"However, to this day, we define ourselves not by numbers, but by people: our customers, suppliers and employees. We want to continue being a good partner and employer for them through consistency, long-term commitment, and reliability.”

_{https://www.wibu.care/de-de/ueber-wibu/ueber-uns/geschichte/}

Information on opportunities and risks is obtained from various sources, from which we derive measures and define targets in terms of sustainability: we derive our targets from the analysis of the roadmap, feedback from our grievance management as well as from our alliance partners and the research initiated (e.g. ILO). They are divided into binding and recommended targets:

Goal Implementation and training on the topics (requirements of the Grüner Knopf) in the individual departments

Goal already achieved ✓

GRI Index: 404-1 | 403-5

Goall : Publication of the topics on the homepage (details from the Policy Statement, details from this Sustainability Report)

Goal already achieved ✓

GRI Index: 102–18 | GRI 102–32

Goal : Certification in accordance with the requirements for the Grüner Knopf and the first products (bed linen, scrubs)

Goal already achieved ✓

GRI Index: 102-21

Goal Determination of the requirements of our suppliers by means of _{(F 0840-07)} Supplier Questionnaire and dispatch of the _{(F 0840-06)} Terms and Conditions of Purchase

Goal already achieved ✓

GRI Index: 102-21

Goal Active participation in the Textiles Partnership in the ‘BI Supplier Decarbonisation’ project. It is estimated that the textile industry is responsible for 10% of global carbon emissions. The long-term goal of the alliance initiative is to reduce greenhouse gas emissions in the textile supply chain. Training measures are intended to enable production companies to record their emissions. At least three energy-saving measures should be implemented per company.

Project measures:

GRI Index:

102–21 | 102-29 | 102-9 | 308–1 | 308–2 | 407-1 | 419–1

Goal : continuous assessment and identification of our most serious risks in our supply chain

Status: The risk assessment for the Grüner Knopf has been completed, however, some of the suppliers’ data are still missing. Nevertheless, an initial overview and prioritisation of our most important risks can be compiled from the available data.

Our largest purchases (37%) are made in Germany (region of Bavaria) and this includes the excellent system in which all legal issues are regulated and comply with ILO requirements. In Estonia, with a business share of 16%, and Portugal (region of Vizela) with 0.5%, the situation is similarly good, although the wage situation is not quite as favourable. The UK, with a share of 4%, is also rather inconspicuous, even though less strict EU laws apply here. In Turkey (region of Denizli), the risks are already significantly higher at 0.5%.

The situation is completely different in countries outside the EU. Our largest partner companies in Pakistan account for 34% (regions of Sindh, Punjab, Karachi, Faisalabad) and China 8% (region of Fujian, Taijiang District). This is where our risks are highest.

We have long-standing business relationships with companies in Pakistan and maintain intensive and constructive dialogue with them. We are delighted that we have been able to deepen and expand our business relationships with the first companies to be recognised in the multi-seal process. We are also pleased that two of these partner companies are also part of our Textiles Partnership working group and are participating in the decarbonisation project (see chapter). Our aim is to successively expand our trust-based cooperation with the aim of strengthening this supply chain.

After the Covid-19 pandemic put our resilience and that of our suppliers to the test in 2020–2021, a devastating flood (10.2022) in Pakistan destroyed the factories and also the homes of our suppliers in this region. Millions of Pakistanis lost their homes and at least 1,700 people lost their lives in the flood disaster.

_{https://www.bpb.de/kurz-knapp/hintergrund-aktuell/514557/flutkatastrophe-in-pakistan/}

Hundreds of thousands of Pakistanis who had to flee from the floods, lived in makeshift shelters. In many places, the electricity and drinking water supply has been disrupted or has collapsed. The impending winter threatened to exacerbate the situation.

The infrastructure has suffered long-term damage, particularly in the provinces of Sindh, where our suppliers operate their factories, Khyber Pakhtunkhwa and Balochistan. An estimated two million houses, almost 400 bridges and around 13,000 kilometres of roads were destroyed, and hundreds of thousands of farm animals died. According to government estimates, the damage to homes, infrastructure and agriculture totalled around 30 billion euros. Crop failures have consequences for the country’s economy and food security that are difficult to quantify. According to observers, half of this year’s cotton harvest, for example, which is a key export for Pakistan, has been destroyed – the jobs of hundreds of thousands of workers in the textile industry are now at risk. Pakistan's government expects the reconstruction to take many years.

