Ensuring socially acceptable production conditions is an essential pillar of our corporate philosophy. Our specially developed Code of Conduct for Suppliers (Ethical Code of Conduct) defines our requirements and expectations with regard to compliance with human and employee rights. This Code is based on the Declaration on Respect for Human Rights and Environmental Protection and is the foundation and prerequisite of every business relationship.

Crucial factors in making progress towards decent working conditions in global supply chains are responsible sourcing and purchasing practices. HOLY FASHION GROUP therefore strives to implement these as part of its business activities. For example, forward-looking collection framework design can ensure effective production planning that takes into account fair payment terms and reasonable production and delivery times.

HOLY FASHION GROUP is also taking part in the ILO Better Work Academy for Swiss Brands in order to identify the impact of its own purchasing practices and, based on this, to develop strategies for improvement measures. The program, which lasts several weeks, consists of classroom sessions and online courses and serves to build up knowledge on all aspects of social compliance. Further information is available here: https://betterwork.org/training/.

In addition, the promotion of living wages plays an important role on the way to fair supply chains. The background to this is that the minimum wages set in the production countries are often not sufficient to enable employees and their families to have an adequate standard of living. In a first step, the specific wage situation in the supply chains of the HOLY FASHION GROUP was therefore analyzed by carrying out a wage gap analysis at the level of ready-made clothing. Based on survey data from amfori BSCI audit reports, the statutory minimum wage was compared to the actual wage paid and the calculated living wage. In the long term, HOLY FASHION GROUP has set itself the goal of implementing the realization of living wages in its company-wide sustainability strategy. A number of different short-term goals serve the implementation for more responsible supply chains and an improvement of the wage situation in partner factories. Through training and collaboration in multistakeholder initiatives, further measures are being worked on to raise awareness of fair working conditions and wages among suppliers.

The code is based on international standards for the protection of workers' rights and includes the following core elements: Management practices, worker participation and protection, right to freedom of association and collective bargaining, no discrimination, fair remuneration, reasonable working hours, health and safety at work, no child labor, special protection for young workers, no precarious employment, no forced labor, environmental protection aspects and ethical business conduct.

The member companies are obliged to conduct appropriate audits in their own supply chains in order to implement compliance with the BSCI Code of Conduct. The results of the social audits are then published on the amfori sustainability platform for all members to view.

More information can be found here: https://www.amfori.org/content/amfori-bsci

Based on the amfori BSCI Code of Conduct, the HOLY FASHION GROUP conducts social audits of all suppliers at the first supply chain level in both risk and non-risk countries. The audits take place every one to two years and are conducted by neutral auditing institutes. The results of the audits provide indications for mitigating or eliminating actual negative impacts together with the supplier. It is important for us to support our partners in developing and implementing corrective action plans.

Over the last few years, we have already made progress in the following areas by mutual agreement with our partners:

• Improved health and safety measures in the workplace at a Turkish accessories supplier. Structural changes have been made to ensure adequate escape and rescue routes as well as safe chemical management. The consistent wearing of safety clothing remains a challenge, which we are keen to highlight.

• The situation of overtime at some of our Chinese partners is a recurring issue for which we are raising awareness.

• We were able to bring about a significant improvement in sanitary facilities at one Chinese supplier.

• The discontinuation of salary payments in cash at one of our Turkish suppliers. Necessary social security contributions are now correctly paid.

In the future, HOLY FASHION GROUP also likes to carry out social audits at further upstream supply chain stages and also drive forward environmental and chemical-related audits.

HIGG INDEX

Since 2021, we have been measuring and evaluating our sustainability activities with worldly's Higg Index, a modular, web-based online tool for the footwear and apparel industry. A standardized questionnaire is used to identify sustainability risks and subsequently formulate measurable improvement targets. This also enables benchmarking with other companies.

The Higg Index was introduced in 2012 by the Sustainable Apparel Coalition (SAC) and helps companies audit environmental, social, and governance (ESG) policies and practices.

https://worldly.io/tools/higg-index/