THE NEW CODE sustainability and responsibility Excerpt from the 2014 Annual Report
Sustainability and Responsibility COMMITTED TO CORPORATE RESPONSIBILITY In a global industry such as textiles, corporate responsibility towards employees, customers, suppliers and the environment is becoming an ever more important competitive factor. As an international fashion company, the TOM TAILOR GROUP takes its corporate responsibility very seriously, which is why sustainable, responsible corporate management is a core component of its business policy. This includes a well-balanced social and human resources policy as well as trusting relationships with the Group s business partners. The Company places particular emphasis on decent, safe and fair working conditions at its supplier operations, on reducing its environmental footprint in the production process and on high product quality. The TOM TAILOR GROUP sees corporate responsibility as a process of continuous improvement and will therefore strengthen its commitment in all areas, particularly with regard to the production process. In the production process, the TOM TAILOR GROUP has voluntarily undertaken to observe the principles of the Business Social Compliance Initiative (BSCI). This BSCI code of conduct includes all key standards of the International Labour Organisation (ILO), the UN Global Compact and the UN Declaration of Human Rights. Further elements are the OECD Guidelines for Multinational Enterprises and other internationally recognised treaties. These include a ban on child labour, safe and decent working conditions, fair pay, regulated working times, adherence to local laws, no discrimination and workers freedom of association to form unions and freely negotiate rates. Before the TOM TAILOR GROUP works with a new supplier, auditors from the purchasing company TOM TAILOR Sourcing perform in-depth checks of this supplier. These inspections are based on the BSCI standards and other standards defined by the Company. If the inspection is successful, the TOM TAILOR GROUP enters into an agreement with the supplier concerned in which the supplier undertakes to adhere to the purchasing guidelines of the TOM TAILOR GROUP. These include restrictions or complete bans on the use of animal hair, certain types of down and feathers, real fur, leather and skins, shells, silk from India, cotton from Uzbekistan, mulesing of sheep and sandblasting in the production process. Over the course of the cooperation, employees from the TOM TAILOR purchasing offices and other accredited agencies will perform regular announced but also unannounced supplier audits and checks. If any deviations from the specified standards arise, the supplier will be sanctioned or the employees of the TOM TAILOR purchasing company will draft suitable measures and development plans with the supplier so that the standards are complied with once more. 2
RESPONSIBLE ACTION IN THE PRODUCTION PROCESS The TOM TAILOR GROUP s collections are mainly manufactured in Asia, where the majority of global textile production takes place. The diversified supplier structures in the textile industry require a high degree of responsibility in order to guarantee decent, safe and fair working conditions at the Asian suppliers. The Company takes this responsibility very seriously and since 2011 has maintained purchasing offices in Asia s most important procurement markets via the joint venture TOM TAILOR Sourcing Ltd. so as to ensure direct contact with its suppliers, regularly monitor these itself and assist them. Furthermore, the TOM TAILOR GROUP participates in its procurement markets in the dedicated projects and initiatives listed below. In India, the TOM TAILOR GROUP has been a member of the Tamil Nadu Multi-Stakeholder Group (TNMS Group) since 2012, an association combining individual BSCI members and the Ethical Trading Initiative (ETI). The group is taking a determined stand against the custom of Sumangali in southern India. Sumangali is a widespread form of employment in this region, in which young women undertake to work in factories for several years. The idea is that the girls save for a dowry, which is a prerequisite for getting married. They are only paid the majority of their salary when they have completed this multi-year period. This widespread practice frequently results in a number of types of forced labour of young women. The TNMS Group is conducting systematic educational campaigns on the ground, including training suppliers, holding discussions with legislators in the area, and setting up local community and training centres. The TOM TAILOR GROUP sources a large proportion of its merchandise from Bangladesh. In light of the events in Rhana Plaza in 2013, the TOM TAILOR GROUP set up its own purchasing office in Bangladesh last year. This shows that the Company has made a long-term commitment to Bangladesh as a key