SUSTAINABLE SUPPLY CHAINHANDBOOKVERSION 2022/2023

G-Star Sustainable Supply Chain Handbook

2022/2023

ABBREVIATIONSBSCIThe Business Social Compliance Initiative (third-party monitoring tool)

CMT

Cut-Made-Trim

S&ESH

Social and Environmental, Safety and Health

FEM

Facility Environmental Module (Higg Index tool)

FSLM

Facility Social & Labor Module (Higg Index tool)

FWF

Fair Wear Foundation

IIP

Impact Improvement Plan (Supplier monitoring)

ILO

International Labor Organization

SAC

Sustainable Apparel Coalition

SMETA

SEDEX Members Ethical Trade Audit (third-party monitoring tool)

ZDHC

Zero Discharge of Hazardous Chemicals

ZT

Zero Tolerance (G-Star minimum requirement baseline)

WRAPWorldwide Responsible Accredited Production (third-party monitoring tool)

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TABLE OF CONTENTS
Abbreviations ....................................................................................................................................................... 2
Table of Contents................................................................................................................................................ 3
Introduction to Sustainable Supply Chain Handbook ........................................................................ 5
1.1

Sustainability collaboration and integration in other departments.......................................... 5

1.2

Content ................................................................................................................................................ 5Due diligence .............................................................................................................................................. 6
2.1

Sector risks in the garment and footwear industry .................................................................... 6

2.2

G-Star RAW value chain risk factors ............................................................................................ 7

2.3

Product risk factors ........................................................................................................................... 7

2.3.1

Raw materials ............................................................................................................................ 7

2.3.2

Processing techniques ............................................................................................................ 7

2.4

Business and sourcing model risk factors ................................................................................... 7

2.4.1

Agents ......................................................................................................................................... 7

2.4.2

Sourcing strategy ...................................................................................................................... 8

2.4.3

Purchasing practices................................................................................................................ 8

2.4.4

Unforeseen product orders ..................................................................................................... 8

2.4.5

Licensees.................................................................................................................................... 8

2.5Country and tier risk factors ............................................................................................................ 9

2.6

Risk assessment................................................................................................................................ 9

2.6.1

Initial country and tier assessment ....................................................................................... 92.6.2

In-depth supply chain assessment ..................................................................................... 10

2.6.3

Identify likelihood and severity ............................................................................................. 10

G-Star Compliance Policy ...................................................................................................................... 11
3.1

Sustainability Requirements for suppliers.................................................................................. 11

3.1.1

Supplier Code of Conduct..................................................................................................... 11

3.1.2(Manufacturing) Restricted Substances List..................................................................... 11

3.1.3

G-Star RAW Materials & Animal Welfare Policy ............................................................. 11

3.1.4

Supplier Declaration ............................................................................................................... 12

3.1.5

G-Star Subcontracting (& Homeworkers) Policy ............................................................. 12

G-Star Supply Chain................................................................................................................................ 14
4.1

Definition of supplier categories ................................................................................................... 14

4.1.1

Tier 1 suppliers ........................................................................................................................ 14

4.1.2

Tier 2 suppliers ........................................................................................................................ 15

4.2

Sustainability Scope ....................................................................................................................... 16

Supply Chain Monitoring Tools ............................................................................................................. 17
5.1

Sustainable Apparel Coalition (SAC) and the Higg Index tools ............................................ 17

5.1.1

Higg Facility Social & Labor Module (FSLM) ................................................................... 17

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5.1.2Social & Labor Convergence Program (SLCP) ............................................................... 17

5.1.3

Other social compliance audit mechanisms in the transition phase ........................... 18

5.1.4

Higg Facility Environmental Module (FEM) ...................................................................... 18

5.2

The Zero Discharge of Hazardous Chemicals (ZDHC) Roadmap to Zero......................... 18

5.2.1

ZDHC Manufacturing Restricted Substances List (MRSL) ........................................... 18

5.2.2

ZDHC InCheck ........................................................................................................................ 18

5.2.3

ZDHC ClearStream ................................................................................................................ 18

5.3

Sustainability Monitoring Focus as per type of Factory .......................................................... 18

5.3.1

Supplier Sustainability Requirements ................................................................................ 19

Supplier Onboarding Process ............................................................................................................... 21
6.1

Country risk assessment ............................................................................................................... 21

6.2

Sustainability Review...................................................................................................................... 22

6.3

Supplier onboarding ........................................................................................................................ 22

6.4

Supplier onboarding follow-up process ...................................................................................... 23

Supplier Monitoring Process.................................................................................................................. 24
7.1

Supplier monitoring for social sustainability performance (Higg FSLM) ............................. 24

7.2

Environmental sustainability performance (Higg FEM & ZDHC) .......................................... 24

Supplier improvement and development ............................................................................................ 25
8.1

Manuals ............................................................................................................................................. 25

8.2

Supplier Training.............................................................................................................................. 25

8.3

Supply Chain Development Program ......................................................................................... 25

8.4

Corrective Action Plan (CAP) ....................................................................................................... 26

8.5

Supplier Detox program and Reports ......................................................................................... 26

8.6

Complaint Mechanism .................................................................................................................... 27

8.6.1

Social Dialogue & Factory Complaints System ............................................................... 27

8.7

ACT ..................................................................................................................................................... 27

8.8

Non-Performing Suppliers ............................................................................................................. 27

8.9

Responsible Exit Strategy ............................................................................................................. 28

Licensee requirements............................................................................................................................ 29
Annex................................................................................................................................................................... 30
A2. G-Star Supplier Code of Conduct ..................................................................................................... 30
A3. G-Star Environmental guidelines....................................................................................................... 31
A4. G-Star Social & Labor guidelines ...................................................................................................... 31
A5. G-Star Materials & Animal Welfare Policy ....................................................................................... 31
A6. G-Star Homeworker’s Policy .............................................................................................................. 31

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INTRODUCTIONHANDBOOKTOSUSTAINABLE

SUPPLYCHAIN

G-Star products are manufactured in factories all over the world. G-Star does not own any factories
but purchases ready-made garments from its suppliers. Although the factories are owned and run
by others, G-Star feels responsible to positively contribute to the labor and environmental
conditions on site. We are committed to ensure that our products are manufactured in a responsible
and sustainable way.
Therefore, all the suppliers G-Star collaborates with are required to be compliant with the latest GStar RAW Code of Conduct and the underlying Social and Environmental, Safety and Health(S&ESH) standards. The goal of this Handbook is to explain the steps that G-Star takes in order to
responsibly conduct its business throughout its supply chain.
An important part of ensuring a sustainable supply chain is the way G-Star selects and monitors
the suppliers and factories it works with. Through monitoring we are aware of the issues occurring
at a factory; however we do acknowledge the fact that monitoring in itself does not bring us answers
to solve these issues. We first need to identify the issues and then dive deeper to find the root
causes behind them before they can be solved.
Although we feel responsible for positively contributing to the working conditions in the factories
where our products are made, we do believe that the factory itself needs to embrace and takeownership of the necessary changes. Only then sustainable improvements can be made. G-Star isthere to help and support suppliers in their development towards full compliance of the Code of
Conduct.

1.1 SUSTAINABILITYCOLLABORATIONANDINTEGRATION

IN

OTHER

DEPARTMENTS
G-Star’s sustainability team works together with various departments that are jointly responsible
for achieving G-Star’s sustainability goals. Besides the sustainability team, the departments
involved in implementing G-Star’s sustainability strategy are Design, Product Development,
Merchandise, Purchasing & Pricing, Quality Assurance, Sourcing, Logistics, Marketing andCommunications.
When working on improving the sustainability performance in our supply chain there are different
levels of shared responsibilities and collaboration amongst the sustainability team and otherdepartments involved. For example, Planning managers and Product Developers both ensure that
product certification for sustainable fibers and materials are collected. Moreover, the Sourcing and
Quality Assurance department are working together to monitor suppliers’ factory allocation andsubcontractors used for G-Star production. In addition, there is close collaboration with theSourcing Director to communicate G-Star’s minimum requirements on social and environmental
standards. For the complete overview of sustainability integration in all involved departments, seeannex A9.

1.2 CONTENTThis Handbook starts with explaining G-Star’s due diligence process that identifies (potential) risks
in the supply chain in Chapter 2. This is followed by G-Star’s Compliance Policy in Chapter 3.
Thereafter, Chapter 4 will focus on the breakdown of G-Star’s supply chain and Chapter 5 will
elaborate on the sustainability monitoring tools G-Star uses to ensure compliance and performance
improvement. This is all necessary information in order to explain what G-Star’s supplier and factory
onboarding process (Chapter 6) and the continuous monitoring process (Chapter 7) look like.
Chapter 8 discusses G-Star’s Supplier Development Programs. Finally, Chapter 9 describes ourrequirements for licensee partners.

