Responsible purchasing and sourcing policy

As one of Australia’s largest fashion retailers Mosaic Brands is consistently embracing positive change to build a better future. We know our customers demand a high quality product at a good price, but our obligation to our customers does not end there. We are also committed to ensuring our products are made under safe and decent working conditions as outlined in our Responsible Sourcing policies. We recognise the responsibility to fully understand the impacts of our organisation from working conditions in the supply chain, to the environmental impacts of our packaging.

We are committed to fulfilling our social and environmental responsibilities.

Mosaic Brands commits to a strict responsible sourcing policy and ethical sourcing practices. We work in close partnership with vendors, manufacturers, contractors and consultants, that are like minded and share our ethical philosophy and behaviours. We support this through our sourcing and procurement processes, our polices and our principles of behaviour.

Our social and environmental responsibilities focus on, but are not limited to three pillars:

WE'RE COMMITTED TO ETHICAL SOURCING

Our ethical sourcing policies are applied to all vendors regardless of the regions where they are located. All supply partners must adhere to our Group’s responsible sourcing standards and policies which are based on, and aligned with the Ethical Trade Initiative (ETI) base code. We will not knowingly source product from any vendor that does not comply with these ethical sourcing policies and the policies form part of all Group product purchasing decisions.

As part of complying with the Groups ethical sourcing policy, all vendors, their factories and authorised subcontractors must also adhere to and demonstrate continuous improvement in line with the Mosaic Brands group responsible sourcing policies and practices. Key points of which include;

• That child labour will not be permitted;
• That employment is freely chosen;
• That freedom of association and the right to collective bargaining is respected
• That all working conditions are safe and hygienic.
• That living wages are paid;
• That discrimination should never be permitted;
• That regular employment is provided; and
• That no harsh or inhumane treatment is allowed.

We will continue to require that all factories producing our final product clearly display our sourcing policies in line with a vendor code of conduct covering these key principles.

Mosaic Brands maintains a strict vendor selection and engagement process, which requires all vendors to agree and sign up to our responsible sourcing policies and its associated practices. Before partnering with a new vendor, we ensure that they understand these policies, which cover working conditions, wages, labour rights and sourcing practices. We maintain a database of the factories where our products are being produced and this is updated regularly. We require our direct vendors to communicate and promote the principles of our Responsible Sourcing Policy throughout their supply chain. We have a zero tolerance policy regarding the use of child, forced or prison labour in the manufacturing of our product. Subcontracting is not accepted unless there is displayed adherence to the groups responsible sourcing policies.

We maintain an audit database to review compliance with the Responsible sourcing policies, and this is based on a principle of mutual recognition of different social compliance programs, including Sedex, Wrap, BSCI etc. Only audits from independent 3rd parties are accepted in the group.

These policies are reviewed annually, or as required in line with changes in regulations or legislation within the regions that we are sourcing.

Our responsible sourcing policies cover several criteria across the following key areas.

• Compliance with local laws
• Social and labour standards
• Management systems

Modern Slavery

To ensure focus on this potential problem area we have prepared the following statement that guides us on how we review the potential issues within this area.

Mosaic Brands Group is committed to reducing the risk of slavery, servitude, forced or compulsory labour within our business and supply chain. We believe that business can be a force for good if it acts responsibly towards those within its supply chain. We consider modern slavery to be a significant risk within the global garment and textile sector and are committed to preventing and addressing modern slavery in line with the UN Guiding Principles on Business and Human Rights.

Raw Materials

Our sourcing commitment is supported by a number of initiatives relating to raw materials, including restrictions on where our raw materials can be sourced, and restrictions on how the materials are processed for our final product. These cover cotton sourcing, angora, azo dyes and sandblasting restrictions. These are reviewed and added to on a regular basis as new research and understanding is developed within our industry. Some highlights are listed here;

Cotton Source

Prohibition of child and forced labour (including slavery) is an important element of our standards and requirements. We regularly review our policy in relation to Cotton source and we regularly remind all our vendors that it is Mosaic Brands expectation and requirement that neither our vendors, nor their nominated fabric and yarn suppliers, source cotton from the following countries or regions, and that they communicate our concern for this issue down their own supply chain.

• Uzbekistan
• Turkmenistan
• Xinjiang province (China)

If any issue is identified, then remediation plans will be enacted with our vendors and their supply chain.

Animal Product

No fur or angora fibre is used in our product, and we work to ensure no animal cruelty occurs within our supply chain, including no testing on animals.

WE'RE COMMITTED TO PAYING A LIVING WAGE

Commitment to Living wages

Mosaic Brands is working to close the gap between living wages and minimum wages for the product that is produced for our group in the regions that we operate. The wages paid must meet national legal standards or industry benchmark standards, whichever is higher. Wages should always be enough to meet basic needs, a decent standard of living and to provide a measure of comfort including education for children, requirements of essential social needs. The required amount of income should be obtainable within normal working hours. Our standard sourcing commitment is to avoid the downward pressure on wages, by following fair and reasonable sourcing practices. We also promote these within our group, by providing training to our internal teams and to our vendors on efficient product development processes.

Paying higher prices for product does not guarantee that workers receive a higher wage. We understand that this requires a multi stakeholder approach, where vendors, brands, governments unions etc. must work together to find ways to increase minimum wages to be in line with living wages.

Our vendors have signed up to our policies, which requires them to follow the requirements of the ETI Base code, encompassing a requirement for living wages to be paid. We have audit and corrective action plans to ensure minimum wages are paid to the workers in our supply chain.

We embrace the ACT (Action Collaboration Transformation group) purchasing practices, fair terms of payment, better planning and forecasting, and training for our brand teams. With this in mind we work closely with our long term supply partners, we produce a high proportion of our goods from vendors who have been with the group for more than 5 years.

A fundamental part of Mosaic Brands ethical sourcing strategy is to restrict the number of vendors used to supply our product, and to work with vendors where we have established close and long term relationships.

Our Next steps over the next 12 months to the end of 2020

• Define a living wage for Mosaic Brands product (whilst we understand that there is no universal guidance on how to calculate the living wage we will work with vendors to promote principles of the ETI base code).
• Identify method that allows us to measure and monitor wage level for suppliers to the Mosaic group following simple measure and consideration of volume of product from specific regions
• Over the next 12 months assess vendors to build better understanding of their wage systems and the levels within supply chain.
• Benchmark vendors on average wage, and conduct research to understand the take home wage of workers for our key vendors.
• Implement and review the sourcing standards used in our supply chain to identify new opportunities for areas where living wages can be positively impacted by the actions of our buying teams.
• Ongoing and regular education programs for buying and sourcing team to understand how behaviour impacts vendor, incorporated with modern slavery legislation training. [ongoing]
• Working with organisations and encouraging the engagement with other brands and retailers where we share manufacturing regions.
• Annual report on progress towards increasing the average wage of workers within our group supply chain.
• Continue to build and strengthen relationships with our vendors to improve wages and working conditions.

WE'RE REDUCING PACKAGING AND PAPER

Over the course of the next 12 months we are implementing a number of environmental standards in line with applicable environmental laws. These standards will be used to develop a system that manages environmental impacts of how we do business.

We welcome your feedback and are always happy to answer your questions, please contact us at ethicalsourcing@mosaicbrandsltd.com.au