Social report 2021 Hydrowear

2021 SOCIAL REPORT

Innovation in Rainwear Hydrowear Simply No Sweat Light Collection Style: 024020FO Bristow Standard: EN 343-3 Ret 2,95 high breathable 2

Social report 2021 3 7 Company at a glance 9 Hydrowear protective clothing 11 15  Founded 17  Products  Customers 21  Employees  Warehouse 25  Products Management summary  Goals & achievements 2021 Organisation  Sourcing strategy & pricing  Organisation of the sourcing department  Production cycle Supplier relations  Integration monitoring activities and sourcing decisions Coherent system for monitoring and remediation  Factory A/Country A  Factory B/Country B  Factory C/Country C  Factory D/Country C  Factory E/Country C  Corrective action plans CAP’s  Production locations  Supplier overview  Performance Complaints handling  Training and capacity building  Activities to inform staff members  Activities to inform manufacturers and workers  Information management  Transparency & communication  Complaint system Corporate Social Responsibility  CSR and Sustainability STEP 3

We care for details! Hydrowear Offshore Collection Style: 043520 Minden Standards: EN 13034, EN ISO 11611, EN 1149-5, EN ISO 11612, IEC 61482-2. 4

Company at a glance Hydrowear is a designer and retailer of quality protective workwear based in the Netherlands • Companyactivities: Hydrowear is active in the market for specialisedp rotective workwear. Corebusinesschannels revolvearound B2B sales to clients inindustries that require various types of industrial workwear. The geographics pread of clients is concentrated in and around the Netherlands and Europe. Serviced sectors include offshore, construction, heavyindustry, aviation and securityservices. Uniquesellingpoints are short customerleadtimes (98% below 24 hours), tailoredofferings and a large variety of quality products. Within the SASB framework, the company is classified under the ‘Apparel, Accessories & Footwear’ sector. • Supply chain position: Hydrowear has in-house design capabilities for protective clothing. Manufacturing and logistics are outsourced. The company has a strong focus on retailing finished goods. The largest raw materials used by volume are polyester, cotton and polyurethane. • Geographical footprint: The firm’s head office is located in Emmen, the Netherlands, and employs a total of 16 FTEs, solely on this location. Compared to industry peers, Hydrowear’s supplier base is relatively small and concentrated, resulting in positive spillover effects in supply chain control and management complexity. The company works with 1 supplier in Croatia, 2 suppliers in India and a total of 7 suppliers in China. Indirectly, Hydrowear has exposure to around 1,900 employees at its suppliers. • History: The company was founded in 2001 and has historically operated as a family-run business, experiencing strong growth in its market segment. VP Capital acquired the company in 2020. 5

High Danger? Our multinorm clothing keeps you safe! Hydrowear Multi Inherent Waterproof ARC Collection Style: 043750ONP March Standards: EN 343-3, EN 13034-6, EN 1149-5, EN 61482-2 Class 2, EN ISO 11612, EN ISO 11611 EN 20471. 6

Hydrowear protective Clothing Founded: 2001 Products: Customer: Protective Clothing Employees: Trade and Textile service throughout Europe Warehouse: Approximately 15 employees at our head office in Production: Emmen and approximately 1900 over our partner Products: factories divided over the world. We have a brand new warehouse powered by a warehousemanagementsystem consisting of a wide and extensive never out of stock position (NOS). This wharehouse is situated in Emmen (NL) Delivery to 98 percent of our customers within 24 hours the rest within 48 hours. Production is divided over two continents. Europe, Croatia. Asia, India and China. hydrowear offers a very wide and extensive NOS range in 4 different ranges. High Visibility, Workwear, Waterproof and Multi Norm. 7

New markets. Segmented striping. Hydrowear Ribstop Line Style: 072398OBP Uddel Standards: EN 343, EN ISO 20471. 8

