Building a Responsible with amfori BSCI Date: March 18, 2021 Presenters

Emi Vrioni Kelli Hoggle Business Development Manager, Network Representative US & Canada, QIMA amfori – Trade with Purpose

[email protected] 2 A global footprint to help with all your quality and compliance programs, everywhere

3,800 staff 35+ offices and labs 85 countries covered 14,000 corporate customers spanning all Consumer Goods & Food

[email protected] 3 Managing global supply chains has never been tougher

Compliance pressure Increasing scrutiny from regulatory bodies, governments and civil initiatives Expertise Visibility Eyes on the ground to Be on top of safety and Consumer expectations really understand all tiers regulatory requirements Media scandals are commonplace; modern consumers of your supply chain are increasingly educated and demand higher standards from the brands they buy brings you Mounting supply chain risks Forced and child labor, environmental impacts, ground water pollution, worker safety concerns, fire hazards... the list goes on Insights Agility Collect real-time data A global footprint so you Disruption is the new normal you can use to make can easily scale your operations Trade wars, pandemics, rise of pure e-commerce players… informed decisions up or down anywhere uncertainty is everywhere

[email protected] 4 Human Intelligence is at the heart of QIMA solutions

People, not organizations or management systems, get things done” — Hyman Rickover

Field experts in 85 countries, trained and accredited to QIMA processes or your own tailored requirements We train your own suppliers and staff on compliance best practice for your programs With a blended approach: onsite workshops for vendors + QIMA Academy for e-learning (50,000 courses taken every year)

QIMA training promotes and continuous improvement for a stable, safe and ethical supply chain

[email protected] 5 Digital from Day 1

Our services are tech-enabled, accessible from your secured QIMA online account

Easily book and manage QIMA audit services online Access real-time reporting, monitor compliance trends and assess supplier performance via your custom audit dashboard or the QIMA Mobile App Manage risk in your supply chain with data-driven tools: GPS tracking, supplier mapping and risk mapping

A single platform that brings you flexibility, efficiency and smart insights for your compliance activities

[email protected] 6 Comprehensive CSR solutions for a responsible supply chain

A suite of options to help your business meet all of its ethical and environmental sourcing goals

Independent third-party review of your supply chain’s impact with a focus on long-term change Ethical Environmental Gather data to manage risks and make informed decisions to build audits a sustainable supplier network Audit protocols performed to recognized industry standards or customized to your needs Corrective action plans equip you and your suppliers to take action

Protect workers and the planet, improve consumer trust and encourage meaningful continuous improvement

[email protected] 7 Ethical Audits: Manage social risks in your supply chain with QIMA’s best-in-class audit protocol Gather an accurate picture of working conditions and human rights QIMA’s in-house ethical audit program is built from 15 years of audit experience, utilizing best practice from international standards and experience gathered from tens of thousands audits per year Protocol covers hygiene, health & safety, waste management, labor practices, worker representation, disciplinary practices, discrimination, working hours and wages On-site process consists of opening meeting, factory tour, document review, worker interviews, closing meeting, Corrective Action Plan review and optional supplier workshops Programs can be tailored to ensure the compliance of your suppliers to your specific requirements

[email protected] 8 Ethical Audits: Perform audits to the standards of key international schemes QIMA is accredited to key international standards for responsible business practice Reduce audit duplication with results shared between brands and retailers using the same scheme Protocols based on key international and national regulations, as well as codes from the International Labor Organization (ILO) and ETI Globally recognized schemes help communicate your supply chain’s achievements in addressing social issues and enforcing socially responsible practices

[email protected] 9 Environmental Audits: Monitor and improve your environmental impact Assess compliance with regulations for environmental protection QIMA’s actionable protocol based on the ISO 14001 standard Suppliers are assessed on their: • Environmental management system • Nuisance • Solid and hazardous wastes • Energy and water use • Wastewater • CO² emissions • Air emissions • Waste management Chemical control audits use protocols based on the global environmental Detox® campaign, Zero Discharge of Hazardous Chemicals principles (ZDHC) or your own requirements

[email protected] 10 Structural Audits: Verify the integrity and safety of your suppliers' premises Structural audits ensure there’s no danger to worker life and health

Structural auditors are licensed structural/civil engineers Audit protocols covering: • Verification of load conditions • Maintenance and exposure • Structural system of the building to aggressive environment • Detection of structural defects, damage, • Fire safety check (optional) distress, deformation or deterioration • Electrical safety check • Plan and alignment check (optional) Suggestions provided for repairs, strengthening and retrofitting measures Follow-up services including live load analysis and redesign of fire/electric safety systems