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DUE DILIGENCE
In order to identify the most significant risk factors in our supply chain G-Star RAW conducts due
diligence checks based on the OECD Due Diligence Guidance for Responsible Supply Chains in
the Garment and Footwear Sector. This guidance defines due diligence as “the process throughwhich enterprises can identify, prevent, mitigate and account for how they address their actual andpotential adverse impacts”. When performing due diligence G-Star RAW builds upon a risk
assessment that provides the foundation and justification for our actions and goals. This chapter
explains the methodology of our risks assessment and the most significant risks G-Star RAW has
identified in its supply chain.

2.1 SECTOR RISKS IN THE GARMENT AND FOOTWEAR INDUSTRY

Risk factors

When performing our risk assessment, we took several risk categories into account. The categories
have been identified on a sector level by the OECD and are divided into three categories: Human
Rights & Labor, Environment and Integrity. These categories are explained in more detail in thetable below. All listed Human Rights & Labor risks and Environmental risks are addressed in the
G-Star RAW Supplier Code of Conduct
Human Rights & Labor risks

Risk categories
Environmental risks

Integrity risksChild labor

Hazardous chemicals

Bribery and corruption

Discrimination & gender-based
violence

Water consumption

Forced labor(Excessive) Working Hours

Water pollution
Greenhouse Gas (GHG)
emissionsOccupational Health & Safety
Freedom of Association (FOA)
Minimum Wages
Living Wages

Table 1. OECD sector risks for garment and footwear

Animal Welfare
The OECD does not identify Animal Welfare as a risk category but G-Star RAW acknowledges
potential risks involved when using animal origin materials.
Being a denim brand, the majority of our products (80%) is made from cotton or includes cotton.
About 1 to 2% of our products is made from animal fibers such as wool or leather. To ensure thatthese fibers come from safe and ethical circumstances, we have a Materials & Animal Welfare
policyTo be able to assess the risk factors in these categories and determine the most salient risks in our
supply chain, we approached the three categories from the OECD on two different levels: country
and tier 1. However, before we were able to assess potential risk factors and identify salient risks,
we had to breakdown our value chain, business-model and sourcing-model to set the scope of ourrisk assessment.

1 We follow the definition of the four tiers as defined by the SAC on their How to Higg website. Tier 1: Final product manufacturing and assembly,

Tier 2: Material or Finished Component Manufacturing, Tier 3: Raw material processing, and Tier 4: Agriculture and extraction .

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2.2 G-STAR RAW VALUE CHAIN RISK FACTORS
The identified risks by the OECD can potentially occur in G-Star RAW’s value chain. In Chapter 4,
G-Star RAW shows the breakdown of its value chain and associated production processes per tier.
Our value chain is mainly defined by the fact that G-Star’s Hardcore Denim philosophy is at thecore of our business. Because of this, cotton makes up approximately 80% of our material use anddenim processing techniques play an important role in manufacturing our denim products.
Therefore, certain sector risks might be higher.
Our value chain is also defined by the countries that we source from. We monitor all the countries
in our supply chain to make sure we are aware of country-specific risks. Currently, around 80-85%
of our total production volume comes from the following core countries: China, Vietnam, India and
Bangladesh. G-Star RAW’s sustainability requirements and monitoring processes are designed insuch a way that they focus on measuring and monitoring risks per factory. Please see Chapter 5
for a more detailed explanation.

2.3 PRODUCT RISK FACTORS
G-Star RAW distinguishes six product groups: denim, woven, knits, tees, accessories, andfootwear. Challenges associated with the raw materials and desired product look are listed below.

2.3.1 Raw materials
G-Star RAW’s collection consists of approximately 80% cotton, 10% polyester and 10% othermaterials. The materials that are used in the production of G-Star RAW items are listed andbenchmarked in the G-Star RAW Fiber Ranking which is based on the Made-By Fiber Benchmark,the Higg Materials Sustainability Index (MSI), and benchmarks created by industry peers. G-Star
RAW is constantly exploring options for more sustainable materials and aims to expand by setting
ambitious goals for product development teams to make the right choices. Our goal for 2025 is that
75% of our collection will be made from recycled, organic, bio-based or compostable materials.

2.3.2 Processing techniques
The processing techniques used to create a certain look must be executed properly to avoid human
and/or environmental risks. As a denim brand we are aware of those risks and train our suppliers
how to mitigate related risks. Please refer to the Environmental Guidelines (Appendix 3) for more
information.
Next to that, our technical sourcing teams are continuously searching for the most sustainable wet
processing techniques available in the industry. This is supported with our work on achieving Cradle
to Cradle Certified® fabrics and products in our collection. Our goal for 2025 is that 20% of theentire G-Star RAW collection will be made from Cradle to Cradle Certified® fabrics.

2.4 BUSINESS AND SOURCING MODEL RISK FACTORS
G-Star RAW is a privately-owned denim brand founded in 1989. Over time we have changed froma wholesale to a retail model, now focusing mostly on our online business. Every collection isdesigned at the G-Star RAW Headquarters in The Netherlands. Our materials and designs are
manufactured in factories all over the world. G-Star RAW does not own any factories but purchases
ready-made garments from its suppliers. To minimize risk factors G-Star RAW has its own Sourcing
Department and, in general, does not make use of agents.

2.4.1 Agents
Agents do not own factories but work as an intermediary between suppliers and brands. In general,
G-Star RAW prefers to work directly with suppliers. However, in some rare occasions, this form ofcooperation is used. If so, G-Star RAW has business relationships with the agent and demands
direct contact with its factories. Consequently, the factories that the agent works with are classified
as first tier.

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2.4.2 Sourcing strategy
Our own Sourcing Department at our headquarters in The Netherlands and our supporting offices
in Dhaka and China source directly from Tier 1 suppliers. They form the bridge between our Design
and Product Development Departments and our suppliers. Together they develop and manufacture
our collections.
To be able to present pioneering styles every year, G-Star RAW deliberately works with a tightsupply chain. A long-term business relationship between buyer and supplier means that there ismore trust, transparency, and commitment from both sides to move towards a more sustainable
and innovative supply chain and product. Therefore, good purchasing practices are an essential
part of our sourcing strategy.

2.4.3 Purchasing practices
Purchasing practices are the way that retailers and brands interact and do business with the
suppliers that produce their products such as strategic planning, sourcing, pricing, development
and buying. The way we buy from and work with our suppliers can impact the working conditions
at their factories. Good purchasing practices are therefore essential to promote better working
conditions. We work on improving our purchasing practices, mainly through our commitment andwork within ACT. See chapter 8.7 for more information on this initiative.

2.4.4 Unforeseen product orders
Even though most of our collections are ordered within set timeframes, exceptions do occur. These
could pose risk factors, how these are minimized is explained in the following paragraphs.

2.4.4.1

Special Marketing Units (SMU)

Special Marketing Units (SMU) are additions to the general G-Star RAW collections. Normally, thedevelopment phase between Design, Product Development, and Sourcing and G-Star’s supplierrequires time and planning. SMU products do not require a development phase because theseproducts follow a current design and will therefore follow the standard planning and workflow of the
G-Star RAW collections (e.g. a color addition). That is why these extra units can be added easily
to running production orders. The products are sourced within the current supply chain of G-StarRAW.

2.4.4.2

Fast track process

Global or regional fast track requests occur in case of an unexpected gap in the full-price collectionthat is offered – for example, a missed trend or a response to a regional festivity or
event. Development time is not desirable, but in some cases possible when time allows. To
minimize risks – taking into account that these items are only offered in full price stores or online –we only work with existing G-Star RAW suppliers to fill the gap. Fabrics, trims and labels areordered via nominated suppliers to guarantee G-Star RAW’s quality standards.

2.4.4.3

Outlet process

Global or regional outlet requests occur when there is an unexpected shortage of a certain productgroup, which we could not foresee. To fulfil these within a short time frame it needs to concern
repeat styles, as there is no development time possible. To guarantee the G-Star RAW quality andDNA, these styles run at our existing suppliers. The fabrics used for these items are from leftoverstock liability or running fabrics – which will always be compliant with our sustainable materials
goals.

2.4.5 Licensees
Currently, G-Star RAW only makes use of one licensee for G-Star RAW’s Footwear line. The
licensee manages and works directly with its respective supply chain. The responsibility of thecompliance monitoring activities lies with the licensee partner. They are responsible for
implementing the Sustainability Compliance Policy at their suppliers. More information on
Licensees can be found in Chapter 9.

