Moving forwardwith our suppliers

The Clarks group of companies attaches real importance to the welfare not only of our own employees but also those employed by our suppliers. While we undertake most of the design and development of our products ourselves, we outsource the manufacturing of all our products. We believe it is our responsibility to know and understand the welfare and working conditions of those who make Clarks shoes. We do this by auditing and assessing our supplier factories against the working condition standards set out in Clarks Code of Practice.

In 2018 the audit programme covered over 99% of our first tier footwear production, i.e. the factories that produce the finished product. We also undertake audits of second tier material and component suppliers. These audits currently cover tanneries and sole suppliers that supply at least 90% of the volume of these materials from Clarks nominated suppliers as well as some other component and material suppliers.

The information gathered through these audits informs our sourcing decisions and helps us work with our suppliers to ensure the high standards we expect in our products are reflected in the working environments in which they are made.

Suppliers

We believe in building long term relationships which offer the most benefit for the Clarks business and the people who make our shoes. Over 80% of our production comes from suppliers we have worked with for more than 5 years and some of them for much longer. In 2018 approximately 80% of our footwear products were ordered directly from our suppliers with the remainder sourced through specialist agents. While we do sell some handbags and accessories these are a small part of our total business. In most factories the facilities are shared with production for other brands and customers. The information below is for our footwear production in 2018.

Most of the production takes place in Asia with a small percentage of production from Europe.

2017 Proportion of footwear production by country

To meet Clarks commitment to increased transparency a list of suppliers used in the production of Clarks products during 2018 can be found here. If you would like the information provided in an alternative format please contact csr@clarks.com.

The list includes Clarks direct managed footwear suppliers who produce approximately 80% of Clarks branded footwear as well as footwear and non-footwear suppliers used through agents and licensees.

While most of these suppliers will continue to be used during 2019 it should not be taken as a current list of all suppliers.

Standards

At Clarks we expect everyone engaged in the production of our products to be treated fairly, with dignity and respect and for their work to be undertaken in conditions which are safe and not detrimental to their health.

The working condition standards we expect our suppliers to follow are set out in our Code of Practice. These standards apply to all those engaged in the production of Clarks products. Our Code of Practice requires compliance with all local legal and regulatory requirements and the core labour principles of the United Nations International Labour Organization (ILO) conventions.

We support the right to freedom of association and for collective bargaining in the negotiation of wages and encourage governments and employers to set wages that are appropriate for the needs of workers and for the economic conditions in each country. Wages must be set at a level that meets both the immediate basic needs of workers and ensure the long term security of employment for those concerned. Clarks is committed to ensuring that our suppliers pay workers at least the legally required minimum wage.

We require suppliers to sign a copy of our Code of Practice to acknowledge they have read, understood and will comply with it. Compliance with our Code of Practice forms part of our template trading terms and conditions for the purchase of goods.

A copy of Clarks Code of Practice is available here

Supporting Improvement

In an instance of non-compliance with the expected standards we aim to work with the supplier to develop an Improvement Action Plan (IAP) that seeks to address root causes and provide for sustained improvement. We believe that long term relationships offer the most benefit for the Clarks business and the people who make our shoes. We do not just walk away from a supplier without first assessing what and how improvements could be made. However, in instances of continuous non-compliance and no evidence or willingness to adhere to an Improvement Action Plan, termination of the relationship remains the final sanction.

We have consulted UNICEF with regards to our remediation plan for any cases of child labour, as defined in our Code of Practice that are identified in any of our suppliers. A copy of the plan can be found here

Understand

In common with other brands, audits are conducted either by our in house specialist supplier audit team or by a third party audit service provider. Clarks in house specialists focus on our primary sourcing countries which enables the team to develop a much stronger relationship with the factory to support an ongoing improvement process. In countries where we do not have our own resources we utilise a third party audit service provider whilst maintaining our engagement with the supplier by the supplier audit team.

