2022 | Modern Slavery Report

Modern EsP t.en Slavery 1932tland Br ands: report 2022

This is Pentland Brands’ seventh annual Modern Slavery report, reviewing the progress we’ve made and setting our direction 01 CEO’s message 1 for years to come. It was approved by the Pentland Brands Executive team on 07/04/23. 02 About 2 This report covers our progress from January 2022 to December 2022. It meets the requirement under section 54 (Transparency 03 Progress 5 in Supply Chains) of the Modern Slavery Act 2015. More information can be found here. This report is also aligned with 04 Risks 6 the California Transparency in Supply Chains Act. We welcome your feedback on how we can improve 05 Due diligence 8 our policies and approach. To get in touch, email us at [email protected] 06 Policies and governance 10 07 Training 12 08 Actions 13 09 Next steps 15

Letter from our CEO At Pentland Brands, we have a rich history of pioneering Global challenges, such as the COVID-19 pandemic, Despite the many challenges we as a global community 1 brands that make life better. As a 90-year-old company, armed con昀氀icts, and a volatile market, have face, we remain resolute in realising our positive business we have a long-term view of success and support unfortunately increased the risk of modern slavery for ambitions. our brands so that they succeed well into the future. vulnerable groups. Our approach to corporate responsibility is the same: we want to create a long lasting, positive impact. In the past year, we have reviewed our policies, updated our compulsory modern slavery training for our people, As an international business, our brands have a and piloted a gender equality project to improve women’s Chirag Patel far-reaching impact on our consumers, communities, rights in our supply chain. We strive to build a fair, ethical CEO, Pentland Brands and the workers in our supply chain. To drive our social and transparent supply chain, and do this through good and environmental ambitions, we launched our 100-1-0 governance, regularly reviewing policies and training, positive business strategy in November 2021. The and completing due diligence processes. strategy outlines our commitments to help 100 million consumers live positive, active, sustainable lifestyles, We partner with global organisations to ensure we’re improve the lives of one million people in our continuously improving our ethical trading practices. communities and become a net zero business by 2032. Our ACT membership means we can contribute to Although we’re always evolving, we’re committed to transforming the garment, textile and footwear industry doing the right thing. for good. We are also members of other organisations including Nirapon, Better Work and the Ethical Trading One of our goals is to support our suppliers and work Initiative to inform, promote and improve worker rights. towards 100% transparency across our supply chain.

About us Positive business Pentland Brands is the name behind some of the world’s best sports, outdoor and Our positive business strategy shows our commitment to taking action for people lifestyle brands. We own Speedo, Berghaus, Canterbury of New Zealand, Endura, and our planet. This strategy is shaped by the United Nations’ Sustainable 2 ellesse, SeaVees, Red or Dead, KangaROOS and Mitre. We also manage the Fitco Development Goals, with this report showing how we contribute to targets 8.5 and business and are the UK footwear and apparel licensee for Kickers. 8.8 to end modern slavery and improve and protect the lives of the workers in our sourcing markets. Read more about our goals and progress on our website. 100– 1 – 0 * Making life better: We will improve the lives of 1 million people in the communities in which we operate. + 1,500 employees globally + Distribution Centres: + 21 o昀케ces across four continents: 2 owned and operated Pioneering Driving America, Asia, Australia, Europe 2 leased and operated brands for good: a sustainable + 4 co-owned factories: 3 in Sri Lanka We will help 100 future: 9 third-party operations million consumers to We will be a net and 1 in Vietnam live positive, active zero business + 1 factory owned in Scotland and sustainable lifestyles.

OurOur business approach to modern slavery Modern slavery is found all over the processes, regular risk assessments In 2022 globe and intersects all industries, and audits, collaborations with others A3 genders, ethnicities and regions. On in the industry and transparent 175 supplier relationships. The Code of any given day, 50 million people 昀椀nd tier 1 suppliers manufacturing positiv themselves in a situation where they Conduct in Our Standards outlines our in 19 locations face modern slavery.* requirements to ensure all employment e business is freely chosen. Apparel and footwear supply chains 65 are complex and far-reaching, making it We use the Ethical Trading Initiative easier to hide the exploitation of workers. (ETI) de昀椀nitions of modern slavery, tier 2 nominated fabric and trim Workers can be exploited through forced including forced labour, human suppliers manufacturing in 10 locations labour, long working hours, and lack of tra昀케cking and bonded labour, which worker rights. Vulnerable groups such as can be viewed here. migrant workers, temporary workers and 180 women and children are more at risk of *2022 Global Estimates of Modern Slavery. audits modern slavery. We believe modern slavery is over unacceptable and strive to build a fair, ethical and transparent supply chain 100,000 that protects and respects workers’ people in our supply chain rights and improves working conditions. We work to tackle exploitative practices through robust policies and governance