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2.5 COUNTRY AND TIER RISK FACTORS
We monitor the developments in G-Star’s production countries in our supply chain to make sure
we are aware of country-specific risks. In Chapter 2.6.1 data and sources used are further
described.
G-Star has production offices in China and Bangladesh. When considering working with a new
supplier, the Sustainability Department conducts a due diligence check by visiting the factory as
part of the Sustainability Review. If G-Star RAW does not have staff on the ground, we make useof accredited external parties and available reports. As part of the Sustainability Review, we also
conduct a country and tier risk analysis. This policy lists the risks regarding potential breaches withthe local labor law and the G-Star RAW Supplier Code of Conduct. Thereafter, risk mitigating
actions are formulated and incorporated into G-Star RAW’s Social Sustainability Strategy.
The analysis will result in advice from the Sustainability Department to the CEO and Sourcing
Department on the resources needed to minimize the identified risks. This country analysis andadvice should be finalized before any sourcing activity can take place in a new sourcing country for
G-Star RAW. This also applies for starting any new supplier business relationship, this process isfurther explained in Chapter 6.

2.6 RISK ASSESSMENT
Our risk assessment approach consists of a two-step methodology that first includes theassessment of the potential risk factors on a general industry level and then zooms in on our own
supply chain. These potential risk factors have been described in the scope setting above.
The risk assessment results are published in our annual Sustainability Report. The following chapter
contains an extensive explanation on the methodology and approach.

2.6.1 Initial country and tier assessment
As a first step we derived information from external sources. Initially, our social risk assessment
focuses more on the country perspective of potential risk factors, while the environmental risk
assessment focuses more on the tier-level perspective. For instance, risks related to Freedom of
Association are connected to national or local labor laws, which are very country specific.
Meanwhile, environmental risks, like the use of chemicals, are more dependent on the production
stage of the process. Dyeing and finishing a fabric is more chemical intensive than weaving or
knitting a fabric. With this initial focus in mind, we then extended the risk assessment within country(for social risks) and tier (for environmental risks) along the process.
External sources used for the environmental risk assessment were derived from:• The Higg Materials Sustainability Index (MSI)• WWF (Worldwide Fund) Water Risk Filter Tool
• Quantis• Zero Discharge of Hazardous Chemicals (ZDHC)• McKinsey & Company
External sources used for the social risk assessment were derived from:• GoBlu• International Labor Organization (ILO)• Fair Labor Association (FLA)• Fair Wear Foundation (FWF)• CNV• Global Slavery Index• Clean Clothes Campaign (CCC)• Human Rights Watch• Global Living Wage Coalition• Corruption Perception Index

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2.6.2 In-depth supply chain assessment
To link the initial-scoping assessment regarding social and environmental factors in our main
production countries to our own supply chain and zoom in on regional level, we included supplierassessment findings in our risk assessment. These findings came from the Higg Facility
Environmental Module (FEM) and Higg Facility Social & Labor Module (FSLM) or from other thirdparty social assessment reports and created a more accurate perspective on potential risks incontext of G-Star RAW’s value chain.
To gain an even better perspective on local scale we consulted our Tier 1 and 2 suppliers in China,
Vietnam, India, and Bangladesh beginning of 2021 through a survey in which they were asked to
identify challenges in their operations. During this survey we considered the risk factors identified
by the OECD. Per risk factor we asked our suppliers to scale social and environmental risk factors
from 0 (no risk) to 5 (very high risk). We also asked our suppliers how they would improve thesechallenges per risk factor. The final question focused on the role of G-Star within improving thesechallenges.
In general, the respondents recognized the following social and environmental risk factors that we
identified as salient: Working hours, Freedom of Association, Living Wage, Water consumption andWater pollution. However, they indicated lower risk levels than reported in our assessment. Our
suppliers also identified Bribery and Corruption as a potential high risk.
Before continuing to determine the most salient risks in the context of G-Star RAW’s supply chain,
we discussed our risk assessment methodology with two external parties. Firstly, we consulted a
Dutch Agreement on Sustainable Garments and Textile (AGT) signatory retailer to compare their
methodology and approach towards identifying salient risks with ours. Secondly, during an annualdue diligence assessment from the AGT we also discussed our risk assessment methodology.
As a next step, we started a dialogue with local trade unions in India and our aim is to continue andexpand this throughout the years ahead. This way we aim to include even more local perspectives
into our current risk assessment to be able to determine more specific actions in certain areas.
Besides that, we will zoom in on our direct Tier 1 and 2 supplier base to increase the visibility ofsupplier-specific risks even further.

2.6.3 Identify likelihood and severity
A risk assessment's goal is to identify the likelihood and severity of potential and/or actual risks
within the value chain. Severity is based on the scale, scope, and remediable character of the risk
factor. We identified the likelihood of the risk factor with the help of our own supply chain-specificinformation.
On top of that, it should also be highlighted that many risks are interconnected with others. This
interconnection is very important when it comes to the severity of risks. High risks are usuallyconnected to multiple other factors, which increases the importance of the risk even more. For
example, Freedom of Association is one of the building blocks towards a Living Wage. Meanwhile,the lack of earning a Living Wage can lead to excessive working hours because workers are notable to make a living within normal working hours with a minimum wage salary. Therefore, G-Star
RAW identifies risks as salient when they are severe, likely to occur and interconnected.
Whenever the risk assessment is updated (annually or every 2 years) we also publicly
communicate this through our annual sustainability report.

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G-STAR COMPLIANCE POLICY
3.1 SUSTAINABILITY REQUIREMENTS FOR SUPPLIERS
Driving sustainability in G-Star’s supply chain starts with communicating clear expectations andrequirements to our supply chain partners. To that end, G-Star has developed four separate
standards that address particular sustainability topics and risks as identified through our due
diligence processes (see Chapter 2). Together, these four standards form the G-Star Compliance
Policy. The separate standards are explained in detail below.
A.
B.
C.
D.

G-Star RAW Supplier Code of Conduct
G-Star RAW Restricted Substances List (RSL)ZDHC Manufacturing Restricted Substances List (MRSL)
G-Star RAW Materials & Animal Welfare Policy

3.1.1 Supplier Code of Conduct
The G-Star Supplier Code of Conduct (CoC) was first developed in November 2006 and is
updated periodically. The CoC represents the basis of G-Star’s compliance strategy. The CoC
was developed based upon the following international standards and conventions:
•
•
•
•
•
•
•
•
•

United Nations Universal Declaration of Human Rights
United Nations Guiding Principles on Business and Human Rights
United Nations Global Compact
United Nations Conventions on the Rights if a Child and the Elimination of all forms ofDiscrimination Against WomenThe International Labor Organisation (ILO) Core Conventions and their relevant
Recommendations
The Ethical Trading Initiative Base Code
ISO14000
Zero Discharge of Hazardous Chemicals (ZDHC) guidelines
Organisation for Economic Cooperation and Development (OECD) guidelines forMultinational Enterprises

The CoC defines G-Star’s minimum requirements with regards to Social and Environmental, Safety
and Health (S&ESH) standards. The latest version (see annex A2) is shared with all supply chain
partners and is embedded in the G-Star Supplier Agreement. This Agreement is the contractual
framework document between G-Star and its direct suppliers.

3.1.2 (Manufacturing) Restricted Substances List
The G-Star Restricted Substance List (RSL) lists all chemical substances that are banned or
restricted in use for G-Star products. The RSL applies to all materials such as textiles, metals, trims,
and leather. G-Star’s standards follow and/or exceed international laws and regulations (REACH
legislation). The G-Star RSL is updated annually. Compliance with this RSL is a mandatory
condition for all products which are delivered to G-Star and are placed on the market. Therefore,
G-Star has an RSL Testing Policy that entails finished articles testing by a third-party laboratory ona seasonal basis. The RSL Testing Policy and handling is the responsibility of the Quality
Assurance team. This process is not further explained in this Handbook.
Since 2019, G-Star follows the latest ZDHC Manufacturing Restricted Substance List (MRSL) to
manage hazardous substances used and discharged during manufacturing processes. The MRSL
is managed by the Sustainability team and is further explained in Chapter 5.

3.1.3 G-Star RAW Materials & Animal Welfare Policy
The G-Star RAW Materials & Animal Welfare Policy (see Annex A5) lists our restrictions andrequirements for ethical sourcing of raw materials (specifically for down and feathers, fur, leather,angora, wool, cotton, and wood). By 2025, the goal is to make 75% of our collection from recycledmaterials and/or organic, bio-based, or compostable materials and by 2030 this will apply for ourfull collection.

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As a result of this commitment, G-Star asks certifications for the use of sustainable materials suchas organic cotton, recycled cotton, recycled polyester, and others; a Lenzing license number forcellulosic fibers and Better Cotton Claim Units (BCCUs) for Better Cotton (BCI).
The Sustainability Department is responsible for updating and maintaining the policy, but both theProduct Intelligence Centre (PIC) and Product Development are responsible for collecting thecertificates. This process is not part of the compliance Handbook.

