affiliate establishes and commits to clear standards. 3 Principle 2: Company affiliate identifies and trains specific staff responsible for implementing workplace standards and provides training to all head office and regional staff. www.fairlabor.org 6 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

achieved, and to further develop a program that would make a positive impact at the factory-level. • CR Program: In the last five years, PVH experienced turnover in its CR program in the top management positions of the department. The newly named Corporate Responsibility (CR) Department includes the Social Compliance Team, Environmental Sustainability Team, and Chemical Management Team, and manages all Tier 1 production facilities.

At the time of the 2008 Reaccreditation, PVH had in place a Human Rights Department that included 18 full-time staff and 19 part-time staff, for a total of 37 staff. In 2016, PVH’s CR Department includes 47 full-time staff, four part-time staff, and seven vacant positions, for a total of 58 staff positions. PVH has CR staff located in Bangladesh, Brazil, China, Ethiopia, Hong Kong, India, Indonesia, the Netherlands, Turkey, the United States, and Vietnam The CR Department is headed by the Group Vice President of CR and reports to the Chief Risk Officer. A PVH contract facility for Calvin Klien shoes in Brazil The PVH CR Department operates a centralized social compliance program across four consolidated sourcing divisions; all contract suppliers for the PVH brands are managed by these divisions.

The CR Department is structurally organized to implement its program across the sourcing divisions by developing programs centrally, and implementing guidelines and trainings across the different markets geographically.

Training CR Staff & Assessors After PVH revised its Code of Conduct in 2012, the CR Department worked to implement the code through revisions to its assessment methodology. PVH revised their assessment tool and developed assessor guidelines to operationalize the tool. In 2014, PVH rolled out its CSR Roadshow training for all PVH regional staff and assessors on the revised assessment tool. PVH maintains an extensive training calendar for the CR staff and third-party auditors. In 2015, PVH conducted 92 trainings on topics ranging from PVH assessments to fire safety, CSR data management, and hazardous chemicals. PVH has begun to develop a short survey for PVH staff to complete after trainings to assess the effectiveness of the training and provide feedback to the trainer. The survey will be included as a component of trainings by early 2017.

Training All PVH Staff Since the restructuring of PVH operations, the CR Department has focused training efforts within the CR and sourcing divisions. The CR Department and the sourcing divisions have regular joint trainings to ensure the CR ratings of suppliers are integrated into sourcing decisions. The CR Department has established a multi-year plan to develop CR and responsible purchasing

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practices training applicable to other departments such as Merchandising, Product Development, and Design.

While formal training has not been implemented for all PVH staff, the CR Department’s work is widely communicated to all staff through company-wide emails and PVH’s internal website forum, “The Thread.” In this forum, PVH-related news is posted. PVH’s annual CR Report shares the same space as celebrities wearing or endorsing Calvin Klein and Tommy Hilfiger.

PRINCIPLE 3: SUPPLIER TRAINING4

Supplier Commitment PVH requires all suppliers to sign its supplier agreement, an extensive agreement that outlines all terms and conditions for producing PVH products. PVH developed supplier guidelines, which comprehensively outline expectations, processes, procedures, and helpful guidance for suppliers who are required to abide by PVH’s standards.

The supplier guidelines include the PVH code, the FLA’s Sourcing Principles, red-flag issues, zero tolerance issues, and immediate action issues. The supplier guidelines also include PVH’s policies on assessments and remediation; other assessments suppliers may be subject to, such as FLA assessments; and additional policies on issues such as unauthorized subcontracting, bribery, counterfeiting, and others. There are also guidance materials on root-cause analysis, responsible retrenchment, and how to implement each code element.

Conditioning Future Business on Suppliers’ Improvement of Working Conditions PVH’s Supplier Guidelines outline the company’s policy on the effect of factory assessment results on a supplier’s eligibility for future orders. PVH’s assessment tool uses a weighting system to score findings in order to determine a rating for each assessment. After an assessment, each supplier receives a rating: gold, green, yellow, orange 1st, orange 2nd, or red. Suppliers that receive red ratings are not authorized for production. Suppliers that receive PVH Corporate Responsibility associates conduct st an assessment at a contract facility in Suzhou, China orange 1 are required to have follow-up assessments to verify remediation within six months. If remediation actions do not show progress, the supplier receives an orange 2nd rating and will receive another follow-up assessment within six months. If remediation is not verified during the second follow-up assessment, the supplier has its rating downgraded to red and is not authorized for PVH production. For the gold rating, PVH has yet to

4 Principle 3: Company affiliate obtains commitment and trains relevant supplier management on workplace standards and tracks effectiveness of supplier workforce training. www.fairlabor.org 8 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

apply this rating to its suppliers, but is piloting an approach which is further discussed in the “Principle 8” section below.