Audits are normally conducted at any potential new supplier prior to the placement of an order for production. For existing suppliers, we use a tiered approach to the frequency of audits based on their previous audit results and management capability. Audits can be undertaken as either unannounced, semi-announced or announced depending on the location, type of relationship with the supplier and prior audit performance.

The audit process includes a review of all relevant documentation, interviews with management & workers and an inspection of all areas of the factory site.

Audit Activity during 2018

In total 250 social audits were conducted during 2018 across Clarks supply base. Of these 210 were undertaken in China, India and Vietnam by our own internal audit team and an additional 40 audits were undertaken by 3rd party audit service providers.

In addition to the social audits conducted 53 security audits were undertaken at finished goods suppliers in support of customs requirements.

Improve

Undertaking audits does not in itself change or improve the working conditions in our suppliers. It is the starting point in an ongoing process of improvement. What makes the difference is how the information gained through the audit is used to address the issues identified and make a positive change for the benefit of those working in each factory. We do this in a number of ways.

For any issues that are identified through the audit we require the supplier to complete an improvement action plan which identifies the root cause of the issue, what action will be taken to address it, who is responsible and when it will be completed. We use this information in subsequent follow ups to verify that appropriate action has been taken to ensure sustainable improvement is made.

We provide training inputs to our suppliers, both formal and informal delivered either by ourselves or through working with other partners and providers including supporting attendance at publicly available events. These have covered topics such as children's rights, transparency, wages and benefits and health & safety including fire safety, chemical management and exposure control.

The working conditions within supplier facilities and the improvement made, as assessed through our audit process are included in the performance evaluation of our suppliers and represented within the Balanced Scorecards for suppliers.

Collaborate

At Clarks we believe strongly in working collaboratively with others to effect change and bring about improvements within the footwear supply chain. For example;

We have worked with the teams from other brands to undertake joint auditing of shared suppliers which allows the factory to make better use of their resources towards corrective actions and improvements.

Following Clarks membership of the Global Social Compliance Programme (GSCP) operated by the Consumer Goods Forum (CGF), we have maintained our engagement with this work now that it has been incorporated into the Social Sustainability work stream of the CGF through becoming members of the CGF. As a global cross-industry network the CGF Social Sustainability Committee aims to drive harmonisation, convergence and best-practice sharing for a better and more sustainable supply chains. More information about the CGF can be found on their website.

In 2016 Clarks became a member of the Mekong Club which is a membership-based organisation that works with companies to help them take steps to eradicate slavery from their business through industry-specific working groups. Clarks is proud to be one of the first brands to commit to the Mekong Club Business Pledge against Modern Slavery. Further information on the Mekong Club and the Business Pledge are available on their website.

In 2018 Clarks became a member of the Slave Free Alliance to further support our work to prevent and mitigate the risk of forced labour in our suppliers Further information on the Slave Free Alliance can be found on their website.

Community

Clarks has a long history of supporting the communities in which we work. Today that extends to the communities in which our suppliers are located.

Since 2016 Clarks has supported a key supplier in India to provide mammogram and pap smear cancer screening services not otherwise available at their facilities for relevant employees. This has been undertaken by the Penn Nalam Hospital which operates a fully equipped mobile unit. Support has been given to any employees needing further tests or treatment as a result of the screening. Further information on the work undertaken by the Penn Nalam Hospital can be found on their website.

During 2018 Clarks has worked with Better Factories Cambodia and a number of other brands to support a pilot programme in Cambodia to provide training and improve road safety for factory workers.

TRUSTS ASSOCIATED WITH C&J CLARK Ltd

The principal purpose of the Trusts is to benefit current and past employees, their families and the communities in which they live. They were established by the Company but are now funded independently.

The Clark Foundation makes capital grants for the benefit of communities in the areas of education, health, community resources and recreation. This has included support for projects undertaken through some of our suppliers for the benefit of the communities in which they are located and operate. These have included provision of educational facilities in China, and an ambulance and water purification system to serve communities in India and Vietnam.

For further information on any aspect of our Corporate Responsibility programme, please contact: csr@clarks.com