3.1.4 Supplier Declaration
Every direct supplier of G-Star must sign the Supplier Declaration. By doing so, the supplieracknowledges the standards mentioned in the G-Star Corporate Responsibility Compliance Policy(CoC, RSL, MRSL and Materials & Animal Welfare Policy) and commits towards compliance withthese standards, if not immediately, in a timeframe discussed and agreed with G-Star. Additionally,
the supplier is responsible for communicating and ensuring that all parts of the policy are
implemented and adhered to by the factories, subcontractors, and business partners it uses for GStar production. This responsibility extends to promoting awareness and alignment with thesestandards throughout the supplier’s extended network, including Tier 3 and 4 suppliers involved in
raw material processing and extraction, fostering a holistic approach to corporate responsibility andsustainability within G-Star's supply chain.
Every direct supplier of G-Star must sign the Supplier Declaration. By doing so, the supplieracknowledges the standards mentioned in the G-Star Corporate Responsibility Compliance Policy(CoC, RSL, MRSL and Materials & Animal Welfare Policy) and commits towards compliance withthese standards, if not immediately, in a timeframe discussed and agreed with G-Star. Furthermore,
it is expected that the supplier will take diligent steps to communicate these standards and promote
their implementation throughout their supply chain. This includes ensuring, to a reasonable extent,
that these policies are understood and adhered to by all entities involved in the G-Star production
processes, extending to factories, subcontractors, business partners and raw materials suppliers.
The suppliers should endeavor to cascade these requirements down the supply chain, recognizing
the complexities and challenges involved in achieving full compliance at every tier and striving forcontinuous improvement in alignment with G-Star's policies.

3.1.5 G-Star Subcontracting (& Homeworkers) Policy
Subcontracting orders to third parties is common in the garment and footwear supply chain.
Companies outsource orders to subcontractors if they cannot fulfil their agreement on capacity orcapabilities. As a result, transparency often decreases down the supply chain and therefore
monitoring labor and environmental conditions is more challenging.

G-Star recognizes that subcontracting to homeworkers is a common practice in the garment
industry. However, G-Star strictly prohibits homeworking and has implemented various measures
to enforce this policy:

G-Star defines a subcontractor as “a company that does part of a job that another company iscontracted for.”
G-Star’s first tier suppliers might subcontract work to complete the order placed by G-Star incompliance with the product specificities, timeframe, and agreed quantities. Not every supplier isable to fulfil the product specificities at its own site(s) of production mainly because of the type ofprocess required or the volume of the order. In these cases, subcontracting part of the order (e.g.,
printing, embroidery, dyeing and finishing and laundry) is accepted only with G-Star’s prior approvaland full knowledge of the locations. Although there is no direct contractual relationship between thesubcontractor and G-Star, we do require the subcontracting facility to be compliant with the G-Star
Compliance Policy.

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As a general rule, G-Star prohibits subcontracting to homeworkers, because of limited resources
to monitor homeworkers. G-Star feels it cannot responsibly source from homeworkers on a
structural basis. For more information about the G-Star homeworker policy, see Annex 7.

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G-STAR SUPPLY CHAIN
In general, G-Star buys ready-made garments from its suppliers. G-Star aims to establish longterm relationships with its suppliers to ensure transparency of the supply chain. G-Star’s suppliers
are mainly in Asia, but there are also suppliers based in Europe and North and East Africa. The
mapping of the supply chain is a continuous work of the Sustainability Department in close
collaboration with the Sourcing Department.
Evidently, G-Star’s supply chain is changing over time, with new suppliers being added in line with
our growth, and some suppliers being removed. This fluctuation is more noticeable deeper in the
supply chain, as there is no contractual relationship with parties beyond the ready-made garment
suppliers. Regardless, the goal is to maintain long-term relationships with suppliers to keep asustainable business for both parties.
G-Star works towards full supply chain transparency. Currently, G-Star has mapped its supply chain
up until Tier 1 and nominated Tier 2 suppliers, as explained below. Section 4.1 explains thebreakdown and definition of the different parties in G-Star’s supply chain, while section 4.2 explains
the extent to which G-Star’s compliance policy is rolled out per supplier category.

4.1 DEFINITION OF SUPPLIER CATEGORIESTo be able to mitigate any potential risks in its supply chain as identified in the due diligence process,
G-Star divides the G-Star supply chain into four tiers (aligned with the Sustainable Apparel
Coalition’s definition). As potential risks differ per factory and production processes involved, thistier methodology allows G-Star to focus resources within the monitoring process appropriately.
••••

Tier 1 are all processes related to finished product assembly such as cutting, panel screen
printing, embroidery, sewing, washing, pressing, garment dyeing, packing etc.
Tier 2 includes all processes related to material production such as weaving, knitting, fabricdyeing/printing, chemical/mechanical finishing, tanning etc.
Tier 3 includes all processes related to raw material production such as stock dyeing, yarn
spinning/dyeing, fleshing, liming etc.
Tier 4 relates to all processes of raw material extraction such as growing and harvesting ofplants, raising, and slaughtering of animals and extraction and processing of oils, minerals, andchemicals.

Figure 1. G-Star supply chain tier structure

If a supplier has Tier 1, 2 and 3 production processes under its own control, we define this as avertically integrated supplier.

4.1.1 Tier 1 suppliers
G-Star buys the ready-made products directly from the supplier. These suppliers are the directcontact point for the different G-Star teams (PIC, Product Development, Sourcing andSustainability). Usually, the supplier has one or multiple offices which are not always located at thesame premises as the production location (factory) where the supplier produces for G-Star. While
the supplier signs the Supplier Agreement and Supplier Declaration, the actual sustainability
monitoring extends to the factory(ies).
As not every supplier can fulfil the product specificities at its own site(s) of production - because of
the type of process required or the high volume - the subcontracting part of the order is accepted
under certain conditions (see Annex 6). The main outsourced processes include Printing,Embroidery, Dyeing & Finishing, Washing & Laundry. Subcontracting can only be allowed with GStar’s full knowledge of the locations and prior written approval. Although there is no direct

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contractual relationship with G-Star, we do require these suppliers to be compliant with ourstandards before authorizing them as “subcontractors”.
DirectCMT
X

Cut-Make-Trim
Printing
Embroidery
Dyeing & finishing

DirectProcessing

Washing & laundry

Subcontracted
CMT
X

Subcontracted
processing

X
X

X
X

X

X

X

X

Table 2. Tier 1 processes and types of factories

4.1.2 Tier 2 suppliers
Tier 2 suppliers produce fabrics and trims that Tier 1 suppliers use to produce the final product. GStar nominates tier 2 suppliers for trims and fabric to ensure the product is produced as envisioned.
G-Star does not have a contractual business relationship with these suppliers. G-Star does havedirect contact with these suppliers for development, but there is no financial stream between GStar and its second-tier suppliers. The only exception is when there is a surplus of an order; G-Starwill buy the overstock from the second-tier supplier in exceptional circumstances. Tier 2 also
include leather tanneries.

Weaving
Knitting
Chemicalfinishing
DyeingTanning

Denim MillX

Fabric Mill
X
X

X

X

X

X

TanneryX

Table 3. Tier 2 processes and types of factories

4.1.3 Tier 3 suppliers
Tier 3 suppliers are responsible for providing the basic raw materials that are later transformed into
fabrics and trims by Tier 2 suppliers. These include entities involved in the initial stages of raw
material production such as yarn spinning, dyeing and (leather) beamhouse processing. While GStar does not engage in direct contractual relationships with these suppliers, their role is crucial inensuring the quality and sustainability of the raw materials used in G-Star products. G-Star,
therefore, maintains, when possible, indirect oversight of Tier 3 suppliers through its engagementwith Tier 2 suppliers. This oversight includes ensuring that Tier 3 suppliers adhere to G-Star's
standards for environmental and social responsibility, even though they do not have a direct
financial transaction with G-Star.

4.1.4 Tier 4 suppliers
Tier 4 suppliers are at the foundation of the supply chain and are involved in the extraction andinitial processing of raw materials. This includes the cultivation of cotton or any other plants/animals,
the extraction of minerals and oils, and the initial processing of animal hides that are then further
processed at Tier 3 suppliers. G-Star recognizes the significant impact these processes can haveon the environment and communities. Therefore, even though G-Star does not have directcontractual or financial relationships with Tier 4 suppliers, it is committed to ensuring that they
operate in a responsible and sustainable manner.

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4.2 SUSTAINABILITY SCOPE
Table 4 explains the sustainability scope per tier in the Apparel supplier category.

