FITFLOP MODERN SLAVERY TRANSPARENCY STATEMENT

Financial Year 2022-2023

INTRODUCTION

FitFlop Limited (“FitFlop”) is absolutely committed to ensuring that there is no modern slavery or human trafficking in our business or supply chains; and to preventing modern slavery and human trafficking in our corporate activities.

This is our sixth Modern Slavery Transparency Statement, made pursuant to the UK Modern Slavery Act 2015 and the California Transparency in Supply Chains Act 2020. It relates to our most recent financial year, which ended on 31st March 2023. This statement sets out the potential risks related to our business, the steps that we have taken during the past 15 months, and the steps that we will continue to take to ensure that modern slavery and human trafficking are not taking place within any part of our organisation and supply chain. Modern slavery is an extreme breach of fundamental human rights and a serious crime.

We have continued to take active steps across our global business to increase the depth and breadth of our work to ensure we identify any instance of modern slavery practices and eliminate them from our supply base. To this end we have also worked hard to educate and build knowledge in this area within our own teams and those of our suppliers, distributors and partners.

We remain committed to developing our policies, practices and ways of working to deal with any evolving risks we face as a business. Our definition of slavery and human trafficking is aligned to section 54 (12) of the Modern Slavery Act 2015.

Our CEO is ultimately responsible for overall compliance in accordance with the Modern Slavery Statement.

You can find out more below about our business and supply chains, our policies, the due diligence processes we have in place, the steps we took in 2022/2023 to identify and mitigate the risks of modern slavery and human trafficking, and the steps we will take in the coming year.

OUR STRUCTURE, BUSINESS & SUPPLY CHAIN

OUR STRUCTURE & BUSINESS

FitFlop is a global, multi-channel brand.

Launched in 2007, FitFlop™ is one of the world’s most popular makers of biomechanically engineered shoes, sneakers and sandals. Supporting you from the ground up with the perfect combination of biomechanics, comfort and fashion. We are a global brand, providing footwear and related items to customers and consumers in more than 60 territories. Business activities include the design, development, sourcing, manufacture, transport and sale of products. We act as a holding company for subsidiary undertakings in the US, Switzerland and Germany, with our headquarters in London and operational offices in Hong Kong, China and Ho Chi Minh City, Vietnam.
As of 31st March 2023, we have 246 employees across our own operations directly employed. We have two retail stores and two showrooms in London, United Kingdom and New York, United States of America. We deliver our products across the world through our e-commerce sites and vast network of distributors, wholesalers and retailers.

OUR CORE VALUES

At FitFlop, our core values frame our approach to the prevention of modern slavery and human trafficking and ensure that we are committed to acting ethically and with integrity in all of our business relationships.
- BETTER... At what we do, all the time. By continually raising the bar on our product, our communications, customer service, work output, efficiency, respect for ourselves, our coworkers and our customers
- PROUD... Of every shoe we make, of our brand and its energy and of every interaction we have on behalf of our company.
- APPRECIATIVE... Of the opportunities we have, the people who work with and support us, the retailers who stock us, the suppliers who supply us and the customers who love us - we never take them for granted.

OUR SUPPLY CHAIN

We divide our suppliers into stock and non-stock suppliers.

1. Stock Supply Chain

We undertake the design and development of our products but outsource the manufacturing. In most factories, the facilities are shared with the production for other brands. We source finished footwear from factories (“Tier 1”) in Vietnam, Thailand, China, Cambodia and Indonesia. We also work directly with several component and material suppliers (“Tier 2”) globally. We carry out testing and development work in the UK, Canada, Vietnam, Indonesia, Cambodia and China. We have established long-term relationships with several of our partners and have built these relationships over many years in most cases. This enables us to gain a deeper understanding of the issues faced by our suppliers. All our activities are underpinned by a commitment to responsible craftsmanship.

2. Non-Stock Supply Chain

Through our non-stock suppliers, we source a range of goods not for resale and services which support our business operations, such as printing, packaging, labelling, office cleaning, recruitment, warehousing, logistics, transport and shipping. They are contractually required to comply with our supply chain policies described below. Taking into consideration our current methods of due diligence, there are no situations we believe we need to declare in the context of the Modern Slavery Statement.