procurement market. The purchasing office in Dhaka now has more than 100 employees working for the TOM TAILOR GROUP, most of whom visit the factories on a daily basis to monitor them and provide assistance. With purchasing offices in key sourcing markets in Asia, the TOM TAILOR GROUP maintains direct contact with suppliers, which provides support for them and ensures control Another project the TOM TAILOR GROUP has been actively involved with for many years is the Aid by Trade foundation s Cotton made in Africa (CmiA) initiative. This initiative is aimed at improving the living and working conditions of cotton farmers in Africa. The cotton farmers are trained in modern, efficient, environmentally friendly methods of cultivation to improve the quality of their cotton and raise their income through higher yields. The training concept also extends to children of cotton farmers, who are to benefit from improved school education. The Cotton made in Africa projects are financed by licence fees, which are paid by partner companies such as the TOM TAILOR GROUP in return for the right to sell specified quantities of products made from CmiA cotton. In 2014, the TOM TAILOR GROUP sold a comparable number of products manufactured using CmiA-certified cotton as in 2013, and it intends to increase this number again in 2015. In 2014, the Company launched the Safer Factory initiative here. Together with two external management consulting companies specialising in this field, the TOM TAILOR GROUP advises and supports its suppliers in improving the safety and working conditions at the production facilities. This initiative also benefits the manufacturers, who receive advice and training in how they can reduce costs through more effective and more efficient production, for example by reducing scrap when cutting the fabric. 3
DEVELOPING AND SUPPORTING EMPLOYEES IN MANY DIFFERENT WAYS Employees are a company s most valuable resource. They are key to an enterprise s long-term success. As a socially committed employer, the TOM TAILOR GROUP therefore focuses in particular on its employees when it comes to sustainability and responsibility. This involves not only searching for the best people for the Company, but also developing and supporting its current workforce. Some 6,500 employees now work in a wide variety of tasks and functions for the TOM TAILOR GROUP worldwide. The focus of human resources management in 2014 was on the Employer Branding project, the aim of which is to position the Group with its two brands, TOM TAILOR and BONITA, as an attractive employer both internally and externally, particularly in Germany, in light of the demographic trend. This is expected to have a lasting, positive impact on employee recruitment and retention as well as on their motivation and the corporate culture. As a fast-growing company, the TOM TAILOR GROUP places special emphasis on employee education and training. For example, it offers young people practical, needs-based education and training programmes in various functional areas. The Company cooperates with institutions such as the Akademie für Mode und Design (AMD Academy of Fashion and Design), which aligns its interest in recruiting talented and well-educated young people for the TOM TAILOR GROUP with retaining them for the long term. In this way, the Company enables young people to benefit from forward-looking vocational education. All employees also have access to a wide range of training opportunities for professional and personal development. In addition, the Company helps its employees to better reconcile career and family and to find a healthy work/life balance by providing day care subsidies or offering flexitime schemes, among other things. Since 2012, the Group has also offered its employees an external counselling programme called the Employee Assistance Programme. An external coaching institute advises the Group s employees, who remain anonymous, on questions concerning their work, private life or health and in highly stressful situations. The objective is to address potential physical and psychological problems among employees at an early stage. Continuing education and work-life balance opportunities as well as external coaching services are available to all employees Diversity is lived out at the TOM TAILOR GROUP as an international fashion company and considered a key factor for success: employees of 52 different nationalities work in the Group. The Company is convinced that only by drawing on different cultural backgrounds, viewpoints, opinions and experience can businesses exploit their full potential and achieve success. All employees have equal opportunities in the Company irrespective of their background, gender, religion or sexual orientation. Detailed information on employees can be found in the section entitled Employee. Employees are the focus of the TOM TAILOR GROUP s sustainability and corporate responsibility efforts 4