Management summary Already aware of the importance of corporate social responisbility we joined the Fair Wear Foundation in 2009. Fair Wear Foundation aims to improve working conditions for people working in the international clothing industry. Fair Wear is an independent and not-for-profit foundation. Independence is guaranteed by a multi-stakeholder board in which industry associations, trade unions and NGOs are equally represented. The most important achievements for 2021 are: Fair Wear audits. in 2021 we have conducted a FWF audit at one of our Chinese production locations. This will ensure us to maintain our stable monitoring percentage. Corrective action plan was shared and short term follow up has been done, further remediation is running. In 2021 no verification audit was conducted. Furthermore we have enrolled one Chinese supplier for a Workplace Educations Programme. Training reports were shared and we received very positive feedback form all involved. Third party audits. This year we had several third party audits. Four BSCI audits were conducted at four different suppliers. Corrective action plans were shared and follow up is running. Cooperation with competitors at shared suppliers. We strive to cooperate with competitors on every level of social responsibility at shared suppliers. Trying to share corrective action plans with competitors has proven to be difficult. So far we managed to share a corrective action plan with one competitor. In the past year we have added a new supplier to our existing supplier base. Fair Wear Foundation audits have already been conducted for many years. ESG assessment. In 2021 MJ Hudson conducted an ESG Scan. The report uses ESG as a framework to assess the company’s sustainability performance. ESG stands for Environmental, Social and Governance, known as the three central factors in measuring the sustainability impact of a company. The report is updated annually, to monitor progress and keep the company focussed on achieving its goal to become a frontrunner in the sustainability transition. Besides this we did a carbon footprint analysis, besides our own emissions, we also looked at the up- and downstream emissions. Sourcing strategy. To follow up on avoiding and reducing excessive overtime we have been working on setting up systems to give our suppliers better sights on our purchasing volumes. Combined with smoothening the production planning we also have invested in fabric stocks at our partner suppliers. To become partners we have a high level of transparency in communication and knowledge sharing. Involvement with suppliers. With focus on long term sustainable business relationships we choose to source our collection at a fixed supplier base. Our supplier base consist of solely partners that we have been working with for many years. Different from previous years, in 2021 we were unable to fulfil our commitment to visit all our main suppliers. Due to the restrictions as result of the COVID-19 virus we have visited none of our suppliers. Challenge. One particular challenge remains the payment of living wages. Under the terms of FWF a living wage is the minimum income necessary for a worker to meet the basic needs of a family of four. This aim can only be achieved in the long-term by taking many small steps. COVID-19. The effects of the COVID-19 virus have been greatly impactful on day to day operations. Even in 2021 most of our production location had to deal with lockdowns and complete standstill of production. Despite this, we kept our tight lines of communication to deal with any difficulties. The impact the virus had on our total supply chain were overall very minor. Risk assessment has been done. 9

Durability. Triple stitched seams. Hydrowear Constructor Collection Eye for detail! Style: 042860K Riva 10

Hydrowear Organisation Sourcing strategy and pricing. As a rule the Hydrowear supplier determines the processing steps necessary to manufacture each product and the resulting standard requirement. This forms the basis for the negotiations with our manufacturers. This is the benchmark for further implementation. Before mass-producing a model, the manufacturer creates a pre-production- sample in order to guarantee that he is able to manufacture the model in the required quality and time. He can also determine any uncertainties regarding processing or deviations from the calculated standard requirement and discuss these with Hydrowear. If necessary Hydrowear can advise in achieving the standard requirement. The sourcing strategy also focusses on the specialization of the supplier, for example all our waterproof garments come from our Chinese suppliers, whereas the trendy non waterproof workwear is manufactured in India. With China being more specialized in the techniques necessary for waterproof garment manufacturing. In 2021 we maintained the policy for our suppliers to have stock of raw materials at the production locations. At our Indian and 2 Chinese suppliers we have invested extensively in large stocks of fabrics and auxiliaries. This was welcomed with open arms. It allows suppliers to efficiently plan their production and spreading production over longer periods of time and ensures steady delivery times for us; making it work both ways. As of 2020 we co-manage these fabric stock together with our supplier. We set minimum for each fabric type and colour as a reference. Together with them and our planning we make purchase decisions. Our involvement with the supplier also shows in the long term partnerships we strive to have and already established. We are working with a small dedicated group of suppliers. Of all our main suppliers we have partnerships with an average duration of 5 years or more. 11

Only the best is good enough. We do not compromise. Hydrowear Multi Induwash Waterproof Collection Style: 043440 Michigan Standards: EN 13034, EN ISO 11611, EN 1149-5, EN ISO 11612, IEC 61482-2, EN 343-3, EN ISO 20471 12

Organisation Chart 13

Lightweight, breathable and durable. Your second skin. Hydrowear Simply no Sweat Light Collection Style: 021200ZW Bonn Standard: EN 343-3 14

