CORPORATE SOCIAL RESPONSIBILITY AT ORSAY 2012
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1 CORPORATE SOCIAL RESPONSIBILITY AT ORSAY 2012
2 SOCIAL CORPORATE COMPLIANCE SOCIAL RESPONSIBILITY Dear readers, Corporate social responsibility challenges all of us as individuals and as actors in a world in constant motion. Companies are central actors in terms of environmental change and the development of the economic system, two areas that influence our daily lives to a very high degree. Here at ORSAY we have been dealing with the subject of Corporate Social Responsibility (CSR) for several years now, something which is of a high significance for the textile industry. CSR is no longer just an empty catchword; we know that both strategic and purely operational challenges are associated with it. However, it allows us to open up new potentials for the development of the entire company and its value chain. For instance, resulting innovations in the product and service segment enable us to increase our efficiency, also in comparison to our competitors on the market. solutions. Therefore we are able to make a valuable contribution to society. People are our company s greatest potential. It is therefore imperative that we ensure, on the one hand, humane working conditions in our supply chain and on the other hand, safe, trustworthy products for our customers. This edition gives the readers an overview of ORSAY s current CSR activities and explains the integration into the company s organisational processes. At the same time it serves to sustainably increase the CSR knowledge and awareness of every single employee. After all, it is only with an appropriate understanding and commitment towards the CSR activities that we can maintain our credibility in this area and thus advance in corporate development. Your Matthias Klein CEO ORSAY CONTENTS 4 What is Corporate Social Responsibility? 5 SOCIAL COMPLIANCE 6 The fundament of ORSAY social compliance 7 Tools for implementing the Code of Conduct requirements 11 CONSUMER HEALTH AND OCCUPATIONAL SAFETY 12 Rules of purchasing - bans 14 ENVIRONMENT 14 WAY FORWARD 15 CSR-TEAM This edition is printed on recycled paper Since 2006 CSR has been anchored in ORSAY s core business and production processes from the supply chain to the distribution and sales and it contributes to future-oriented
3 CORPORATE SOCIAL RESPONSIBILITY SOCIAL COMPLIANCE WHAT IS CORPORATE SOCIAL RESPONSIBILITY? SOCIAL COMPLIANCE Corporate Social Responsibility or CSR, is a voluntary social responsibility that companies commit to over and above their legal obligations. The European Union defines CSR as A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. (Source: Green Paper - Promoting a European Framework for Corporate Social Responsibility ). The CSR activities at ORSAY are based on social compliance, consumer health and occupational safety and the environment, similar to the 3- pillar Model of Sustainability. The 3-pillar model seeks to bring about an equitable, symbiotic relationship between economic, social and environmental objectives, which in turn serve to sustainably improve and secure our society s ecological, economic and social performance. Being socially compliant is the conformity to the rules of social accountability including not only the organization s own policies and practices but also those of its supply and distribution chains. It is a continuing process in which all business partners keep on looking for better ways to protect the health, safety, and fundamental rights of employees, workers and consumers, and to protect and enhance the community and environment in which they operate. ORSAY aims to have all of its products produced in accordance with the laws and under decent working conditions. THE 3-PILLAR MODEL OF SUSTAINABILITY SOCIAL Equitable SUSTAINABLE ECONOMIC In their performance of CSR-related activities, all ORSAY employees are guided by a strong set of values to which they are deeply committed. This in turn ensures that they are naturally respectful and ethical in their treatment of colleagues, partners, suppliers and customers. Our major objective when putting the focus of our CSR actions on social compliance is, to ensure the application of ethical practices and the development of decent working conditions in all our production countries. Production countries of ORSAY are (in alphabetical order): Bangladesh, China, India, Indonesia, Morocco, Poland, Portugal, South Korea, Taiwan, Thailand, Tunisia, Turkey, Ukraine, Vietnam. Bearable Viable ENVIRONMENT