Nominated Trims
2022

X

2022

X

X

2023

X

X

X

2023

X

X

X

2023

X

X

-

Supplier declaration signed

X-

Sustainability Assessment

X

X

X

-

Supplier Development

X

X

-

Publication manufacturing
list

X

X

Embroidery

Sustainability Review

X

LaundryX

CMT
subcontractors

Nominated Fabrics

Tier 3X-

Printers

Tier 2

Washing

Tier 1

CMT/VISApparelTier 4

Putting ourefforts tocontinuously
gain insights
into rawmaterialsources andorigins.

2025

Table 4. Sustainability scope per tier in the apparel supplier category

G-Star is continuously working towards increased transparency and visibility over the whole supply
chain. The sustainability scope will be expanded in 2022 to also include Tier 2 and trim suppliers.
G-Star has the objective of mapping out its apparel supply chain further to include Tier 3 in 2025,
and continuously working towards transparency of Tier 4.

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SUPPLY CHAIN MONITORING TOOLSIn order to measure the sustainability performance of its supply chain partners, G-Star makes useof external, industry-wide verified assessment methodologies.
The Sustainable Apparel Coalition’s (SAC) Higg Facility Environmental Module (FEM), the Facility
Social & Labor Module (FSLM) and the ZDHC tools are the main assessment frameworks for GStar’s supply chain monitoring on environmental and social risks.2.

5.1 SUSTAINABLE APPAREL COALITION (SAC) AND THE HIGG INDEXTOOLSG-Star considers the development of one unified and effective industry-wide standard framework
for measuring supply chain performance an important goal for the industry. To support this objective,
G-Star became a member of the Sustainable Apparel Coalition (SAC) in 2017. The Sustainable
Apparel Coalition (SAC) is an industry-wide collaboration aiming to collaboratively transform theapparel, footwear, and textile industry through standardized measurement. SAC has developed theHigg Index suite of tools that brands, retailers, and manufacturers can use to assess social andenvironmental performance, identify hotspots, and drive lasting change.
G-Star uses the SAC Higg Facility Environmental Module (FEM) for tracking environmental
sustainability performance (see section 5.1.4) and the SAC Higg Facility Social & Labor Module(FSLM) for tracking social sustainability performance (see section 5.1.1). Higg FEM and Higg FSLM
modules include both self-assessed and verified scores.
A Higg self-assessment means the facility has evaluated its performance according to the Higg
parameters and uploaded the necessary documentation on the Higg.org portal, but the scores havenot (yet) been verified by an external auditor.
A facility can choose to have its self-assessment verified by an SAC-approved third-party verifier.
The verifier reviews the Higg self-assessment submitted by the factory either on-site or throughdesktop review. G-Star requires suppliers to go for on-site verification and have the verified module
posted and shared with G-Star in the Higg portal. 3

5.1.1 Higg Facility Social & Labor Module (FSLM)
The Higg Facility Social & Labor Module (FSLM) allows manufacturing facilities to measure theirsocial & labor performance, benchmark against peers, and identify areas to make meaningfulimprovements. The Higg FSLM assessment covers the following topics: recruitment and hiring,working hours, wages and benefits, employee treatment, employee involvement, health and safety
and termination. G-Star requires factories to complete the Higg FSLM self-assessment and thirdparty verification on an annual basis

5.1.2 Social & Labor Convergence Program (SLCP)The SLCP is an independent multi-stakeholder program which has developed the Converged
Assessment Framework (CAF) (this includes a Data Collection Tool and verification methodology)
as well as data hosting and sharing process. The objective of SLCP is to improve social and labor
conditions by reducing the number of social and labor audits. This eliminates audit fatigue, enables
data comparison, and frees up resources for improvement programs.
The Social & Labor Convergence Program question sets are incorporated into the updated Higg
FSLM. SLCP data can be completed as a self-assessment and verified on an accredited hostplatform (e.g. higg.org). Therefore, the first step for a facility to take is to purchase a Higg FSLM
self-assessment on higg.org.

2

However, in a transition period towards full adoption of Higg tools in the industry, G-Star accepts certain third-party verification mechanisms
as a part of the supplier onboarding process (see section 5.1.3)
3
In countries where the verification is not yet available, suppliers should provide the self-assessment report as a minimum requirement,alongside other accepted audit reports

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5.1.3 Other social compliance audit mechanisms in the transition phase
G-Star requires all suppliers to implement the Higg monitoring system. If available, suppliers needto provide verified Higg FEM & FSLM assessments. In extraordinary circumstances, G-Star is open
to accepting other standards. However, that needs to be communicated and decided on a caseby-case basis.

5.1.4 Higg Facility Environmental Module (FEM)
The Higg Facility Environmental Module (FEM) allows manufacturing facilities to measure theirenvironmental performance, benchmark against peers, and identify areas to make meaningfulimprovements. The Higg FEM assessment focuses on: environmental management systems,
energy use and greenhouse gas emissions, water use, wastewater, air emissions, waste
management and chemical management. The Higg FEM report includes detailed scores for eachsubsection as well as options for additional information, such as uploading relevant documents andverifier comments. G-Star requires factories to complete the Higg FEM self-assessment and thirdparty verification on an annual basis

5.2 T HE ZERO DISCHARGEROADMAP TO ZEROOF

HAZARDOUS CHEMICALS (ZDHC)The ZDHC Roadmap to Zero Program is a coalition of fashion brands, value chain affiliates andassociates, aiming to transform the global textile, leather, apparel and footwear value chain to
substitute hazardous chemicals for safer ones in the production process. In 2012, G-Star became
part of the coalition and committed to eliminate industrial releases of hazardous chemicals into theenvironment, setting the target to reach zero discharge of hazardous chemicals (ZDHC) from all GStar’s products and production processes . The performance of suppliers are monitored through
ZDHC InCheck and ZDHC ClearStream reports, which are linked to the ZDHC Manufacturing
Restricted Substance List (MRSL). The results of these reports are combined in a template of GStar supplier Detox program (explained in chapter 8.5).

5.2.1 ZDHC Manufacturing Restricted Substances List (MRSL)The ZDHC MRSL is a list of chemical substances used in the manufacturing process that are
subject to a usage ban. The MRSL applies to chemicals used in facilities that process materials
and trim parts for use in apparel and footwear. Chemicals in the ZDHC MRSL include solvents,
cleaners, adhesives, paints, inks, detergents, dyes, colorants, auxiliaries, coatings and finishing
agents used during raw material production, wet processing, maintenance, wastewater treatment,
sanitation and pest control.

5.2.2 ZDHC InCheck
The ZDHC InCheck report, a universally accepted chemical inventory standard for input
management, is an easy to read report of a factory’s chemical inventory list. The InCheck report
reviews the extent to which the chemical products of a factory conform to the ZDHC MRSL. The
ZDHC Gateway contains a database of ZDHC MRSL conformant chemicals, as uploaded bychemical formulators. Subsequently, a factory can source and select more MRSL conformant
chemicals to increase its performance on its InCheck report.

5.2.3 ZDHC ClearStream
The ZDHC ClearStream report is a global uniform wastewater reporting standard for output control.
A ZDHC ClearStream report can be generated from the ZDHC Gateway by uploading the resultsof a valid wastewater test completed according to ZDHC’s latest Wastewater Guidelines. The
ClearStream report is a scorecard that shows wastewater performance against conventional, heavy
metals and ZDHC MRSL parameters.

5.3 SUSTAINABILITY MONITORING FOCUS AS PER TYPE OF FACTORY
The extent to which production facilities are monitored on both social and environmental
sustainability performance depends largely on the type of factory and associated production
processes. In general, all Tier 1 and Tier 2 suppliers are monitored for both their social andenvironmental sustainability performance. For Tier 3 suppliers, the environmental and social

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monitoring process, as previously mentioned, will be a requirement as of 2025. Finally, Tier 4
suppliers will be mapped out and their performance will also be monitored from an environmental
and social perspective.
Social & Environmental Sustainability Monitoring
Vertically integrated suppliers
Direct Cut-Make-Trim

Tier 1

Subcontract Cut-Make-Trim
Direct processing (embroidery, dyeing, printing, washing, finishing)

Tier 2Tier 3 (from 2025)
Tier 4 (as they aremapped out)

Subcontract processing (embroidery, dyeing, printing, washing,finishing)
Fabric Mills
Tanneries
Stock dyeing
Yarn spinning/dyeing
Fleshing/liming
Farms
Chemical suppliers
Synthetic material manufacturers

Table 5. Sustainability Monitoring focus as per type of factory (2019-2025)

5.3.1 Supplier Sustainability Requirements
The tables below display the required monitoring tools per type of factory and/or processes.
REQUIREMENTS – Tier 1 Suppliers

Factory TypeCMT – Direct
CMT –Subcontract
Non-wetprocessing (e.g.,
embroidery) –directNon-wetprocessing (e.g.,
embroidery) –subcontract