For PVH’s Global Supply Chain Division, to ensure they are sourcing from green and yellow factories, PVH uses a key performance indicator (KPI) Operational Excellence Overview, which incorporates ratings of each business division for each season. Business divisions receive a “Human Rights Percentage Approved” rating based on the CR Department’s ratings of each supplier sourced by that business division. The division’s target is to source from an average of suppliers that received green and yellow ratings from PVH assessments. When it’s found that a business division’s average factory Human Rights Percentage Approved rating is not Green or Yellow, a review of the purchasing data is conducted after each season to understand why a department did not source from higher-rated factories. PVH is working with its other supply chain divisions to implement this accountability mechanism. This mechanism is discussed in further detail on the sourcing KPIs in the “Principle 8” section.

Workplace Standards Training & Accessibility for Workers PVH has translated its Code of Conduct into 24 different languages for its global supply chain. The only language translation still in development is Bulgarian, which would apply to two of PVH’s 918 contract facilities. It was verified through FLA field observations that PVH supplies large posters of its Code of Conduct to its contract facilities in local languages so the standards are clear and legible to workers.

To ensure that training on the code is provided to workers, supervisors, and managers, PVH assessors verify the training through document review. Documentation such as training logs and quizzes are reviewed to ensure workers received training and that the factory is assessing whether the training was effective. PVH includes findings in their audit report if worker training is not verified, and will collect training logs and quizzes for remediation verification.

During the two field observations of PVH assessments, the FLA noted that the assessors did not include questions during worker interviews on the training they received. The FLA recommended that PVH assessors include questions to verify training is taking place and to assess whether workers remember and utilize the learnings from the trainings.

PRINCIPLE 4: FUNCTIONING GRIEVANCE MECHANISMS5

Assessing for Functioning Grievance Mechanisms PVH assesses grievance mechanisms in their factory assessment process. The assessment tool includes verification of a confidential reporting channel or grievance system, regular investigation of submitted grievances, responses provided by management, and communication on the grievance procedures. Additionally, it is a recommended best practice in PVH’s supplier guidelines and assessment tool that the factory have a grievance committee that includes worker representatives. The assessor guidelines also include guidance on how to assess for functioning grievance mechanisms. For example, assessors are to review grievance logs and verify through worker interviews that they know how to use the channel. Questions for worker interviews on grievance mechanisms are also included in the assessor guidelines. Additionally, assessors are provided a contact information card to complete to provide workers during interviews.

5 Principle 4: Company affiliate ensures workers have access to functioning grievance mechanisms, which include multiple reporting channels of which at least one is confidential. www.fairlabor.org 9 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

In the audit field observations conducted by the FLA, observers found inconsistent application of the assessor guidelines. During the audit field observation in China, the FLA verified that the assessor reviewed grievance policies and procedures, however the assessor did not ask workers about their use of the grievance mechanisms and did not review records of grievances submitted and resolutions. The FLA provided recommendations to PVH to ensure the review of grievance records in the document review and to inquire A third party assessor talking to employees at a contract facility in Brazil with workers if they use the grievance mechanisms. PVH committed to include the recommendations provided in the field observation report in their ongoing trainings for assessors.

Grievance Mechanisms Guidance & Training for Suppliers PVH’s Supplier Guidelines include guidance on developing grievance policies and procedures to implement PVH’s Employment Relationship Standard. Guidance on implementing PVH’s nondiscrimination, harassment/abuse, and freedom of association standards include references to ensuring workers have access to the grievance channels so that they may report personal violations of these standards.

While FLA observers could not consistently verify that grievance mechanisms are assessed for functionality, the FLA verified that PVH treats the lack of functioning grievance mechanisms as a noncompliance and requires factories to develop immediate and sustainable action plans to address these findings. Factories provide immediate remediation actions, such as development of training for managers and workers on how to handle and submit grievances.

PRINCIPLE 5: MONITORING6

Pre-Sourcing Factory Assessments PVH has developed comprehensive policies and standard operating procedures for on-boarding new contract suppliers, which begins with written confirmation from a senior executive from the appropriate business division explaining the business need for a new supplier. The business need for a new supplier requires senior leadership approval. Once the business need is approved, the factory receives PVH’s New Factory Packet which includes information on the on- boarding process, the code of conduct, and other necessary requirements. New factories are required to submit information on location, production capacity, product categories,

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subcontractors, and other relevant topics. Once received, PVH will conduct a risk-assessment and from that information will choose one of three options of assessments to conduct: a full CSR assessment, a CSR Short Form Assessment, or acceptance of an assessment report from another brand or multi-stakeholder initiative (MSI). PVH will approve factories enrolled in a country Better Work program, so long as the factory is in good standing with Better Work and is making progress on Better Work goals.

Prior to the pre-sourcing assessment, CR staff will conduct orientation calls with the new supplier to review the pre-sourcing requirements. Contract facilities must receive a green or yellow rating to commence business.

