Communication on Progress (COP) Implementing UN Global Compact principles in International Furniture A/S 2012/13

Communication on Progress (COP) Implementing UN Global Compact principles in International Furniture A/S 2012/13

Content 1. INTRODUCTION 3 2. ON INTERNATIONAL FURNITURE 4 3. OUR APPROACH ON GLOBAL COMPACT 5 4. PROGRESS ON HUMAN RIGHTS 7 4.1 PRINCIPLE 1: SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS 7 4.2 PRINCIPLE 2: MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES. 7 5. PROGRESS ON LABOUR STANDARDS 8 5.1 PRINCIPLE 3: THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING 8 5.2 PRINCIPLE 4: THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR 8 5.3 PRINCIPLE 5: THE EFFECTIVE ABOLITION OF CHILD LABOUR 8 5.4 PRINCIPLE 6: THE ELIMINATION OF DISCRIMINATION IN EMPLOYMENT AND OCCUPATION 9 6. PROGRESS ON ENVIRONMENT 10 6.1 PRINCIPLE 7: SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES 10 6.2 PRINCIPLE 8: UNDERTAKE INITIATIVES TO PROMOTE ENVIRONMENTAL RESPONSIBILITY 10 6.3 PRINCIPLE 9: ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES 10 6.4 MEASUREMENTS 10 7. ANTI-CORRUPTION 12 7.1 PRINCIPLE 10: BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS, INCLUDING EXTORTION AND BRIBERY 12 2

1. Introduction International Furniture in pleased to reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti Corruption. In this our first annual Communication on Progress, we describe our actions to integrate the Global Compact and its principles into our business strategy, culture and daily operations. We are also committed to share this information with our stakeholders using our primary channels of communication. Best regards Henrik B. Nielsen Managing Director 3

2. On International Furniture International Furniture A/S was founded in 1981 and is located on the peninsula of Djursland in Jutland, Denmark. We develop and produce furniture in a good quality design. We provide furniture for use in offices, conferences, cafés, hotels, institutions and within the care sector. We exclusively sell our furniture through our dealer network. International Furniture A/S employs 14 persons including 2 representatives in Slovenia and Norway. 4

3. Our approach on Global Compact Through our core value chain we strive to build a growing positive impact on society. This is done by producing and distributing high quality furniture with high durability, and thus less negative impact on the environment. We believe that our furniture due to better comfort, less toxic emissions and better ergonomic design in schools and other teaching facilities will create a better learning environment in working environments will create higher output and less sick leaves in the care sector will support the effect of the medical treatment in general will increase the quality of life of the users Social responsibility policy International Furniture A/S strives to be a trustworthy and socially responsible company that aims to contribute to improve quality of life and living standard for workers here and in the supply chain. International Furniture A/S strives to promote sustainable development by considering the conditions, which influence peopleʼs lives when making decisions. This implies that we will work active within the four main areas in the UN Global Compact Initiative, which we joined in 2012. We will: Support international human rights and basic labour standards and include social aspects in business decisions, where we find it relevant. Implement a diversity effort not to discriminate due to sex, gender, race, religion, nationality etc. Ensure a safe and sound working environment for our employees. Our working environment initiatives should be of a preventive nature to prevent potential work-related injuries. Implement a set of ethic rules - in our organization and in our supply chain. Our is similar to the international recognized BSCI. Our will provide workers with minimum rules within working time and payments, the rights to unionize, abolishing discrimination and child labour. Environment Policy International Furniture A/S is committed to a continuous improvement of our environmental performance and the prevention of environmental pollution. We will continue to influence our suppliers to involve the same environmental concerns in their business. International Furniture A/S strives to meet customer demands for environmental friendly products. Environmental considerations are an integral part of our business practices and range of products. We will: Commit to reducing the environmental impact of the manufacturing process. We shall actively strive to reduce material consumption and ensure that chemicals and hazardous materials are handled, stored and disposed in an environmentally safe way. 5

Contribute to the recycling and reuse of materials and waste to the extent possible and to ensure compliance with EC laws on chemicals, REACH. Whenever possible we shall use wood from FSC-certified sources or PEFC-sources and promote environmental friendly products such as polypropylene, linoleum, tempered glass etc. Anti-corruption policy International Furniture A/S disassociates itself from bribery, corruption and all facility payments. We believe that it is possible to create a profitable business and take on a corporate social responsibility at the same time. We will: Work against corruption in every form in our effort to run a profitable business. Our employees are not allowed to receive any gifts beyond DKK 350. Strive to influence our partners to refrain from using corruption in order to remain objective. 6

4. Progress on human rights We will respect the basic human rights conventions - also in our supply chain. 4.1 Principle 1: Support and respect the protection of internationally proclaimed human rights We have implemented a new personnel policy, which contain the area of human rights. This has been distributed to 10 out of 12 employees. We have trained our employees in corporate social responsibility including the personnel policy. All of the employees were offered the ½ day training session, and all 10 employees participated. The 2 newly employed have received a light version of the training. We will thus make sure that all our employees will know and respect the fundamental human rights in all company related activities. All significant suppliers, i.e. having at least 1% of our buying volume 1, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed and returned the Code of Conduct. The international proclaimed human rights are included in the. Developed personnel Policy, including human rights % of employees introduced to human rights 100% 83% 4.2 Principle 2: Make sure that they are not complicit in human rights abuses. On top of the activities described under 4.1, we have trained our employees in Corporate Social Responsibility. All of the employees were offered the ½ day training session, and all participated. The 2 newly employed have received a light version of the training. We planned to install an anonymous suggestion box in the headquarters, in order for the employees to report breaches of human rights in our company and in the supply chain. This objective was cancelled as it was considered to be overkill in a small organization as International Furniture. Developed personnel Policy, including human rights % of employees introduced to human rights Anonymous suggestion box set up 100% 83% 100% n/a 1 Only trading goods, not supporting materials and services. 7

