The TOM TAILOR GROUP’s collections are mainly manufac- tured in Asia, where the majority of global textile production takes place. The diversified supplier structures in the textile industry require a high degree of responsibility in order to guarantee decent, safe and fair working conditions at the Asian suppliers. The Company takes this responsibility very seriously and since 2011 has maintained purchasing offices in Asia’s most important procurement markets via the joint venture TOM TAILOR Sourcing Ltd. so as to ensure direct con- tact with its suppliers, regularly monitor these itself and assist them. Furthermore, the TOM TAILOR GROUP participates in its procurement markets in the dedicated projects and initia- tives listed below.
The TOM TAILOR GROUP sources a large proportion of its mer- chandise from Bangladesh. In light of the events in Rhana Plaza in 2013, the TOM TAILOR GROUP set up its own purchasing office in Bangladesh last year. This shows that the Company has made a long-term commitment to Bangladesh as a key procurement market. The purchasing office in Dhaka now has more than 100 employees working for the TOM TAILOR GROUP, most of whom visit the factories on a daily basis to monitor them and provide assistance.
With purchasing offices in key sourcing markets in Asia, the TOM TAILOR GROUP maintains direct contact with suppliers, which provides support for them and
ensures control
In 2014, the Company launched the Safer Factory initiative here. Together with two external management consulting companies specialising in this field, the TOM TAILOR GROUP advises and supports its suppliers in improving the safety and working conditions at the production facilities. This initia- tive also benefits the manufacturers, who receive advice and training in how they can reduce costs through more effective and more efficient production, for example by reducing scrap when cutting the fabric.
In India, the TOM TAILOR GROUP has been a member of the Tamil Nadu Multi-Stakeholder Group (TNMS Group) since 2012, an association combining individual BSCI members and the Ethical Trading Initiative (ETI). The group is taking a deter- mined stand against the custom of Sumangali in southern India. Sumangali is a widespread form of employment in this region, in which young women undertake to work in factories for several years. The idea is that the girls save for a dowry, which is a prerequisite for getting married. They are only paid the majority of their salary when they have completed this multi-year period. This widespread practice frequently results in a number of types of forced labour of young women. The TNMS Group is conducting systematic educational campaigns on the ground, including training suppliers, holding discus- sions with legislators in the area, and setting up local com- munity and training centres.
Another project the TOM TAILOR GROUP has been actively involved with for many years is the Aid by Trade foundation’s Cotton made in Africa (CmiA) initiative. This initiative is aimed at improving the living and working conditions of cotton farmers in Africa. The cotton farmers are trained in modern, efficient, environmentally friendly methods of cultivation to improve the quality of their cotton and raise their income through higher yields. The training concept also extends to children of cotton farmers, who are to benefit from improved school education. The Cotton made in Africa projects are fi- nanced by licence fees, which are paid by partner compa- nies such as the TOM TAILOR GROUP in return for the right to sell specified quantities of products made from CmiA cot- ton. In 2014, the TOM TAILOR GROUP sold a comparable num- ber of products manufactured using CmiA-certified cotton as in 2013, and it intends to increase this number again in 2015.
deVelopinG and supportinG eMploYees
in ManY diFFerent WaYs
Employees are a company’s most valuable resource. They are key to an enterprise’s long-term success. As a socially com- mitted employer, the TOM TAILOR GROUP therefore focuses in particular on its employees when it comes to sustainability and responsibility. This involves not only searching for the best people for the Company, but also developing and sup- porting its current workforce. Some 6,500 employees now work in a wide variety of tasks and functions for the TOM TAILOR GROUP worldwide.
The focus of human resources management in 2014 was on the Employer Branding project, the aim of which is to posi- tion the Group with its two brands, TOM TAILOR and BONITA, as an attractive employer both internally and externally, par- ticularly in Germany, in light of the demographic trend. This is expected to have a lasting, positive impact on employee recruitment and retention as well as on their motivation and the corporate culture.
As a fast-growing company, the TOM TAILOR GROUP places special emphasis on employee education and training. For ex- ample, it offers young people practical, needs-based educa- tion and training programmes in various functional areas. The Company cooperates with institutions such as the Akademie für Mode und Design (AMD — Academy of Fashion and Design), which aligns its interest in recruiting talented and well-edu- cated young people for the TOM TAILOR GROUP with retain- ing them for the long term. In this way, the Company enables young people to benefit from forward-looking vocational education.
