P.8

"Supplier non-compliances are classified into four categories, with standard response for each:•breaches by suppliers’ subject to zero tolerance (relating to the most serious situations liable to be encountered, among which child labour and forced labour). Identification of a zero-tolerance breach triggers the immediate establishment of a crisis unit bringing together the Kering audit team and the relevant House(s) to decide on the future of the relationship with the supplier: immediate shutdown of the approval process if the supplier is in the process of being activated but has not started working; and discussions about the possibility of remediation and support for the supplier or about the need to terminate the contractual relationship if the supplier is working on one or more orders. The brand is the ultimate decision-maker on the most appropriate response,•serious compliance breaches by suppliers. The supplier is given one month to resolve the serious breach of compliance, and a follow-up audit is scheduled to confirm that the issue has been resolved,•moderate compliance breaches by suppliers. The supplier is given three months to resolve the moderate breach of compliance, and a follow-up audit is scheduled to confirm that the issue has been resolved,•observations. These give rise to a corrective action plan and are the subject of a dedicated checklist at the next audit. The supplier has six months to remedy the observation.For each of the 13 categories of the comprehensive audit requirements, a detailed description of what constitutes zero-tolerance breaches, serious breaches of compliance, moderate breaches of compliance and observations has been prepared. Depending on the results of audits, suppliers are classified as: compliant; partially; progress expected; zero tolerance."