OUR POLICIES & CONTRACTS

We are committed to acting responsibly and ethically across our business and operations and ensuring continued compliance with applicable laws and regulations. We have a zero-tolerance approach to modern slavery across all areas of our business.

We are continuously working on ways to provide additional support to vulnerable supply chain workers. Over the next year, we will be working to strengthen our existing policies and implement new policies to fill in any missing gaps so as to ensure that they continue to develop in line with best practice. Please refer to our future areas of focus for further information.

Our key relevant policies are outlined below.

SUPPLIERS & DISTRIBUTORS

Code of Conduct for Suppliers and Distributors

We understand that we need to drive initiatives beyond our own business. We have a responsibility to identify potential risks from unauthorised subcontractors, the exploitation of a growing migrant workforce, or any other sectors of vulnerable labour. We seek to ensure that our suppliers and distributors adhere to the highest standards of ethics. We require all material product, materials and service suppliers (regardless of the tier they are in within the supply chain), together with all distributors and franchisees to sign our Code of Conduct. The table below, provides a description of the guidelines and standards mandated by our Code of Conduct.
All our suppliers are required to demonstrate that they provide safe working conditions, treat workers with dignity and respect, and act ethically and within the law in their use of labour. We work with suppliers to ensure that they meet the standards of the Code and improve their workers' working conditions. Serious violations of our Code of Conduct would typically lead to the termination of the business relationship.

Policies	Description
Compliance with Laws	This section lists the obligations to meet all legal requirements and regulations and operate in a manner that is consistent with the same. This section further stipulates the requirement of informing all local labourers and workers about the local labour law.
Health and Safety	This section sets out our expectations to ensure safe and fair working environments and practices.
Forced Labour	This section sets out our requirements to ensure forced labour (or similar practices) are not taking place.
Non-Discrimination	This section sets out our expectations to ensure that no workers are discriminated against (on any grounds whatsoever).
Harassment & Abuse	This section sets our guidance to ensure that workers are protected in the workplace and are not subject to any form of bullying, harassment or abuse.
Freedom of Association & Collective Bargaining	This section reinforces the right of workers to join (or not to join) and organise associations of their own choosing and to bargain collectively.
Minimum Wage & Working Hours	This section stipulates the requirement of paying workers the minimum wage and setting working hours that are within the remit of local laws and benchmark industry standards.
Child Labour	This section out our requirements for ensuring children are not working within the supply chains and that young workers are adequately protected at work.
Environmental Protection	These guidelines stipulate that all relevant laws and regulations and industry standards regarding protection and preservation of the environment should be complied with.
Anti-Bribery & Corruption	This section is designed to give guidance on countering bribery and corruption and to assist in complying with the Bribery Act 2010.
Supplier Terms	This section communicates the standards we set for our suppliers and the framework governing how business should be communicated between us and our suppliers.

CONTRACTS

Our standard manufacturer, distributor and franchisee contracts require adherence to our Code of Conduct. We also include contractual provisions that help us implement and enforce our controls to identify, prevent and mitigate modern slavery and human trafficking. These include provisions regarding auditing, access to records, treatment of workers, anti-bribery and compliance with laws.

EMPLOYEES

WHISTLEBLOWING POLICY (EMPLOYEES)

We strongly encourage all our employees to report any concerns related to our activities. Our whistleblowing policy ensures that all employees know that they can raise concerns about how workers are being treated or practices within our business. This policy is designed to make it easy for workers to make disclosures, without fear of reprisals, in the knowledge that they will be taken seriously and that the matters will be investigated appropriately and regarded as confidential.

ANTI-BRIBERY POLICY

We have a comprehensive anti-bribery policy that reflects the fact that bribery will not be tolerated in any form. This policy sets out our responsibilities, and of those working for and on our behalf, in observing and upholding our position on bribery and corruption and is supported by detailed guidance on how to recognise and deal with bribery and corruption issues.

RISK ASSESSMENT

The primary risk for our business is in association with our suppliers in relation to sourcing from countries outside of the UK, particularly those based in Asia-Pacific countries. We consider the following risk factors: product and service type, geographical location, worker type, including vulnerable worker groups, high risk labour practices, such as excessive working hours, and the likelihood of involvement of recruitment and labour agencies and intermediaries.
Every Tier 1 factory is expected to meet our bi-annual audit requirements and we grade these audits depending on the issues found. We work closely with our suppliers and factories on remediation to ensure that the factories are improving, and worker welfare is protected and monitored.
Our risk assessment process is not static, it continues to evolve as the risk landscape changes.