Employees are the focus of the TOM TAILOR GROUP’s sustainability and corporate responsibility efforts
All employees also have access to a wide range of training opportunities for professional and personal development. In addition, the Company helps its employees to better recon- cile career and family and to find a healthy work/life balance by providing day care subsidies or offering flexitime schemes, among other things. Since 2012, the Group has also offered its employees an external counselling programme called the Employee Assistance Programme. An external coaching institute advises the Group’s employees, who remain anon- ymous, on questions concerning their work, private life or health and in highly stressful situations. The objective is to address potential physical and psychological problems among employees at an early stage.
Continuing education and work-life balance opportunities as well as external coaching services
are available to all employees
Diversity is lived out at the TOM TAILOR GROUP as an inter- national fashion company and considered a key factor for success: employees of 52 different nationalities work in the Group. The Company is convinced that only by drawing on different cultural backgrounds, viewpoints, opinions and experience can businesses exploit their full potential and achieve success. All employees have equal opportunities in the Company irrespective of their background, gender, religion or sexual orientation.
Detailed information on employees can be found in the section entitled “Employee”.
FoCus on tHe enVironMent
Supporting Environmental Projects and Initiatives
By joining the BSCI and voluntarily signing up to its code of conduct, the TOM TAILOR GROUP has undertaken to comply with national environmental protection legislation. However, depending on the individual national regulations, local regu- lations are insufficient to guarantee adequate environmental protection in the production countries.
Since 2011, together with other retail and branded goods companies, the TOM TAILOR GROUP has therefore been ac- tive in the Carbon Performance Improvement Initiative (CPI2) funded by the Deutsche Investitions- und Entwicklungsge- sellschaft (DEG — German Investment and Development Corpo- ration). This initiative aims to reduce harmful carbon dioxide (CO2) emissions in individual companies’ supply chains. In the emerging and developing countries, huge potential savings in CO2 emissions can be made simply by raising awareness of the problem and by taking what in some cases is simple action. To do this, the CPI2 initiative has developed a management tool for producers in these countries with concrete recommen- dations on how to save energy.
Since the completion of the pilot phase in 2012, the TOM TAILOR GROUP has held climate protection seminars at its suppliers in Bangladesh, China, India, Vietnam and Turkey. About 70 of the Group’s suppliers are currently involved in the climate project and are at the stage of establishing their existing CO2 emissions. In 2015, nearly all suppliers are ex- pected to participate in the project so as to obtain an over- view of the factors causing suppliers’ CO2 emissions. After that, targets for cutting CO2 emissions will be set for each individual supplier, taking into account their respective start- ing situations, and measures will be implemented to achieve them. The CPI2 initiative plans to extend its activities to the areas of water and chemicals in 2015 and in so doing help to reduce water and chemical consumption in the production process.
Increasing the Use of Organic Cotton
For some years now, the TOM TAILOR GROUP has used organic cotton in selected products. This supports the transition from conventional, resource-intensive cotton cultivation towards more ecologically balanced cultivation methods. The TOM TAILOR GROUP sources its organically produced cotton from certified suppliers complying either with the leading global certification standard, GOTS (Global Organic Textile Standard), or the Organic Exchange 100 standard. The Company plans to increase the use of products manufactured from organic cotton continually.
Contributing to Environmental Protection with High Prod- uct Quality
The TOM TAILOR GROUP offers consumers high-quality, fash- ionable casual wear with an attractive value proposition. In order to guarantee this high standard of quality, the Company checks the entire value chain. The items of clothing are sub- ject to a variety of quality controls from production through to delivery to the point of sale. These include parameters such as checking the general workmanship and fit, and, in parti- cular, checking to see whether the processed materials fulfil the Group’s strict quality and material requirements.
The TOM TAILOR GROUP actively contributes to protecting the environment with numerous projects
and initiatives
Because of its high quality, clothing from the TOM TAILOR GROUP is extremely durable. Seen in terms of the entire life cycle — from growing the cotton to the ultimate disposal of the product by consumers — a high quality standard therefore also makes a key contribution to protecting the environment.
The Corporate Governance Statement in accordance with section 289 a of the Handelsgesetzbuch (HGB — German Commercial Code) can be found in the Corporate Governance Report of the Annual Report and on TOM TAILOR Holding AG’s website http://ir.tom -tailor -group.com.