By 2020, THE ICONIC aims to be positively and transparently contributing to the improvement of social and environmental conditions in our own-brand supply chain, and have implemented minimum criteria for our third party brands, encouraging them to implement their own standards.
At THE ICONIC we value people and know they are our greatest asset, which means we believe in equal opportunity and basic rights to fair and safe working environments for all.
As part of our 2020 strategy, we have developed a set of environmental, human rights, labour, health and safety standards framed under our Supplier Code of Conduct. This Code of Conduct applies to our manufacturers, their subcontractors and suppliers of inputs and raw materials. These minimum standards are referenced in all supplier contracts and based on international measures and regulations, including the International Labour Organization's fundamental Conventions, and the Base Code of the Ethical Trading Initiative (ETI). We are committed to maintaining a strong human rights due diligence system and preventing any exploitation of workers, including children, in the production of our products. This commitment is clearly stated in our Supplier Code of Conduct and available to view, here.
Our own brands—Atmos&Here, Spurr, Staple Superior, Aere, Double Oak Mills, Dazie, Mika Muse and Locale — are produced in 59 independent supplying factories in China (49), India (6), Bangladesh (3) and Australia (1). Just over 11,500 people are employed in those locations, 57% of which are female. A list of all THE ICONIC's final-stage factories is updated on a monthly basis and can be found here. Subcontracting from these facilities is not permitted without prior approval as a part of the Purchase Order Terms stated in THE ICONIC’s contract with the supplier who must commit to ensuring production takes place in the nominated approved factory. THE ICONIC has regular checks in place to identify unapproved subcontractors and whenever identified they are also audited. Suppliers who are found to be undertaking in unapproved subcontracting are issued with contract breach notices, and repeated violations can result in contract termination. We hold regular third-party audits covering areas of our Code of Conduct with our first tier supplying factories, which all involve interviews with production workers. At least 25% of these interviews are conducted on a semi-unannounced or unannounced basis. These audits enable us to track the use of migrant, temporary and agency workers, and to gain visibility of the worker training programs and grievance mechanisms that exist in these factories. All factories must undergo a full audit every 24 months, with follow-up third party audits in between to verify that any issues uncovered have been rectified, ensuring all factories working with THE ICONIC show continuous commitment to meeting our standards.
We recognise that there can be times where our standards are not being met by our factory partners and we are committed to working with our supply chain to support continuous improvement. In the first half of 2019, we increased the number of minor or major audit issues resolved from 27% to 48% and although this is a significant result, we recognise the work that still needs to be done. Since 2018, we have exited four factories as a result of a failure to address critical issues identified through our audit process despite our remediation efforts. This was not our preferred outcome as we always aim to resolve issues and maintain long-term supplier relationships, but we are committed to the ethical trading standards we have set and will not work with factories who will not meet these expectations.
Should THE ICONIC ever identify incidences of forced or child labour in our supply chain, we would seek to use our leverage to influence positive change and we would work with the appropriate local organisations to support the factory in implementing a remediation plan designed to achieve positive outcomes for the people concerned. However, we reserve the right to immediately terminate the relationship with the factory or vendor if they do not comply with the remediation plan in place.
We are on a journey to better manage our social and environmental impacts. We have been working closely with the manufacturers of our own-brands to understand and improve the working conditions provided to workers.
THE ICONIC rejects any form of modern slavery or exploitation where a person cannot refuse or leave work because of threats, violence, coercion, abuse of power or deception. This crime and exercise of power or ownership over another in modern economic circumstances occurs in every region of the world. The Global Slavery Index estimated that in 2018 over 40 million people globally were living in modern slavery globally and that 15,000 of these people are subject to these conditions in Australia. If a situation of slavery, servitude, forced labour, debt bondage and deceptive recruiting or any other human rights abuse is to be found occuring in our operations or supply chain, an immediate remediation response would commence. This would focus first and foremost on ensuring the person or people involved were safely removed from the situation and provided the necessary support by local organisations. We would also work with local authorities to help ensure perpetrators are brought to justice.
Australian modern slavery legislation necessitates a rapid response by companies to prioritise supply chain human rights risks. THE ICONIC fully supports this legislation and the requirement to publish a Modern Slavery Statement. We expect all employees, suppliers and stakeholders to actively support the work involved to eradicate modern slavery and where relevant ensure they meet their relevant modern slavery reporting requirements. Our first step in what will be a continuous and rigourous end-to-end process of managing modern slavery in the context of THE ICONIC’s business, has been to perform a top-down risk analysis of both our business operations and the various entry points to our supply chain. This analysis of the intersections between known risks, current controls, and opportunities identified to ensure that THE ICONIC is operating to effectively combat any risk of modern slavery and other human rights abuses in our business operations and supply chain.
We recognise that auditing alone does not drive change in working conditions within supply chains and that there is a need to go beyond audit to drive mindset change and support our suppliers to improve the social and environmental conditions.
In the first half of 2019 we have continued to engage our supply chain with face-to-face visits to factories to deepen relationships with factory management, speak with workers and gain a better understanding of the social contexts in which our products are made. We have also undertaken a series of control audits at factories to test the information we had previously collected about our supply chain. As expected, this provided further insight into our supply chain, which we will use to inform and strengthen our audit program, and the way that we engage with our supply chain going forward. We also intend to build on and shape the current factory-managed grievance mechanisms (including training) that are in place, and extend this engagement by piloting an in-factory worker-centric grievance mechanism by 2020.
