SOCIAL & LABOR CONVERGENCE PROJECT

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SOCIAL & LABORCONVERGENCE PROJECTStuart CranfieldGroup Head of Vendor AuditC & J Clarks International LtdOCTOBER 20, 2016 – HONG KONG2016 LEADERSHIP pls« BACKNEXT »

Social and Labor ConvergenceProject :Joining Hands to Create a SingleAssesment FrameworkBusiness Leadership Series, Hong Kong20th October 2016

Objective & PurposeThis project seeks to develop an industry-wide, unified and effective assessmenttool and verification methodology for the collection of information on Social andLabor performance in the apparel and footwear supply chains.This will result in a standard agnostic tool and verification methodology to collectrelevant and essential data, with the intent to replace current proprietary tools.In order to allow adoption at scale, the tool, verification methodology, anddeliverables will be publicly available.

Trends Requiring ConvergencePoliticalContext Social / Labor initiativeslaunched recently by politicalactors ( OECD – new textileguidelines, EU – Textileflagship initiative, Nationalplatform)Emerging demand from policymakers for a commonframeworkStakeholderContextIndustryContext Manufacturing partnerssuffering audit overloadLarge number of assessmentframeworks with minimaldifferencesHigh cost of duplicativeapproachesNeed to shift resources fromassessment to improvement Increasing stakeholder demandfor transparency and consumercommunication at scalerequires comparability ofresultsCommon platform will enableindustry to accelerateimprovements to addressstakeholder concerns

Guiding Principles of the Projectstrategy document, June 2016jective & Purpose Single converged assessment toolUnrestricted performanceEqual partnershipBuilt collaboratively and owned collectivelyPublicly availableTerms of use: framework to be used in its entirety and without modificationPublic commitments for adoptionTransparency in process and products Facilitated by the Sustainable Apparel Coalition (SAC)Open to SAC members and non-members

Project goalsCreating impactRace to the topInvestment in improving performanceTrue transparencySaving resourcesComparability of results across industryReduction duplications and driving qualityCommon and best in classassessment framework

Convergence Process and Timelines:Phased ApproachE.g., X Y Z data pointsStep 3 – Full Convergence: All of level 2 advanced convergence criteria in plus Comprehensive, covers all material/relevant issues Out of scope for the 2 year project (but leave for later) Should satisfy all current stakeholders, including tool ownerswith most comprehensive question setsStep 3E.g., X Y data pointsStep 2Step 2 – Intermediate Convergence: All of level 1 Basic convergence criteria in plus More advanced categories that examine non-core ILO conventionsor other decent work aspects May also include additional management systems, employeeengagement initiatives, and other relevant issues Should satisfy majority of current stakeholdersStep 2E.g., X data pointsStep 1Step 1CONVERGENCEStep 1TIMEProject Scope: Year 1 and Year 2Year 3 and further(pending project continuation)Step 1 – Initial Convergence: Foundational Labor categories based on ILO core conventions andpossibly some non-core ILO conventions or other decent workrelated aspects which are considered basic/highest priority Referring to local law To include some elements on policy, procedures, managementsystems Should not leave room for anyone to use other tools for basicassessments Should cover the questions/data points that the current toolshave in common

nceStrategy20172018AdoptionTool Development(Step 1 and 2)VerificationOperations

Why will it be different this time Changing momentum Critical mass Clear focus Standard agnostic Inclusive process and equal partnership We build collaboratively, it will be owned collectively

Signatories S&L Convergence ProjectOctober 2016 (88)Manufacturers (19): Artistic Milliners, Arvind, Avery Dennison, Crystal Group, Chenfeng Group, Comfit CompositeLimited, DBL Group, Esquel, Hanbo, Hirdaramani Ent., L&E Int. Lmtd., MAS Holdings, Pratibha Syntex Limited, RamatexGroup, Saitex, Sing Lun Global, Sun Queen Garments, TAL Group, W. L. Gore & AssociatesBrands /Retailers (36):adidas Group, Asics, Bestseller, Burton, C & J Clark International Ltd, Columbia Sportswear, Ecco, Fast Retailing/Uniqlo,Gap Inc., G-Star, H&M, IC Group, INDIGENOUS, Inditex, Kering, Levi Strauss & Co., Li&Fung, LL Bean, Lululemon, MEC,M&S, Nike, Outerknown, Patagonia, PrAna, Puma, PVH Corp., Randa Accessories, REI, Stella McCartney, Schutt Sports,Target,The Children’s Place, Tory Burch, VFc- Timberland , Zephyr Graf-XNational Governments (1): TheNetherlands Intergovernmental Observer (1): OECD Civil Society/Multi-stakeholder Initiatives/Standard Holders(17): Danish Fashion Institute, Ethical Trade Initiative Norway (IEH), European Outdoor Group (EOG), Fair Trade USA,International Apparel Federation (IAF), IDH, The Mekong Club, New Earth, NBIM, Outdoor Industry Association (OIA),Responsible Sourcing Network, Sedex, Sustainable Apparel Coalition (SAC), Solidaridad, Verité, Worldwide ResponsibleAccredited Production (WRAP), Textile Exchange Auditing Firms/Service providers/Consultancies (14): BureauVeritas, BSI group, Control Union, CTC Groups, Elevate Extensive, Fire Lantern, FLO-CERT, Impactt Limited, IntertekKSSA Leverage Limited, NEWAsia Solutions Limited, Openview Services Lmtd., SMT Global, SGS, UL ResponsibleSourcing

- THANK YOU Please send questions to:janet@apparelcoalition.org

Group Head of Vendor Audit C & J Clarks International Ltd . This project seeks to develop an industry-wide, unified and effective assessment tool and verification methodology for the collection of information on Social and Labor performance in the apparel and footwear supply chains. . VFc- Timberland , Zephyr Graf-X National Governments (1 .

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