_{https://www.bpb.de/kurz-knapp/hintergrund-aktuell/514557/flutkatastrophe-in-pakistan/#node-content-title-2}

GRI Index: 102-21

_{Note: Cooperation with our partners in China, who officially cover all topics, presents greater challenges. The risks have been identified, but we can only appeal to the government to take legal steps to initiate the implementation of the Supply Chain Due Diligence Act.}

Goal : Continuous evaluation of the status of our suppliers' seals and certifications

Status : It will be continuously implemented in the purchasing department after the introduction of the Grüner Knopf.

GRI Index: 102-21

Goal : Continuous assessment of the situation at our suppliers, especially in Pakistan

Status : Assessment of the situation after the fall of the government (04.2022)

After the fall of Imran Khan’s government in April 2022, Pakistan is facing turbulent times in terms of domestic politics. The security situation has also deteriorated. This is because the Taliban takeover in neighbouring Afghanistan has given Islamist extremists and separatist nationalists a boost in Pakistan. In future, we would like to keep ourselves informed about the situation on the ground and work with our suppliers to analyse mitigation options in order to counteract potential effects. These include, for example, food distribution in the factories (see Supplier Questionnaires) and the prevention of labour migration from Pakistan to the Gulf States.

_{https://www.bpb.de/themen/kriege-konflikte/dossier-kriege-konflikte/54682/pakistan/}

_{https://www.bpb.de/themen/migration-integration/regionalprofile/510100/arbeitsmigration-aus-suedasien-in-die-golfstaaten-das-beispiel-pakistan/}

GRI Index: 102-21

Goal : Ensuring the legal compliance of our grievance mechanism

Goal already achieved ✓

GRI Index: 102-21

Goal: Establishment of the possibility for continuous feedback from interested parties

Goal already achieved ✓

GRI Index: 102-21

_{Note: Source of the whistleblower system (WiBU Group):} https://www.wibu.care/de-de/ueber-wibu/

The internal reporting office was implemented in Q2/2024. No grievances have been addressed since the introduction of this system. Neither internal nor external grievances were forwarded to the law firm.

Goal : Ongoing evaluation of the grievance mechanisms

Status: Will be implemented continuously following the introduction of the Grüner Knopf. We are receiving legal support for this.

We are proceeding according to the guidelines of CSR Europe, which are based on the framework of the ‘CSR Europe’s Collaborative Project on Sustainable Supply Chains, Business & Human Rights’. The ‘tandem system’ for utilising the legal entity is described here, see ‘UN Guidance Principles and Grievance Mechanisms’ (see introduction, page 4).

GRI Index: 102-21

Goal: Ensure that vulnerable groups are aware of the grievance mechanism

Status: The ‘Internal Reporting Office’, including whistleblower protection, is linked to a law firm that records and categorises the grievances before the issues are forwarded to us.

Access should be ensured for employees in the factories, e.g. training should be provided and access to this contact should be granted. Access should also be ensured for all vulnerable groups who are unable to read. We coordinate this with our suppliers (see also process "P 1020-01 Grievances"), as a notice (even in the local language) may not always be the most effective approach. We want the grievance mechanism to be effective. It is effective when we meet the requirements and it is:

GRI Index: 102-21

_{Note: Only after the introduction of the grievance mechanisms can the ‘5.1.2 Backup grievance mechanisms’ be identified.}

_{Grüner Knopf Requirement:}

_{Based on the overview and identified gaps (5.1.1) regarding existing backup mechanisms, the company has identified areas for improvement and:}

_{- reviews participation in existing effective mechanisms and/or}

_{- works on improving existing mechanisms and/or}

_{- explores opportunities to develop new mechanisms in collaboration with external stakeholders. Potentially affected parties and/or their legitimate representatives are involved.}

_{The development and/or improvement of these mechanisms is designed to make them effective (5.1.1).}

_{Note: External stakeholders can include, for example, suppliers, civil society, trade unions, other companies, as well as industry and/or multi-stakeholder initiatives.}