No continuous improvement plans

Pg. 2

"Ensuring good working conditions in our fulfillment centers is a priority for Zalando. Since 2012 we have processes in place to closely monitor the social standards at both our own and partner fulfillment centers. The implementation and maintenance of the social standards are reviewed on a regular basis both inter-nally and externally by the independent testing and certification company, DEKRA. DEKRA checks take place on an unannounced basis approximately twice a year. These checks cover, among other topics, that no forced labour is taking place and that working hours do not exceed the legal regulations.

At zLabels GmbH we have a robust Ethical Trading program in place. As part of our onboarding process, all new suppliers and factories must sign up to the Zalando Code of Conduct for Business Partners. In addition, all factories must provide a recent audit done by an accredited, external third-party. Based on the findings of the audit, a Corrective Action Plan (CAP) is developed and we ask our suppliers and their factories to demonstrate improvement in all identified areas. No orders can be placed without setting up a factory on our system and this is only done if it meets all our ethical requirements as laid down in our Code of Conduct.

For a new factory setup, if critical findings are observed, we do not begin the relationship without evidence that the existing findings have been remediated. If a critical non-compliance (NC) is found at an existing factory, we require evidence of improvement to continue our business relationship. We work with nomi-nated third-party consultants who provide external support on resolving NCs at our suppliers’ factories. In addition to our third party audit program, the zLabels Ethical Trade team also visits approximately 10% of all strategic factories annually to ensure our Code of Conduct is being followed.

We have an ethical database that connects various parts of our business to factory ethical information. On the database, suppliers can manage their factories, audits and CAPs. This system was put in place to increase transparency of our process with suppliers and also within other parts of the zLabels business. This new system allows us to easily track each factory’s progress and provides reminders to suppliers and their factories on uploading evidence and CAP closures.

We carry out business partner due diligence for all partners of an entity of the Zalando group which are associated with a potential higher risk according to our Group Policy “Compliance Checks on Business Partners”. "