Social Report. January 2015 to December

Transcription

1 Social Report. January 2015 to December

2 Membership start date : December 2011 Reporting period : January 2015 December 2015 Organisational chart

3 CONTENTS SUMMARY: GOALS & ACHIEVEMENTS SOURCING STRATEGY Sourcing strategy & pricing Organisation of the sourcing department Production cycle Supplier relations Integration monitoring activities and sourcing decisions COHERENT SYSTEM FOR MONITORING AND REMEDIATION Factory S003 / Bangladesh Factory S006 / Bangladesh Factory S008 / Bangladesh Factory S005 / Bangladesh Factory S009 / Portugal Factory S001 / Turkey Factory S012 / China Factory S013 / China Factory S014 / Bangladesh External production COMPLAINTS HANDLING TRAINING AND CAPACITY BUILDING Activities to inform staff members Activities to inform agents Activities to inform manufacturers and workers INFORMATION MANAGEMENT TRANSPARENCY & COMMUNICATION STAKEHOLDER ENGAGEMENT CORPORATE SOCIAL RESPONSIBILITY... 21

4 Summary: goals & achievements 2015 Introduction Headquartered in Belgium, Stanley & Stella (ST&ST) is a company developing fashionable and sustainable garments for the imprint and retail business. Since day 1, Stanley & Stella embraced the Fair Wear Foundation initiatives and has been focusing on cooperating in a responsible way with its suppliers. Summary of key achievements During the year 2015, Stanley & Stella made great efforts in promoting the FWF code of conduct (CoC) along its supply chain. A systematic approach has been adopted and number of controls with factories has been significantly increased. In parallel to the CAP monitoring (regularly held every 2 to 3 months), ST&ST has now installed monitoring system based on systematic checks performed during all production runs. This system allows ST&ST to have an update on the working conditions in the scoped factories almost on a daily basis. As part of this monitoring system, ST&ST included some environmental checks. Initial efforts have been focusing on following up operations of effluent treatment plant (ETP) of Bangladesh partners (ph level of released water). Additional checks are being defined and will be implement in year Records are centralized in an internal CSR report. This tool allows ST&ST headquarters to be informed in case of deviation to regulations or principles of FWF CoC. Covered spend amounts for 99% of overall ST&ST spend (factories of sources S003, S006 and S008). Developing this tool was strategic for ST&ST and will allow a more proactive approach towards CSR. 4

5 1. Sourcing strategy In addition to this reporting process, additional achievements can be communicated. For instance, the work education program (WEP) has been introduced to a new factory (S014) in This factory will effectively join the WEP program that will be held in Also, a new system planning system was implemented in year This system enhances precision and quality of ST&ST order planning. Key result is that ST&ST suppliers can now order raw materials in advance and manage their capacity booking in a more efficient way. This resulted in decreasing pressure on pricing and avoiding overtime. Some projects managed in 2015 were dropped or postponed. For instance, a direct-to-source cotton sourcing project was abandoned. Despite long discussions with an organic cotton coalition (CHETNA), ST&ST was not able to join this initiative. Some initiatives may be postponed to year 2016 (e.g. ST&ST sustainability annual report). Last but not least, Stanley & Stella has remained a proud active Fair Wear Foundation member all along year Our company kept communicating on its membership status in different ways such as external communication (website, webshop, Facebook account), marketing tools (look books) and garment labels Sourcing strategy & pricing Type of products Stanley & Stella product portfolio mainly includes knitted garments such as t-shirts, polo shirts, sweat shirts and scarves. Since the end of 2014, the company has been working on expanding its range with the addition of woven products (shirts and jackets). Sustainability being the main part of its DNA, Stanley & Stella is exclusively developing garments that contain the following: Organic materials (such as organic cotton); Natural fibers (such as linen): Sustainable materials (such as Lenzing Tencel and Modal ) Recycled materials (such as recycled polyester) 5