As part of our initiative to identify and mitigate risk in our supply chains, we have systems in place to:
- Identify and assess potential risk areas in our supply chains.
- Mitigate the risk of slavery and human trafficking occurring in our supply chains.
- Monitor potential risk areas in our supply chains.
- Protect whistle-blowers.

We know modern slavery, though prevalent, is difficult to identify and that we must continue to refine our policies, processes and assessments so that we place ourselves in the best possible position to detect and prevent modern slavery.

DUE DILIGENCE

SUPPLIER REVIEWS

We are committed to developing long-term relationships with suppliers that share our values, are open, honest and transparent about their business and supply chain operations and are prepared to demonstrate continuous improvements with respect to their human rights performance.

All our supply chain partners, and their supporting facilities are screened and assessed at the onboarding stage to identify any human rights and modern slavery risk. We undertake due diligence when considering new suppliers to take on and regularly review our existing suppliers. We use supplier on-boarding packs to communicate and certify our requirements on forced labour and modern slavery to manufacturers, agents and suppliers. Suppliers are required to sign a copy of the Code of Conduct to confirm that they have received, reviewed and understand it, and that they are in, or working towards, full compliance with its requirements.

We assess our supply chain to evaluate geographical risks of modern slavery and human trafficking. We work closely with our suppliers to understand their production processes and we make it a contractual requirement that all manufacturers (Tier 1 and Tier 2), major retailers, distributors, franchisees and major suppliers we do business with sign our Code of Conduct. Employees from our London head office and our regional offices in Hong Kong and Ho Chi Minh City regularly visit all our suppliers.

This gives us invaluable insight into working practices, processes and conditions across our supply base, allowing us to spot potential issues relating to modern slavery and human trafficking. In most cases we operate in shared factory environments. We work with our industry partners in spotting and addressing modern slavery and human trafficking issues.

AUDITS

We work with specialist external auditors to carry out independent, third-party semi-announced audits every two years in the factories where we manufacture all our branded components (Tier 1 and all Tier 2 manufacturing locations). We employ a global specialist auditing firm to evaluate our partners using the SMETA (SEDEX Members Ethical Trade Audit) methodology, considered to be the gold standard and used by many other established, responsible brands. We use risk ratings for all Tier 1 factories to inform prioritisation and remediation. We support sites to identify critical issues, recognise modern slavery risks and help build capacity to address these issues and risks. During the FY 2022/23, we conducted 13 audits and across our Tier 1 and Tier 2 factories. All our partners are provided with an approved corrective action plan that is closely monitored and supported by our teams, who work with the facilities on a continuous improvement plan.

AUDIT OUTCOMES

We analyse the outcome of audits and decide what action, if any, needs to be taken, including providing advice to suppliers through our third-party auditors and our internal CSR team; requiring, where necessary, the factory to implement corrective action plans. Should suppliers fail to take appropriate action on any corrective measures or where they seriously violate our Code of Conduct, we would consider invoking sanctions against them or terminating the business relationship.

EMPLOYEE/WORKER DUE DILIGENCE

In each country where we employ staff, we ensure our compliance with the relevant employment legislation. We recruit and select our own workers, with the help of reputable recruitment agents or in-house recruiters and determine the terms and conditions of their employment. Employees/ workers are free to accept or reject any employment offers made. As part of our recruitment process, we undertake checks on all workers to verify their identity, age and eligibility to work in that country. We always aim to pay our workers a reasonable and fair wage for the job they are doing, and this will be at or above the legal minimum wage in the country they are employed. We require the same standards from our suppliers, and we confirm this through our audits. We also require the same or equivalent standards from our distributor and franchise partners.

TRAINING & CAPACITY BUILDING

In the coming year, we are working towards introducing and implementing further training modules.
Please refer to our future areas of focus for further information.