[email protected] 11 Robust process designed for long-term transformation

1. Engage (months 1-2) 2. Measure and correct (months 3-6) 3. Train and educate (months 6-12)

• Mandatory supplier kickoff workshop • Ensure visibility of your supply chain • Organize supplier training workshops to share the audit program and know who your high and low • Follow-up audits for failed suppliers; philosophy and organization performing suppliers are eliminate those with continued non- • Audit existing factories incl. tier 2 • Use QIMA Factory Improvement compliance suppliers (fabric mills, raw material Services to help suppliers implement suppliers, etc.) corrective action plan

• Timeframe: Agree on a format and Potential third AT RISK launch within 1-2 weeks intervention follow-up Action Plan AT RISK + NEEDS GOOD Desktop Review InitialVisual Second IMPROVEMENT CONDITION Audit NEEDS Intervention - IMPROVEMENT GOOD Full Visual CONDITION Re-audit Desktop GOOD Review CONDITION

Approved for 1 Year

[email protected] 12 Complement onsite audits with worker voice solutions

Confidential channels for grievance reporting to gain a complete and accurate picture of your factory’s work environment

Integrate worker voice surveys into onsite assessments to provide an additional layer of reporting and objectivity A worker hotline provides a direct line for workers to share complaints direct to the auditor and end buyer Our proactive callback service uncovers occurrences of post-audit factory retaliation to ensure worker safety Services provided in the worker’s own language, via their preferred platform and at the time that best suits them

Gather the voice of your workers for full transparency and informed decision making

[email protected] 13 Anti-Retaliation Callback Service

A proactive approach to worker voice How the data is reported

Proactively contacting workers leads to 20X more non- Automatically categorize complaints and determine compliances discovered if they’re a non-compliance or red-flag issue Get consent in advance and determine the best day, Grievances are presented by category in an online time and phone number to contact the worker at their portal with analytics and live filtering of data convenience Red flag issues are agreed with the client before Multi-lingual support in 17 languages commonly program commencement – if they’re reported, spoken by factory workers they’re immediately drawn to the client’s attention Program can be customized to focus on at-risk migrant workers’ and support them in their own language and culture

[email protected] 14 Data and tech-enabled solutions for greater visibility

Identify and manage risk in your supply chain

Monitor supplier compliance and identify performance trends by audit type, industry or location with your custom dashboard Identify unauthorized subcontracting with GPS tracking & supplier mapping; link audit and inspection data to spot inconsistencies Risk-based approach: prioritize audits for higher risk countries and establish optimal frequency based on KPI data and our robust country risk map Ensure business continuity and assess ethical compliance when physical factory access is limited with remote auditing solutions

Advanced tools to simplify decision making and maximize the impact of your supplier audit programs

[email protected] 15 Auditor app for streamlined operations

Proprietary app developed to improve efficiency, accuracy and data security

Developed in-house for our auditors and tested extensively in the field Auditors can capture all audit entries as data points, receive checklist updates in real-time, edit and upload pictures, automatically generate a corrective action plan Reports delivered faster and auditors have more time onsite to detect areas for improvement All sensitive information is secure and cannot be edited, such as GPS coordinates and time of audit No missing information – reports cannot be submitted until all information is completed

[email protected] 16 Team of expert auditors with specialist knowledge

QIMA auditors are experienced professionals trained in the latest best practice All QIMA ethical auditors are registered with APSCA (Association of Professional Social Compliance Auditors) Auditors are university graduates with a relevant degree and experience in auditing, or a QIMA supervisor with a long track record of customer satisfaction Local auditors understand the language, culture, laws, practices and regulations of the region Auditors receive regular training via the QIMA e-learning system on new standards, latest regulatory requirements and your specific client program QIMA tracks and reports the status of auditor courses taken, exams passed, exam scores, time to completion

[email protected] 17 Appendix

[email protected] 18 Mutual recognition program for consistent measurement

Reduce duplication, costs and audit fatigue for suppliers

Mutual recognition program recognizes and accepts key social auditing schemes (SMETA, amfori BSCI, , SA8000, Betterwork, ICS) to provide an equivalent score (QIMA red, amber or green matrix scoring) A simplified audit report is provided with equivalent score, result and corrective action plan within 72 hours of booking Equivalent data is synchronized with your QIMA account and visible in your audit dashboard for easy reporting and comparison across multiple standards