Assessing Factory Conditions PVH developed formal comprehensive assessor guidelines for its monitoring program that were rolled out across their supply chain beginning in 2015. The roll-out of the assessor guidelines required comprehensive training of all PVH regional staff and third-party service providers. Additionally, PVH consulted with its key third-party service providers on the revisions of the PVH monitoring tool and development of the assessor guidelines. The PVH global monitoring program covers all sourcing countries, and PVH partners with other organizations or service providers to conduct assessments. PVH’s assessments are conducted by internal assessors and third-party service providers and include worker interviews, management interviews, documentation review, visual inspection, occupational health and safety review, and consultation with union or worker representatives.

In Brazil, PVH is a signatory company of Associoção Brasileria do Varejo Têxtil (ABVTEX), a textile and retail association. Because PVH is a signatory company, all of PVH’s Tier 1 suppliers and subcontractors in Brazil must be assessed and approved through ABVTEX’s supplier certification process. All of PVH’s 97 contract facilities and 510 subcontractors in Brazil received a social compliance assessment by a third-party service provider to be considered certified ABVTEX suppliers. Through this process, PVH staff realized that there could be improvements made to the ABVTEX social compliance assessment, and proposed to pilot a partnered approach with ABVTEX in 2016 at 32 factories. The FLA observed the ABVTEX/PVH assessment pilot in July 2016. The FLA provided recommendations for improvement of the assessment methodology to further evaluate conditions of workers throughout their employment at the factory and to understand worker/manager dynamics. While the FLA offered many recommendations to improve the ABVTEX and PVH assessment methodology, the FLA supports PVH’s partnership with ABVTEX to raise the standards of working conditions in apparel manufacturing in Brazil.

FLA Analysis of the PVH Assessment Tool The FLA piloted factory-level verification assessments to confirm remediation efforts of PVH contract facilities. The FLA reviewed previous SCI assessments and PVH internal assessments to assess the progress of remediation and compared PVH’s assessment to the FLA Compliance Benchmarks incorporated into the SCI assessment. Through this analysis, FLA found the PVH assessment tool captures approximately 65 percent of the FLA’s Compliance Benchmarks and covers all code elements. While not all FLA Compliance Benchmarks are incorporated, the PVH assessment tool is a comprehensive tool to assess the PVH global supply chain.

Assessors & Collective Bargaining Agreements PVH incorporates the review of collective bargaining agreements (CBAs) in its assessment methodology, to ensure the CBA includes provisions that go beyond local law requirements. During the Brazil observation of the ABVTEX/PVH assessment, the FLA verified that the CBA was reviewed during the assessment. In June 2016, PVH organized a training on freedom of www.fairlabor.org 11 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

association and collective bargaining in Mexico and invited other brands to participate. This training was facilitated by a social auditing firm and included a legal expert that supported work by the Maquila Solidarity Network (MSN) and the Americas Group’s Mexico Committee to provide guidance on illegitimate collective bargaining agreements, commonly known in Mexico as “protection contracts.” Protection contracts typically block the establishment of legitimate unions and do not represent worker interests. The training specifically focused how third-party auditors can detect protection contracts in Mexican contract facilities and also included review of other common local issues such as non-payment or provision of vacation time, profit sharing, short- term contracts, different forms of termination, and subcontracting. The FLA observed this training and commended PVH’s collaboration with other brands and MSN to develop a training that addresses the complexity and challenges of identifying protection contracts. PVH is developing a mechanism to ensure that the learnings from this informative training are applied to all assessments conducted in Mexico.

PRINCIPLE 6: COLLECTION & MANAGEMENT OF COMPLIANCE INFORMATION7

PVH’s Data Management & Platform PVH maintains an accurate factory list and has not had any cases of cancelled Independent External Assessments (IEAs) due to an inaccurate factory list since the expansion of PVH’s scope with the FLA in 2015. PVH is also able to supply the FLA with a factory list that includes all relevant business divisions at each contract facility. In 2014, PVH started to work with a health, safety, and environment and sustainability data management software provider to develop a new CR platform to manage PVH’s social compliance and environmental assessment, remediation, and ratings data.

While the development of this platform is ongoing, PVH has worked to develop sophisticated offline tools using Excel for its factory assessments and remediation action data analysis. To analyze the compliance data, the CR Department has developed reports that present assessment metrics such as assessment types, assessments per month, number of assessments by each third-party service provider, and the number of findings by code element. Additionally, PVH’s supplier ratings are calculated through their assessment tool and are provided to the sourcing divisions on a regular basis to inform sourcing decisions and to contribute to the KPI Operational Excellence Overview for the Global Supply Chain division after each season.

PVH also continues to refine and adjust a tool that captures working hours during a factory assessment. During the audit field observation in China, the FLA observed the assessor collecting the factory’s working hours in a version of the working hours’ tool. At the time of the assessment, PVH CR staff was in the process of refining the tool to capture peak, regular, and low working hours during factory assessments in order to accurately capture and weight hours of work findings. To ensure assessors understood and utilized this revised tool, PVH developed an addendum to its assessor guidelines that was finalized in August 2016. Since the revision of the tool would have an effect on supplier ratings, the CR Department also provided training to the sourcing divisions so they would understand how this might affect the ratings of its suppliers.