How we source Our supply chain model Our licensee supply chain model Our supply chain encompasses a product’s journey from creation to distribution. We seek to have 100% Distribution and retail Distribution and retail visibility of our supply chain to ensure we’re 4 mitigating the risks of modern slavery by 2032. Royalties Pentland Brands Licensee Pentland Our supply chain model varies for owned and Stock suppliers Intellectual Brands licensed brands. We operate the footwear license for property Kickers in the UK. We also act as the licensor for our owned brands; for example, ellesse is managed by our Product assembly Product partners in France, Italy and the UK. Panel Print, Embroidery, Homeworkers, assembly Subcontractors Tier 1 Tier 1 Find more about our supply chain model here. View our tier 1 and tier 2 factories lists here. Materials and components Materials and Tier 2 components Tier 2 Chemicals and dyes Chemicals Tier 3 and dyes Tier 3 Raw materials, farming Raw materials, and agriculture farming Tier 4 and agriculture Tier 4

A year in review Topic 2022 Objective Status Progress Managing our risks Continue mapping and assessing risk for our Ongoing We’re continually increasing visibility in our supply chain. We published 69% of our nominated fabric and 5 tier 2 suppliers 91% nominated trims suppliers on our website. We extended our factory mapping to include Speedo North American suppliers and more nominated European suppliers. Continue social audits of suppliers to investigate risk Complete We carried out 180 audits, 156 for tier 1 and 24 for tier 2. 164 of these were by third-party auditors, 15 were part of the Better Work programme, and 1 risk assessment was undertaken by our Corporate Responsibility team. Due diligence Improve due diligence processes around human rights Ongoing We selected a new ethical mapping software platform that will impact key processes. We will review a昀昀ected policies and processes once integration is completed in 2023. Increase supply chain transparency Ongoing We published additional data on our tier 1 suppliers around gender balance, freedom of association and audit type. We published gender balance data for our tier 2 suppliers. We ensure information is biannually published on the Open Supply Hub (formerly Open Apparel Registry). We reviewed our ethical mapping software and selected a new platform to increase transparency. Policies and governance Continue to review and publish our ethical trade policies Complete We’ve reviewed our responsible exit policy and restricted countries list. Training our people Train our teams on modern slavery Complete We updated the compulsory modern slavery online training module. Taking action Train suppliers on key areas Complete We provided targeted training to our suppliers on health and safety practices and labour laws. Continue implementing ACT’s global purchasing Ongoing One of our purchasing practice commitments was to train sta昀昀 around responsible purchasing practices. practices commitment Four training modules were created, which will be rolled out in 2023. Focus on gender equality in our supply chain Ongoing We completed the gender due diligence pilot in 2022 and will continue testing it in more factories in 2023. to improve women’s rights

Our risks To help us better tackle modern slavery in our supply Licensed business model: chain, we’ve identi昀椀ed risks common to our industry. This is a common model with global brands and can 146 mean no commercial relationship with our licensee Casual and homeworkers: partners’ factories. This makes it di昀케cult to enforce Hand stitching of products such as footwear often standards at factory level. happens in low income, rural areas and in people’s homes. This informal supply chain decreases visibility Working with agents: and makes it di昀케cult to manage human rights, Sometimes, agents are used to 昀椀nd suppliers or especially as legislation protecting these workers’ consolidate relationships with a manufacturer. Using human rights and employment status is often weaker. an agent can make it harder to maintain transparency of factory manufacturing sites. Child labour and young workers: Children are easy to exploit and are vulnerable to External factors: hazardous work that could harm their health or Global challenges, such as the COVID-19 pandemic, development. armed con昀氀icts, and a volatile market, have unfortunately increased the risk of modern slavery Demand cycles: for vulnerable groups. We’re not in the business of fast fashion, but we do work to four annual peaks in demand. Companies’ excessive demands can increase the risk of modern slavery if suppliers enforce excessive working hours, draft in temporary labour, or subcontract the work to meet a client’s deadline.