[email protected] 19 SMETA

Strengthen compliance and select suppliers that abide by ethical practices

Globally recognized audit protocol focused on responsible business practice Conducted in compliance with the latest best practice guidelines (SMETA 6.1), following the ETI Base Code and relevant local laws Reports published in the Sedex system to minimize duplication, ensure transparency and efficiently share information SMETA Corrective Action Plan Report (CAPR) outlines the improvements the factory must make to achieve compliance Sedex Virtual Assessments utilize the SMETA audit methodology and video conferencing technology to remotely carry out the assessment

[email protected] 20 amfori BSCI

Focus on continuous improvement in your supply chain by monitoring performance against a respected

Verify factory compliance with requirements of the amfori BSCI Code of Conduct Monitor improvement and implementation of Corrective Action Plan with follow-up audits Code of Conduct based on the standards of the International Labor Organization and other key international and national regulations Central platform to upload results, share reports, map supply networks and track performance

[email protected] 21 Higg Index FSLM and FEM

Evaluate and benchmark your facility’s performance with the Higg Index standardized measurement tools

Assess social and labor conditions in a facility and the effectiveness of social management programs with Higg Facility Social & Labor Module; leverages the SLCP Converged Assessment Framework to ensure consistency in assessment and measurement Measure a facility’s environmental impact and make improvements to reduce negative effects with Higg Facility Environmental Module Self-assessment conducted by the facility; verifying body conducts an on-site assessment to improve the credibility, accuracy and comparability of scores Reduce audit duplication with results shared between brands and retailers Results benchmarked by facility type to easily compare performance; facilities receive clear guidance on areas for improvement

[email protected] 22 Introduction to amfori

Kelli Hoggle, Network Representative USA & Canada

18 March 2021 Hello!

Kelli Hoggle Network Representative, USA & Canada Based in Seattle [email protected] Who is amfori? amfori is the leading global business association for open and sustainable trade.

44 Member Countries 30,000 Engaged producers in our database +100 Countries where we have operations amfori Structure Your challenges

• Managing complex global supply chains in an efficient and sustainable way • Ensuring producers follow fair labour practices and don’t abuse human rights • Using resources sustainably • Complying with environmental & social regulations • Being prepared and informed about upcoming regulations on trade, environment, social issues or transparency • Engaging in dialogue with stakeholders and civil society organizations • Managing complex customs procedures • Keeping up to date with smart product regulations • Leveraging trade agreements amfori Solutions

We offer holistic trade, social and environment services to improve the resilience and sustainability of your global sourcing strategy. By joining forces and sharing resources, you save time and money and become more efficient. Relevance and Influence of SDGs What is amfori BSCI?

Empower your supply chain to create better working conditions and improve people’s lives through a holistic approach that includes supply chain mapping, early detection, monitoring, remedy and training. 11 Code Principles amfori BSCI Key Features

• Collaborative • Members share audit results and remediation • Multi-Sector • 3 Audit Types • Single Site • Multi-Tier (agriculture only) • Small Producer • Member Driven • Members decide what’s needed for their business • Members initiate audits, not producers • Rating based (not a certification system) • Use letter grading scale • Audit validity and cadence determined by rating amfori BSCI Journey

Member and Monitoring: Findings Capacity producer audit results addressed by building & Onboarding show where Continuous ongoing review & Supply Chain issues are Improvement of continuous Mapping improvement amfori’s Tools Sustainable Intelligence Dashboard – a single interactive access point with a visual dashboard to amfori Sustainability Platform monitor performance data. – our online platform allows our members to amfori BSCI, amfori BEPI easily map their supply chains and drive improvements. amfori Academy – training, amfori BSCI, amfori BEPI workshops and e-learning in 13 languages. amfori BSCI, amfori BEPI, amfori Advocacy amfori Country Due Diligence – we help you determine the level of risk related to a country’s governance and give Audit quality tools - high- you an overview of its trade and quality, independent supply chain sustainability situation. audits. amfori was the first to have a comprehensive Audit Quality amfori BSCI, amfori BEPI, amfori Advocacy Assurance Program – an external watchdog to monitor the quality of our field audits.

amfori BSCI amfori Sustainability Platform Audit summary report with findings summary

Members can drill down into the audit report directly, to view a summary or else to go into the question-by-question detail of the report

Detailed question-level section of report What does amfori BSCI give you?

• Improved reputation by meeting customer and expectations • Access to the amfori Academy’s 700+ sustainability seminars in 13 languages, delivered in a variety of formats, both online and face to face • Auditing services that are continuously updated and quality checked by an external watchdog • Reduced cost and audit fatigue by sharing the auditing and improvement responsibility Any Questions? What is amfori BEPI?

