PVH Corp. Slavery and Human Trafficking Statement Under the California Transparency in Supply Chains Act, UK Modern Slavery Act and Australian Commonwealth Modern Slavery Act
This Statement provides an overview of the efforts that PVH Corp. (together with its subsidiaries, “PVH,” the “Company,” “we,” “us” or “our”) has taken, including during our fiscal year from January 31, 2022 to January 29, 2023 (“fiscal 2022”), to ensure that forced and child labor is not taking place in our business, including within our supply chain. We have prepared this Statement on a consolidated basis for PVH --although not all the entities in our consolidated group are subject to each or any of the California Transparency in Supply Chains Act, UK Modern Slavery Act or Australian Commonwealth Modern Slavery Act -- because we have a single compliance program, with one set of policies, relating to forced and child labor. Our compliance program and policies also address child labor risks.
In this Statement, PVH uses “forced and child labor” to refer to slave labor, prison labor, indentured labor, bonded labor, human trafficking, child labor and similar conduct.
PVH is a consumer-focused global growth platform for brands in our sector, building Calvin Klein and TOMMY HILFIGER into the most desirable lifestyle brands in the world. We have approximately 27,000 associates operating in over 40 countries and generated over $9.0 billion in 2022 revenue.
We have an extensive established network of worldwide sourcing partners that enables us to meet our customers’ needs in an efficient manner without relying on any one vendor or factory or on vendors or
factories in any one country. Our products were produced in approximately 1,100 factories in approximately 40 countries during fiscal 2022. We source finished products and, to a limited extent, raw materials and trim. Raw materials and trim include fabric, buttons, thread, labels and similar components. Finished products consist of manufactured and fully assembled products ready for shipment to our customers and our stores (apparel, footwear, accessories and related products). Raw material, trim, and finished product commitments are generally made two to six months prior to production. Our supply chain is constantly evolving, both at the manufacturer and country level. Please visit our factory list for details about business partners from whom we source and their location.
At PVH, Corporate Responsibility (“CR”) has long been central to how we conduct business and plays a critical role in our PVH+ Plan strategy. Through our Forward Fashion strategy, we have set commitments for human rights and climate action. We do this because human rights are non-negotiable for us, and these two issues must be addressed in tandem, to help advance human rights within the fashion industry. We aim to be transparent about our progress – please visit responsibility.pvh.com to read about our Forward Fashion strategy, and to access our current and past annual CR reports.
Alignment with International Standards; PVH Policies
The requirements for doing business with PVH are based, in part, on the Universal Declaration of Human Rights, the International Labour Organization’s (“ILO”) Core Conventions, and the United Nations Guiding Principles on Business and Human Rights, as well as other third-party standards, such as the OECD Due
Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, frameworks and codes of conduct, some of which are discussed in this Statement. We communicate our standards and requirements to our business partners in our supply chain through the following:
- A Shared Commitment, our code of conduct for all of our business partners, a copy of which is provided to each of them at the outset of our relationship. First introduced in 1991, A Shared Commitment prohibits forced and child labor and more generally requires our business partners to comply with ILO standards.
- CR Supply Chain Guidelines, which are provided to both suppliers and licensees during our onboarding process. The CR Supply Chain Guidelines provide guidance to our suppliers and licensees on how to comply with all elements of A Shared Commitment, including its prohibitions on forced and child labor.
Specifically, our Migrant Worker Policy, which is part of the CR Supply Chain Guidelines, requires suppliers and licensees to comply with a “no fees” (i.e., employer pays) policy, and ensures that migrant workers are not responsible for paying fees or expenses to secure or maintain employment with the factory at any point during the employment cycle. Additionally, our Migrant Worker Policy provides more detailed guidance to suppliers and licensees on the requirements for the responsible recruitment of migrant workers, and how to address, in a comprehensive and sustainable manner, the risks of forced and child labor. In support of our Migrant Worker Policy, we developed materials and practical tools to help suppliers improve their management and recruitment systems relating to migrant workers. These materials are also used in our supplier training courses in high-risk jurisdictions.
- As part of our contractual terms and conditions, all Level 1 and key Level 2 suppliers are required to represent and warrant that they will not use any forced and child labor in the growing, harvesting, mining, extraction, processing, refining, manufacturing, production or assembly of any PVH products.
Additionally, PVH signed the Turkmen Cotton Pledge led by the Responsible Sourcing Network, committing not to knowingly source cotton from that country. PVH is also one of the signatories to the AAFA/FLA Apparel & Footwear Industry Commitment to Responsible Recruitment aiming to address forced labor risks for migrant workers. Lastly, we believe that we are in compliance in all material respects with all applicable regulations and laws relating to forced and child labor and other labor-related regulations.