5. Progress on labour standards We will comply with international labour standards - also in our supply chain. 5.1 Principle 3: The freedom of association and the effective recognition of the right to collective bargaining We have developed a personnel policy on the rights on freedom of association and collective bargaining. This has been distributed to all employees. In addition we have signed a local collective agreement with the workers union 3F. We have secures training for all employees in the above rights, in order to keep them informed and focused in these rights in Denmark and especially in our supply chain abroad. All significant suppliers, i.e. having at least 1% of our buying volume, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed the. The rights on freedom of association and collective bargaining are included in the. Developed personnel Policy, including labour rights % of employees introduced to labour rights 100% 83% introduced to policy 100% introduced to rights in DK 5.2 Principle 4: The elimination of all forms of forced and compulsory labour We have developed a personnel policy including the elimination of forced and compulsory labour. This has been distributed to all employees. All significant suppliers, i.e. having at least 1% of our buying volume, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed the. The elimination of forced and compulsory labour is included in the. Developed personnel Policy, including forced labour % of employees introduced to forced labour 100% 83% 5.3 Principle 5: The effective abolition of child labour We have developed a personnel policy including the abolition of child labour. This has been distributed to all employees. All significant suppliers, i.e. having at least 1% of our buying volume, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed the. The abolition of child labour is included in the. 8

Developed personnel Policy, including child labour % of employees introduced to child labour 100% 83% 5.4 Principle 6: The elimination of discrimination in employment and occupation We have developed a personnel policy including the elimination of discrimination in employment and occupation. This has been distributed to all employees. All significant suppliers, i.e. having at least 1% of our buying volume, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed the. The elimination of discrimination in employment and occupation is included in the. We planned to install an anonymous suggestion box in the headquarters, in order for the employees to report breaches of human rights in our company and in the supply chain. This objective was cancelled as it was considered to be overkill in a small organization as International Furniture. Developed personnel Policy, including discrimination % of employees introduced to discrimination Anonymous suggestion box set up 100% 83% 100% n/a 9

6. Progress on environment We will minimize our CO 2 footprint of operating the business. We support environmentally friendly technologies and raise awareness of environmentally friendly products and materials. Our suppliers must comply with the EU chemicals regulation REACH. As this is the first year of reporting, the measurement in this section will act as a baseline for future goals. 6.1 Principle 7: Support a precautionary approach to environmental challenges Whether or not scientific evidence is present, we strive to minimize the usage of chemicals and the emission of elements, which could create a negative footprint on the environment. Please find the measurements in 6.4. 6.2 Principle 8: Undertake initiatives to promote environmental responsibility Through employee training session, supplier involvement and commitment, and a general transparency about our environmental focus, we strive to promote environmental responsibility. Please find the measurements in 6.4. 6.3 Principle 9: Encourage the development and diffusion of environmentally friendly technologies Through continuously improvements in the production processes, input materials and changing the end products, we strive to promote the development and use of environmentally friendly technologies in our company, and among our customers and suppliers. Please find the measurements in 6.4. 6.4 Measurements The table below shows the current achievements in the area of environment. (2012/13) Water usage in total 2 132 m 3 Water usage per employee 3 13,2 m 3 Cardboard for recycling in % 100% Heating usage Electricity usage in total Electricity usage per employee 12 of 15 windows exchanged with low-energy glass 4 heat pumps installed 43.820 kwh 4 4.382 kwh Transport by ship / plane / truck to customers 100% by truck (Euro 4) % of types of plastic chairs made from environmentally friendly 97% (36 of 37) 2 By calendar year 2012. 3 Average number of employees in 2012. 4 Addition of two production addresses: a) 32.020 kwh in calendar year 2012, and b) 11.800 kwh in period 29.02.2012-28.02-2013. 10

plastic Part of the suppliers with more than 1% of the buying volume signing the commitment regarding chemicals, etc. REACH Part of the product types with upholstery as flame retardant foam 59% (10 of 17) 48% (45 of 93) 11

7. Anti- Corruption We have a zero tolerance policy towards corruption, bribery and other facility-payments in the operation of our business. 7.1 Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery We have developed a personnel policy on anti corruption. This has been distributed to all employees. We have trained 83% of our employees in anti corruption, in order to keep them informed and focused on our zero tolerance policy in Denmark and especially in our supply chain abroad. We planned to install an anonymous suggestion box in the headquarters, in order for the employees to report breaches of human rights in our company and in the supply chain. This objective was cancelled as it was considered to be overkill in a small organization as International Furniture. All significant suppliers, i.e. having at least 1% of our buying volume, have been presented with a new Code of Conduct, which we have asked them to sign. Out of 17 suppliers 10 have signed the. The anti corruption area is included in the. Developed personnel Policy, including anti corruption Part of employees introduced to anti-corruption Anonymous suggestion box set up 100% 83% 100% n/a 12

International Furniture A/S Savværksvej 2 8586 Ørum Djurs Denmark Phone +45 86 38 22 22 Fax +45 86 38 20 02 e-mail if@if-dk.com web www.if-dk.com 13