1. Overview of NPG Social Responsibility Audit Process
2015
Overview of NPG Social Responsibility Audit Process
May 2015

2. TABLE OF CONTENTS SECTION PAGE(S) Table of Contents 2
Social Responsibility Contact Information 3
NPG Social Responsibility 4
Program Components
Factory Approval Process 5
Audit Process 6
Remediation Process 7
Peer Collaboration 8
Appendix 9
Letter of Confirmation and Commitment I
Nordstrom’s Guidelines for Photographic and Written Documentation II

3. Social Responsibility Contact information
All communication should be sent to only, unless otherwise requested.
TITLE
NAME
CONTACT INFO.
Social Responsibility Support
Social Responsibility Specialist
Motthida Chin
Arielle Kohr
Senior Manager of Social Responsibility, Quality, and Product Integrity
Kaleene Kenning
Director of Operational Support Group
Abby Bueler

4. Program components
Monitoring means collection of information related to factory operation via the Nordstrom Supplier Questionnaire (NSQ) and Partnership Guidelines (PG).
Auditing means the assessment of factory compliance with local law and Nordstrom expectations via a Nordstrom or third-party visit. An audit includes a factory tour, full records review, in addition to management and employee interviews.

5. Factory Approval Process
NPG defines a new factory as any factory that is not currently in Nordstrom Product Group’s (NPG) system (deactivated) or has never produced orders bearing a Nordstrom-owned brand name or logo.
There are three steps in the new factory approval process:
The factory and manufacturer must complete the Nordstrom Supplier Questionnaire (NSQ), sign the Partnership Guidelines (PG) and sign the Letter of Confirmation and Commitment (Appendix I)
All factories producing for NPG are required to schedule, complete and pay for in advance, a comprehensive audit performed by our third party monitor (TPM) as determined by Nordstrom. New factories must complete the audit prior to being approved for production
Providing the audit does not reveal high-risk non-compliance issues, NPG’s Social Responsibility will approve the factory for order placement

6. Audit Process
All facilities that produce Nordstrom Product Group (NPG) products must be audited. New and existing factories follow the same audit process:
When requested to do so by an NPG contact, a factory will complete an Assessment Request Form and schedule a comprehensive factory audit with our TPM
Factory shall sign and return a copy of Nordstrom’s Letter of Confirmation and Commitment. This letter indicates the factory will comply with Nordstrom’s Corrective Action Plan (CAP) and remediate all findings discovered during an audit
Factory should inform TPM as soon as possible of any closures or time conflicts due to peak production and/or holidays, etc. Denying access to execute a scheduled audit will result in a a Demands Immediate Action rating and cancellation fee charged to the factory in the approximate amount of $1400 USD (+ travel costs). This incurred cost will be in addition to the factory audit fee, in the approximate amount of $1400 USD (+ travel costs)
Pay for audit directly to TPM prior to audit execution. If payment is not received, the audit will not be conducted
Once the audit is conducted, and the signed Letter of Confirmation and Commitment has been received, NPG’s Social Responsibility team will review the report and inform brand of production approval status
Factory will be informed by NPG’s brand contact when they are approved for production and orders can proceed

7. Remediation Process
Remediation means addressing non-compliance issues identified in a social compliance audit.
There are three steps in the remediation process:
NPG’s Social Responsibility team reviews the audit results, provides the factory a Corrective Action Plan (CAP), and requests factory input. The CAP outlines findings according to risk level
The factory reviews the CAP, provides comments, and begins to remediate the non-compliance issues. The factory s photos and other electronic documentation, per Nordstrom’s Guidelines for Photographic and Written Documentation (Appendix II), to NPG’s Social Responsibility team for verification that corrective actions have been completed
Any Zero Tolerance (ZT) or Demands Immediate Action (DIA) issues found must be remediated immediately. Other issues are remediated according to CAP timelines
If necessary, the NPG Social Responsibility team will schedule a follow-up audit to verify that corrective action have been remediated

8. Peer Collaboration
All new factory audits and every 3rd annual audit must be an NPG audit. These audits can still be shared with peers but need to be in NPG’s template and conducted by NPG’s designated TPM.
Peer Audits
Peer collaboration means working with other retailers (“peer companies”) to streamline the social compliance process at shared facilities. Peer collaboration may include shared audits, remediation, training, and projects.
Annual audits may be conducted as peer audits at NPG’s discretion. There are three steps in the peer collaboration process:
NPG’s Social Responsibility team identifies a shared facility and proposes a joint social compliance activity with facility consent
NPG’s Social Responsibility team and the peer company conduct the activity and communicate results internally. Only social responsibility-related information is discussed, and all information remains confidential
NPG’s Social Responsibility team, the peer company, and the facility determine applicable next steps to remediate any issues found
Audit Sharing
In order to further reduce audit fatigue, NPG may elect to accept an audit conducted by another retailer or brand, at the discretion of the Social Responsibility team. To be considered for review, the audit must have been conducted within the last six months. The factory shall submit the full audit report (not a corrective action plan, CAP) to NPG. Once reviewed against our standards we may choose to accept the alternative audit in lieu of conducting our own.

9. Appendix

10. Appendix I.

11. Appendix II.