Production Cycle. Before the start of each calendar year Hydrowear makes a forecast for the upcoming year together with its suppliers. The buffer effect of our large stock and the durability of our workwear enables our supplier to balance their capacity utilisation in regards to quantity and model variance. This, in turn, enables us to make good available competitive products. The side benefits of our large stock is that urgent productions that often lead to overtime situation are very uncommon. Were the hard part of managing overtime lies with the understanding and willingness of end-users that have special made items. Their demands can sometimes be challenging. 15

Exclusive designs. Hydrowear Skyline Collection Style: 091006 Vietnam 16

Selection of new factories. (New) Suppliers are selected on Quality, staff, working conditions/ social responsibility, history, knowledge/ innovation, capacity and pricing. Monitoring is done by checking (existing) audit reports and assessments at the supplier. Hydrowear only produces high quality garments. This together with innovation is the most important marketing tool for Hydrowear. Therefore Hydrowear works together with the same suppliers for many years. Because of this we are aware of the good working conditions at our suppliers. Integration monitoring activities and sourcing decisions. The Hydrowear monitoring outcome will decide if we will start/continue with our supplier. If they apply the (FWF) standards we will continue. If they partly do not apply these standards we will tell the supplier to improve with deadline and monitoring of Hydrowear. If there are some major issues concerning for example labour conditions the supplier has to take immediate action. New locations. As of 2021 we have one new production locations, Questionnaire and worker information sheet have been shared. Third party audit was conducted in 2021, follow up is running. Furthermore our main Indian supplier has finished building the new factory in the west of India. Supplier has opted for full sustainability engagement. And therefore made the building as sustainable as possible. Solar panels are covering the roof of the entire production plant. First productions have rolled out at the end of 2021. 17

Leading the market with Design Hydrowear Simply no Sweat Collection Style: 04026045 Kassel Standards: EN343-3 18

Coherent system for monitoring and remediation. Corrective Action Plans (Caps) are running for our Indian and Chinese partners. Some critical issues were solved and some are running. In 2021 we started with implementing a systematical approach in monitoring and registering our CAP follow ups. Over the course of 2021 we have worked on improving the follow up of the Corrective Action Plans (CAPs) and monitoring of our production locations. The first step in this process was to receive insight in all audits and CAPs of our production locations and defining our highest leverage to work on remediation following the FWF monitoring requirements. The second step was to set-up an internal system to support the CAP follow-up. We have created a systemetical approach which resulted in a general document with an overview of all CAP findings per production location. All findings can be filtered on for example: factory name, country, deadline and/or status. This supports us with communicating to the supplier as well keeping an up-to-date overview of the exact status per finding. Evidence to make sure the finding is closed will be saved internally and will be linked to the number of the finding in the CAP overview. This is a continuous process that will be followed up on a weekly basis. Croatia: 1 supplier Production Volume 2021: Supplier 1 – 4% India: 1 supplier, 3 locations China: 7 suppliers Production Volumes 2021: Production Volumes Supplier 1 – 32% 2021: Supplier 1 – 46% Supplier 2 – 13% Supplier 3 – 2% Supplier 4 – 1% Supplier 5 – 1% Supplier 6 – 0,5% Supplier 7 – 0,5% Figure: Production distribution 2021 19

We stay ahead of the game with new styles. Glow in the Dark. Hydrowear Glow in the dark Collection Style: 131001YN Italie Standards: EN 343-3, EN ISO 20471 20

CAP follow up constist of gathering evidence of improvements, for example in documentation or pictures of the facotry. There are many examples to mention in regards to the continuos follow up of the CAP’s. For example issues like adding a grievance procedures and giving trainings about the code of labour practices. Making sure all Code of Labour practices are clearly visible posted at all the workfloors. Exit signs where placed at our chinese factory as well as certificates of first aid responders where shared. Also issues like conducting risk assessements of the impacts of COVID 19 were conducted. We also had awareness trainings to groups of workers at one Chinese supplier. Our european partner is part of a low risk location and is informed / monitored accordingly. Updated questionnaire is available. 21

We stay ahead of the game with new styles. FRAST softshell. Hydrowear Multi Bodywear Collection Style: 072396YB Menorca Standards: EN ISO 20471, EN ISO 13034, EN ISO 1149, EN ISO 11612, IEC 61482-2 22