We hosted our first Supplier & Factory Conference in Shenzhen in November 2018 where we provided training for factory managers in health and safety management, as well as human resources management. The sessions focused on our supply chain standards, including intractable issues that appear during audit process such as working hours and social insurance. Our second Supplier & Factory Conference, took place in August 2019, and provided training on modern slavery risk indicators and issues that may or may not be identified during an audit process, as well as training on other sustainability topics such as packging, more sustainabile materials and responsible chemicals management. The purpose of us holding these conferences is to help our partners understand our requirements and provide factories with information that helps them implement positive change in their working environments.
Through our parent company, Global Fashion Group, we are members of the Ethical Trading Initiative (ETI), a leading alliance of companies, trade unions and Civil Society Organisations that promotes respect for workers’ rights around the world. Our ETI membership provides great value to our business and gives us the opportunity to engage with our wider industry, including civil society representatives, to learn and share best practices. Our suppliers have also been involved in ETI training programs on worker representation in Bangladesh, modern slavery and a Better Buying program on purchasing practices.
We also recognise the need to grow the ethical sourcing awareness within our wider Category Management team through education that will help them understand the role they have in better buying practices. In 2018 we introduced an extensive program on ethical sourcing as a part of our Buying Academy (an internal education program for our Category Management team), which has been completed by all our buyers. THE ICONIC Buying Academy is a permanent internal program to ensure education on ethical sourcing will continue throughout 2019 and beyond.
All brand partner agreements include reference to our Supplier Code of Conduct and the minimum standards it sets, however we want to do more to ensure that we are partnering with organisations who are aligned with our core values, so by 2020, we will develop minimum criteria for brand partners and use these to inform decision making about new brand partnerships.
We understand that the production of materials used to make our products causes environmental impacts, such as water consumption and carbon emissions, and that we have the power to make better decisions to reduce these impacts.
We also know these issues can occur at the raw material stage (e.g. during the farming process) or material processing stage (e.g. during washing or dying of fabric) and that we have a responsibility to address at this level. In 2018, we began transitioning to certified organic cotton styles in both our men’s and women’s apparel own-brands, leveraging the lower water and chemical impacts associated with organic cotton production and providing the corresponding traceability of Chinese mills, dying houses and farms. Our current percentage of more sustainable materials—including organic cotton and linen— in our own-brand apparel is around 5% of units.
While transitioning materials in our own brands, we identified the need to conduct a more formal analysis to ensure we are focusing on the most significant environmental impacts of our materials. In late 2018, we completed a risk assessment of our own-brand supply chain to assess materials used to produce our own-brand products. Our analysis showed that although we used more than 20 different materials in the production of our own-brands during the year, 94% of all styles were made of just six materials. Of these six materials, we have priortised the transition of three fibres (cotton, polyurethane and cow leather) to more sustainable alternatives. Our goal is to continue prioritising use of materials based on their environmental impacts (such as global warming and water impact) and transition to better alternatives where possible.
In 2019, we have built on this by running a series of workshops with our own-brand teams to build their knowledge on material sustainability and alternative materials. We have also used these sessions to collaboratively design a Preferred Material Benchmark and associated targets. To support this endeavour we have recently joined the Leather Working Group, a certification scheme assessing environmental performance of tanneries, allowing us to requiring our suppliers to purchase leather from tanneries operating at a certain level.
In the first half of 2019, we also completed a significant work on traceability, gaining more visibility of the key suppliers for our product materials and inputs (i.e. the second tier) and assessing what is required to gather this information on a regular and ongoing basis across the whole supply chain. The complexity of the fashion supply chain is significant and we are now designing phase two of our traceability strategy and the path towards an integrated supply chain mapping solution.
Consumer safety, worker health and environmental protection are priorities for THE ICONIC. Responsible use of chemicals in our supply chain is essential. To ensure safe use, we have embedded a Chemical Standards and Restricted Substances List outlining the requirements our suppliers must adhere to. This includes our Manufacturing Restricted Substances List, which is consistent with industry standards and that of many other retailers. THE ICONIC expects all suppliers to undertake due diligence to ensure that these standards are being met, including in their own supply chains.
THE ICONIC acknowledges that the way we interact with suppliers and how well organised we are in relation to production can have an impact on their ability to meet the standards we outline in our Supplier Code of Conduct. As such we have developed our Responsible Purchasing Policy, outlining our commitment to behaving with integrity in our dealings with suppliers, and to support our internal teams to ensure that our purchasing behaviours align with our aim to be positively and transparently contributing to the improvement of social and environmental conditions in our own-brand supply chain.
THE ICONIC Animal Welfare Policy outlines our expectations as to how and where animal materials are used in our products, and is applicable to both our own brands and our third party brand partners.
We expect our suppliers to implement industry-recognised practices to ensure animal welfare is safeguarded during rearing, transportation and slaughter.
We also expect that the industry-recognised Five Freedoms developed by the UK’s Farm Animal Welfare Committee are implemented.
The five freedoms include:
1 . Freedom from hunger and thirst
2 . Freedom from discomfort
3 . Freedom from pain, injury and disease
4 . Freedom to express normal behaviour
5 . Freedom from fear and distress
Additionally, THE ICONIC requires any animal materials used in our private label styles or partner brand’s styles to strictly be a by-product of the food industry. THE ICONIC does not purchase, nor sell items that use real animal fur of any kind including exotic skins or hair from the angora rabbit and prohibits processes including; unnatural abortions, live skinning, live plucking, mulesing, confinement of animals in veal or sow crates and animal testing on cosmetics.