FOCUS ON THE ENVIRONMENT Supporting Environmental Projects and Initiatives By joining the BSCI and voluntarily signing up to its code of conduct, the TOM TAILOR GROUP has undertaken to comply with national environmental protection legislation. However, depending on the individual national regulations, local regulations are insufficient to guarantee adequate environmental protection in the production countries. Since 2011, together with other retail and branded goods companies, the TOM TAILOR GROUP has therefore been active in the Carbon Performance Improvement Initiative (CPI 2 ) funded by the Deutsche Investitions- und Entwicklungsgesellschaft (DEG German Investment and Development Corporation). This initiative aims to reduce harmful carbon dioxide (CO 2 ) emissions in individual companies supply chains. In the emerging and developing countries, huge potential savings in CO 2 emissions can be made simply by raising awareness of the problem and by taking what in some cases is simple action. To do this, the CPI 2 initiative has developed a management tool for producers in these countries with concrete recommendations on how to save energy. Increasing the Use of Organic Cotton For some years now, the TOM TAILOR GROUP has used organic cotton in selected products. This supports the transition from conventional, resource-intensive cotton cultivation towards more ecologically balanced cultivation methods. The TOM TAILOR GROUP sources its organically produced cotton from certified suppliers complying either with the leading global certification standard, GOTS (Global Organic Textile Standard), or the Organic Exchange 100 standard. The Company plans to increase the use of products manufactured from organic cotton continually. Contributing to Environmental Protection with High Product Quality The TOM TAILOR GROUP offers consumers high-quality, fashionable casual wear with an attractive value proposition. In order to guarantee this high standard of quality, the Company checks the entire value chain. The items of clothing are subject to a variety of quality controls from production through to delivery to the point of sale. These include parameters such as checking the general workmanship and fit, and, in particular, checking to see whether the processed materials fulfil the Group s strict quality and material requirements. Since the completion of the pilot phase in 2012, the TOM TAILOR GROUP has held climate protection seminars at its suppliers in Bangladesh, China, India, Vietnam and Turkey. About 70 of the Group s suppliers are currently involved in the climate project and are at the stage of establishing their existing CO 2 emissions. In 2015, nearly all suppliers are expected to participate in the project so as to obtain an overview of the factors causing suppliers CO 2 emissions. After that, targets for cutting CO 2 emissions will be set for each individual supplier, taking into account their respective starting situations, and measures will be implemented to achieve them. The CPI 2 initiative plans to extend its activities to the areas of water and chemicals in 2015 and in so doing help to reduce water and chemical consumption in the production process. The TOM TAILOR GROUP actively contributes to protecting the environment with numerous projects and initiatives Because of its high quality, clothing from the TOM TAILOR GROUP is extremely durable. Seen in terms of the entire life cycle from growing the cotton to the ultimate disposal of the product by consumers a high quality standard therefore also makes a key contribution to protecting the environment. 5
PUBLICATION contact DETAILS TOM TAILOR Published Holding by AG TOM Garstedter TAILOR Holding Weg 14 AG 22453 Garstedter Hamburg, Weg Germany 14 22453 Phone: Hamburg, +49 (0)40 Germany 589 56 0 Phone: Fax: +49 +49 (0)40 (0)40 589 589 56 56 3980 Fax: info@tom-tailor.com +49 (0)40 589 56 398 www.tom-tailor-group.com info@tom-tailor.com www.tom-tailor-group.com Investor Relations & Corporate Communications Investor Relations Felix & Corporate Zander Communications Head of Investor Relations Felix & Zander Corporate Communications Head of Investor Phone: Relations +49 (0)40 & Corporate 589 56 449 Communications Phone: Fax: +49 +49 (0)40 589 5895656199 449 felix.zander@tom-tailor.com Fax: +49 (0)40 589 56 199 felix.zander@tom-tailor.com Erika Kirsten Manager Corporate Erika Kirsten Communications Corporate Phone: +49 Communications (0)40 589 56 420 Phone: Fax: +49 +49 (0)40 589 5895656199 420 erika.kirsten@tom-tailor.com Fax: +49 (0)40 589 561 99 erika.kirsten@tom-tailor.com Concept, Editing, Design & Production CAT Consultants, Hamburg www.cat-consultants.com Printing Rasch Druckerei und Verlag, Bramsche www.raschdruck.de Photography Christian Schmid (pages XX, XX, XX, XX) The rights to the campaign photos are held by TOM TAILOR GmbH.