Managing our risks Risk by location As a global business with owned and licensed brands there are many touch points for We carry out location-based risk assessments to help us understand how vulnerable us to manage our risks. We assess risk in our supply chain based on locations, industry di昀昀erent regions are to modern slavery, which informs our decisions on where to 147 and factory factors. source our materials. These include: Our sourcing locations: Prevalence Very high risk High risk Medium risk of modern slavery Pakistan Cambodia Taiwan India Japan Geographical risk Thailand France Malaysia Belgium Level of supply chain control Turkey United Kingdom Political stability Indonesia Spain Bosnia and Herzegovina United States Worker demographics Lithuania Portugal South Korea The presence of governance China and management systems Bangladesh Sri Lanka Environmental risk Vietnam Italy External factors We consider external documentation to analyse risk by region. ILO Global Estimates of Modern Slavery Report 2022 The Walk Free Foundation’s Global Slavery Index 2018 The US State Department’s Tra昀케cking in Persons Report 2022 Transparency International’s Corruption Perceptions Index 2022 Freedom House’s Freedom in the World All Data 2022

Due diligence To help mitigate the risks of modern slavery, we work Audit format Tier 1 Tier 2 Audits by location Tier 1 Tier 2 closely with our suppliers to ensure ethical, social and Bangladesh 9 8 operational compliance with Our Standards. We do this Full audit 139 24 through a cycle of continuous improvement, which Belgium 1 includes ensuring our factories are regularly audited. Risk assessment 1 Bosnia & Herzegovina 1 Follow-up audit 1 Cambodia 3 China 82 10 Supplier Better Work full assessment 13 India 10 questionnaire Better Work follow-up 2 Indonesia 5 assessment Italy 0 1 Facilitating Initial Total 180 Lithuania 1 improvement Continuous audit Malaysia 1 improvement Pakistan 6 Audit type Tier 1 Tier 2 Portugal 1 Spain 1 Training Regular Announced* 29 24 Sri Lanka 4 2 audits Semi-announced 110 Taiwan 2 7 Unannounced 17 Thailand 3 1 Turkey 1 Total 180 United Kingdom 1 Our tier 1 factories are audited by independent third-party Vietnam 24 3 auditors or our in-house Corporate Responsibility (CR) team. We accept a combination of announced, Total 180 semi-announced and unannounced audits. *Due to COVID restrictions

Audit programme All issues identi昀椀ed Zero tolerance issues by type Through regular audits, we can identify risks and Through audits, 11 zero tolerance issues were better understand how workers in our supply chain identi昀椀ed. These were: working hours are not 9 are treated. These audits identify minor, critical excessive, living wages are paid, and working and zero tolerance issues. We deal with all issues conditions are safe and hygenic. We worked seriously and work directly with our suppliers to with the factories a昀昀ected to ensure all zero deal with incidents. tolerance issues from 2022 were resolved. Minor: Less signi昀椀cant breaches. Alone, they can be quickly tackled, but if identi昀椀ed in clusters they Issue type 2022 2021 2020 can signal the need for improved management practices. Minor 57% 57% 58% Critical: Critical 42% 42% 40% An issue of serious concern that could turn into Working conditions are safe and hygienic | 61.4% a zero tolerance issue. Zero 1% 1% 2% Working hours are not excessive | 14.4% tolerance Zero tolerance: Living wages are paid | 13.4% An issue that has an unacceptable impact on Environment, waste and other 昀椀ndings | 4.4% worker rights or conditions. It could lead to Freedom of association and collective bargaining | 2.6% a suspension or ending a supplier relationship if Regular employment is provided | 1.5% they do not immediately engage in sustainable Management systems and code implementation | 1.5% improvement. Employment is freely chosen | 0.3% No discrimination is practised | 0.3% No harsh or inhumane treatment | 0.1% No child labour | 0.1%