Wet processing(e.g., printing,washing/laundry)– direct

Wet processing(e.g., printing,washing/laundry)– subcontract

Higg FSLM
SelfAssessment

Higg FSLM
Verification

Required

Required

Required

Required

Required

Required

Required

Required

ZDHC
InCheck
ReportNotapplicableNot
applicable

ZDHC
ClearStream
ReportNotapplicableNot
applicable

RequiredNot
applicable

RequiredNot
applicable

Required

Requiredon amonthlybasis

Required

Requiredon amonthlybasis

G-Star Sustainable Supply Chain Handbook

2022 Higg
FEM SelfAssessment

2022 Higg
FEM
Verification

Required

Required

Required

RequiredNot
applicable

Required

RequiredNot
applicable

Required

Required

Required

Required

Required

Required

Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)
Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)

2022/2023

Table 6. Supplier Sustainability Requirements Tier 1 Suppliers

REQUIREMENTS Tier 2 Suppliers (Fabric & Denim Mills)

FactoryType

Higg FSLM
SelfAssessment

Higg FSLM
Verification

Required

Required

Weaving

Knitting
Required

RequiredChemicalfinishingRequired

RequiredDyeingRequired

Required

Required

Required

ZDHC
InCheck
ReportRequired ona monthlybasis

Required ona monthlybasis

Required ona monthlybasis

Required ona monthlybasis

Tanning
Required ona monthly
basis

ZDHC
ClearStream
ReportRequired
2x/year (1xbefore April
30, 1xbeforeOctober 31)
Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)
Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)
Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)
Required
2x/year (1xbefore April
30, 1xbeforeOctober 31)

2022 Higg
FEM SelfAssessment

2022 Higg
FEM
Verification

Required

Required

Required

Required

Required

Required

Required

Required

Required

Required

Table 7. Supplier Sustainability Requirements Tier 2 Suppliers

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SUPPLIER ONBOARDING PROCESSThe onboarding process for new suppliers and factories is a crucial part of creating and maintaining
a responsible supply chain. It is important to ensure that the new suppliers meet G-Star’s standards
and are committed to monitoring and improving their sustainability performance. Therefore, all new
suppliers and factories are assessed as a part of the onboarding process before any orders areplaced, to ensure that the factory is committed to ensure good working conditions and meeting
environmental standards as well as providing price, quality and on-time delivery. The G-Star
supplier entry system which each supplier needs to go through before becoming part of the supply
chain is depicted below.

Figure 2. New supplier communication process from introduction to onboarding

The supplier onboarding process consists of three steps:
1. Sourcing notification of the new supplier through the Sourcing Director – that includes apreliminary country risk assessment (if applicable);
2. The sustainability desktop review (social & environmental) – that includes a decision on
approval from the sustainability dept.
3. The supplier onboarding and entry into G-Star monitoring process.
During the review process the sustainability team will review the required documentation from the
supplier and plans a visit (if circumstances allow) to the factories that are potentially used for GStar productions (including tier 1 subcontractors).
A pass in the review only allows the sourcing department to go ahead with proceeding a business
relationship with the supplier and its factories. Without the final “go” from the sustainability
department, placing orders (this includes salesman samples) are not allowed.
In case a supplier uses subcontractors it can be decided that only approved subcontracted factories
by G-Star can be used for production. This decision is based on the outcomes of the sustainability
review and is communicated and agreed upon with the supplier and the Sourcing Director.

6.1 COUNTRY RISK ASSESSMENT
Before the Sustainability Review takes place, the country-specific risks will be analyzed. If G-Star
does not yet source from the specific country, the country-specific risks will firstly be analyzed

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based on a due diligence check (see chapter 3). Based on the country risk-assessment profile, GStar will decide whether to begin the onboarding process with the new supplier.

6.2 SUSTAINABILITY REVIEWThe Supplier Sustainability review is based on the information collected through G-Star’s“sustainability minimum requirements for new suppliers” checklist.
The Sourcing department shares this checklist with the suppliers and at the same time introduces
the contact person of the Sustainability team. The checklist informs the supplier on G-Star’s
sustainability requirement and standards and serves as a request to provide the required
documentations.
The figure below demonstrates the step-by-step process of performing a sustainability review as apart of the supplier onboarding process.
Step 1:
Receive andcollect
information
required.

Step 2:
Identify tier &type factory ofcompletefactory portfolio

Step 2:Check social &environmental
requirements

Step 3:
Performance
review &addtional
information
requestStep 4:Make
Improvement
Plan & Final
Desicion

Figure 3. Sustainability Review process step-by-step

Based on the supplier category and processes, the Sustainability Performance Review will focus
on the risks associated with the specific supplier and factory category. For new Tier 1 and Tier 2
suppliers, both social and environmental performance is assessed during the onboarding process.
The review process is based on the verified scores for the SAC Higg tools (Higg FEM and FSLM),
and the performance of ZDHC ClearStream and InCheck reports result, when applicable.
The requirements are aligned and analyzed according to the sustainability requirements as
described in chapter 5.3, meaning depended on the type of factory and processes taking place it
is determined to focus on the Higg performance for social and/or environmental. The minimum
requirements are also updated and adjusted according the industry benchmarking.
All the information collected and reviewed is saved and stored by the Sustainability department in
the Salesforce database system. The supplier and their approved factories basic details (e.g. nameand country) are also added in the PLM system.

6.3 SUPPLIER ONBOARDING
Based on the Sustainability Review process, the supplier and its factories are either approved or
rejected. When the supplier has been approved, an order can be placed immediately and up till
one year after the review has been performed. If the order is placed after 1 year, the Sustainability
Review process will be repeated.
If the supplier is accepted the supplier has to sign the G-Star Supplier Declaration statingcompliance with the G-Star Corporate Responsibility Compliance Policy (CoC, RSL, ZDHC MRSL
and Materials Policy). The Purchasing Department will add the supplier to SAP system. As a
supplier to G-Star, the supplier will be part of the G-Star sustainability monitoring system. In thenext chapter (Chapter 7), the supplier monitoring system will be explained.

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Sustainability Review(Social & Environmental)

Supplier
Approved

Sign Supplier
Declaration

Add Supplier to
G-Stardatabase

Enter G-Star
Monitoring
SystemFigure 4. Process of Accepted Supplier after Sustainability Review

6.4 SUPPLIER ONBOARDING FOLLOW-UP PROCESS
Based on the outcome of the sustainability review the supplier will receive feedback on
improvements needed, this is through a Corrective Action Plan (CAP). In addition, additional
agreements can be made on the implementation of required monitoring tools or improvement ofscoring on certain sections of the Higg Index tools. The CAP might also include suggestions orfurther advice on policies or organization structures based on the documents reviewed.

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SUPPLIER MONITORING PROCESSThe social and environmental sustainability requirements for each supplier category are explained
in detail in Chapter 5. The sections in this chapter show the monitoring processes on both social(7.1) and environmental (7.2) performance and the corresponding timelines.

7.1 SUPPLIER MONITORING FOR SOCIAL SUSTAINABILITY PERFORMANCE(HIGG FSLM)
G-Star monitors the social sustainability performance of a factory based on the Higg Facility Social& Labor Module tool. As previously mentioned, all factories are expected to complete the Higg
FSLM self-assessment and third-party verification on an annual basis.

7.2 ENVIRONMENTAL SUSTAINABILITY PERFORMANCE (HIGG FEM &ZDHC)G-Star monitors the environmental sustainability performance of both Tier 1 and Tier 2 suppliers.
All suppliers should report their environmental performance with the Higg FEM tool. Additionally,
wet-processing facilities need to complete ZDHC InCheck reports on a monthly basis and ZDHC
ClearStream reports twice per year (1x before April 30, 1x before October 31) as per therequirements of G-Star Detox Program (see Chapter 8.5).

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SUPPLIER IMPROVEMENT AND DEVELOPMENT
8.1 MANUALSNext to the Supplier Compliance Policy G-Star provides its suppliers with a Social & Labor
Standards Guideline (Annex A4) and Environmental Guideline (Annex A3) that explain G-Star’s
expectations in detail to the suppliers.
The Social & Labor Standards Guideline helps suppliers to clearly understand the G-Star Code of
Conduct and its definitions, regulations and requirements. Each article in the Code of Conduct is
explained further, along with the expectations of remedial to the supplier's recommendations, sothat suppliers can develop a remediation plan that is effective and durable. This manual will support
suppliers to understand how to reach compliancy to the G-Star Code of Conduct, but also helps indeveloping and establishing clear policies, procedures, and strengthen interaction to build an own
Corporate Responsibility/Sustainability management system in the factory.
With the Environmental Guidelines, G-Star wants to promote a standard of environmental
management that ensures safe and responsible production of G-Star products. The guiding manual
helps suppliers to manage the environmental standards as set forth in our Code of Conduct.