7 Principle 6: Company affiliate collects, manages, and analyzes workplace standards compliance information. www.fairlabor.org 12 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

PRINCIPLE 7: TIMELY & PREVENTATIVE REMEDIATION8

PVH includes a process to remediate findings from factory assessments in their supplier guidelines. During the post-assessment meeting, the supplier and assessors discuss the corrective action plan (CAP) and supplier agreement and sign-off is required. In this meeting, PVH also shares the supplier’s rating from the assessment and provides guidance on remediation. The PVH CR platform also tracks the deadlines for CAP development and remediation updates. PVH conducts a follow-up assessment process to verify remediation; depending on the rating of the supplier, the follow-up assessment occurs six to 24 months after the original assessment. The supplier guidelines also include an extensive guidance appendix on conducting root-cause analysis, including steps to analyze the problem and determine root causes, diagrams to show the escalating levels of analysis, and an applicable example.

Participating in the FLA’s Factory-Level Verification Assessment Pilot In both verification assessments, the FLA found that the majority of the findings had yet to be completely remediated since the original SCI assessment had been conducted. The below chart shows the percentage of findings the FLA verified as remediated:

Percentage of Remediated Findings Veriied by the FLA

Factory A 26% 9% 65%

Factory B 46% 7% 47%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Remediated Partial Improvement No Improvement

In Factory A, the FLA conducted a pilot foundational SCI assessment in 2014 and PVH conducted an internal assessment in 2015. FLA staff reviewed both the 2014 SCI report, PVH’s 2015 assessment report, and PVH’s corrective action plan. FLA staff then conducted a foundational SCI assessment as the verification assessment at the same facility and verified 26 percent of findings identified in the 2014 SCI as fully remediated. In the review of PVH’s assessment report, the FLA found that not all of the 2014 SCI findings were reviewed for remediation progress in PVH’s follow-up assessment. FLA staff identified 11 findings from the 2014 SCI report not incorporated into PVH’s follow-up for remediation, which may have led to the lack of remediation for 65 percent of the findings from the 2014 SCI. Findings that were not remediated included inaccurate provision of social insurance benefits, excessive overtime, and various findings related to freedom of association.

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Factory B received an SCI Assessment in 2012, but due to unforeseen complications with the FLA’s launch of its first SCI cycle, this report was not released to PVH until 2014. However, PVH continued to assess this factory, submitting multiple assessment reports to the FLA to review for the verification assessment from 2012 to 2016. FLA staff reviewed PVH’s assessment reports and the 2012 SCI report and conducted a foundational SCI assessment as the verification assessment at the facility. FLA staff verified that 46 percent of the 2012 SCI findings have been remediated fully, seven percent of findings have been partially remediated, and 47 percent of findings show no progress for remediation. The findings not remediated were similar to the findings from Factory A.

PRINCIPLE 8: RESPONSIBLE PURCHASING PRACTICES9

Consolidation of Sourcing for Calvin Klein, Tommy Hilfiger, and Heritage Brand Suppliers Due to the acquisitions of Warnaco and Tommy Hilfiger, PVH’s Tier 1 facilities grew to include 918 contract suppliers. To manage the sudden growth in its supply chain, PVH hired new executive-level personnel that had experience in supply chain consolidation and management of production facilities. Through the changes in leadership, PVH consolidated its sourcing structure to three main divisions so to manage the supply chains by market as described in the “Principle 2” section above. The company determined that within each division, suppliers across A PVH contract supplier in Bangladesh the different brands could be consolidated. The divisions were then able to coordinate to buy repeat brand styles and to also allow for further consolidation of orders. For example, a style for Calvin Klein Europe can be bought by Calvin Klein North America so that the Central Supply Chain Division can consolidate both Calvin Klein orders for the supplier. While each brand has its own design and product development teams by market, orders are allocated through the three main sourcing divisions. As stated in the “Principle 2” section above, products for the Brazil market are managed by its sourcing division and Brazil is mostly a Calvin Klein market.

PVH is continuously working to consolidate its supply chain across sourcing divisions, holding regular meetings and training on the consolidation. These trainings include multi-year goals toward consolidating suppliers, identifying best-in-class suppliers to increase business, and determining how to exit suppliers responsibly. The CR Department provides regular trainings on the responsible exit procedures developed to accommodate the supply chain consolidation.

9 Principle 8: Company affiliate aligns planning and purchasing practices with commitment to workplace standards. www.fairlabor.org 14 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

PVH’s Source to Store Strategy PVH’s Corporate Responsibility program is designed to address PVH’s “Source to Store” strategy on which the company reports progress in their annual report. This corporate strategy and public accountability effort reflects PVH’s drive to achieve high standards in its CR program and collaborate with its sourcing divisions on a commitment to “empower people, support communities, and preserve the environment.” To that end, the CR Department provided trainings to the sourcing divisions on the FLA’s responsible purchasing benchmarks and then pursued topic-specific trainings to provide further guidance on how purchasing practices affect workplace conditions. While PVH has yet to develop a comprehensive Responsible Purchasing Practices Policy, the CR department has worked collaboratively with the sourcing divisions to implement practices that uphold PVH’s “Source to Store” strategy. Procedures and practices on adequate lead time, balanced planning, accurate forecasting, and internal accountability are described below. PVH is working to train other departments from each business division, including the Raw Materials & Technical Design, Sales, Design, and Innovation Departments, throughout 2016 and 2017.