Policies We promote ethical behaviour in our supply chain Speaking Up: through several detailed policies, which internal and For our employees we have a free, con昀椀dential 10 external stakeholders regularly review. This ensures our whistleblowing hotline to raise grievances. suppliers understand our expectations around modern slavery. In 2022 we reviewed our responsible exit policy Our workers in our Bangladeshi factories have a helpline and restricted countries list. through our Nirapon membership. This helpline provides workers with an accessible and timely avenue to raise Our Standards safety and other concerns without fear of reprisal. In 2022 Corporate Responsibility Charter we didn’t receive any calls. Zero Tolerance policy Supplier Agreement: Ethical Materials policy We continue to strengthen governance mechanisms Restricted Substance list for our tier 2 vendors, with 60% of tier 2 nominated fabric suppliers and 42% of tier 2 nominated trims suppliers Child Labour & Young Worker policy signing our Supplier Agreement (this is for suppliers Homeworker policy across our brands Berghaus, Canterbury, Speedo and Endura). Migrant Worker policy Responsible Exit policy Anti-bribery and Corruption policy Speaking Up policy

Governance Good governance is an essential part of ensuring we can continue to do business in the right way. CEO & Executive team* Our team of experts in supply chain, logistics and 11 corporate responsibility work together to remediate any issues with the relevant supplier. We follow a robust process to resolve potential incidences of modern slavery. Issue management Senior leaders Supply Chain teams We strengthen our approach to corporate Zero tolerance alert responsibility through regular, business-wide collaboration. Whistleblowing Corporate Responsibility team Our In Good Conscience forum evaluates the risks and opportunities in our supply chain, including those Vendor noti昀椀cation related to ethics, integrity and the environment. Follow zero tolerance policy It’s made up of representatives from supply chain, / remediate with vendor sourcing, corporate responsibility and legal. Media alert Our Risk committee unites stakeholders across NGO alert key functional areas to strengthen the e昀昀ectiveness of risk management in the business. They identify, monitor and measure risk to improve awareness Factory visit issue and accountability. *Includes Executive team members *2022 structure

Training our people We raise awareness about modern slavery for our employees through a compulsory online training module. In 2022 we updated this module to help everyone in our 12 organisation to do business ethically and responsibly. In addition to this, we also have training covering anti-bribery and corruption, personal data, competition law and how to speak up about concerning issues. As a member of ACT, we’ve committed to conducting training on purchasing practices. ACT has created training modules which we reviewed internally. We plan to incorporate it into our compulsory training next year.

Taking action Fair wages purchasing practices assessment, as well as conducting Advancing gender equality We launched a labour cost pilot to help us deliver on an internal purchasing practices self-assessment. Although women play a critical role in the garment and 13 our ACT purchasing practices commitment to ringfence footwear industry and account for 67% of our tier 1 labour costs with key suppliers. This will help us 昀椀nd Investing in new software workforce, there is little gender-speci昀椀c data available the best way to include labour as an itemised cost for To help us in our goal to gain 100% supply chain for this industry. all suppliers by: transparency and increase our e昀케ciency, we’re investing in a new ethical supply chain and mapping In 2021 we piloted a gender due diligence project. Using Increasing our understanding of how our suppliers software. In 2022 we went through a rigorous the Business for Social Responsibility (BSR™) Framework currently work. evaluation process to select the platform and we plan for Conducting Gender Responsive Due Diligence in Iden tifying any challenges in collecting that to migrate to it in 2023. Supply Chains, we worked with a key supplier and an information from suppliers, so that they can Indian advisory company, Traidcraft Services India, be addressed. Freedom of Association to collect enhanced additional workforce information, Freedom of association is a fundamental human right, and to conduct in-depth worker interviews based on And helping us to create useful and relevant supplier enabling people to come together to discuss ideas, the framework’s impact areas. We continued the pilot guidance on labour costing for all our suppliers. issues and solutions. into 2022. We will use the supplier’s feedback and pilot learnings to In 2021 we drafted guidelines to help workers become Moving forward, we’ll focus on increasing workforce implement the necessary changes. As part of the country more proactive in representing their rights. However, it data collection with our new mapping platform across work in Bangladesh, an interim dispute resolution was di昀케cult to implement our guidelines as factories all suppliers to gather more meaningful gender data. mechanism was launched. This enables workers to raise were still facing COVID-19 restrictions. We plan to test This will help us better understand the challenges women disputes in factories supplying ACT brands with them in 2023. face in factories and the data collected will help inform IndustriALL, the global union. wider policy work and our human rights due diligence. We respect our workers’ right to freedom of association In 2023 we will gather data on our purchasing practices and collective bargaining and have added this data to from our suppliers through an anonymous ACT our tier 1 factory list, found on our website.