8.2 SUPPLIER T RAINING
On an annual basis, the Sustainability team organizes a sustainability supplier conference, this caneither be digitally or in-person. During this event, G-Star invites all tier 1 and tier 2 suppliers withthe objective to provide updates on G-Star’s sustainability strategy and supplier sustainability
requirements. In addition, external relevant stakeholders are invited (e.g. Sustainable Apparel
Coalition or Zero Discharge of Hazardous Chemicals specialists) to provide additional training on
topics that were identified by the sustainability team (topics are selected based on supplier Higg
Index scoring or are based on the experiences during supplier engagement).
G-Star gives these trainings mainly to supplier management level but will also request Human
Resources and Environmental management related roles to these trainings. In addition, G-Star
monitors (as part of the supplier monitoring performance) if suppliers train their own workers andstaff sufficiently and effectively.
If G-Star’s internal team is not knowledgeable on a topic that is relevant to a supplier, the servicesof an external trainer could always be requested.

8.3 SUPPLY CHAIN DEVELOPMENT PROGRAM
To support G-Star suppliers to improve their social and environmental performance, G-Star alsooffers Supply Chain Development projects and programs. G-Star distinguishes these programs insocial and environmental topics. As indicated before, some improvement points can be country
specific. Development Programs like the Bangladesh Accord on Fire, Electrical and Building Safety
are therefore regionally focused.

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General Sustainability

SocialEnvironmental

G-Star Annual Supplier
Sustainability Training

ACT Purchasing Practices
Survey (conducted every 2
years)
Fair Wear Complaint System(Country specific)

ZDHC Academy

Higg Facility Tools Trainings(SAC)

DETOX supplier reports

Bangladesh ACCORD (country
specific)
Table 8. Overview of Supplier Sustainability development programs & trainings

8.4 CORRECTIVE ACTION PLAN (CAP)
G-Star adopted the Higg Index tools within G-Star’s supplier monitoring tools to support one unified
and effective industry-wide standard framework to measure social and environmental supply chain
performance. With this approach we aim to reduce the number of assessment and audits for
suppliers, in order to save resources (both for G-Star and its suppliers) that can be used for
performance improvement.
Based on the results of the verified Higg results, G-Star’s Sustainability team develops a Corrective
Action Pan (CAP) with each supplier. With this data suppliers are monitored on their sustainability
performance progress. The CAP is shared and communicated to the supplier around the end of
the year, after they completed their annual verified Higg FEM and FSLM module (see chapter 7).
In case High Risks are identified we expect an update and or an improvement plan within 3-6
months. In case we identify immediate concerns (Zero Tolerances) we will follow-up with the
suppliers immediately and ask support from our Sourcing director in communication to the supplierwith the request to work on an immediate remediation. This data of the Higg Index also serves to
identify the focus of G-Star’s Supplier Sustainability programs and trainings.

8.5 SUPPLIER DETOX PROGRAM AND REPORTS
Back in 2012, environmental NGO Greenpeace launched its Dirty Laundry campaign that exposed
the use of hazardous chemicals in the fashion industry. The use of these hazardous chemicals may
harm the workers and the environment if discharged into waterways untreated. Many apparel andfootwear brands were requested by Greenpeace to clean up their supply chains by banning theuse of these hazardous chemicals. G-Star signed a so-called Detox commitment with Greenpeacein 2013, and has worked on phasing out hazardous chemicals from its products and supply chains
ever since. To monitor the performance of its supply chain, G-Star has been running its Detox
Program since early 2018.
In this Detox program, G-Star requests its suppliers to ensure that all wet-processing facilities used
for G-Star production improve their performance on the input, process, and output areas ofchemicals management. The information is collected through the tools of ZDHC as described inchapter 5.2 and the Higg Facility Environmental Module (FEM), as described in chapter 5.1.4.
All suppliers and its facilities (Tier 1 and Tier 2) are actively monitored and are part of this internal
program.
Each supplier included in the program receives a Supplier Detox Report (annual or bi-annual) thatreflects the results of the above performance tools and test results. The information considers thecomplete wet-processing facilities, including subcontractors involved.
The report also includes a complete analysis of the requested test -and verified reports to give thesupplier full transparency on its performance against our Detox program. This also serves as a
guide to identify where corrective actions are needed in case medium risk or high risk substanceswere detected.

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8.6 COMPLAINT MECHANISM
8.6.1 Social Dialogue & Factory Complaints System
During 2019 and 2020 G-Star focused on training suppliers about the concept of a social dialogue
and how this could benefit them. During these trainings G-Star also informed and gave guidanceon key improvement points for their workers’ committee and factory complaint system, aiming toincrease functionality and effectiveness.
Starting 2021, G-Star participated in a cooperation program together with Fair Wear Foundation(FWF) and the Dutch Agreement on Sustainable Garments and Textile (AGT) that allowed us tohave access to the independent complaint system of FWF. This system was introduced at our
suppliers in India. If this program is deemed successful, we plan to roll this out in other key
production countries as well. The goal of this program is to enhance access to remedy for garment
workers and to collaboratively work on and learn about the remediation processes.

8.7 ACTACT is a ground- breaking agreement between 22 global brands and retailers and the IndustriALL
Global Union, a global trade union fighting for better working conditions and trade union rights
around the world. It aims to achieve a living wage for all textile workers through collective bargaining
at an industry level. By joining, we have committed to purchasing practices with our suppliers thatwill ensure fair terms of payment, full coverage of wage increases, better forecasting and planning,training and responsible exit strategies. With sector common indicators, the ACT accountability andmonitoring framework will help us measure progress towards more equal supplier partnerships.
Together with the involved and responsible departments (purchasing, product development, design,
finance, corporate strategy, sourcing, sustainability and supply chain management), G-Star RAW
analyzes its current performance. This is done through the ACT Purchasing Practices surveys.
With this data each responsible department will set targets to improve its purchasing practices thatare in line with the ACT purchasing practices commitments.
One of the focus points is improving G-Star RAW’s planning & forecasting in which G-Star RAW
aims to improve its practices in providing the forecast more in advance, update the forecast moreregularly and making sure the data has a higher accuracy rate. By booking the capacity at the
supplier beforehand and communicating with a detailed production planning multiple positiveeffects for both G-Star RAW and the supplier will be reached:
▪
▪
▪
▪
▪

Order security for the supplier which results in more job security for the workforce;Less pressure on the workforce at the supplier to reach delivery deadlines;
Reduced risk of (excessive) overtime working hours at the supplier;Improvements in on-time deliveries by the supplier and therefore more security for G-Star RAW
in shop date;
Increase in product quality due to better planning of the quality inspections by the Quality
Assurance team.

8.8 NON-PERFORMING SUPPLIERS
If during an assessment High Risks or Zero-Tolerances are found G-Star is committed to work withand support these suppliers to solve the non-compliance(s). The supplier will be offered theabovementioned activities of the Supplier Development Program or Trainings. However, if a
supplier repeatedly does not take any action to follow the remediation plan, the Sustainability
Department will escalate the unwillingness of the supplier to improve to the next level. We
distinguish two levels of escalation:••

Sourcing Director
CEOFirst the Sustainability Department will inform the Sourcing Director of the unwillingness of the
supplier to improve the identified issues/non-compliances. They will stimulate the suppliers to
improve the situation. If the supplier is still unresponsive or if there is conflict of interest for the

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Sourcing Director, the CEO will talk with the supplier to emphasize the importance of improving its
compliance status in order to remain its business relationship with G-Star. If the supplier is stillunresponsive to the CEO, and if the supplier is still important to G-Star for other reasons, thechairman can intervene as a last resort.
If the supplier is still unresponsive after going through the levels of Escalation it can lead to
discontinuation of the business relationship with the supplier and G-Star will start an exit procedure.

8.9 RESPONSIBLE EXIT STRATEGY
As a member of ACT, G-Star is committed to improving purchasing practices, including acommitment to practice responsible exit strategies with suppliers. Together with the Sourcing
department, G-Star’s sustainability team implements this exit strategy when exiting a factory forcommercial business reasons.
The aim of having a responsible exit commitment is to manage supplier expectations, mitigate
productivity issues, reduce legal and reputation risks, and reduce an adverse impact on workers.
The responsible exit strategy consists of three phases and follows the ACT Responsible Exit
Policy and Checklist:
A. Prior to exiting:Internally communicate and perform an initial risk assessment.

B. Exiting factories:

Communicate with suppliers on the ongoing risk assessment.

