high-risk violations such as child and forced labor, human trafficking, illegal subcontracting, bribery, fraudulent record-keeping, homeworkers and physical abuse as well as our involvement with industry initiatives. Additionally, all colleagues receive annual Legal Compliance and Code of Conduct training that includes information on our human rights and human trafficking policies. To further advance our human rights strategy, in 2021, Macy’s engaged a third party to benchmark our existing programs and to provide recommendations for enhancement. The project includes saliency mapping, gap analysis and action plans for our entire enterprise. Factory Audits We require factories supplying our Private Brand division to be audited by a third party at least once every 18 months and more frequently if any issues are identified. Audits are conducted using the Supplier Code of Conduct. Suppliers that are “at risk” are given the opportunity to make improvements through a formal corrective action plan process that is prepared by our third-party auditor. If a supplier does not comply, Macy’s, Inc. holds the right to terminate the relationship. In 2020, we conducted 495 audits in 434 factories, and monitored social compliance in an additional 43 factories through reviewing audit reports conducted by other companies on our suppliers’ facilities. Altogether, they accounted for 90% of Macy’s total Tier- 1 factories. The audit results showed that a little more than half of factories were in acceptable compliance; while the remainder of factories had areas of concern that needed improvement. We found 3 factories under the “Unacceptable” category. All of which were terminated and no longer manufacture for Macy’s. Macy’s is committed to advocating sustainable practices with our brand partners and across the retail and fashion industry. We are an active member of and collaborate with numerous associations and networks that directly engage with policy makers on international trade, human rights and sustainability issues. We participate in many of these organizations. Working Together For Change Macy’s, Inc. Sustainability Report 2020 Return to Table of Contents 14