6 Sourcing countries In 2015, Stanley & Stella sourced products from the following countries (% by number of units): 99,41% from Bangladesh (t-shirts, polos, knitted tops, sweat shirts) 0,28% from Portugal (t-shirt and knitted tops) 0,06% from Turkey (sweat shirts) 0,25% from China (jackets, scarfs) ST&ST favors long-term business relationship with suppliers and has been working with their core suppliers from day 1. Over the last 12 months, ST&ST supplier network has slightly evolved: Business relationships have been developed with Chinese sources due to ST&ST strategic decision to diversify its product portfolio (outerwear, accessories); Styles previously produced in Pakistan have been transferred to existing Bangladesh sources in order to allow a greater control over production outputs (especially quality level). Pricing Overall principle at Stanley & Stella is that each partner along the supply chain should make a fair profit. Therefore, it is key for us to install business relationships that are commercially viable for both ST&ST and its suppliers. With most of its suppliers, ST&ST as installed an open-book policy. This methodology allows suppliers to make profits as FOB/EXW prices are linked to material costs, wages and other pricing components in a transparent way. It is not part of Stanley & Stella common practice to look for the cheapest product. The nature and high quality of the materials used for ST&ST products (e.g. organic cotton), in combination with the sustainable way of producing, does not able us to reach bottom prices. 6

7 1.2. Organisation of the sourcing department The Stanley & Stella sourcing organization is composed of two separate teams. A first team seats in the company headquarters in Brussels. This team is responsible for the definition of ST&ST sourcing strategy. In 2015, this Belgian team has been enlarged with the addition of 1 FTE sourcing specialist, bringing the overall resources to 2.8 FTE. In addition to this European team, ST&ST invested in building a solid team in Bangladesh. This team of 12 people allows us to monitor each ST&ST production run in local factories. Such team is a key asset to the brand as it allows a great control over product quality and social/environmental conditions at external partners Production cycle Stanley & Stella is a major player in the imprint industry. Which means that ST&ST develops and distributes blank garments to the garment imprint & retail market. One remarkable characteristic of this market is the relatively long product life cycle. A new ST&ST collection is structured as below: Major part of the collection is repeated from previous years. From one season to another, between 80 to 90% of the ST&ST product portfolio is maintained but refreshed. Two collections of new products are launched every year (Spring/Summer and Autumn/ Winter). On average, launched products remain part of the catalogue for at least 3 years. In 2015, 49 new styles were developed:»» 20 new styles for men and women respectively»» 3 unisex new styles (for both men and women)»» 6 new styles for kids This process allows ST&ST to stick to the market trends while offering plenty of options to its customers. 7

8 Production planning There are two factors that allow ST&ST for optimizing its production planning: Organizational maturity on supplier side Most of ST&ST suppliers have experience in the fashion/retail industry which means that their production planning systems are quite mature. This means that ST&ST suppliers have the ability to plan their order in an efficient way and avoiding rush orders. Efficient planning During the last 6 months of year 2015, ST&ST improved the quality of its order planning. By working closer together with our suppliers, we are able to significantly reduce production L/T. Production lead-times Standard lead-times for ST&ST products range between 6-8 weeks (for European shipments) and 8-16 weeks (for Asian sources). On top of these lead-times, goods transportation typically lasts between 1-2 to 5-6 weeks (for European and Asian shipments respectively) Supplier relations In year 2015, Stanley & Stella supplier portfolio remained relatively stable. However, some new sources were added to ST&ST supplier portfolio. Most of these suppliers are supporting ST&ST product range diversification (additional categories such as jackets, scarves, etc.). On another hand, business relationship was terminated with a source located in Bangladesh. Lack of responsiveness on various topics (including CSR) was the main reason for stopping cooperation. For ST&ST, sustainability and ethics are key when assessing new factories. New factories are sourced, visited and validated by the Stanley & Stella HQ sourcing team (2 people) as well as our Bangladesh liaison office. Key checks made with new potential partners are including (but not limited to): visiting factories collecting and checking certificates (GOTS/OCS, Oeko-Tex 100, BSCI, SEDEX, WRAP, ACCORD) auditing factories (e.g. FWF audits) 8