C. Immediately after exiting:Assess adverse impact on workers.

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LICENSEE REQUIREMENTS
G-Star currently works with licensee partners for footwear. They have the responsibility of theirrespective supply chains to comply with the G-Star Supplier Compliance Policy (Code of Conduct,(M)RSL, and Materials Policy). Following the Licensee Contract, the partners are responsible for:••••Appointing at least one employee within the company as a contact person to the
Sustainability Department. This person needs to have demonstrable management-levelknowledge and experience on social and labor and environmental compliance issues.
Applying the same monitoring processes as mentioned in chapter 7 with their respective
suppliers based on the same supplier categories as mentioned in chapter 4.
Informing the Sustainability department about any new suppliers before start of eachseason and sending in a signed declaration per supplier.
Quarterly reporting to the Sustainability Department monitoring activities per supplierfollowing the Licensee Contract.

G-Star reserves the right to visit licensees’ suppliers’ factories and this is agreed upon by thelicensees.

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ANNEX
A1. OTHER ACCEPTED THIRD-PARTY AUDIT MECHANISMS
In the transitioning phase, in order to avoid assessment fatigue, G-Star recognizes certain othercompliance assessment mechanisms for the purposes of new supplier onboarding process (seeAnnex for detailed information). In any case, the certification should not be more than one year
old and be in line with G-Star’s Code of Conduct, which include:A1.1. BSCI/Amfori
BSCI = The Business Social Compliance Initiative (BSCI) is a supply chain management systemthat supports companies to drive social compliance and improvements within the factories andfarms in their global supply chains. BSCI/Amfori implements the principle international labor
standards protecting workers’ rights such as International Labor Organization (ILO) conventions
and declarations, the United Nations (UN) Guiding Principles on Business and Human Rights andguidelines for multinational enterprises of the Organization for Economic Co-operation andDevelopment (OECD).
https://www.amfori.org/

A1.2. WRAP
WRAP = Worldwide Responsible Accredited Production (WRAP) is an independent certification
program mainly focused on the apparel, footwear, and sewn products sectors. WRAP issues
three levels of certification that are valid from six months to two years based on a facility's
compliance with specific principles, based on the rule of law within each individual country andinclude the spirit or language of the relevant conventions of the International Labor Organization(ILO).
http://www.wrapcompliance.org/

A1.3. SMETA
SMETA = Sedex Members Ethical Trade Audit (SMETA) is an audit methodology, providing acompilation of best practice ethical audit techniques. It is designed to help auditors conduct highquality audits that encompass all aspects of responsible business practice, covering Sedex’s fourpillars of Labor, Health and Safety, Environment and Business Ethics.
https://www.sedexglobal.com/smeta-audit/A1.4. SA8000
SA8000 = The SA8000® Standard is a social certification standard established by Social
Accountability International. SA8000 measures social performance of factories and organizations
in eight areas important to social accountability in workplaces, anchored by a management
system element that drives continuous improvement in all areas of the Standard. The Standard
reflects labor provisions contained within the Universal Declaration of Human Rights andInternational Labor Organization (ILO) conventions. It also respects, complements and supports
national labor laws around the world and helps to secure ethical working conditions.
https://sa-intl.org/

A1.5. FWF
FWF = Fair Wear Foundation (FWF) is a non-profit organisation that works with garment brands,
factories, trade unions, NGOs and governments to improve working conditions for garment
workers. They conduct a Brand Performance Check at all FWF member companies annually.
They also conduct audits in garment factories if they meet FWF labor standards. The FWF labor
standards derived from ILO Conventions and the UN’s Declaration on Human Rights. This means
the FWF Code of Labor Practices is based on internationally recognised standards which havebeen set through tripartite negotiation.
https://www.fairwear.org/labor-standards/

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A2. G-STAR SUPPLIER CODE OF CONDUCT
https://img2.g-star.com/image/upload/v01/CSR/23-1/G-Star_RAW_Supplier_Code_of_Conduct_2023.pdf

A3. G-STAR ENVIRONMENTAL GUIDELINES
https://img2.g-star.com/image/upload/v01/raw-responsibility/downloads/planet/polution/GStar_Environmental_Guidelines_v4.0_Final_Version.pdf

A4. G-STAR SOCIAL & LABOR GUIDELINES
https://img2.g-star.com/image/upload/v1640601408/CSR/21-4/GStar_Social_and_Labour_Guideline_version_2.2_-_December_2021.pdf

A5. G-STAR MATERIALS & ANIMAL WELFARE POLICY
https://img2.g-star.com/image/upload/v01/CSR/23-1/GStar_RAW_Materials_Animal_Welfare_Policy_2023.pdf

A6. G-STAR HOMEWORKER’S POLICY
Homeworkers are defined by the International Labor Organization as: people working from theirhomes or from other premises of their choosing other than the workplace, for payment, which
results of a product or service specified by the employer. Homeworkers are often employed in piece
work, meaning they are paid according to the amount of pieces made. Homeworkers are
considered a high risk as they are often outside of a controlled workplace. Monitoring the labor
conditions is therefore more difficult.
Homework Policy: As a general rule, G-Star prohibits subcontracting to homeworkers, because of
its limited resources to be able to responsibly source from homeworkers on a structural basis. GStar only allows homeworkers in its supply chain if this is pre-approved by the Sustainability
Department.
1.1

DUE DILIGENCE

G-Star is aware that it is not uncommon in the garment industry that factories (partly) outsource
their orders to homeworkers. In general, G-Star does not allow homeworking. Several measures
are taken to ensure the no homeworkers policy:
Product design: Designers and Product Developers are trained to flag designs where outsourcing
to homeworkers can be more common, such as hand embroidery. Therefore, these techniques are
not used in our collection. Next to that, our Product Intelligence Teams carefully check if (one ofour) suppliers has the capabilities and capacity to produce the G-Star design. If a certain design
cannot be made by one of our suppliers a new supplier will be found following the steps described
the Responsible Sourcing Manual and the Supplier onboarding process as described in chapter 6.
Due diligence check: However, G-Star includes homeworkers in the due diligence check (seechapter 3). This check is performed on a seasonal basis, based on the products that G-Star sources.
Partnership with the supplier: G-Star is aware of the capacity and capabilities of the supplier.
Furthermore, G-Star books capacity at the factories ahead in order to reduce the chance of
subcontracting.

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Monitoring the supplier: The Product Intelligence Centers, specifically QA and Sustainability teamare in close contact with the factory. Therefore, they can closely monitor and track the productionof the orders that are placed at the supplier.
Supplier Monitoring: The Product Intelligence Centers (PIC), specifically the QA and Sustainability
teams, maintain close communication with factories. This allows for continuous monitoring andtracking of order production at the supplier level.

1.2

AUTHORIZATION PROCESS

If there is a valid reason in which capabilities of homeworkers are needed to realize a certain design
the Sustainability Department will first perform a Sustainability Performance Review. Please notethat homeworker as a result of under capacity at a direct supplier can never be a reason for working
with homeworkers.
1.3

ENTRY PROCESSThe process described in chapter 6 of this Handbook will be followed for homeworkers too. G-Starwill support its supplier to sources responsibly. G-Star advises its suppliers to work withacknowledged intermediaries that are experienced in the contracting of work to homeworkers.
Those intermediaries should at least be compliant with the law.
1.4

MONITORING PROCESS AND RATING SYSTEM

Since G-Star’s inception homework was not identified in G-Star supply chain nor was it needed tocreate a certain design. In general, the monitoring system will be set up following the monitoringprocess and rating system as described in chapter 7. However, requirements for responsibly
monitoring homeworkers will be added. The monitor will differ from case to case depending on theorganization of the homeworkers, the process outsourced to the homeworkers, volume, country,
etc. The ETI Homeworker Guidelines (2010) and the International Labor Organization Good
practice guidelines for the employment of homeworkers) Jakarta, International Labor Organization,2013 will be taken into account when monitoring homeworkers.
The Quality Assurance (QA) team plays an important role in identifying (unauthorized)
subcontracting to homeworkers during their seasonal quality inspections. The QA team and theSustainability team therefore work closely together.
The costs of the third party assessments and follow-up assessment(s) will be borne by thesubcontractor / 2nd Tier supplier.

Suppliers must disclose all production units, including home workers, to G-Star before
production commences. Supplier must need to Adhere ILO - Home Work Convention, 1996
(No. 177) Guidelines for Home Worker. Prior approval from G-Star Raw is required for theengagement of home workers, with detailed information on the production process andinvolved contractors.

1.5

UNAUTHORIZED HOMEWORK

If G-Star encounters unauthorized homework in its supply chain meaningful engagement will be
provided to the affected stakeholders through the course of due diligence. Furthermore, training
will be provided to the 1st supplier(s) to explain the importance of supply chain transparency andthe labor risks associated with subcontracting and homework.
If unauthorized homework is discovered in G-Star Raw supply chain, we will engage meaningfully
with the affected stakeholders throughout the due diligence process. Furthermore, training
sessions will be conducted for the primary supplier(s) to underscore the importance of supply chaintransparency and to raise awareness about the labor risks associated with subcontracting andhomework.

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