p.103

"Onboarding of new suppliers

⌐ In 2023, our primary focus was on maintaining partnerships with our existing manufacturing partners rather than onboarding new ones. Consequently, the number of initial assessments – the first approval stage for a new entry into our supply chain – in prospective supplier factories remained with 66 at a similar level to the previous year (2022: 58). Of these, 19 factories (2022: 20) were either rejected directly after the initial assessment identified zero-tolerance issues or were ‘rejected with a second visit’ due to identification of one or more threshold issues, which means they were rejected but given the chance to remediate the non-compliance issues within a specific timeframe. The vast majority (64%) of all initial assessments were undertaken in Asia (2022: 71%), with China accounting for 20% (2022: 26%).

Overall, at the end of 2023, the first-time rejection rate of new factories visited was 29% and thus lower than in the previous year (2022: 34%). Manufacturing partners with threshold issues are typically given three months to remediate them before being re-audited for final acceptance. Through active support and capacity building, all initially rejected factories successfully closed their non-compliance issues and were onboarded. As a result, in 2023, there were no factories subject to ‘final rejection."