9 Factory general attitude towards social responsibility is also key. New factories willingness to invest in CSR on the long-term is critical for ST&ST (e.g. child care in factories facilitating fulltime employment for female workers, positive attitude toward the installation of anti-harassment committee, etc.). With regards to sustainability, ST&ST also focus on factory bringing innovative solutions (e.g. investing in performant effluent treatment plant, developing recycling program, etc.). Apart from CSR and sustainability, key aspects of ST&ST factory assessment are: strategic aspects (country risk, ST&ST sourcing strategy) health & Safety (certification such as Oeko-Tex 100, REACH, RSL.) quality assurance (Internal Audit, Tolerances, quality controls) technical (tech specs, patterns, master samples, expertise & know-how, factory set-up) innovation (willingness to develop new products, new techniques, etc.) commercial (supplier s customer portfolio management, long-term relationship, commitments versus proven-track performance, development & communication responsiveness, delays penalties & quality compensation) financial (purchasing prices, payment terms & conditions, financial stability) logistics & Planning (production L/T, shipment L/T, flexibility, MOQs) legal (purchase general conditions, contracts, GSP scheme, quotas, trade & tariffs regulations, anti-dumping, certifications, etc.) 9

10 1.5. Integration monitoring activities and sourcing decisions As much as possible, Stanley & Stella is trying to leverage general business discussions and CSRrelated topics. ST&ST aims at having a positive social impact in the industry on the long-term. In order to reach this goal, our team has created a systematic approach to the instalment of the FWF code of conduct all along its supply chain: Selection of new partners At the earliest stage of business relationship, ST&ST is transparent with potential supplier and exposes its FWF member status. Motivation of potential suppliers is assessed during factory visits and discussions. Relevant FWF material is shared with potential sources such as the Information needed for FWF audit list (in local language). ST&ST headquarters and local teams are managing a tight monitoring on active sources. Monitoring events are tracked in a summary table that reports environmental and CSR situation in the factories. This table is kept up-to-date at all time CAPs are key tools and followed up with all active suppliers. Regular reviews of the open CAPs are performed during on-site visits of ST&ST HQ teams. However, despite the fact that ST&ST favours dialogue with its suppliers, non-compliance or nonwillingness to comply to the basic FWF requirements will result in the termination of business relationships. CSR-related topics monitoring had a key impact on Stanley & Stella supplier base in As a matter of non-responsiveness regarding the implementation of the FWF code of conduct (CoC), business relationship with supplier S005 was stopped (see more information 2.4). 10

11 2. Coherent system for monitoring and remediation In year 2015, Stanley & Stella monitoring is covering almost 100% of its spend. Key monitoring activities cover the execution of corrective action plans, complaints follow-up, regular factory visits and CSR-related discussions. As explained in the 2015 achievements section (see page 3), ST&ST monitoring process has been significantly enhanced in 2015 and became more systematic. Here are details about the last FWF audits at ST&ST key factories: Factory Name FWF Audit date Expected / Second FWF Audit date S003 - unit 1 8th & 9th August th & 17th Nov, 2013 S003 - unit 2 2nd & 3rd Nov, 2013 S006 18th & 19th May, th & 15th Feb, 2015 S008 - unit 1 25th & 26th June, 2014 Not Yet Confirmed S008 - unit 2 15th & 16th June, 2014 Not Yet Confirmed S012 5th & 6th Nov, 2015 Not Yet Confirmed S014 7th & 8th Nov, 2015 Not Yet Confirmed 11

12 2.1. Factory S003 / Bangladesh a) The percentage of your total production sourced from the factory in question: 58% of 2015 production b) If the factory has been visited and by whom In the year 2015, factory S003 has been visited by ST&ST staff in charge of sustainability from ST&ST headquarters (during half a dozen of business trips). In addition to these contacts, ST&ST Bangladesh liaison office remains in contact with this factory on a daily basis. c) Whether during the factory visit there has been discussion of code implementation, informing staff, upcoming or past audits, progress of corrective action plans etc. This factory is monitored on a daily basis by either ST&ST Bangladesh office management team or QC inspectors who visit factory during production. ST&ST QC staff is particularly active in escalating the smallest deviations to social standards that could lead to non-conformance. On top of this close monitoring, CSR topics were on the agenda of each meeting attended by ST&ST HQ staff. In every quarter, ST&ST HQ staff sit with the factory management to discuss about the progress on CAP completion. d) If any complaints have been filed and how these were handled; A few complaints have been filed against this factory. Main complaints were related to late payment of bonuses (for workers who worked during Eid festival) and absence of protective ear plugs. After discussion with the factory, these non-conformances were solved shortly after. e) Cooperation with other clients, for example on complaints or corrective actions; No cooperation with other supplier s clients was managed in f) If the factory has been audited and how often; The FWF August 2012 and November 2013 audits came to a CAP (Corrective Action Plan) with minor points to improve and all were completed in couple of months. The verification audit was held on 16th & 17th Nov, ST&ST sustainability Officer in Bangladesh Office is to responsible for day to day Factory Monitoring also get updated information on CAP quarterly. FWF audit g) What the most important audit outcomes were; Report the most important findings per FWF labour standard. Over the last 12 months, the achievement of a living wage for workers came up as the most important topic to address with factory. ST&ST is encouraging factory to reach living wage. All of the ST&ST factories in the country are following the minimum wage standard and paying employees slightly above the living wage level. h) If there is a corrective action plan and what corrective actions have been taken. Also include the time lag between audits and follow up of findings. Factory is required to take immediate actions based on CAP and report progress on a quarterly basis. ST&ST sustainability officer in Bangladesh is following up on the implementation of corrective actions. Since monitoring is managed on a daily basis, immediate actions are taken in case of deviation. i) Any other monitoring activities (e.g. factory training). No additional training was organized at this factory on social side since this supplier is already engaged in several social projects directly with FWF (AHC, etc.). However, ST&ST has implemented a tool related to social, health, safety & environmental issues. In regards to the environmental issues and as part of our monthly CSR check, the ph level of water released by factories ETPs (Effluent Treatment Plant) is verified. 12

