Kwintet’s Social and Environmental Program - for the supply chain CSR Dept. Incentra Agenda Council, Oslo, 7th of September 2010

Overview Kwintet CSR policy  To achieve economic success, Kwintet must also contribute to social and environmental success  On a fundamental human level we act because we care and because we can – we are a big company with a potentially large impact wherever we operate  Kwintet’s ambition is to meet and exceed CSR related expectations of the company’s stakeholders

Working together to create a compliant supply chain for Kwintet Preferred suppliers Complementary suppliers Preferred suppliers Complementary suppliers Close cooperation between CSR Dept. and Strategic Sourcing will be done in a way that does not hamper the consolidation process; the more consolidated supply chain, the more we can reach a sustainable compliance level among our suppliers

Kwintet’s supply chain compliance strategy Strategic Tactical Complementary Preferred suppliers 1)Finished goods 2)Fabric and trim Time and resources spent on audits and compliance monitoring Integrating compliance activities into the sourcing activities, focusing on the most important suppliers, i.e. where we plan for long term business relations, will promote a sustainable compliance level and as well as a truly compliant Preferred supply chain

 2008: CSR department established – location in Asia and at head office  Kwintet’s Code of Conduct developed and rolled out in December 2008  Extensive social compliance program and audit procedure developed, tailor-made for the Group’s Strategic sourcing approach  Kwintet group – member of Sedex – Supplier Ethical Data Exchange  Members of Fair Wear Foundation (FWF)  REACH compliance procedure set up  Other environmental measures are currently under development Overview

 Fair Wear Foundation (FWF) - multi-stakeholder initiative based in Netherlands to support and promote good labor conditions in garment production  Assurance of CSR objective, planning and performance by FWF  Verification audits of Kwintet suppliers  Management System Audit  Results from FWF verification made public on FWF web site  Support provided by FWF:  Information on local legislation, labor standards and culture  Multi-stakeholder dialogue  All Kwintet entities to be members of FWF within 2011  More info on FWF: Fair Wear Foundation

Minimum requirements from all Kwintet suppliers regarding our compliance program  Sign the Code of Conduct (COC)  Sign the Restricted Substances List (RSL)  Fill out the Production Unit Register  Be audited according to our audit planning criteria:  Sourcing importance  Compliance risk of geographical location  Compliance risk of product category  Sedex SAQ results

AUDIT PROCEDURE FOR DIRECT PRODUCT SUPPLIERS - a first phase of data gathering for the supply chain Minimum requirement for all direct product suppliers Compliance audit conducted; Corrective Action Plan (CAP) set up for each audited supplier Yellow Audit grading system – Red, Orange, Yellow, Green Red graded findings to be corrected immediately Re-audit to verify corrections according to CAP Progress reported monthly to Sourcing Team/Category Management and integrated into running order placement plans Signed COC and RSL Audit planning criteria Compliance audit conducted Correction, monitoring, Re-audits Potentially new supplier or production unit shall be audited and pass, i.e. no Red graded audit findings, prior to order placement Compliance procedure for new suppliers Supplier dialogue; continuous compliance progress Focus on Preferred suppliers during 2010 – : Preferred finished goods suppliers 2011: Preferred fabric and trimming suppliers

CSR targets  2010  100 % of Preferred suppliers have signed the COC and RSL  100 % of Preferred finished goods suppliers audited  0 % Red graded findings by the end of the year  Minimum 50 % have no worse than Yellow grading  2011  100 % of Preferred fabric and trimming suppliers audited  Total Preferred supply chain cleansed from and Red graded findings  100 % of Complementary suppliers to have signed the COC and RSL  Framework for environmental program ready  2013  All Strategic suppliers have no worse than Yellow grading  All employees have received training in company CSR

 Our aim is to improve worklife – for users, workers in production and for employees  We are a committed partner with a significant and long-term impact on people’s lives in various local communities  We have the size, power and will to commit to taking responsibility for our business activities  We have started to build a long-term sustainable social compliance program with thorough and credible procedures for:  Auditing  Remediation  Continuous compliance progress and supplier dialogue  No quick fixes  Fair Wear Foundation continuously evaluates the quality of our compliance program and purchasing practices and publish the results on its web site What customers can expect from us today

Compliance in the supply chain – it’s complex and not a quick fix  We need to get started with the basics  Kwintet Group’s supply base is huge and complex and we are starting from scratch by mapping out the starting compliance level  How to reach sustainable compliance in our supply chain  Focus needs to be on our overall approach rather than audit details. There are no short cuts;  We will have come a long way when our sourcing is consolidated through the Kwintet Preferred supply chain  CSR and sourcing are symbiotically connected  Long-term business relations with a fewer amount of suppliers  Mutual supplier dialogue  Cooperation with local community and other stakeholders – MSI (multi-stakeholder initiatives)  Keeping the internal and external discussions on CSR alive  Raising the bar for our ambition level as we gradually make progress in laying the foundation of our CSR program

Questions? Feel free to contact Wenaas or the CSR Dept. directly Kwintet CSR Department Deeba C Remheden Global Head of Social and Environmental Affairs