4 SOCIAL COMPLIANCE THE FUNDAMENT OF ORSAY SOCIAL COMPLIANCE TOOLS FOR IMPLEMENTING THE CODE OF CONDUCT REQUIREMENTS CODE OF CONDUCT We expect our business partners activities to conform to the Code of Conduct distributed by us. This Code of Conduct reinforces the rights of the people by referring to the Universal Declaration of Human Rights UNDHR and the International Labour Organization (ILO). To ensure this Code of Conduct is applied, audits are carried out by our social officers. The Code of Conduct, which was established by ORSAY in 2006, has been continuously developed over the years. It is a voluntary commitment to defined social and ecological standards. The standards are based on both social international and national laws and cover the following chapters: Forced labour Child labour Freedom of association and bargaining Discrimination Health and safety Working hours Wages Disciplinary measures SOCIAL COMPLIANCE SELF ASSESSMENT New suppliers are provided with a social compliance self-assessment form, which they are to fill out for every production facility working for ORSAY. This not only provides us with a first impression of the supplier and its facilities, but also serves as a basis for the auditor s assessment, and as a first evaluation of the suppliers facilities. The self assessment is based on the chapters of the Code of Conduct and gives us more transparency with regards to factories in which our goods are produced. AUDIT In order to assure that our Social Compliance Policy is properly implemented, ORSAY requires all suppliers and manufacturers to share and communicate the ORSAY Code of Conduct. We strongly encourage all our suppliers to implement this policy and promote best practices in their manufacturing facilities. Where issues of noncompliance are identified, suppliers shall work to continuously improve such issues. We assess our factories on a regular basis through our own audits and support them in their development and implementation process. When inspecting a factory, all aspects will be assessed in accordance with the local and national labour law provisions and international standard regulations. In this regards, national law prevails over international standard whenever it is stricter. The audit translates the content of the Code of Conduct into a checklist, with which the auditor can estimate a factory s current status quo. The checklist questions all possible aspects of factory life in detail
5 SOCIAL COMPLIANCE Factory Tour The audit is based on these three interconnected pieces of a puzzle. The audit is opened by a brief introduction with the management in order to explain the procedure. The factory walkthrough includes main factory buildings, working area(s), restrooms, kitchens/canteens, building interiors/ exteriors and dormitories (if applicable) and storage areas of chemical substances. A key aspect of the audit process are the employee interviews. The selection of employees for interviews is made only by the auditor; factory management cannot pre-select employees. Interviews will be conducted one-on-one or in small groups. ORSAY suppliers must disclose several documents, which will then be checked. Amongst Workers Interview Document check & background information others following papers will be examined: pay slips, attendance records, personal files, employment contract, first aider certificates, fire drill, company policy, social insurance, machinery certificates, etc. At the end of the visit, the factory management will receive a Corrective Action Plan (CAP) which lists the details of the noncompliance issues identified during the visit. The CAP also defines a time period within which the noncompli ance issues have to be solved. Based on the audit result, the auditor will monitor the progress of the factory several times a year. The overall results of the audit are then recorded in a report, which states the total performance of the fac tory and which summarises its current social performance and its development po tential. The evaluation result can range from good through to improvements needed and possible and critical, and, in exceptional cases, to alert : Good No deviation, or only minor deviations, from our requirements; full protection for workers exists. Improvement needed and possible Few to some but no significant deviations from our requirements. Critical A factory with this rating will be advised to take part in a qualification programme through which the factories can achieve significant improvements within a short period of time. An auditor assists and monitors such qualification measures. Alert This rating is given in exceptional circumstances only; new suppliers or factories will be not considered by ORSAY for future business relations. If an existing supplier or factory drops down to alert, immediate actions must be taken. Our objective is a long-term relationship and a constant improvement of working conditions. Should this not be possible despite our efforts, we reserve the right to end the business relationship. The second evaluation assesses social performance and provides information on how transparent compliance with current social standards is at the factory in question. Possible ratings here are alert, critical, improvements needed and acceptable. These overall results comprises two evaluation sections. The first evaluation section assesses the development potential of a factory. This specific result is important because it testifies the own managerial and therefore the general development potential of the whole factory. The result can range from not possible, over low, and medium to high