13 2.2. Factory S006 / Bangladesh (Below answers are related to the paragraphs listed in the above section 2.1). a) 36% of 2015 Production b) In 2015, factory S006 has been visited by ST&ST staff in charge of sustainability from ST&ST headquarters (during half a dozen of business trips). In addition to these contacts, ST&ST Bangladesh liaison office is in contact with this factory on a daily basis. c) This factory is also monitored on a daily basis by either ST&ST Bangladesh office management team or QC inspectors who visit factory during production. ST&ST QC staff is particularly active in escalating the smallest deviations to social standards that could lead to non-conformance. On top of this close monitoring, CSR topics were on the agenda of each meeting attended by ST&ST HQ staff. d) No complaints have been filed or received during that period of time. In case of any harassmentrelated issue, the Anti-Harassment Committee directly reports to the Factory top management. This allows the AHC and factory representative to solve issues independently. In the case when a factory is not able to solve a dispute, the complaint is transferred by FWF local office to ST&ST Bangladesh office. In year 2015, no such complaint was issued. e) No cooperation with other supplier s clients was managed in f) Factory is monitored on a daily basis by ST&ST CSR assistant. The active CAP with this factory is reviewed quarterly. FWF audit g) Over the last 12 months, factory S006 has been cooperating further on the CSR area. Key progresses related to fire and building safety were achieved (improvement of safety for a new building). This partner also successfully installed an anti-harassment committee. This AHC is working independently in the factory as a mechanism to handle grievances. h) The BSCI April 2012 and FWF May 2013 audits came to a CAP (Corrective Action Plan). The verification audit was held on 14th & 15th Feb, i) As specified above, our factory S006 focused on successfully completing the anti-harassment committee (AHC) program. On top of the AHC, ST&ST has implemented some special checking tools related to social, building safety, fire safety, health (similar tool as factory S003) Factory S008 / Bangladesh a) 5% of 2015 Production b) In 2015, factory S008 has been visited by the ST&ST staff in charge of sustainability from ST&ST headquarters. In addition to these contacts, ST&ST Bangladesh liaison office is in contact with this factory on a monthly basis. c) Discussions on code implementation and past audits have been the main events with this supplier. Due to the (relatively) limited business with this supplier, discussions have been held on a monthly basis (when production is on-going ). Per as what has been organized with other sources, ST&ST staff is performing a monitoring of CSR situation during production. d) No complaints have been filed or received during the given period of time e) No cooperation with other supplier s clients was managed in f) Factory is monitored on a monthly basis by ST&ST CSR sustainability officer through ST&ST QC team. During Production, QCs are present over there and they check all the CSR related topics and then report to Sustainability officer. The active CAP with this factory is reviewed quarterly. 13