Holding the Global Supply Chain Division Accountable PVH has consolidated to four main sourcing divisions to manage the supply chains for all business divisions. For the business divisions within one of these sourcing divisions (the “Global Supply Chain Division”), PVH employs an Operational Excellence KPI Overview process to capture division performance by season. The Global Supply Chain Division tracks each rating to see how each business division’s supply chain is performing against PVH’s standards.Where brands do not maintain an average of a green or yellow rating in any of the categories (purchase order on-time delivery, finished goods on-time delivery, quality, forecast accuracy, and human rights percent approved), the sourcing division reviews the brand's season to understand how the KPI-rating did not achieve a green or yellow rating. PVH’s system allows them to track how many purchase orders (POs) were issued late to the factory by each business division and the difference between the number of units forecasted versus the number of units in the final PO. When delays in POs are identified, the sourcing division reviews internally how to improve upon these KPIs for future seasons. The CR department is working with the other sourcing divisions to implement this accountability mechanism.

Striving Towards Accurate Forecasting In reviewing the KPI overview ratings, FLA staff noticed the average percent of forecast accuracy was consistently low across PVH’s global supply chain brands. When inquiring with PVH on how they are capturing forecast accuracy and how PVH will work to improve this KPI, the CR Department explained the complexities involved in providing accurate forecasts to suppliers and then measuring this data consistently and accurately. To address this low-performing KPI, the division is pursuing the implementation of a software system to manage PVH’s supply chain. The software system specializes in supply chain management, manufacturing planning, and retail planning and operations. PVH will be applying this system throughout 2017. The FLA supports PVH’s motivation to systematically improve forecast accuracy so that PVH and its suppliers can better accommodate and react to market demands and changes related to unforeseen circumstances that affect production planning.

Adequate Lead Time & Balanced Planning The supply chain divisions have procedures that address adequate lead-time. FLA staff verified the implementation of these practices during interviews with factory management at the Brazil and China field observations. The factories’ managers stated to FLA observers that PVH consistently provides POs on time and provides adequate lead time for the factories to complete the orders. www.fairlabor.org 15 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

The sourcing divisions strive to support factories in balanced planning by working with suppliers to streamline operations or diversify product assortment. PVH’s Chief Supply Chain Officer led the effort to consolidate the men’s shirts orders for Calvin Klein, Tommy Hilfiger, and Van Heusen to five vendors. To consolidate from roughly 20 vendors to five vendors, PVH worked to understand which vendors were willing and able to accommodate the production changes that would be necessary to adapt to PVH’s increase in men’s shirt POs. By consolidating down to five vendors, these vendors are able to manage and distribute the consistent POs to their factories with minimal changes to the production lines to accommodate the orders. The CR Department also showed FLA staff the green and yellow supplier ratings of some of the factories of men’s shirts vendors that supported PVH’s integration of the “human rights percentage approved” KPI in its sourcing decisions.

PVH’s Chief of Supply Chain encourages factories specializing in one product to consider diversification. For example, a factory producing swimwear for Speedo, a product with one major season, was encouraged to consider pursuing production of women’s underwear and bras so that they could receive POs from Calvin Klein, Olga, or Warner’s during the off-season for swimwear. FLA staff observed an example of PVH striving to support suppliers with balanced planning during the field observation in Brazil. FLA staff interviewed the general manager of the factory who noted that in prior years, the factory had produced only men’s shoes for Calvin Klein during two peak seasons. In 2015, Calvin Klein started to include POs for children’s and women’s shoes at the factory, which led the factory to have more consistent orders and work throughout the year.

Incentivizing Suppliers to Improve Conditions for Workers Through the Operational Excellence KPI Overview for the Global Supply Chain division, the Human Rights Percentage Approved KPI drives the divisi on to issue POs to suppliers that received green or yellow ratings from their social compliance assessment. PVH tracked the POs issued over time to green and yellow-rated suppliers, and has seen the number of POs increasing at some of its green- and yellow-rated factories. PVH will take into account a supplier’s ownership of its social responsibility by factoring in certain achievements, such as FLA accreditation of Participating Suppliers. While PVH has yet to apply the gold rating, PVH is piloting an approach to implement the gold standard, which would result in PVH assessments once every two years. Additionally, the FLA verified that PVH accepted the internal monitoring report of an FLA Participating Supplier that has achieved accreditation of its social compliance program. By treating these reports as equivalent to the external audits of another buyer, PVH supports this supplier’s ownership of an internal monitoring program.

