In 2015, Kering and its Houses established a compliance management
system, which is intended to provide supply chain analysis within Kering’s
production processes, as well as create and share relevant best practices.
The system is based on the following six key pillars.
• SUSTAINABILITY
The Sustainability Principles include mandatory expectations, due to
requirements imposed by international and national laws, as well as
Kering’s additional expectations. Suppliers are required to abide by these
principles and supplier compliance is evaluated on this basis. Each supplier
is in turn tasked with passing on these principles to its own subcontractor
network, if it has one. Along with the Code of Ethics, including the
Supplier’s Charter, the principles are embodied in the Group’s template
contract with suppliers. They are systematically issued to suppliers and
both form an integral part of their contractual relationship with Kering.
• CENTRALIZED MANAGEMENT
Kering has centralized oversight through a team of 24 people (including
twelve auditors specialized in conducting supplier audits and monitoring
anomalies). This team may also be assisted by an external service provider.
• UNIFORM PROCEDURES
There are clear and uniform procedures for all Houses that correspond to
the different stages of the supplier relationship, including the activation
procedure, monitoring procedure and contract termination procedure.
• RISK-BASED AUDITING
Risk assessments and audits plans are constructed based on predefined
criteria. Audit plans are regularly updated to take into account new
suppliers.
• STANDARDISED AUDITS
Kering uses a single and comprehensive audit methodology with a
questionnaire of 97 questions, divided into 13 categories (including child
labor and forced labor), which are aligned with the best standards in the
field, in particular the SA8000 and SMETA standards. Follow-up audits
include a smaller scope focusing on the area(s) in which breaches of
compliance were identified or observations made during the first
comprehensive audit. In any case, the announced or unannounced audits
consist of document reviews, site tours, and worker interviews. Workers are
selected to offer a representation of the workforce, notably concerning age
and union affiliation, if any. These interviews are confidential.
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"• ENHANCED MONITORING OF SUPPLIERS
In 2020, Kering established a portal designed to enhance communication
with suppliers, as well as to reinforce the monitoring of their operations,
based on a self-assessment. Indeed, in addition to providing suppliers with
access to relevant training and key Kering documents, the portal fosters a
greater transparency on supply chains operations since suppliers are
annually asked to complete three questionnaires designed to collect
information necessary to further evaluate their practices, including with
respect to mitigating the risks of forced and child labor."
"• COST PER MINUTE ANALYSIS
The Kering Supply Chain Audit Department performs a periodic analysis
designed to assess the cost of the suppliers’ work per minute, which takes
into account, inter alia, the number of worked hours and the corresponding
cost for Kering. A high cost per minute might be an indicator of the use of
undeclared suppliers or underpaid workers, which leads to the performance
of targeted investigations by the Kering Supply Chain Audit Department to
determine the opportunity of corrective actions."
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"In 2020, Kering’s Sustainability Department also conducted a study aimed at
identifying and assessing human rights risks linked to the supply of certain
raw materials. This analysis was carried out in the countries in which the
Group’s suppliers are located. The findings from these various studies enabled
the Group to identify a number of key points and subjects, and the resulting
recommendations were shared with members of the Executive Committee."