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"■ Living Wage Approach

1. Approach

Fast Retailing recognizes a living wage as a worker’s right and strives to not only ensure a legal minimum wage for workers in our supply chain, but also a living wage that provides workers with a comfortable standard of living. Since joining the Fair Labor Association (FLA) in 2015, an organization committed to fair compensation, we have collaborated to analyze wage compensation data at our partner factories to identify gaps between worker wages and a living wage, seeking solutions to any gaps we identify. Most apparel brands, including brands in the Fast Retailing group of companies, outsource production to suppliers. Those suppliers determine the wages of the workers by considering multiple factors including the local minimum wage, the local cost of living, wage levels at neighboring factories and factory’s business performance. While understanding the challenge of those suppliers in defining and guaranteeing workers’ living wage, we are committed to the following actions towards a living wage, in collaboration with our production partners and stakeholders:

 By engaging with production partners, we comply with legal requirements and strive to build sound industrial relations, enhance human resource management capacity and improve performance and efficiency of factory and individual workers, and share best practices.

 Pursuing responsible procurement practices.

 Advocating improved social security systems in sourcing countries to mitigate the impact of unexpected worker circumstances such as illness, injury, unemployment etc."

"Improving performance and efficiency

Performance and efficiency at both the factory and individual worker level are key factors in determining wage levels. Since 2020, we have developed programs to standardize worker skill assessment and skill training and conducted pilot programs. The programs help workers improve their skills and increase their efficiency. Our progress and planning toward improving worker skills for 2023 includes:

 Implemented the program in 12 factories in China, with a plan to introduce to factories in Vietnam and Bangladesh.

 Received training focusing on Human Resource Management and Wage Management from the Better Work Academy to contribute to further efficiency, with an aim to develop a suitable training curriculum for our partner factories."