6 SOCIAL COMPLIANCE CONSUMER HEALTH AND OCCUPATIONAL SAFETY Since 2008 we have conducted 250 factory visits in total. Countries that are visited on a regular basis are China, Turkey, Poland, Ukraine, India, Bangladesh, Thailand, Vietnam, Tunisia, Morocco. In some factories, the focus was not only on conducting in-depth examinations of the conditions in place, but on providing training measures through which to increase awareness for the necessity of social compliance, and to eliminate root causes. We increased the amount of auditing in the year 2012 by 24 percent compared to the year percent of our suppliers from whom we source 80 percent of our goods, have been visited at least once by a social officer and, as such, are part of the ORSAY Social Compliance Programme. The CSR re sults are regularly compared with sourcing activity in order to increase, from year to year, the share of garments produced by factories with a global social performance of Good. In the year percent of our factories were rated as Good, 56 percent as Improvement needed, 12 percent as Critical, and only 4 percent as Alarming. Appropriate improvement measures have since been taken. Concerned consumers are increasingly interested in how companies assume and implement their responsibility. In addition to the possible expectations of customers, this responsibility is also gaining in strategic importance, particularly as regards companies advancement, innovation potential and integrity. While doing business, special emphasis has to be put on the environment and the human being. Simultaneously, economically important aims, i.e. cost reduction and increase in efficiency, are to be achieved. The long-term aim of our Social Compliance Programme is to gain an overview of the social performance of all factories producing goods for ORSAY, and to thus contribute towards improving the working conditions there on a longterm and sustain able basis. CONSUMER HEALTH AND OCCUPATIONAL SAFETY Because numerous different units are involved in producing our goods, the field of consumer health and occupational safety at ORSAY is interdisciplinary in structure. This area is primarily concerned with protecting the people working in our supply chain as well as consumers, who use the goods after they have been produced. Safety and health measures play an important role in any industry. It is essential that we take steps to protect workers and consumers. This is why we developed a Framework Agreement which needs to be signed by all our manufacturers. This means that chemical substances used in the production and dying of raw materials, components and finished products must come from reliable sources, have been registered and are easily identificable through the American Organization Chemical Abstracts Service number. AUDIT RESULTS IN 2012 (%) GOOD IMPROVEMENT CRITICAL ALERT 4% 12% 28% 56% The purpose of this Agreement is to ensure health and safety in compliance with the laws and directives applicable in the respective distribution countries where ORSAY is selling. FRAMEWORK AGREEMENT In accordance with REACH, the EU Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals, and in view of the social responsibility of our company, additional agreements between ORSAY and its business partners have been formulated within our Framework Agreement regarding health and safety in compliance with statutory provisions
7 CONSUMER HEALTH AND OCCUPATIONAL SAFETY All goods produced for ORSAY must be accompanied by a Bill of Material and a Bill of Substances. It must also be possible to easily verify if the products contain SVHC (Substances of Very High Concern) in a non-approved concentration which may harm the consumer, the worker and also the environment. ORSAY expects better safety and an even higher level of credibility of the products delivered. Additionally all items should comply with the OEKO-TEX Standard 100, which is a recognized textile standard intended to promote sustainable production and human-ecological safety In order to assure that our Framework Agreement is properly implemented, ORSAY requires all suppliers, manufacturers and factories in Asia to test the goods for harmful substances prior to shipping. Only test results that respect the limits are allowed to be shipped. For all other countries we do random tests on a regular basis conducted by an official laboratory. Additionally, each season, we make a so-called snapshot of some articles in our shops to verify the non