In August 2016, PVH completed its addendum to PVH staff in Brazil shadowing an ABVTEX/PVH audit the assessor guidelines to incorporate best www.fairlabor.org 16 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

practices into its assessment tool. The addendum defines best practices as an activity or process that is not already required by PVH’s standards and can contribute to a supplier’s score from its social compliance assessment. In order to avoid diluting the severity of noncompliance findings in the overall rating, the best practice score cannot exceed certain thresholds, but acknowledges the work a supplier has done to benefit workers. PVH will train its assessors on the Best Practices Addendum to implement in its assessments in 2017. The FLA supports PVH’s efforts to continue to find different and creative processes and initiatives to incentivize suppliers to pursue ownership of their social compliance performance and to champion best practices.

PRINCIPLE 9: CONSULTING WITH CIVIL SOCIETY10

Managing CSO and NGO Campaigns or Inquiries PVH’s popular brands,Tommy Hilfiger, Calvin Klein, and others receive numerous complaints and inquiries from a range of non-profit organizations, unions, and local and global CSOs on topics like working conditions, social compliance issues, environmental practices, and material sourcing choices. These inquiries or campaigns include hot-button issues like protests against the use of animal leather or fur, or more broad-based demands to improve the company’s labor rights or environmental record, All of these inquiries are reviewed and managed by PVH’s CR Department. PVH maintains internal procedures and a standard review process for inquiries from CSOs. These inquiries are reviewed on a weekly basis and included in a tracker that reflect the steps of the internal flow charts that outline the escalation process for global inquiries, and how PVH will provide responses. PVH’s CSO Engagement procedures are focused on reactive engagement, though PVH has also been able to pursue some proactive engagement with civil society.

Leadership in Supporting the Bangladesh Accord on Fire & Building Safety PVH was the first US apparel company to join the Accord after it was formed following the Rana Plaza building collapse. PVH’s Chief Risk Officer served two terms as a steering committee member of the Accord from 2013 to 2016. In 2016, the Group Vice President of Corporate Responsibility was elected to fill the vacant position previously occupied by PVH’s Chief Risk Officer. The Accord’s Steering Committee comprises representatives from apparel businesses, global unions IndustriALL and UNI Global, the Worker Rights Consortium, and the Clean Clothes Campaign. The Steering Committee meets quarterly to review the progress of remediation in inspected factories and to develop further initiatives, such as the establishment of functioning worker-management committees in factories.

PVH also applies its data analysis capabilities to tracking the improvement maintained in its Bangladesh contract suppliers under the Accord. The CR staff in Bangladesh produce regular reports to show progress in remediation, completed remediation, and other metrics pertaining to the Accord. PVH communicates regularly to ensure PVH and its suppliers are in good standing with the Accord, and have noted that none of the PVH contract suppliers in Bangladesh have been escalated by the Accord for not showing progress towards remediation.

Additionally, the Group Vice President of Corporate Responsibility was a panelist on the FLA’s “Perspectives on Sourcing from Bangladesh” webinar in August 2016, which included perspectives from representatives from other FLA company affiliates, Human Rights Watch, the Accord, and Karmojibi Nari, a women’s rights NGO in Bangladesh.

10 Principle 9: Company affiliate identifies, researches and engages with relevant labor non-governmental organizations, trade unions and other civil society institutions www.fairlabor.org 17 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

CSO Engagement in a Global Supply Chain PVH has developed collaborative CSO engagement relationships with the Americas Group and its Mexico Committee, the Maquila Solidarity Network, Better Work, the Bangladesh Accord on Fire and Building Safety, Save the Children, and the India Committee of the Netherlands (ICN). Below is a chart summarizing some of PVH’s CSO Engagement activities.

Organization Geographical Focus Engagement Summary Americas Group & North America PVH has been an active participant in the America’s Group Maquila Solidarity Mexico Committee in developing guidance on protection Network contracts. As described earlier in this report, PVH facilitated a training for assessors in Mexico on identifying protection contracts during factory assessments. Better Work Cambodia, Vietnam, PVH is a “Buying Partner” with the global Better Works Bangladesh, Haiti, program. PVH supports the Better Work assessments and Lesotho, Jordan, and remediation follow-up, along with the training opportunities Indonesia provided by Better Work. Save the Children Bangladesh PVH has supported the opening of childcare facilities in Bangladesh in factory communities. The India India ICN published a report in January 2016 detailing research done Committee of the on migrant worker issues in factories in India. The research Netherlands (ICN) consisted mostly of interviews with workers from factories of major brands and union members. Tommy Hilfiger was named as one of the brands, and PVH provided a response that summarized their work to address the findings with the suppliers named in the report.

The FLA identified further opportunities for PVH to engage with CSOs in its supply chain. FLA recommends PVH pursue CSO engagement in Brazil, due to the high number of contract facilities utilized, second only to China. PVH has engaged with various organizations in China, such as Business for Social Responsibility (BSR), to develop various programs to support worker well- being. While the FLA acknowledges the complexities of engaging with CSOs in China11, the FLA recommends PVH continue to pursue engagement with civil society in China.

