Social report 2019 Hydrowear

2019

Innovation in Rainwear Hydrowear Simply No Sweat Collection Style: 042505 Rimini Standard: EN 343-3 Ret 5,2 high breathable 2

Social report 2019 3 7 Introduction 9 Hydrowear protective clothing 11 15  Founded 17  Products  Customers 21  Employees  Warehouse 25  Products 3 Management summary  Goals & achievements 2019 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

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

Introduction “Social and environmental Hydrowear, based in Holland, is an independent family responsibility is an important business which designs, develops, and manufactures high theme throughout our whole quality industrial workwear and waterproof protective production chain.” clothing for the industry. The Hydrowear product range is a result of many years of experience in fabrics, accessories, design, fashion and marketing. Our personal protective clothing meets the strictest criteria of technological and legal standards prescribed in the European Directives. We manufacture in Asia, India and Europe. We can deliver garments directly from stock and also deal with bespoke requests, special requirements etc. Our garments range from Waterproof, HiVis and Constructor to Flame Retardant, Antistatic, ATEX and Offshore. We are committed professionals who are passionate about creating protective clothing and serving our customers. As a modern manufacturer, we see our contribution as complying with our social and environmental responsibillity throughout the entire production process. Our Fair Wear Foundation membership is an important step on this path, which is not always an easy one. 5

High Danger? Our multinorm clothing keeps you safe! Hydrowear Multi Inherent Waterproof 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 500 over our partner Products: factories divided over the world. We have a wide and extensive never out of stock system (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 internationally clothing industry. The initiative is made up of trade associations, trade unions and non-governmental orginisations and this ensures independence and credibility. The most important achievements for 2019 are: Threshold. Our efforts of 2018 have shown its results in the 2019 monitoring percentage. The commitment in maintaining our threshold has not stagnated as of 2019. After achieving a share of purchasing volume sourced from audited production of more than 90%. By continuously improving on the past audits we have no doubts in maintaining our current threshold for the coming years. In 2019 we have had no Fairwear Foundation audits of production locations. Third party audits. This year we had PricewaterhouseCoopers who conducted an audit at our Chinese supplier, on behalf of our end user. They issued a supplier CSR review report as well as a corrective action plan and factory picture report. The outcome was very positive over all. Corporation 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. Fairwear Foundation audits have already been conducted for many years. 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. WEP. In 2019 we have had a basic workplace education programme at our Indian supplier. Afterwards the feedback from our supplier and its employees were very positive. Keeping the importance worker awareness and evolvement in mind, we are planning on extending these practices in coming years. Involvement with suppliers. As in all precious years, In 2019 we continued our commitment to visit all our main suppliers. This comes down to 60%. These visits are carefully planned and a key factor in maintaining and monitoring our relationship and efforts 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. 9

Durability. Triple stitched seams. Hydrowear Constructor Collection Style: 042003 Coevorden 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 2019 we further invested in our suppliers to have stock of raw materials at the production locations. At our Indian supplier 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 last year 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 an 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

Organization 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 location. In able to respond to the huge demand in the last year and looking to the future, we are selecting new production locations. We have added a Chinese production location that has already been audited by both us and Amfori BSCI. Updated reports will be available in 2020. 17

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

Coherent system for monitoring and remediation. China: 4 suppliers Production Volumes: Corrective Action Plans (Caps) are running for our Indian and chinese partners. Supplier 1 2017 – 23% Some critical issues were solved and some are running. Last year our main chinese partner has moved the entire production location. The brand new 2018 – 31% factory has been audited and minor follow ups are needed. There also are 2019 – 35% worker representatives elected to participate in salary and wellfare meetings Supplier 2 2019 – 8% at our second China location. We also have detailed documentation of CAP Supplier 3 2019 – 6% follow up including pictures. For example issues like adding a grievance Supplier 4 2019 – 3% procedure and giving trainings about the code of labour practices. Also, based on detailed research, the workforce was expanded to better fit the order forecasts. Implementing improvement of livingwages, still remains a challenge, as of 2019 we have had a 5-10% increase of worker wages at our india factory. Croatia: 1 supplier Production Volumes: 2017 – 26% 2018 – 8% 2019 – 4% India: 1 supplier Production Volumes: 2017 – 41% 2018 – 32% 2019 – 43% Figure: Production distribution 2019 (tail end = <5%) 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’s of the second production location for our Indian partner are released and we have begun to addres in 2018. At first instance minor issues like maintenance of fire equipment and posting the CoLP have been addressed. Also issues like conductin risk assessements for each function and awareness trainings to all female workers. Large documententation of improvements are being kept. Our european partner is part of a low risk location and is informed / monitored accordingly. 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) Complaint in 2019. Hydrowear has had one complaint from the india factory in 2019. Workers had contacted the FwF complaints system to report the case that there is no CCTV unit in the embroidery unit. The windows were blocked and they would feel safer with camera’s installed. Complaint was fixed immediately. CCTV camera’s have been places and windows are unblocked. For more detailed information about the complaint and the resolvement please check the fairwear resources webpage. 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 27

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

STeP 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. 29

Corporate social responsibility and sustainability. We care! Hydrowear. 05-04-2019. Emmen. No rights can be derived fro3m0this publication.