CEO’S MESSAGE OUR ESG STRATEGY DASHBOARD PEOPLE SUPPLY CHAIN ENVIRONMENT TRANSPARENCY REFERENCE TABLES Verifying Suppliers In FY21, we audited 100% of our Tier 1 proprietary brand suppliers. We did not identify any serious violations of our GSG or local laws during the audits. Key supply chain challenges in the value chains of the merchandise we sell could include human rights risks, such as child labor, forced labor, unfair wages Global Security and Compliance Programs and benefits, poor working conditions, and health and safety risks, such as We are an active member of several voluntary global security and compliance high temperatures in factories, extreme noise levels, and potential impacts from government programs. cleaning agents. In the selection of our suppliers, we work hard to find reputable business In the United States, we have been a member of the CTPAT, a voluntary supply partners who are committed to ethical standards and business practices chain security program led by CBP, since 2003. The program is focused on consistent with our values. Each of our suppliers agrees that, by accepting improving and strengthening security processes globally. As a member, we are orders from us or any of our subsidiaries, it will abide by and implement the required to update our supply chain security profile annually, as well as undergo a terms of our GSG and require the same from each of its subcontractors. Each of foreign and domestic site visit every four years with CBP. We are also a member our suppliers acknowledges that its failure to honor this agreement will compel of the Trade Compliance Program f/k/a Importer Self-Assessment Program, us to reevaluate, and possibly terminate, our business relationship with them. a voluntary self-auditing compliance program in cooperation with CBP, since 2014. As a member, we have demonstrated our commitment to managing and Each of our contracted factories is required to undergo periodic audits to ensure monitoring important compliance through self-assessment. adherence to the criteria set forth in our GSG and local legal requirements. In In Europe, we have been an active member of the Authorized Economic FY21, audits were conducted by ELEVATE, a business risk and sustainability Operation Program, a voluntary supply chain security and customs simplification solutions provider, and other accredited third-party sources, including amfori’s program, in partnership with Dutch Customs (Belastingdienst/Douane), since Business Social Compliance Initiative, Worldwide Responsible Accredited 2013. The program is focused on mutual transparency, security, and financial Production, and Sedex Members Ethical Trade Audit. responsibility, as well as safe and secure trading partnership. As a member, we These audits, whether in-person or remote, include the following factors: are required to undergo an audit every three years with Dutch Customs. • Transparency and business integrity 100% of our proprietary brand suppliers are audited to maintain compliance with • Hiring, disciplinary, and termination practices these programs. • Child labor and forced/slave labor indicators • Harassment and discrimination policies • Freedom of association and grievance mechanisms • Wages and benefits • Hours of work • Health and safety There are several issues for which we have a “zero tolerance” policy, including bribery/corruption, child labor and forced or slave labor, human trafficking, and factory safety. The outcome of each audit is shared with a cross-functional team, including Trade Compliance, Sourcing, and Legal. If critical issues are identified, we partner with the vendor to remediate the issue(s). Depending on the severity on bribery/corruption/child labor of the issue(s), follow-up audits may be conducted to validate that the critical and forced or slave labor, human issue(s) are resolved. We are invested in partnering with our suppliers to build a more sustainable and compliant supply chain. trafficking, and factory safety 4040