Unions & Worker Representative Structures The PVH Assessor Guidelines require assessors to understand the supplier relationship with the union or worker representative structure in place. FLA staff verified that union representatives were included in the worker interviews during its field observation in China, and recommends PVH consider including union representatives in the opening and closing meetings of their assessments.

From 2008 to 2016, PVH was a part of two Third Party Complaints (3PCs). In 2008, a 3PC was submitted by the Commission for the Verification of Corporate Codes of Conduct (COVERCO) about the severance payments owed to workers of Estofel, S.A., a factory that closed in Guatemala. PVH and Hanesbrands had sourced from Estofel months prior to the closure. PVH, Hanebrands, the Univserity of Washington, the Worker Rights Consortium, and the FLA worked with COVERCO to investigate the complaint, which led to Estofel paying 871 workers a total of nearly $526,00 (USD) for severance benefits.

11The FLA recognizes that legal restrictions on trade unions and CSOs present challenges for company’s implementation of Principle 9. The FLA recognizes the restrictions that have been included in the newly passed Overseas NGO Management Law of the People’s Republic of China, applicable to foreign nongovernmental organizations (NGOs) and civil society organizations (CSOs) operating in China. It is expected that this law, once implemented, may present new restrictions on legal registration, funding and scope of activities. Over the course of 2015, space for labor-focused civil society groups and legal aid centers to operate has been further restricted, and 2016 saw additional restrictions placed on foreign nongovernmental organizations operating in China. www.fairlabor.org 18 PVH: ASSESSMENT FOR REACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

In 2015, the FLA accepted a 3PC filed by the Guatemalan union, Sindicato de Trabajadores y Trabajadores de NGB TOO, S. A. affiliated with the Central General de Trabajadores de Gautemala (CGTC) about the lack of severance payments of another factory that closed in Guatemala, NGB TOO, S. A. This factory was not a direct supplier of PVH, but was an unauthorized subcontractor of one of PVH’s licensees. The FLA did not accept the complaint when it was originally filed, due to the licensee relationship being out of scope of PVH’s affiliation with the FLA. However, in November 2015, the FLA accepted the complaint. A third party investigator engaged by the parent company of the licensee was not able to locate the factory records to determine the volume of Tommy Hilfiger product that the factory produced, but provided an estimate based on limited available information. The parent company of the licensee provided a monetary contribution to the welfare fund for the former NGB TOO workers, which was accepted by the union.

PRINCIPLE 10: VERIFICATION REQUIREMENTS12

PVH is a founding member of the Fair Labor Association and has remained engaged and supportive of the FLA’s mission. In late 2015, the Group Vice President of CR became an FLA Board Member to represent the FLA’s Business Caucus. Additionally, she has served as Business Caucus representative for a number of FLA Committees. PVH was one of three Participating Companies to volunteer to be part of the Reaccreditation Pilot, which piloted an approach to streamline reaccreditations in the FLA and resulted in this report.

PVH’s commitment to the FLA and fulfillment of FLA obligations is integrated throughout the CR program and specifically discussed in the department’s CR Policies & Standard Operating Procedures. The FLA confirms that PVH has completed all administrative requirements including payment of annual dues, submission of its annual self-assessment, and submitting to SCI assessments.

12 Principle 10: Company affiliate meets FLA verification and program requirements.

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SECTION 4: CONCLUSION AND RECOMMENDATION TO THE BOARD OF DIRECTORS This review of PVH’s labor compliance program is intended to help inform the decision of the FLA Board of Directors on whether to reaccredit the company’s program.

The FLA staff conclusion is that since affiliation as a PC, PVH has increasingly developed a labor compliance program that, on balance, aligns with FLA standards, benchmarks, and protocols. Reaccreditation is the FLA’s continuing assessment of an affiliate’s labor compliance program towards ensuring respectful and ethical treatment of workers. The FLA recognizes that no labor compliance program is perfect; the notion of continuous improvement means that there will be instances when a specific principle or benchmark is not met, yet such occurrence does not call into question the integrity of an affiliate’s entire program. FLA will continue to provide programmatic recommendations to further an affiliate’s labor compliance efforts in support of FLA’s mission to protect workers’ rights and ensure decent working conditions. FLA staff recommends to the FLA Board of Directors the reaccreditation of PVH’s labor compliance program.

The assessment identified certain areas in which PVH’s labor compliance program has been strong and also areas with respect to which improvements are possible.

Strengths of PVH’s labor compliance program include: (1) The centralization of the management of Corporate Responsibility program for the consolidated sourcing divisions for all PVH brands; (2) The Company’s public commitment and accountability to uphold workplace standards in its supply chain; (3) The Company’s resources devoted to social compliance and sourcing data analysis to inform enhancements to the Corporate Responsibility program and purchasing practices; (4) Comprehensive procedures and training to implement the PVH assessment methodology in a global supply chain; and (5) The Company’s leadership and collaboration with CSOs, associations, and other brands to improve workplace conditions.