FWF Complaints Handling The complaints procedure allows workers or their representatives in garment factories to make complaints about their working conditions and the way the code of conduct is implemented in these factories. The procedure is also meant for other parties involved. For example, it can be used by suppliers to complain about the way in which FWF procedures are carried out, or by NGOs to file a complaint about the labour situation in factories. The folowing procedure takes place in case of a complaint: 1 The system is implemented by posting the “worker information Sheet”in the factory. 2 Actual submission of the complaint. 3 Complaint is checked by the respionsible complaint manager. 4 Reporting of the complaint to Hydrowear and FWF Amsterdam. If the complaint is legitimate the folowing measures are taken: 5 Investigation of the complaint. 6 Action plan for correction and time schedule. 7 Verification of the complaint by Hydrowear. 8 Verification of the complaint by FWF. 9 Publication of the complaint and corrective action is taken. (for a visual explanation of above see the FWF complaint system on the second next page) In 2021 we have received one complaint. The complaint was raised due to government restrictions to reduce the workforce with 50% to prevent the spread of COVID-19. Certain contractual workers were affected by this as they are only paid for the actual worked hours. As this is a legal policy in combination with force majeure, the compaint was closed in good consultation. The complainant was satisfied with the complaints handling process. 23

We stay ahead of the game with new styles. Segmented striping. Hydrowear Bodywear Collection Style: 040445OB Thorne Standard: EN ISO 20471 24

FWF complaint system 25

We stay ahead of the game with new Styles. Comfortable and durable. Style: 042857 Rumo 26

Corporate Social Responsibility Sustainable textile production Next to our Fair Wear Membership Hydrowear is as of 2016 member of STeP by Öeko-tex. Next to social responsibility this certification also focus on environmental performance and quality management. We will receive yearly verification audits at our office in Emmen. The results can be found on the STeP website Sustainable Textile Production by OEKO-TEX® is a certification system for brands, retail companies and manufacturers from the textile chain who want to communicate their achievements regarding sustainable manufacturing processes to the public in a transparent, credible and clear manner. Therefore we were audited on all six relevant company areas. STeP allows globally operating brands and retail companies to search for suitable suppliers worldwide who meet their demands regarding environmental protection and social responsibility. This enables them to clearly and completely document their joint sustainable commitment to end consumers together with the supply chain. 27

Made for comfortable working Hydrowear Trendy High-vis Line Style: 044479YB Harwich Standards: EN 20471 28

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High comfort rainwear Light, strong and extremely breathable! Style: 021400NA Basel Standards: EN 343 30

Circular Clothing Hydrowear is affiliated with Interreg and NEN to develop Circular workwear that complies with European regulations. We only want to market with Circular clothing if it is really Circular and meets the requirements currently formulated by NEN. There seems to be a big gap between the current clothing with a circular claim and real circular clothing with a good return system. And there are many initiatives on the market that are all concerned with Circular clothing, but all are based on a different principle. As a result, there is a lot of shouting and the end user can no longer see the proverbial “forest” for the trees. That is why we are affiliated with Interreg and NEN. During conversations with factories where polyester is made, it turns out that tests with post-consumer garments have not (yet) been done or have failed due to contamination. On the Dutch market, garments are provided with a 'circular' claim that are often only made from recyclable cloth. Usually this is a polyester. Is this Circular and how is it reused? The NEN provides regulations that European clothing companies must comply with if they want to be able to give a claim of circularity to their products and together under the flag of Interreg we are investigating how and under what conditions this can be technically done. The following technologies and processes for circular PET workwear will be developed:  Mechanical and chemical recycling  Spinning and weaving  No waste production  Wear2 yarn and industrial microwave for assembly and disassembly  Recyclable laminates, logos and accessories  Collection and sorting systems These are tested and developed in a closed process chain, in which the effects of use are also analysed. The results of CircTex are actively communicated in the NWE textile industry in order to increase knowledge and increase the number of SMEs and companies actively working on circularity in the textile sector. To ensure the long-term effect, CircTex will set up an innovation network, actively involving stakeholders across NWE. An international standard for circular textiles will also be initiated to stimulate the further development of the circular process chain for other textiles and textile products. CircTex will drive the growth of NWE textile industry which will create a lot in the future. As the textile industry is transnational, territorial cooperation in NWE is crucial for significant impact. 31

Trendy workwear Fashionable appearance combined with functionality! Style: 042640 Twist 32

Corporate social responsibility and sustainability. We care! Hydrowear. 05-04-2020. Emmen. No rights can be derived from this publication. 33