14 FWF audit g) Key improvements required after the audit were related to: Overtime management in the factory (key tools installed: advance announcement of OT and request of consent before OT) Safety of working conditions (key tool installed: building safety and absence of accident/ injury records) A proper CAP have been implemented and followed up. h) Factory has been required to take immediate actions based on CAP and report progress on a quarterly basis. ST&ST CSR sustainability officer is following up on the implementation of corrective actions. i) No additional monitoring activity or training was organized at this factory Factory S005 / Bangladesh This factory represented 0,65% of 2015 Production. Business relationship with this factory S005 has been terminated early This termination is due to a combination of factor including lack of response towards CSR engagements (CAPs, improvements, etc.) Factory S009 / Portugal a) Product produced at this European partner amounted for a proportion of 0,50% of ST&ST 2015 production b) In 2015, factory S009 has been visited by ST&ST staff. c) The CSR-related topics were discussed during the ST&ST last visit to this supplier in December Key discussion topic was follow-up on 3 rd party certification (SEDEX, GOTS, etc.) d) No complaints have been filed or received during that period of time e) No cooperation with other supplier s clients was managed in f to i) No FWF audit has been scheduled with this factory. Instead, conditions of work in this factory are monitored through BSCI, SEDEX and GOTS certifications. No CAP nor additional training has been implemented with this factory Factory S001 / Turkey This Turkish factory only represented 0,10% of overall 2015 Production. This amount of goods actually represents the remaining quantities of an order placed in 2014 and shipped early Business relationship with factory S001 has been terminated early This terminate is purely due to a combination of commercial factors (delays, quality issues, etc.). 14

15 2.7. Factory S012 / China a) 0,2% of 2015 production b) Factory S012 has been visited by the ST&ST headquarters sourcing specialist as well as the ST&ST Bangladesh country manager in November c) Since the audit report was still pending at the time of the visit, implementation of the code of conduct was not discussed. d) No complaints have been filed or received during that period of time e) No cooperation with other supplier s clients was managed in f) The FWF audit of this factory was held on 5-6 November A corrective action plan with minor points to improve was issued on 22 nd December. Factory is monitored on a daily basis by ST&ST CSR assistant as well as FWF FWF audit g) Key audits findings were centered around the establishment of a living wage and workers awareness of the FWF code of conduct. h) Factory is required to take immediate actions based on CAP and report progress on a quarterly basis. The ST&ST CSR assistant and ST&ST sourcing specialist will be following up on the implementation of corrective actions in i) No additional training was organized at this factory on social side Factory S013 / China a) 0,55% of 2015 production b) Factory S013 has been visited by the ST&ST headquarters sourcing specialist as well as the ST&ST Bangladesh country manager in November c) Since the audit report was still pending at the time of the visit, implementation of the code of conduct was not discussed. d) No complaints have been filed or received during that period of time e) No cooperation with other supplier s clients was managed in f) The FWF audit of this factory was held on 19 October A corrective action plan with minor points to improve was issued on 21st December. Factory is monitored on a daily basis by ST&ST CSR assistant as well as FWF FWF audit g) Key audits findings were centered around the establishment of a living wage, workers awareness of the FWF code of conduct (for both S013 factory and subcontracting printing factory) and voice of workers. h) Factory is required to take immediate actions based on CAP and report progress on a quarterly basis. The ST&ST CSR assistant and ST&ST sourcing specialist will be following up on the implementation of corrective actions in i) No additional training was organized at this factory on social side. 15

16 2.9. Factory S014 / Bangladesh a) Factory S014 is a newly integrated factory. Even though no order has been shipped from this factory in 2015, ST&ST worked on the supplier integration to the FWF system. Initial PO has been placed to this supplier at the very end of year b) In 2015, factory S014 has been visited by ST&ST staff in charge of sustainability from ST&ST headquarters and ST&ST Bangladesh liaison office is managing communication with this factory. c) As this factory never experienced a FWF audit in the past, ST&ST spend some time introducing the FWF code of conduct, support the supplier in preparing FWF audit and thus facilitated factory integration to the ST&ST CSR system. d) No complaints have been filed or received during that period of time e) No cooperation with other supplier s clients was managed in f) Factory S014 has been audited by FWF on 7th & 8th Nov, Before preparing the FWF audit, this factory already passed WRAP and others. This factory is currently certified to produce for customers such as H&M, Tesco, Mothercare, etc. FWF audit g) Before the initial audit, factory S014 cooperated by improving some areas such as: fire safety, building safety and the establishment of an AHC. h) No corrective action plan has been received so far. ST&ST team is waiting for the update of the CAP action plan (due 1 st week of April). i) Before being introduced to FWF, factory S014 CSR policy was already quite advanced. Factory owners and top management decided to invest in different social programs. Among these initiatives, we can list the below two projects: Recruitment of disabled workers. This initiative aims at integrating, training and employing disabled workers that were excluded from local job market Following the Rana Plaza tragedy, factory S014 launched a specific program targeting victims of Rana Plaza (e.g. recruiting victims and giving them special care to recover mentally) External production N/A 16