presence of those substances. RULES OF PURCHASING - BANS We have several rules in purchasing which need to be respected. SANDBLASTING A lot of techniques are used in order to make jeans look fashionable. One of those practices is the sandblasting technique which makes the jeans look used. This technique projects small abrasive particles at the denim fabric under high pressure. One of the most common abrasive particles used is silica sand that breaks up and creates large quantities of dust, which when exposed to people can cause silicosis, an illness of the lungs. The course of the disease is painful and, in almost every case, fatal. explicit orders for our suppliers to exclusively use alternative methods (e.g. stone wash or hand sanding) for achieving the used look. The abidance of the ban is verified on-site within the scope of our social audits. MERINO WOOL ORSAY has banned the sourcing and processing of Me rino wool originating from places where mulesing (a cruel and painful practice) is still applied, regardless of the country of origin. Orders for Merino wool are therefore placed with suppliers who can demonstrate that this prac tice has not been applied. UZBEK COTTON such as forced child labour, human rights violations, excessive pesticide use and severe poverty. NORTH KOREA ORSAY has also made the decision not to source from North Korea and not to develop relations with North Korean sup pliers. This decision is based on the severe social compliance issues in North Korean factories such as prison labour and lack of compensation for work performed. Due to these known severe health risks associated with the sandblasting for workers, we imposed a ban on sandblasting and have enforced its implementation. This ban contains ORSAY banned the use of Uzbek cotton because, while the country is at the forefront of global cotton production, its human rights and environmental record present severe issues
8 CORPORATE SOCIAL RESPONSIBILITY ENVIRONMENT CSR-TEAM The global vision and goal of ORSAY is to find a way of running an effective and sustainable business. Here we should pay particular attention to protecting the environment and also to the people involved or affected by it. A few years ago ORSAY introduced measures to reduce its ecological footprint and has been striving to implement to sustainability on all levels ever since. Some of the most important topics include the reduction of energy consumption, the obligation to deal with all resources in a responsible way and the integration of environmental matters in all decision-making processes. Recycling of outdated materials and avoiding waste are also tasks that ORSAY employees set themselves on a daily basis. One of the most important initiatives concerns our ORSAY shops, where we are aiming to reduce energy consumption by 20 percent. To start this process, we are introducing a new lighting concept, which incorporates the use of energy-saving light bulbs. A plan of action specifying all measures will help us reaching this goal within the next few years. Furthermore, all ORSAY employees are always called upon to continuously improve their own environmental footprint and that of the company. MARIE-CLAUDE KOENIG CSR OFFICER I define the CSR strategy and work with our teams to strive for better working conditions in our supplier facilities and reduce the ORSAY footprint. To push actions in line with my personal values and make things happen, is what motivates me. LAURENCE POSTIC CSR ASSISTANT I support Marie-Claude and Jennifer with regard to CSR topics and related communication. The first steps have already been taken concerning environmental issues. I am looking forward to expanding on them. WAY FORWARD For the coming years we have agreed on an action plan that in particular includes the continuous development of our Social Compliance Programme, intensifying environmental activities and reinforcing our communication. JENNIFER FLÖCK CSR COORDINATOR JOE FAN SOCIAL OFFICER ASIA DERRY LAM CSR MANAGER ASIA Expansion of supplier monitoring system Strengthening cooperations as regards quality / Reduction of substances CSR Report Full coverage of supplier pool Full membership of a multi-stakeholder initiative Assessment according to environmental aspects Mature monitoring system Development of new business areas Enlarge environmental aspect I coordinate CSR topics such as Social Compliance, Consumer Health and Occupational Safety and Environment on an international level. I am happy to be working on improving the working conditions step by step. CSR for us means training suppliers, auditing procedures and documentations, factory walk-throughs and interviews with workers. With continuous effort, this is the most effective way to upgrade working conditions holistically and sustainably
9 ORSAY GMBH IM LOSSENFELD WILLSTÄTT-SAND GERMANY
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