MODERN SLAVERY TRAINING

We have two team members who are trained in modern slavery awareness and on audit principle delivered by our third-party audit partners. They have the knowledge to follow up on any of the areas that the third party deems necessary to improve to international standards. They also have been provided with new resources and materials to ensure constant vigilance, to mitigate risks that formal audits may not uncover.

PLANS FOR FUTURE TRAINING

We understand that raising awareness and conducting training on the risks associated with modern slavery is critical for those making sourcing decisions. Targeted training in this field helps those who have close contact with our extended supply chain to be familiar with the risk areas, likely indications of human rights abuses (including instances of modern slavery) and possible actions to take if an incident of modern slavery is identified. In FY 2023/24, we will offer online resources and conduct trainings to reach a wider our employees and further embed awareness and risk mitigation into our culture.

PLANS FOR SUPPLY CHAIN CAPACITY BUILDING

We are fully aware that training our supply chain partners, including vendors and key raw material suppliers, on understanding, identifying and managing modern slavery risks, is a key component as our partners play an integral role in helping us to identify and prevent modern slavery in our supply chain. In the coming year, as part of our onboarding process, we aim to conduct training with all our new suppliers to ensure they have a clear understanding of our ethical trade requirements before an audit takes place. We will highlight the importance of being transparent during an ethical audit, and clearly explain what our critical issues are.

EFFECTIVENESS OF OUR APPROACH, GOALS & KPIS

REPORTING ON PROGRESS MADE IN 2021 & OUR FUTURE AREAS OF FOCUS

In 2022, we committed to take certain steps to further enhance our ongoing efforts to identify, prevent and mitigate the risks of modern slavery and human trafficking. In 2023 we commit to continue and improve our efforts to identify and mitigate the risks of modern slavery and human trafficking. FitFlop considers that it is essential that it continues its activities to identify and address modern slavery risks in this changing context. FitFlop will consider which parts of its supply chain may be particularly vulnerable, and intends to keep its board of directors updated on emerging risks. We will not support or deal with any business knowingly involved in modern slavery and human trafficking. We are pleased to share below the progress we have made with our modern slavery prevention programme and our commitments for the coming year.

Area	Previous Year	Our Future Areas of Focus
Structure, Business & Supply Chains	Sustainability: We appreciate that using an auditing approach alone does not always allow us to find deeper issues within the supply chain. We have recently onboarded our first full time Sustainability & CSR staff member who will be dedicated to ensuring that we continue to improve our processes in this area.	Extend supply chain mapping beyond Tier 1 & 2. In particular, ensuring that our Tier 2 mapping is robust and continues to be declared by our suppliers.
Policies And Contracts	New	Review and update the Code of Conduct to ensure that it continues to keep pace with best practice to provide effective modern slavery prevention to the business. Review of our suite of policies to ensure they are fit for purpose and brought up to date with relevant legislation.
Risk Assessment	We have conducted a number of in-person visits to our key factory suppliers, supported by appropriate resources, to ensure greater visibility over working practices.	Continue to review our existing supply chains, evaluating all existing and potential suppliers. Strengthen new supplier onboarding process.
Due Diligence	We commenced a new audit cycle, starting with the renewal of audits with existing factory suppliers and new tier 2 suppliers. An independent third party conducts regular reviews to bring insights into ways to tackle slavery and human trafficking.	Complete our latest supplier audit cycle but consider our approach in this manner, and decide if we should redesign our ways of working.
Supplier Relationships	Continued to build and maintain long-term relationships with our suppliers and clearly highlight to them our expectations of business behaviour.	We will continue to create an environment of trust and transparency with suppliers and develop a deeper understanding of the issues our suppliers face.
Training & Capacity Building	New	Increase corporate training on modern slavery awareness, including annual communication of this statement to all employees and Introduce e-learning modules for all employees to be aware of modern slavery indicators and risks.

KEY PERFORMANCE INDICATORS

During the FY 21-22, 100% of our suppliers were signed up to our code of conduct and 82% of factories were audited. Out of these audits, 100% were assessed as reaching a level of Pass, where all are assessed as acceptable and none assessed as unacceptable. We will not support or deal with any business knowingly involved in modern slavery and human trafficking.

This statement has been approved by the sole Director.

Name: Anne Mansbridge
Signature:

You can view our Modern Slavery Statement for previous financial years by clicking here.