Use our monitoring tools, improvement plans and training to identify and take action on environmental issues in your supply chains. What will amfori BEPI give you?

A tailored improvement plan for producers that addresses risks and gaps Greater resilience and efficiency through working with 350 engaged members and their 9,500+ producers The ability to address environmental performance and drive improvements amfori BEPI System Journey Producer Programme Assignment … You are behind the wheel

1. Improvement Activities - Topical Training (except regarding chemicals)

- General Improvement • Environmental Consulting Activity (specific improvement) • Environmental Assessment

- SCCM: Supply Chain Chemical Management module • Wastewater/sludge testing • Chemical Management Training • Chemical Management Audit – CMA Only applying to Clothes & Footwear (based on ZDHC audit)

- Timber Due Diligence

2. No immediate next steps What is amfori advocacy?

Shaping the landscape of trade so you can operate openly and sustainably What will amfori Advocacy give you?

• A partner that stays on top of global political, legal and social developments • A seat at the table with key policy makers and stakeholders • Deep insight and engagement through our relationships with governmental and non-governmental stakeholders • Up to date information on customs, trade agreements and anti-dumping regulations from our in-house experts Some of amfori’s Programmes & Focus

BSCI BEPI - Supply Chain Grievance Mechanism - Timber Programme - Pilot launching in Vietnam in April ‘21 - Partner: Ulula - Supply Chain Chemical Management - Partner: ZDHC - Responsible recruitment of migrant workers - Most active in SE Asia - Wine Programme - Partner: IOM - S. America, Europe, S. Africa

- Wine Programme - S. America, Europe, S. Africa

- Gender Equality and Women Empowerment - Projects active in China, India, & Bangladesh - Partner: UN Women

- State Imposed Force Labor

- Transparency - Members amfori Academy: Member training topics

*Availability depends on country and language

BSCI BEPI

- Introduction to amfori BSCI - Getting started with amfori - Due Diligence in Practice BEPI - Using amfori BSCI audit reports - Materiality Assessment

- Working with Remediation - Timber Due Diligence Plans - Tackling Modern Slavery - Grievance Mechanisms

Not included in the membership fee: - Internal Auditor Training (3-day course) - Customized training amfori Academy: Producer training topics * Availability depends on country and language BSCI BEPI

- Getting started with amfori BSCI - Getting started with amfori BEPI

- Introduction to Social Management Systems - Environmental Management Systems

- Organisational Health and Safety - Environmental Regulatory Compliance

- Responsible Recruitment - Energy Management

- Fair Remuneration - Waste Water Management

- Young Workers Management - Water Management

- Building and Fire Safety - Timber Due Diligence

- Ethical Business Behaviour - ZDHC training

- Working with Remediation Plans

- Grievance Mechanisms Not included in the membership fee: - Risk Assessment E-learning - Customized training - Women Empowerment

- Wine producers training How much does it cost?

Membership options

amfori offers the following standard Annual Turnover Annual Fee membership options. Fees are shown in the tables below. ≤ 20 Million € 3.000 €

> 20 Million € ≤ 100 Million € 6.000 € Option 1: Full amfori Membership > 100 Million € ≤ 500 Million € 12.000 € > 500 Million € ≤ 1 Billion € 18.000 € The following amfori membership fees apply to companies interested in engaging in amfori’s full services, > 1 ≤ 5 Billion € 24.000 € amfori BSCI, amfori BEPI and Advocacy > 5 Billion € 30.000 € How much does it cost?

Annual Turnover Annual Fee

Option 2: ≤ 20 Million € 2.000 € amfori BEPI (only) > 20 Million € ≤ 100 Million € 4.000 € The following amfori membership fees apply (for a limited time period) > 100 Million € ≤ 500 Million € 8.000 € for companies interested in engaging in amfori BEPI only > 500 Million € ≤ 1 Billion € 12.000 €

> 1 ≤ 5 Billion € 16.000 €

> 5 Billion € 20.000 € In conclusion – the benefits for you

1 Efficiently drive improvements in your supply chain

Collaborate with industry peers to save time and 2 resources, and reduce duplication of efforts

Increase the resilience of your business to industry 3 and market changes

4 Improve your businesses' reputation by meeting the expectations of your customers and stakeholders

5 Improved relations in the supply chain: work together with your Producers to develop strong business relations Thank You!

Email: [email protected] or [email protected] Visit: www.qima.com or www.amfori.org