Ethical trading

Our approach starts with visibility.

We respect and uphold our environmental and human rights responsibilities wherever we operate and are aware that risks can arise within our own business and supply chains.

We are members of multiple international and local multi-stakeholder platforms including the Ethical Trading Initiative (ETI) and have adopted their Base Code to form the core of our CODE OF PRACTICE.

Based on international standards including the Universal Declaration of Human Rights and the International Labour Organisation’s Core Conventions on Labour Standards, our Ethical Trading Code of Practice represents our baseline requirements which work alongside local laws to ensure a minimum standard of protection is afforded to all people in our supply base in all countries.

We audit 100% of main factories (known a “Tier 1”), their subcontracted (process) units (known as “Tier 2”), and nominated or preferred trims and label suppliers (known as “Tier 3”).

Superdry audits act as an ongoing risk assessment to detect and respond to evolving risks on a factory, local and global scale. The audit covers all principles defined in our Code of Practice – labour standards, ethical business practice and environmental responsibility.

Our risk framework is founded on the severity of impact vs. likelihood/scale of impact to ensure it remains focussed on worker welfare and material environmental impact. Where we identify evidence of severe human rights or environmental issues, we undertake further due diligence, using offsite assessments and unannounced investigations.

We certify all environmental sustainability claims.

We require factories on our sustainability leadership programme to utilise industry recognised certification schemes (IS0 50001, LEED), completing a certification audit through a recognised certifier every three years.

All ethical audits are completed by independent experts.

100% of Superdry factories have undertaken a semi announced ethical audit within the last 12 months, covering all social and environmental principles defined in our CODE OF PRACTICE.

To get a more accurate view of actual conditions we agree a semi announced (minimum 4-week window) basis with factories and auditors.

We select good auditors approved within each sourcing region (more information is available on our SUPPLY CHAIN PAGE), and closely monitor each audit partner's performance using formal Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) which prioritise accuracy and transparency within ethical audits.

Auditors use defined protocols on the day, defining how many people they speak to and what they need to check (policy, records etc). The protocol is aligned with industry recognised SMETA guidelines to ensure audit quality.

• Auditors interview between 10 and 62 people in every audit depending on factory size. All audits include active participation of male and female interviewees, and interviews are mostly completed onsite. In an average Superdry factory of 645 People, auditors’ interview 7% of the workforce.
• Union or worker representatives are included in the audit process where possible. In 2020, 33% of audits completed included active participation by legally recognised Trade Union or Worker Committee representatives.

The outcome of each audit is an ethical grade based on the risks associated with any issue raised in line with our risk framework, and a practical action plan detailing milestones for improvement as applicable.

We re-audit 100% of Superdry production sites every 6-12 months to ensure information remains relevant, and action plans are validated and up to date.

We have Superdry employed dedicated labour standard experts in key source countries we can respond to risks quickly as they emerge.

Each of our three key source territories have locally based dedicated labour standard experts, employed by Superdry to build partnerships based on transparent disclosure of actual working conditions and agree relevant and achievable action plans where improvement is needed.

Our local labour standards experts shadow a minimum of 15% of third-party audits at Superdry production sites and complete “Control Audits” (repeated) with dedicated external integrity auditors to check consistency in results where we have concerns.

We complete additional checks to ensure groups of workers more vulnerable to human rights risks are protected (including migrant workers, contract workers, and homeworkers) or where we struggle to obtain transparency, accuracy, and clarity in audits.

We have policies and guidance in place to provide additional standards of protection - available on our REPORTING AND POLICIES PAGE.

In these cases we may elect to take a more localised approach - work with local community organisations and wider labour standards experts to complete offsite interviews and further investigation into conditions.

This additional step often provides a further depth of results and root causes. Where we identify ongoing concerns with transparency or critical issues (as defined in our Code of Practice) we will complete offsite, or unannounced assessments.

Where accommodation is provided by the factory, or where subcontracted accommodation is used, we will include accommodation space(s) within scope of the ethical audit. Accommodation is required to meet local legal requirements and the standards defined in our CODE OF PRACTICE and MIGRANT WORKER STANDARDS, whichever provides the worker the greatest protection.

Worker representation is critical for sustainable factories.

We intend to continue to support our factories to improve worker engagement while continuing to establish sustainable and ethically compliant management systems.

As ETHICAL TRADING INITIATIVE (ETI) members, we recognise that supporting and respecting effective worker engagement mechanisms – from worker committees to legally recognised trade unions - can result in a positive business environment, early dispute resolution, skills development and health and safety improvements. It also drives dignity and equality through universally accepted principles.

By 2030, 100% of Superdry factories will be enrolled in our Respect programme, enabling gender empowerment and more effective representation in their workforces through committee structures. Through this programme we aim to see a positive relationship between factories with effective worker representation in place, and ethical compliance. To date,

• 31% of factories have an effective worker committee and representative structures in place - validated through our RESPECT programme and regular due diligence.
• 11% of factories we work with currently have a recognised union.
• 8% of workers operating in our supply chain are currently covered by a Collective Bargaining Agreement (CBA). 4 CBAs in our supply chain define wages that are higher than required by local law.

We recognise the importance of involving worker representatives, committees and trade unions in supporting meaningful corrective action, and will seek to engage them in establishing and supporting their progression.

For example, our local teams regularly engage worker and union representatives to ensure facility improvements are made and sustained in line with worker expectations.

While our standard is strict, we are passionate about making a difference and therefore work closely with our factories to understand the true situation.

We use multiple mechanisms to achieve this.