Verification of Product Supply Chains to Evaluate, Monitor and Address Risks of Forced and Child Labor
We evaluate, monitor and address the risks of forced and child labor in our industry and supply chain in several ways. We believe that forced and child labor risks in our own workforce are minimal due to the strength of our internal employment policies and procedures. Forced and child labor risks in the apparel industry for companies like ours are most prevalent at suppliers further towards the beginning of the supply chain, as we do not have direct relationships with them, and they typically are in jurisdictions with weaker protection of workers’ rights and where migrant labor is used.
We participate in multi-stakeholder initiatives that help us evaluate and address the risk of forced and child labor in our industry and supply chains. PVH is a member of several industry associations and programs
dedicated to protecting workers’ rights, including the prevention of forced and child labor, such as the Responsible Labor Initiative (“RLI”), American Apparel & Footwear Association, the International Accord for Health and Safety, and the Better Work Programme. PVH was the first apparel sector member to join the RLI.
We also consult third-party resources and databases, engage in other research, utilize consultants and work with members of civil society to evaluate forced and child labor risks.
PVH provides transparency concerning our efforts to evaluate, monitor and address the risks of forced and child labor through reporting, survey responses, meetings with stakeholders and other means.
We continually monitor compliance with our CR requirements, including the prohibitions against forced and child labor, and promptly address identified risks or violations. We conduct pre-sourcing assessments at all Level 1 factories before they are allowed to produce any products for us. We also conduct pre-sourcing assessments at certain key Level 2 factories. In addition, we conduct regular audits at all Level 1 and key Level 2 factories once production begins, work closely with factories to remediate any identified deficiencies and, when necessary, terminate supplier factories that fail to comply with our policies, procedures or guidelines.
PVH is committed to building a transparent and traceable value chain, from farm to factory, supported by document verification, auditing, and testing programs.
Certifications: At the beginning or renewal of a relationship, suppliers and licensees are required to acknowledge A Shared Commitment and agree to implement its requirements. In addition, and as noted above, all direct suppliers are contractually obligated to represent and warrant that any materials incorporated into PVH products, whether acquired directly or indirectly, are from a source that does not use forced and child labor.
Factory Audits: Audits are conducted by reputable third-party auditors, typically every 12 to 24 months. Several factors, including the results of the previous audit, dictate audit frequency. Audits are usually scheduled in advance with the suppliers, in order to foster a relationship of trust and cooperation, but unannounced audits are also conducted.
Audits are guided by the Social Labor Convergence Project (“SLCP”), an industry-wide data collection tool that aims to create an efficient and sustainable solution for social audits, with a goal of alleviating audit fatigue for our suppliers. The SLCP includes specific metrics relating to forced and child labor. In addition, as part of the audit, we seek workers’ views in confidence, so that we can hear first-hand about factory conditions. We also monitor factory conditions through assessments by independent organizations, such as the Better Work Programme.
Given the challenges posed by recruitment systems, migrant workers can be disproportionately vulnerable to forced and child labor. For this reason, PVH has worked with an external partner to identify high-risk jurisdictions for migrant labor. The identified jurisdictions are located primarily in East Asia, Southeast Asia, the Middle East and Africa. To further enhance our monitoring capability relating to forced and child labor risks, we utilize a supplementary assessment tool as part of the factory audit for supplier and licensee factories in high-risk jurisdictions that is focused on recruitment practices and treatment of migrant labor. In parallel with these efforts, we have deepened our engagement with suppliers on the prohibition against the payment of recruitment fees and on other migrant labor issues.
Remediation: PVH’s audit program encourages our business partners to assume greater responsibility for their labor practices, and general compliance around employment and worker issues, by providing the opportunity for suppliers to remediate most identified issues. We believe that remediation best serves the interests of workers by enabling the supplier to develop safe, compliant and respectful workplaces. Continuous engagement with suppliers on their progress in addressing forced and child labor risks helps us ensure the effectiveness of our program.
We also reward those business partners that adopt and implement our standards and policies with continued business.
Termination: PVH views termination of a supplier or factory relationship as a remedy of last resort, given the harm to workers that can result. We, therefore, first seek to remediate issues through direct engagement with the supplier or factory or in conjunction with civil society, industry organizations and/or governmental authorities. We generally will terminate a relationship with a supplier or factory only if (i) it fails to remediate issues uncovered by an audit, or (ii) we identify what we would consider an egregious violation of our policies or guidelines, and remediation is not appropriate or feasible (e.g., forced and child labor).
Internal Accountability & Training
To ensure the effectiveness of our efforts to eliminate forced and child labor, we hold ourselves accountable through a robust governance structure, and clearly established roles and responsibilities.
