CSRCSRCSRCSR Corporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social Responsibility at ORSAYat ORSAYat ORSAYat ORSAY

August 2014August 2014August 2014August 2014

What is Corporate Social Responsibility?What is Corporate Social Responsibility?What is Corporate Social Responsibility?What is Corporate Social Responsibility?

Corporate Social Responsibility (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 eq-uitable, 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.

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. Currently our CSR actions focus on our main sourcing countries which are

China, Turkey, Poland and India.

Orsay Code of ConductOrsay Code of ConductOrsay Code of ConductOrsay Code of Conduct

We expect our business partners’ activities to comply with our Code of Conduct. This Code of Conduct reinforces workers’ rights by referring to the Universal Declaration of Human Rights (UNDHR), the International Labour Organization (ILO) and the Ethical Trading Initiative (ETI) Base Code.

To ensure our Code of Conduct is applied, audits are carried out by our social officers and external service providers. The ORSAY Code of Conduct was established in 2006 and 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:

• Legal employmentLegal employmentLegal employmentLegal employment Business partners must ensure that employment is based on a legal document which fulfills the labor laws of the country, such as a working contract

• Forced labourForced labourForced labourForced labour Business partners must ensure that all employment is voluntary, and free from violence or threats.

• Child labourChild labourChild labourChild labour Child labour is forbidden as defined by ILO and UN conventions and/or by national law.

• Freedom of association and collective bargainingFreedom of association and collective bargainingFreedom of association and collective bargainingFreedom of association and collective bargaining It is the right of workers to set up or join workers’ organisations of their choice (including unions) for collective bargaining.

• Discrimination Discrimination Discrimination Discrimination Business partners must not discriminate in employment practices, including recruitment, hiring, compensation, training, benefits, advancement, termination or retirement.

• Health and safetyHealth and safetyHealth and safetyHealth and safety The workplace must not harm workers’ health and safety. A safe and hygienic working environment is provided and has to be maintained.

• Working hoursWorking hoursWorking hoursWorking hours Working hours are set and planned in accordance with local law and regulations. Workers will not work more than 48 hours in a regular working week.

• Wages Wages Wages Wages Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income.

Banned Banned Banned Banned / restricted / restricted / restricted / restricted subjects and countriessubjects and countriessubjects and countriessubjects and countries

The following subjects and countries are banned or restricted in our supply chain:

• Merino Wool / MulesingMerino Wool / MulesingMerino Wool / MulesingMerino Wool / Mulesing Mulesing is a cruel operation performed on merino sheep in order to protect them against infestation with fly eggs. Huge strips of skin and flesh are carved off the backs of the lambs’ legs and the areas around

their tails.

• SandblastingSandblastingSandblastingSandblasting Sandblasting is one of the techniques used to make denim and other fabrics look faded. Workers can be exposed to hazardous crystalline silica and the threat of contracting fatal lung disorders, such as silicosis.

• AngoraAngoraAngoraAngora Angora rabbits may get injured by knives and scissors during the

shearing procedure as they struggle against it. Sometimes their fur is even ripped out of their skin.

• Down featherDown featherDown featherDown feather All down feather supply must come from farms with proper ways of raising and feeding the poultry. The farm must use a decent way of obtaining the feathers from the poultry. Methods such as plucking the animals alive is forbidden.

• Uzbek CottonUzbek CottonUzbek CottonUzbek Cotton There is a high probability that the cotton production in Uzbekistan is

affected by a system of forced labour and child labour.

• North KoreaNorth KoreaNorth KoreaNorth Korea The country has one of the worst human rights records on a global scale and is particularly criticized for its severe restrictions on political and economic freedoms.

Social AuditsSocial AuditsSocial AuditsSocial Audits

We conduct social audits in the factories producing our goods to gain more

transparency and to assess their current social performance and their development potential. A social audit comprises interviews with the factory management as well as with the workers, a check of documents like wage lists and working hour records and a factory tour.

Audit evaluationAudit evaluationAudit evaluationAudit evaluation

There are four levels to measure the global performance of the factory:

• Good

• Improvement Needed

• Critical

• Alert This is not about „pass“ or „fail“, the aim is to identify the level of awareness regarding social compliance, to agree on corrective actions and to follow the

progress. Audit results 2013Audit results 2013Audit results 2013Audit results 2013

In 2013 we conducted social audits in 110 factories.

We focus the audits on our major suppliers, to cover the biggest share of volume sold in our shops.

Focus TopicFocus TopicFocus TopicFocus Topic

TurkeyTurkeyTurkeyTurkey

Turkey is an important sourcing country for ORSAY, due to its proximity to the European market. Around 34 % of our products are manufactured in Turkey and 46 suppliers with approximately 54 factories are producing for us there.