We only approve factories that meet our compliance standard, covering all social and environmental principles enshrined in our Code of Practice. Once approved we apply detailed capacity plans with 100% of our factories to reduce the risk of workers needing to work overtime to produce our orders. We have also taken a leadership role in areas where we have found deep rooted industry wide challenges.

96% of the factories that we work with have been ranked with the highest ratings of social and environmental compliance.

This also includes factories investing in sustainable workplaces through renewable electricity, ISO50001 or LEED Platinum certification – accounting for 46% of our supply base.  Factories that require support to improve compliance in line with our standard are enrolled in our ‘Intensive Care’ programme – accounting for 4% of our supply base.

We provide additional training and support through our Intensive Care programme.

Factories requiring support in maintaining compliance are enrolled in our Intensive Care Programme, which involves close monitoring of performance by the Head of Sustainability and Head of Sourcing, targets and milestones agreed at the most Senior Level within the factory hierarchy, additional training delivered by third party specialists or Superdry representatives and monthly visits to monitor improvement.

During this process, we involve and engage workers and management to ensure that all root causes are identified and addressed, as part of their practical and achievable action plan. Visits are typically either fully announced or unannounced depending on the specific focus of the visit. Where we are training management or require specific resource, we will complete these visits on a fully announced basis.

Factories that fail to meet targets and milestones following completion of the Intensive Care process (usually after 6 months), following a re-audit completed by an independent 3^rd party auditor, are exited in line with our Responsible Exit policy.

Social Insurance

One of our key priorities is ensuring that everyone in our supply base has access to all types of social insurance, as this is critical to workers’ long-term financial security. While Indian and Turkish factories provide social insurance as standard, social insurance provision is not widely adopted in China.

In 2020, we launched detailed roadmaps with our Chinese factories to increase their coverage to at
least 70% (our minimum threshold) in five key areas of social protection – pension, accident, unemployment,
maternity and medical insurance.

Working with local experts, we have trained factory management to build trust in the system with their workforces, gain commitment for enrolment, and ultimately achieve their roadmaps.

We have seen an uplift in average coverage to 74.8% across our China factory base, a 30% increase since
2020. We will continue this work with factories to ensure that 100% of workers benefit from social insurance by 2025.

We work closely with our commercial teams to ensure purchasing decisions are made in line with core Ethical Trading KPIs.

Commercial Team KPIs

Our sourcing team manage our supply base and are responsible for negotiating prices for Superdry product. As part of their role, they are targeted to:

• Only onboard suppliers that can meet our ethical and quality standards within each category.
• Maintain an ethically compliant factory base, tracked through monthly reporting.
• Maintain transparent production routes, contracting directly with factories. Superdry does not onboard agents for garment production.

Their targets also monitor factories which are underperforming during the relationship, requiring escalation to the Head of Department or Director of Sourcing and Sustainability.

Performance against these targets forms part of the Commercial Team’s regular performance review.

Pre-Approval

Commercial teams are only able to place orders in factories which have been approved for production following ethical and quality visits to pre-approve factories.

All pre-approval visits are completed by Superdry representatives and assess the factory’s capacity and capability to meet Superdry’s compliance requirements. All pre-approval visits and approval recommendations are completed prior to SMS sampling.

Should a factory fail to meet our minimum compliance standard they are rejected for production, and no orders will be placed with the factory.

All factories are required to formally apply for use of Tier 2 subcontracted units prior to order placement. Tier 2 factories are limited to ancillary “value add” processes that cannot be completed in the Tier 1 site with which we have direct relationship. Local offices will then initiate the subcontractor pre-approval process consisting of self-assessment and pre-approval visits.

Approval for production is upheld where factories continue to comply with ethical and quality standards.

Factories that perform at or above Superdry compliance standards are rewarded with annual capacity bookings and the opportunity to enrol on our “self-approval programme” - providing greater agility and lead time opportunities through sample approval timelines.

Purchasing Practices

We know that the purchasing practices of brands have a significant impact on working conditions.

As well as working with suppliers to ensure our forecasting aligns with actual capacity, agreeing lead times and supporting the consistency of order placement – we also work with key suppliers to ensure costs reflect fair and safe conditions.

For our core jersey categories produced in Turkey (accounting for 13% of our total order volume), our commercial teams complete open costing with suppliers to gain a detailed and holistic view of all the costs involved in making each garment.

The wage rates within each factory (including benefits like social insurance) are used in conjunction with all other cost areas (such as fabric, energy usage and transportation) to calculate a cost per minute for each garment.

This level of visibility is instrumental in driving fair price negotiations, and we intend to extend the method out to other categories and territories.

Responsible Exit Policy

If factories fail to make the improvements agreed to align with our CODE OF PRACTICE, we commit to exit in line with our Responsible Exit Policy.

A factory or supplier exit is only initiated following escalation to the Head of Sourcing and Head of Sustainability to ensure all possible remedial actions have been explored.

As a responsible business, our policy is that exit will be initiated only where all possible channels for improvement have been exhausted.

• We assess the financial and social impact of exit – based on existing business levels - and identify means to mitigate these impacts. For example, where we assess significant impact the exit time may reach 12 months to allow for the factory to plan its resources – we will scale business down over this time.
• We will formally communicate the decision to the supplier.

Where a factory is in breach of our Modern Slavery policy or has any Critical / Zero Tolerance issues “Red Grade” and refuses to co-operate, we may elect to hold order placement or delivery and shorten the time for exit to ensure we do not continue to condone the practice. We will in these cases work with local specialists to support the impacted workers where access is possible.

Contact details for the ethical trading team is available HERE