Our Executive Leadership Team, led by our CEO, has established and upholds our vision and has final accountability for the implementation of our CR programs, including management of human rights practices across our value chain. The CR Committee of the PVH Corp. Board of Directors provides support and guidance to our Executive Leadership Team and reports to the full Board of Directors with respect to our CR policies and strategies. The CR Committee, which consists of three independent directors, meets four times a year to monitor our CR performance and progress across social and human rights-focused key performance indicators (“KPIs”) that are established annually to advance the program’s commitments. Meetings include updates on current issues, program updates, and discussion and committee approvals of any strategy updates or new partnerships/initiatives. The Committee is also involved in the review of our annual CR Report.
We have established clear lines of accountability for CR throughout PVH, from the subject matter experts on the CR team through to our CEO, via our Chief Sustainability Officer. Our CR team is composed of over 50 associates located in 10 countries across Europe, Asia and the Americas, who work closely with our business units and global supply teams to further align our Forward Fashion commitments, as well as implement on- the-ground assessments, remediation and capability-building programs in supplier regions. Our CR team is also responsible for internal and external reporting on CR, including through our annual CR Report.
All PVH associates are required to complete compliance and ethics training, which includes the review and certification of our core policies, upon hire and annually thereafter. The Company may take disciplinary action against any associate who violates any of our policies, guidelines or otherwise fails to uphold our moral, legal or ethical standards. Additionally, in fiscal 2022, we conducted mandatory modern slavery training for selected associates involved in supply and procurement-related activities. Members of our CR team and other PVH associates attend external training programs and seminars on social compliance issues, including forced and child labor.
We also maintain a 24/7 reporting hotline (available online and by telephone in 21 languages) for use by associates, third party business partners and certain other stakeholders, so that they may report potential legal, regulatory, or policy violations and other ethical concerns. Grievances can be submitted anonymously and confidentially to the extent allowed under applicable law.
Additionally, PVH has a dedicated team responsible for addressing and responding to human rights issues throughout our supply chain, including grievances raised by unions, non-governmental organizations and workers. We investigate issues as they arise. Issues are discussed weekly with PVH leadership and are shared as needed with other senior PVH leadership in order to ensure appropriate action is being taken.
To ensure that 100% of migrant workers in our Level 1 and key Level 2 supplier facilities do not pay recruitment fees, all suppliers and licensees in high-risk jurisdictions are required to complete a set of modules and quizzes, hosted on the RLI e-learning platform, on forced labor and recruitment of foreign migrant workers. We also require that key personnel at all factories we or our suppliers use in high-risk jurisdictions complete the suite of trainings on forced labor on the RLI e-learning platform when the factories are on- boarded.
Our CR team and other PVH associates also participate as speakers in other external training programs and seminars on forced and child labor to increase awareness and encourage the adoption of best practices to address these issues.
Assessing the Effectiveness of our Actions
We track a number of KPIs to measure the effectiveness of our actions in regard to forced and child labor risks, including any audit findings and grievances submitted through our grievance mechanisms. We further track both the number and nature of findings and grievances. We also track the remediation of any identified issues.
In addition, we track our suppliers’ compliance with our training requirements to ensure 100% completion.
Approval and Signature
The following PVH entities are required to publish a statement under the UK Modern Slavery Act: PVH Corp., Calvin Klein Stores UK Limited, PVH Services (UK) Limited (UK), PVH UK Limited (UK) and PVH UK Group Limited. This Statement was approved on June 16, 2023, by the Corporate Responsibility Committee of the PVH Corp. Board of Directors on behalf of the Board and the boards of directors of those entities, and signed by the undersigned on July 12, 2023.
Sunshine A Pty Ltd., Australian Company Number 631684770 (“Sunshine A”), an indirect wholly owned subsidiary of PVH Corp., is required to submit a statement under the Australian Commonwealth Modern Slavery Act. Sunshine A, including through its subsidiaries identified below, engages in local sales and marketing and provides related administrative support. It makes design decisions in relation to its products but does not engage in direct manufacturing nor make manufacturing decisions. Its offices are located in Sydney, Australia and it currently has approximately 2,000 employees in Australia and 160 employees in New Zealand. Sunshine A has two subsidiaries operating in Australia, PVH Brands Australia Pty Ltd. and Gazal Pty Ltd.
Because of the nature of Sunshine A’s operations, it does not have its own product supply chains. The PVH supply chains, and its related compliance activities to address forced and child labor, are discussed earlier in this Statement.
This Statement has been approved on behalf of Sunshine A by the Corporate Responsibility Committee of the PVH Corp. Board of Directors, the principal governing body of the ultimate parent of Sunshine A, and the undersigned is an authorized officer and director of PVH Corp. This Statement was prepared in consultation with Sunshine A, including by making Sunshine A aware of its preparation, and providing Sunshine A with an opportunity to participate therein.
Director & Chief Executive Officer
July 12, 2023