17 3. Complaints handling In year 2015, Stanley & Stella had to deal with complaints related to factory S003. Source of grievance was the late payment of bonuses (for workers who worked during Eid festival). This complaint was issued through the FWF hotline in Bangladesh and directed to ST&ST headquarters. The ST&ST top management immediately made direct contact with the supplier top management. Then ST&ST team monitored the situation and checked that remedies actions were managed. General process around complaints handling can be described as below: Workers from ST&ST partner factories are being informed about the complaints procedure through information letter from FWF. This official communication is posted in the factories on boards located at the sewing floors. At ST&ST headquarters, the Sourcing, Quality & Sustainability Manager handles the complaints and discusses with the involved suppliers. His contact is reported as following:»» Phone number: ST&ST maintains an internal complaint register and follow-up action plans related to complaints received through FWF helpline. 17

18 4. Training and capacity building handling 4.1. Activities to inform staff members Some key activities and events are used in order to inform and train Stanley & Stella staff about the FWF membership. Here is a summary of these tools: A dedicated sourcing & CSR training is offered to each new ST&ST employee (regardless of their position in the company) to understand key CSR concepts (FWF code of conduct, effluent treatment in factories, etc.). A tracker reports dates of training for each employee. Documentation on FWF and more broadly CSR is available on demand to any ST&ST employee. In case of any questions, ST&ST staff may require help from ST&ST Sourcing and Sustainability Manager. Since the beginning of our membership in December 2011, FWF was part of our internal communication. Externally, we communicate on FWF to customers and third parties via visits, meetings, ings, look books, brochures, labels, sales meetings, website & webshop, 18

19 4.2. Activities to inform agents Agents or intermediaries receive the same training and knowledge transfer as manufacturers (see below 4.3) Activities to inform manufacturers and workers Level of knowledge about FWF and its code of conduct vary across Stanley & Stella s pool of suppliers: Some suppliers are already working with FWF Code of Conduct (CoC) for many years and already implemented it Recently integrated suppliers are receiving special training and attention during the integration phase. The FWF code of conduct is presented to the staff during trainings. The CoC is printed in big boards visible at production floors and/or in factory stairways. Four factories have been involved in the FWF (UN-funded) Workers Education Program (WEP) training in An additional supplier has been introduced to the WEP program in 2015 and will effectively join the program in 2016 (factory S014). 5. Information management The Stanley & Stella team tracks CAPs on a systematic basis. First and foremost, CAPs are stored by the mean of soft and/or hard copies in dedicated files. Then content of CAPs and necessary remedy actions is discussed during the regular trips of ST&ST sourcing & sustainability team at factories. An Excel spreadsheet is used as tracking system and summarizes the status of FWF audits (last audit dates) as well as dates of issuances for CAPs. This file is updated/shared internally between ST&ST HQ and Bangladesh liaison office. Production locations for ST&ST products are known and verified. As a matter of fact, each production run is monitored by ST&ST staff. Subcontracting is not allowed by ST&ST policies which eliminates the chance of having ST&ST production at non-audited sites. 19

20 6. Transparency & communication Since joining the organization in 2011, Stanley & Stella have been mainly communicating about its FWF member status. ST&ST communicates by using the following tools: Online: ST&ST website, ST&ST webshop, Facebook account Communication & marketing tools (articles / look books / presentations in conferences / ing campaigns / press releases) On garments (garment labels) 20

21 7. Stakeholder Engagement Among others initiatives, ST&ST is supporting and/or actively taking part in the below projects and initiatives: Fair Wear Foundation, affiliated member since 2011 GOTS OCS Fashion revolution day Textile Exchange (supporter member) Clean Clothes Campaign Belgium»» achact»» Schone Kleren Campagne 8. Corporate Social Responsibility N/A 21