On 30 November 2020, KKR and Coty completed the sale ofCoty’s Professional and Retail Hair businesses, including theWella, Clairol, OPI and ghd brands (the “Wella Business”) to thenewly created Wella group of companies.
The Wella group of companies will operate as an independentgroup of companies as of December 1st, 2020.
The Wella Business operated, during the last 12 months, as partof the Coty group using the resources of the Coty supply chainorganization and following the same plans with regard to supply
chain management (including all modern slavery aspects). TheWella Business therefore reiterates Coty’s current California
Transparency in Supply Chains Act of 2010 disclosure and the UK
Modern Slavery Act Statement dated December 2019 (asattached hereinbelow).
The Wella group of companies will publish statements concerning
future plans and activities concerning Supply Chains and ModernSlavery in the first quarter of 2021.

References to “KKR” are to an affiliate of funds and separately managed accounts, advised and/or managed by Kohlberg Kravis
Roberts & Co. L.P. and/or its affiliates.

DECEMBER
20192Referencesto L.P.
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are toitsanaffiliate of funds and separately managed
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and/oraffiliates.

THIS DOCUMENT IS INTENDED TO SERVE AS:
Annual statement required to be published for thepurposes of the United Kingdom’sModern Slavery Act 2015.
(2) The required disclosure for the purposes of the California
Transparency in Supply Chains Act of 2010.
(1)

Consistent with Coty Inc.'s (“Coty” or “We” or “Our”)
longstanding commitment to excellence and corporate
responsibility, including its commitment to employees andconsumers throughout the world and to the communities andthe environment in which Coty and its products are present,
Coty confirms its dedication to ensuring that the supply chains
it employs in the sourcing and manufacturing of its products
do not include, utilize or tolerate human trafficking, slavery
and forced or child labour.
Consistent with its assessment of the potential risks, and inaccordance with the California Transparency in Supply Chains
Act of 2010 and the UK Modern Slavery Act 2015 (the "Acts"),
Coty describes below the efforts that it makes and has madeover the past financial year (1 July 2018 - 30 June 2019). toensure human trafficking, slavery and forced or child labour
are not present in its operations or the operations of its
contractors, subcontractors and suppliers (together “BusinessPartners”).
STRUCTURE AND SUPPLY CHAIN
Coty is one of the world’s largest beauty companies with an
iconic portfolio of brands across fragrance, color cosmetics,
hair color and styling, and skin and body care. Coty is theglobal leader in fragrance, a strong number two in hair colorand styling, and number three in color cosmetics. Coty has
approximately 19,000 employees in over 46 countries and it
3References
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and/oraffiliates.

products are sold in over 150 countries around the world.
Coty operates through three divisions:•••

Consumer Beauty is primarily focused on color
cosmetics, retail hair coloring and styling
products, body care and mass fragrances.
Luxury is primarily focused on prestige
fragrances, premium skincare and premium
cosmetics.
Professional Beauty is primarily focused on hairand nail care products for salon professionals.

Our supply chain enables the production of our beauty
products and daily business operations.
• Beauty products: We manufacture, package, market, selland distribute a range of beauty products for consumers
to enjoy. We manufacture and package approximately
77% of our products, primarily in facilities located in theUnited States, Europe, Brazil, China, Russia, Mexico andThailand. We also use third-party manufacturers (TPMs)
on a global basis who produce approximately 23% of ourfinished products.
• Raw materials: The principal raw materials used in themanufacture of our products are essential oils, alcohols
and speciality chemicals. They are purchased from third
party suppliers. We also purchase packaging componentsthat are manufactured to our design specifications. We
have identified raw materials where there is an4References
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••

increased risk of human and labour rights abuses and areworking to mitigate this risk.
Licensors: We have a diverse portfolio of brands. We
maintain 30 brand licenses predominantly within ourluxury division. We engage the licensors to ensure specificconditions are met.
Business operations: As a large global organisation we
have other supply chain activities which include offices,marketing, retail stores and websites.

INTRODUCTION
We have made progress over the last year further developing
our sustainability framework that will address the social,environmental and ethical intentions of our business underthree strategic pillars focusing on the Beauty of our People, theBeauty of our Products and the Beauty of our Planet. Theframework includes intentional social and environmental
commitments over a five year timeframe to build a betterbusiness and a achieve a more sustainable and equitable world.
Our sustainability framework also contributes towards theSustainable Development Goals (SDG) - specifically SDG 5, 10,
12 and 17.
Our “People” ambitions encompass our ethical business activity
throughout our value chain and building a more inclusive
business. This includes inclusive leadership training andexpanding our We Stand for You program. The program,delivered in partnership with the advocacy group, GlobalCitizen, engages our employees and citizens worldwide intackling prejudice and discrimination based on gender, sexualorientation, disability and ethnicity. Our “Product” pillar
priorities include responsibly sourced ingredients, supply chaintransparency, sustainable innovation and packaging based on
circular design. Finally our “Planet” pillar sets out how weminimize the environmental impact of our own operations.
5References
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Our approach
We are committed to respecting and promoting fundamental
human rights throughout our own operations and extended
supply chain. This includes a dedication to ensuring our sourcing
and manufacturing supply chains do not include, utilize or
tolerate human trafficking, slavery and forced or child labourand comply with all applicable laws.
Our policies in this area are guided by international standards
including the UN Declaration of Human Rights, thefundamental rights set out in the International Labour
Organization’s (ILO) Declaration on the Fundamental Principles
and Rights at Work and the OECD Guidelines for MultinationalEnterprises.
We have been a signatory to the UN Global Compact (UNGC)
since 2015 and support the ten principles on human rights,
labour, environment and anti-corruption. We are members ofUNGC UK Network Modern Slavery Working Group whichmeets quarterly to develop our understanding of identifying
and managing modern slavery risks and to share best practicewith our peers.
We are also involved in a number of industry efforts related torespecting and advancing human rights in a pre-competitive
manner:•The Responsible Mica Initiative (RMI) aims to eradicate
child labour and poor working conditions from the Indian
mica supply chain by the end of 2022. For further
information, see page 6.

