CA SB657: Supply Chain Transparency Act

Ethical supply chain operation is a core operational principle of our store. We consistently conduct on-site factory inspections and deploy independent third-party audit services to verify that all production facilities maintain safe, hygienic and compliant working environments for employees. In strict accordance with the California Supply Chain Transparency Act, we have formulated a complete set of management measures to eradicate slavery and human trafficking risks across our entire supply chain network.

1. Supply Chain Compliance Verification

Our brand conducts comprehensive supply chain verification work to assess and resolve potential slavery and human trafficking risks in product production and supply links, with all verification activities implemented by external professional audit institutions. All direct suppliers are required to participate in annual formal compliance audits and quarterly regular observation audits conducted by accredited third-party firms. These audits focus on worker working and living condition assessments, wage payment rationality and hour-based salary compliance, workplace health and safety maintenance, and the authenticity and validity of all factory management documents.

We provide our standardized Vendor Code of Conduct (VCOC) to all direct suppliers and mandate public display of this policy in factory public areas. The code has been translated into five commonly used languages in global supply chains: English, Spanish, Italian, Simplified Chinese and Vietnamese. Before launching new cooperative projects, all direct suppliers need to submit detailed social responsibility documents, covering weekly working hour standards, minimum employee age limits, staff disciplinary management norms, and preventive mechanisms for forced labor and imprisoned labor. This pre-cooperation risk assessment helps us effectively screen high-risk suppliers at the early partnership stage.

2. Supplier Audit Management

We carry out standardized supplier audit work to inspect whether suppliers meet our corporate anti-trafficking and anti-slavery management standards, with all formal audits completed by independent third-party organizations. Annual full-scale semi-announced audits are implemented by certified external auditors, with factories informed of a 10-day audit time window. The audit scope covers labor management specifications, wage and overtime payment standards, occupational health and safety systems, environmental management conditions and internal operational mechanisms. Auditors conduct one-on-one and group worker interviews in local languages to obtain real workplace feedback, and check payroll and attendance records to ensure employees receive legal minimum wages and accurate compensation for all working hours and overtime work.

In addition to annual full audits, we conduct unannounced quarterly visual observation audits to inspect daily labor compliance and health safety conditions, reflecting the real daily operation status of production factories. Any non-compliant problems found during audits require suppliers to formulate Corrective Action Plans (CAPs). Our supply chain team cooperates with suppliers to rectify defects, improve management systems and optimize on-site operational processes. All annual audits adopt expanded sampling modes to ensure more comprehensive and accurate wage and hour data statistics. Our internal supply chain team members actively participate in on-site audit inspections and worker interview work.

3. Supplier Certification Requirements

We require all direct suppliers to provide formal compliance certification, proving that all materials used in our products comply with local and international anti-slavery and human trafficking laws and regulations. Our Vendor Code of Conduct is fully delivered to every direct supplier, clarifying factory responsibilities for complying with labor laws, including prohibitions on workplace discrimination, child labor, forced labor and improper employee disciplinary behaviors. We actively promote the implementation of VCOC standards among all upstream material suppliers to realize full supply chain compliance supervision.

4. Internal Accountability Standards

We have established sound internal accountability systems and operational procedures for employees and contractors responsible for supply chain management, to restrain violations of our anti-trafficking and anti-slavery policies. Our brand takes “the ethical choice is the right choice” and “everyone can and should make a difference” as core values to guide all internal decisions and external supply chain cooperation. We only cooperate with suppliers who uphold consistent ethical concepts, and clearly recognize that supplier cooperation is the key to eliminating supply chain labor violations.

We adhere to a zero-tolerance attitude towards all supply chain labor non-compliance issues. Once violations are confirmed, we will terminate cooperative relationships immediately, without considering existing contracts or economic losses. All supply chain management personnel have completed professional CA SB657 compliance training, mastering effective supply chain risk mitigation methods and standardized disposal procedures for non-compliance incidents.

5. Professional Compliance Training

We provide special training on human trafficking and slavery risk prevention for all management and staff with direct supply chain management responsibilities, focusing on improving risk identification and processing capabilities in product supply chains. Our compliance team regularly participates in industry training and seminars to track the latest global supply chain labor trends and human rights risk information, and cooperates with third-party institutions to obtain comprehensive global supply chain compliance data.

All product and supply chain team members must complete mandatory CA SB657 compliance training, which includes identification methods for forced labor and human trafficking violations, as well as standardized reporting and handling processes for high-risk supply chain links. This training is required for all existing employees and new incoming staff.