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Responsible Purchasing

Last Updated: 2021.12.24
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We have formulated guidelines for responsible purchasing in our supply chain. Fast Retailing works with our production partners to engage in production activities according to these guidelines.

Responsible Purchasing Policy

Responsible purchasing can help protect the rights of workers employed by our suppliers, which leads to sound business growth on both sides. To promote responsible purchasing, we have formulated guidelines consistent with purchasing policies and business activities. The Fast Retailing purchasing policy consists of three main principles:

1) We protect the health, safety, human rights, and rights guaranteed by law for workers at partner factories, contributing to improved living and labor conditions.
2) We encourage the growth of our partner factories by expanding our transaction volume steadily over time.
3) We meet customer expectations through products manufactured via appropriate processes.

If we are to engage in responsible purchasing, our procurement-related departments must practice appropriate purchasing procedures. For example, when placing an order, it is important to develop a purchase order plan based on the production equipment and capacity of the factory. It is also important to place orders where quantity and delivery dates are clearly agreed in advance, with no changes to be made without the consent of the factory. In addition, there must be no abuse of dominant bargaining position in negotiations on prices and payment terms. When terminating a business relationship with a factory, it is required to set an appropriate exit time considering the financial impact and employment situation at the factory, and to monitor and confirm there are no potential worker or human rights violations that might occur as a result of the closing business relationship.

Our guidelines specify these procedures. Further, we provide regular training to employees in our procurement-related departments, covering these guidelines and other matters. In fiscal 2021, we conducted training sessions for a total of 600 relevant representatives from the merchandising, marketing, R&D, and production departments of each Fast Retailing Group brand.

Structure for Ensuring Responsible Purchasing

Weekly factory visits provide a clear picture of production partner factories and an opportunity to offer guidance for improvement

We must work closely with our production partners to pursue production activities in line with responsible purchasing, including proper labor conditions and correct manufacturing processes. We station nearly 500 Fast Retailing production department employees responsible for quality and production progress management at production offices in Shanghai, Ho Chi Minh City, Dhaka, Jakarta and Bangalore. Those employees responsible for factories, visit production partners on a weekly basis. We use these visits as opportunities to assess conditions and provide guidance for improvements leading to correct production processes.

Fast Retailing assigns dedicated sustainability teams to production offices

Our production offices in Shanghai, Ho Chi Minh, Dhaka, and Jakarta have permanent dedicated sustainability department teams that specialize in initiatives at partner factories. We oversee workplace monitoring activities at partner factories, offering advice and guidance for improving production floor operations.

Training for Production Departments

Fast Retailing operates a program of regular training that covers our Code of Conduct for Production Partners, as well as country-specific education on laws, apparel industry issues, and sustainability issues in production operations. Personnel in charge of sustainability departments use specific cases of everyday operations at each facility to enhance the effectiveness of training.

Business Ethics

Deliberations in the Fast Retailing Business Ethics Committee

Any serious problems in business between Fast Retailing and partner factories (e.g. defects, delivery delays, etc.) are escalated to the Business Ethics Committee. The committee discusses the issue to determine the share of responsibility, the need to revise our business relationships, and other related matters. The Fast Retailing Business Ethics Committee includes external Audit & Supervisory Board members.

Annual Questionnaire for Business Partners

Fast Retailing sends an annual questionnaire to our major business partners to ensure we engage in fair business practices. In fiscal 2017, we added questions related to responsible purchasing. Questions include whether we place orders in a way that supports the labor conditions and human rights of our partner factories and whether they believe we pay fair prices. When questionnaire results indicate a need for improvement, our Sustainability Department conducts interviews of both Fast Retailing and our business partners. When issues are identified, they are escalated to the Business Ethics Committee.

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