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•

AIM-Progress promotes responsible sourcing practices,including human rights, in supply chains.

•The Responsible Beauty Initiative promotes collaboration
and best practices between beauty companies toimprove sustainable practices, including on human andlabour rights. The first pilot focused on sharing mutualsupplier information related to raw materials. In the lastyear, Coty was able to share over 42 suppliers and accessan additional 36 suppliers from other members.

•The Roundtable on Sustainable Palm Oil (RSPO) aims toreduce the impact of the palm oil supply chain on humanrights as well as biodiversity and the environment.

•SEDEX, or Suppliers’ Ethical Data Exchange, is an online
portal for storing suppliers’ self-assessment and audit
documentation focused on the pillars of Human andLabor Rights; Health & Safety; Environment and Business
Integrity. Following our risk mapping exercise to identify
suppliers at higher risk of non-compliance to our Code of
Conduct for Business Partners, we use the SEDEX
platform to manage the data from these suppliers’ third
party ethical audits.

INTERNAL POLICIES AND TRAINING
Our employees are key to ensuring our business continues
to operate to a high ethical standard and internal
accountability is fostered. All employee receive the Codeof Conduct and are required to follow it. They also undergo
a range of mandatory on-line trainings to ensure they
uphold these standards.
In 2019, we continued to implement our global complianceprogram, Behave Beautifully, designed to detect and7References
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prevent violations of the law and promote a culture of
ethical business practices. We enhanced awareness of key
compliance principles and rules through on-line and livetrainings, townhalls, company-wide communications, andguidance documents accessible on our intranet. On training
alone, over the last year, a total of 12,625 employees
completed e-learning modules, which are available inmultiple languages according to the needs of our workforce.
We continue to actively encourage employees and third
parties to use the Ethics and Compliance Hotline to raisequestions or concerns. The Hotline, run by an independentcompany, is accessible via phone or online in over 300
languages, 24 hours a day, 7 days a week and enables
individuals to report anonymously where permitted by local
law. Coty conducts prompt and unbiased investigations into all
allegations of misconduct, and regularly reports investigation
data to the Executive Committee and Audit & FinanceCommittee of the Board of Directors. We actively uphold our
non-retaliation policy so that individuals are free to report theirconcerns safely.
SUPPLY CHAIN POLICIES AND TRAINING
Our commitment to respecting human rights extends
throughout our supply chain to our business partners. We
request that our key, suppliers, sign our Code of Conduct for
Business Partners as a first step of the compliance process.
This includes our current suppliers and any new suppliers werecruit. The Code is based on international human and laborrights standards, and slavery and human trafficking in theirown businesses and materials supply chains.

8References
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To date, 225 of these suppliers have signed our Code ofConduct for Business Partners and approximately 60 suppliers
have provided an equivalent code to which they are complying.
This represents around 65% of our existing in-scope suppliers.
We foster accountability and therefore take any incidents ofnon-compliance seriously. These would be escalated toappropriate senior leadership and are recorded to ensure wemonitor and address as required.
In addition, our third-party manufacturing agreements include
a specific clause requiring suppliers to not use any child orforced labour.
To support these efforts, there is ongoing internal training
covering our Code’s impact on suppliers, what they need to do
to demonstrate compliance and how we will deploy iteffectively with them. Within the past year we have integrated
new supplier sustainability pre-selection criteria into our global
Category Sourcing Strategy training, which has been deployedin key markets and will continue to be rolled out in the comingyear.
RISK MAPPING
We have made progress in supplier risk mapping andcompliance verification. Based on the results of a supplier risk
mapping exercise carried out in 2017 - around 800 direct spend
supplier sites were identified and ranked according to risk of
non-compliance to our Code of Conduct for Business Partners.
It considered the material or service being purchased, thegeographical region it is provided from, and the level of spend.
In the past year we have prioritised our engagement withthose suppliers who are considered a higher risk of non9
Referencesto L.P.
“KKR”
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compliance. We have begun the compliance verification
process, using the SEDEX online platform, to ensure that those
identified suppliers are able to demonstrate compliance via athird-party ethical audit which is uploaded onto the SEDEX
platform. These audits are either announced or semi
announced (undertaken within a two to three-weektimeframe) and performed on-site by independent auditors.
They cover the areas of labour and human rights (including
modern slavery), health and safety, environmental standards
and business integrity.
The engagement has focused on verifying individual suppliersites. The following supplier sites are part of our “Wave 1”
compliance verification process:582121082

Raw materials (incl Fine Fragrance)
PackagingThird Party Manufacturer
Goods with Purchase & Merchandising
Total "Wave 1” supplier sites

We continue to work with them to resolve any major or critical
non-compliances (NCs) through a Corrective Action Plan. So
far 40 of these sites are verified as compliant with our Codeof Conduct for Business Partners.