Memberships assessments, training and advocacy. In 2022 we Collective e昀昀orts are far more e昀昀ective in bringing about Sustainable Apparel Coalition (SAC) positive change. By working together with global industry carried out audits in our apparel sourcing factories We’re a member of this global alliance that promotes 14 partners and companies, we can share learnings in Bangladesh, Cambodia, Indonesia and Vietnam. sustainable production in the fashion industry. We use that systemically address the complex issue of modern www.betterwork.org their Higg Index tool to measure environmental and slavery. social labour impacts across our supply chain. Ethical Trading Initiative (ETI) www.apparelcoalition.org American Apparel We’re a founding member of this leading membership & Footwear Association organisation that promotes workers’ rights across United Nations Global Compact (UNGC) We’re a member of this American industry trade group the globe. We align our work with their principles, basing The UNGC is a strategic initiative based on CEO representing clothing, footwear and sewn product Our Standards on their ETI base code, and aligning our commitments to implement universal sustainability companies and their suppliers. We participate in their work to combat modern slavery. principles and to take steps to support UN goals. Joint Association Forced Labour Working Group and www.ethicaltrade.org We’re part of the Modern Slavery Working Group that the Corporate Responsibility Committee. explores challenges and best practices to combat www.aafaglobal.org Nirapon modern slavery. As an active participant in the UNGC We’re a member of this non-pro昀椀t that facilitates UK network, we contribute to the advancement of the ACT (Action, Collaboration, workplace safety in Bangladeshi factories. Sustainable Development Goals. Transformation) www.nirapon.org www.unglobalcompact.org We’re a founding member of ACT, a collaborative organisation of 19 global brands and the union Social & Labour Convergence World Federation of Sporting Goods IndustriALL that aims to achieve living wages for Programme (SLCP) Industry (WFSGI) workers in the garment, textile and footwear industries. We’re a signatory of this initiative to eliminate audit We’re a member of this non-pro昀椀t that strives to promote www.actonlivingwages.com fatigue in the apparel and footwear industries. We use the unifying power of sport to move the world forward. their tools to align our audit data with other industry www.wfsgi.org Better Work stakeholders, increasing transparency and allowing us This collaboration helps to improve working conditions for to focus e昀昀orts on improving working conditions. the people in our supply chain through www.slconvergence.org

Next steps We remain committed to tackling modern slavery through our policies, governance, We’ll continue to make sure we’re 昀椀t for purpose for upcoming legislative changes global partnerships and actions. To continue reducing the risk of modern slavery, we’ll and customer requirements. With factory-facing employees travelling more again, 15 focus on key actions in 2023. we’ll renew our modern slavery training for these employees. Through the gender due diligence project, we saw 昀椀rsthand how important As an ACT member, we’re working towards an industry-wide collective bargaining agreement. Additionally, we’ll be conducting ACT purchasing practices surveys for country-speci昀椀c context is when it comes to policies. Next year we’ll focus on our suppliers. e昀昀ectively gathering workforce data collection. One of our ongoing targets is to increase supply chain visibility. With the new We’re committed to working together with organisations and businesses from across mapping platform that we’ll be using in 2023, we’ll be able to work towards increasing the globe on industry-wide solutions to combat modern slavery. All these actions transparency for our tier 2 factories and beyond. mean we can continue improving and protecting people’s lives in our supply chain and beyond.

Pentland Brands Modern Sla Lakeside v Squires Lane ery r London eport N3 2QL 20 To 昀椀nd out more about corporate responsibility at 22 Pentland Brands, please contact [email protected] or [email protected] or visit our website © Pentland Brands 2023. All rights reserved. Airborne Footwear Limited is the UK licensee for footwear under licence from Kickers International B.V. BERGHAUS and are registered trademarks of Berghaus Limited. CANTERBURY and are registered trademarks of Canterbury Limited. ELLESSE and are registered trademarks of Ellesse International S.p.A. ENDURA and are registered trademarks of Endura Limited. KANGAROOS and are registered trademarks of Asco Group Limited. KICKERS is a registered trademark of and used under licence from Kickers International. MITRE and are registered trademarks of Mitre Sports International Limited. RED OR DEAD is a registered trademark of Red or Dead Limited. SeaVees and is a registered trademark of SeaVees, Inc. SPEEDO and are registered trademarks of Speedo Holdings B.V. PENTLAND is a registered trademark of Pentland Industries Limited. 18