Suggestions for strengthening PVH’s labor compliance program include: (1) Further implementation of a mechanism to capture the effectiveness of relevant trainings provided to PVH staff, assessors, suppliers, and workers; (2) Ensuring the implementation of sustainable and effective remediation at the factory level; (3) Development of a comprehensive responsible purchasing policy articulating the practices incorporated by the Corporate Responsibility Department and sourcing divisions; (4) Further implementation of an accountability mechanism across all sourcing divisions; and (5) Development of a comprehensive and proactive CSO Engagement Strategy that articulates the current relationships and plans for engagement with CSOs in other high- production countries such as Brazil.

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APPENDIX A: THE PVH CODE OF CONDUCT

A SHARED COMMITMENT Requirements for our Business Partners

“A Shared Commitment” is our code of conduct for all of our business partners, including suppliers, contractors, vendors, licensees and agents. This code is of utmost importance to PVH Corp. and embodies our commitment to the workers who manufacture our products and their communities. Adherence to the human and labor rights standards in this code by those who seek to do business with us, and by their business partners in our supply chain, is a prerequisite for establishing or continuing a relationship with our company. At PVH Corp., we actively seek business associations with those who share our values. Indeed, we cannot do business with any organization or individual that fails to adhere to these ideals in their operations or cause their business partners in our supply chain to do the same. We believe that by working together to see these standards enforced, our company and business partners can help achieve a genuine improvement in the lives of working people around the world and the communities in which they live. This mission has been a guiding principle of our company for more than 130 years and it will guide us in the future and take precedence over any economic or business interests. Emanuel Chirico Chairman & Chief Executive Officer Michael A. Shaffer Executive Vice President and Chief Operating & Financial Officer

At PVH, we require our business partners to comply with the letter and spirit of all laws, rules and regulations relevant to the conduct of their business and, in particular, those of the countries in which workers are employed in the manufacturing of our products. When local law and the code differ or conflict, we expect them to apply the highest standard. The following standards are prerequisites for all of our business partners & apply equally to their business partners in our supply chain.

EMPLOYMENT RELATIONSHIP Our business partners are required to adopt and adhere to rules and conditions of employment that respect workers and, at a minimum, safeguard their rights under applicable national and international labor and social security laws and regulations.

NONDISCRIMINATION Our business partners cannot discriminate in employment, including with regard to hiring, compensation, advancement, discipline, termination and retirement, whether on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion, social class or ethnic origin.

HARASSMENT AND ABUSE Our business partners must treat employees with respect and dignity. No employee can be subjected to any physical, sexual, psychological or verbal harassment and/or abuse.

FORCED LABOR Our business partners are prohibited from utilizing forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise. Mental and physical coercion, slavery and human trafficking are prohibited throughout our supply chain.

CHILD LABOR Employees of our business partners must be at least 15 years old or over the age required for completion of compulsory education in the country of manufacture, whichever is higher. Our business partners are also required to observe all legal requirements for the work of authorized minors, including those pertaining to hours of work, wages, work type and working conditions.

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FREEDOM OF ASSOCIATION Our business partners are required to recognize and respect the right of their employees to freedom of association and collective bargaining. Employees should be free to join organizations of their choice. Employees should not be subjected to intimidation or harassment in the exercise of their right to join or to refrain from joining any organization.

HEALTH AND SAFETY Our business partners must provide a safe and healthy workplace designed and maintained to prevent accidents, illness and injury attributable to the work performed or the operation of the facility and machinery. In doing so, our business partners must comply with all national laws, regulations and best practices concerning health and safety in the workplace, as well as provide all required and appropriate workers compensation coverage in the event of injury or fatality.

COMPENSATION AND BENEFITS Every worker has a right to compensation for a regular work week that is sufficient to meet the worker’s basic needs and provide some discretionary income. Our business partners must pay at least the minimum wage or the appropriate prevailing wage, whichever is higher, comply with all legal requirements on wages, and provide any fringe benefits required by law or contract. If the compensation paid does not meet the workers’ basic needs and provide some discretionary income, our business partners are required to take appropriate actions that seek to progressively realize a level of compensation that does.

HOURS OF WORK Our business partners are prohibited from requiring their employees to work more than the regular and overtime hours permitted under the law of the country where they are employed. In no circumstance may regular hours exceed 48 hours in a week and, other than in exceptional circumstances, the sum of regular and overtime hours in a week cannot exceed 60 hours. Employees must have at least 24 consecutive hours of rest in every seven–day period. Our business partners are not permitted to request overtime on a regular basis. All overtime must be consensual and compensated at a premium rate.

THE ENVIRONMENT Our business partners are required to comply with all applicable environmental laws, rules and regulations at their facilities and in the communities in which they operate, particularly with respect to water, energy, hazardous chemicals, air quality and waste. Further, we expect our business partners to incorporate environmentally responsible practices into all of their activities that relate to their business with us.