10References
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“KKR”
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affiliate of funds and separately managed
accounts, advised and/or managed by Kohlberg Kravis
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and/oraffiliates.To embed this verification in the day-to-day supplier risk
management process within our Procurement function,
training is being rolled out on audit process management andthe use of SEDEX to key Procurement users in the coming year.
This year we have increased our focus on Mica
Spotlight: Mica
Mica is a mineral found in many products across cosmetics,
automotive, and electronic industries and provides a sparkle orsheen. We are aware of the risks associated with Indian mica
sourced from the regions of Bihar and Jharkhand where there
are reported instances of child labour and unsafe workingconditions.
We continue to participate in the Responsible Mica Initiative(RMI), a multi-stakeholder effort which aims to achieve a 100%
sustainable Indian mica supply chain by eradicating child labour
and unacceptable working conditions by the end of 2022. Coty
was one of the co-founding members and has a role on theBoard of Directors and is active in two of the work-streams –Traceability & Specifications and Community. RMI members
represent around 57% of the total mica exports from India andaround 70% of this is fully traceable to the source mines andprocessing units.
To date the RMI has reached 80 villages and 5,300 household
through community empowerment programs, piloted
workplace standards with three processors and made progresswith local government to create the right regulatoryenvironment for legal mining. We have engaged the sevensuppliers from whom we source Indian mica to share with us
the visibility of their supply chains through the supply chain
traceability tool developed by the RMI.
11References
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By working with other stakeholders across all sectors, we areable to tackle the systemic issues and create a long term,sustainable solution.
Ongoing supplier assessment
As we increase our use of the SEDEX audit platform, over thelast year we have reduced our use of EcoVadis for direct spend
suppliers at a higher risk of non-compliance to our Code ofConduct for Business Partners. We still evaluate through
EcoVadis, and will continue to do so, but with more of a focus
on indirect spend categories.
EcoVadis is used to assess the environmental and social
performance of our suppliers, based on supplier
documentation related to the four key areas:• Environmental Management• Labor and Human Rights• Sustainable Supply Chains• Fair Business Practices
They analyze their performance through a 360° process which
includes over 800 data points and external references fromgovernments, NGO’s, trade associations and stakeholder
feedback. The assessment is then scored, described in a
written report and made available to Coty and the supplier. We
share these with our buyers and they are also

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taken into consideration for request for proposals. If the score
warrants it, a Corrective Action Plan will be put in place by thesupplier and a reassessment timeframe agreed by bothparties.
This year, Coty has 165✓ suppliers assessed in EcoVadis withan average score of 59 out of 100, more than 17 points above
the average EcoVadis score and higher than our 2018 averageof 54. We have had 144 of the suppliers re-evaluated in thelast year and the average performance increase has been +2.9
points, including a 3.2% improvement in the Labour Standards
pillar. 65% of our suppliers re-evaluated have shown an overall
improvement in their performance score.
LOOKING AHEAD
Building on the work conducted this year, over the next 12months Coty plans to:• Launch its Third-Party Due Diligence tool and process
to ensure that Coty is selecting business partners thatare committed to conducting business ethically andlawfully. We will pilot the program in selected markets
by the end of the calendar year, followed by a global
roll-out in the first half of 2020.
• Complete the launch of our updated Code of Conduct
for Business Partners which includes enhanced
standards to help ensure human trafficking, slavery andforced or child labour are not utilized in their operations.
• Launch a new Global Code of Conduct e-learning, andcontinue to conduct live trainings on key risk areas totargeted employees.Conduct an internal review,facilitated by Ethisphere and benchmarked against
leading companies, of our compliance and ethics
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program.
• Complete the second phase of the complianceverification program reaching the remaining directspend supplier sites at a higher risk of non-complianceto our Code of Conduct for Business Partners.
• Extend our Code of Conduct for Business Partners risk
mapping exercise to our key indirect spend categories,
which will include verifying compliance for those
suppliers at a higher risk of non-compliance.
• Continue to identify and mitigate any risk associatedwith sourcing of key raw materials where human andlabour rights may be affected.
• Develop and pilot an e-learning training for the UK
professional salesforce to help ensure they understandhow to detect early warning signs of modern slavery intheir business interactions with prospective and existingsalon partners, and how to report any suspected
instances.
Approved by theBoard Signed by
Pierre Laubies Chief
Executive Officer,Coty

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