For this reason we are focusing our CSR measures on a number of topics that are specifically linked to Turkey. Unauthorized subcontracting is very common in Turkey. Due to capacity constraints, cost pressure and other reasons

orders are subcontracted to other facilities which might not be audited. Sometimes these subcontractors are very small ateliers with a low level of awareness regarding social

compliance. Therefore we oblige our suppliers to inform us about any subcontracting so that we can include them in our social compliance activities. Another serious issue is illegal employment coming from Asian and Near East

countries working without registration. Last but not least many workers in Turkish garment factories are not provided with social insurance.

Focus TopicFocus TopicFocus TopicFocus Topic

Living WageLiving WageLiving WageLiving Wage

The ORSAY Code of Conduct requires that wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any case wages should always be enough to meet basic needs and to provide some discretionary income. We focus our work in this area on China and Turkey as these are our most important sourcing countries producing around 75 % of our products. In order to monitor wage levels we collect data on wages during audits and use wage ladders to compare prevailing wages with benchmarks such as legal minimum wage and living wage estimates. As Living Wage is a difficult topic that is best addressed collectively, we work together with other brands and retailers both within ETI and beyond.

1) as of Jan 2014

Living Wage family of 4, 2 adults, 1 adult: wageindicator.org Living Wage CCC: http://www.cleanclothes.org/livingwage/stitched-up-factsheets/stitched-up-turkey-factsheet

This chart was created using the Fair Wear Foundation wage ladder tool, which is available for public use. The wage ladder tool is provided for informational purposes only. This chart does not imply that the user is a member of or certified by Fair Wear Foundation. Please visit www.fairwear.org for more information.

Factory 1 Factory 2 Factory 3

Focus TopicFocus TopicFocus TopicFocus Topic

Health & SafetyHealth & SafetyHealth & SafetyHealth & Safety

A safe and hygienic workplace is an important requirement of our Code of Conduct. This includes fire and building safety, machine safety, personal protective equipment (PPE) and first aid arrangements such as first aid boxes and a sufficient number of first aiders.

Health & Safety problems are comparatively easy to solve, for example through providing Personal Protective Equipment like steal gloves, ear plugs or masks and Fire Fighting Equipment. Thus lives can be saved by relatively simple

and reasonable measures. In order to monitor improvements in Health & safety in our suppliers’ factories, we put a special focus on this topic during audits and follow up Health &

Safety issues with a separate indicator.

In most of the countries we source from, like for example Turkey and China, suppliers and governments are already well aware of Health & Safety requirements. In countries like Bangladesh however recent factory tragedies have shown that suppliers need special support to ensure a safe workplace for their employees. Although we source only a small percentage of our

goods from Bangladesh, we have decided to join the Bangladesh Accord on Fire and Building Safety in order to support the development of a safe and sustainable garment sector in Bangladesh.

Membership and CollaborationMembership and CollaborationMembership and CollaborationMembership and Collaboration

Ethical Trading Initiative (ETI)Ethical Trading Initiative (ETI)Ethical Trading Initiative (ETI)Ethical Trading Initiative (ETI)

In July 2013 ORSAY joined the Ethical Trading Initiative (ETI) as a Foundation Stage Member. ETI is an alliance of companies, non-governmental organizations (NGOs) and trade unions, all working together to promote respect towards worker’s rights around the globe. ETI supports its member companies in defining best practices, building strategic alliances in key sourcing countries, driving improvements in member companies’ performance and empowering workers. Together with ETI and their members ORSAY is able to tackle more easily different topics of social compliance than working alone. Bangladesh Accord on Fire and Building Bangladesh Accord on Fire and Building Bangladesh Accord on Fire and Building Bangladesh Accord on Fire and Building SafetySafetySafetySafety

In June 2014 ORSAY signed the Bangladesh Accord on Fire and Building Safety in Bangladesh. As Bangladesh remains a significant sourcing area, although we don’t source big volumes there, we decided to join the ACCORD and to support its work towards safe garment factories in Bangladesh.

The aim of this agreement between trade unions, companies and NGOs is the implementation of a programme for reasonable health and safety measures to ensure a safe and sustainable Bangladeshi Ready Made Garment industry.

The CSRThe CSRThe CSRThe CSR----TeamTeamTeamTeam

MarieMarieMarieMarie----Claude KoenigClaude KoenigClaude KoenigClaude Koenig CSR Officer

Laurence PosticLaurence PosticLaurence PosticLaurence Postic CSR Assistant

Stefanie ReichenbachStefanie ReichenbachStefanie ReichenbachStefanie Reichenbach CSR Coordinator

Derry LamDerry LamDerry LamDerry Lam CSR Manager Asia

Joe FanJoe FanJoe FanJoe Fan Social Officer Asia

Contact: csr@orsay.com

ORSAY GMBH | IM LOSSENFELD 12 | 77731 WILLSTÄTT-SAND | GERMANY

CSR@ORSAY.COM