Gildan Activewear : 2022 SASB Index

Environmental impacts in the supply chain

2022

Percentage of Tier 1 supplier facilities that have completed the Sustainable Apparel Coalition’s Higg Facility Environmental Module

50%

(Higg FEM) assessment

(7 out of 14 sites)

Percentage of supplier facilities beyond Tier 1 that have completed the Sustainable Apparel Coalition’s Higg Facility Environmental

67%

Module (Higg FEM) assessment or an equivalent environmental data assessment

(4 out of 6 sites)

Labour conditions in the supply chain

2022

Percentage of Tier 1 supplier facilities that have been audited to a labour code of conduct

100%

Percentage of supplier facilities beyond Tier 1 that have been audited to a labour code of conduct

0%

Percentage of total audits conducted by a third-party auditor

2022

Percentage of total audits of supplier facilities that were performed by an independent third-party auditor

86%*

METRIC

SASB CODE

DATA RESPONSE

Case #1 (own facility): work contracts

Case #2 (own facility): environment / chemical safety

Case #1 (contractor facility): compensation

Context

Our Social Compliance Program ensures that all Company-oper-

Our Social Compliance Program ensures that all Company-oper-

Our Social Compliance Program ensures that third-party contrac-

ated and contractor facilities comply with our Code of Conduct,

ated and contractor facilities comply with our Code of Conduct,

tors comply with our Code of Conduct, local and international

local and international laws, including applicable ILO conventions

local and international laws, including applicable ILO conventions

laws, including applicable ILO conventions, and industry codes

and industry codes, from the Worldwide Responsible Accredited

and industry codes, from the Worldwide Responsible Accredited

from the Worldwide Responsible Accredited Production (WRAP),

Production (WRAP), Supplier Ethical Data Exchange (SEDEX), and

Production (WRAP), Supplier Ethical Data Exchange (SEDEX),

Supplier Ethical Data Exchange (SEDEX), and the Fair Labor

the Fair Labor Association (FLA).

and the Fair Labor Association (FLA). This includes ensuring that

Association (FLA). As per our Code of Conduct, we expect that

Gildan-operated sites and third-party contractors follow strict

our third-party contractors uphold appropriate work standards

guidelines related to chemical safety and hazardous material

aligned to our Codes and Policies. These expectations include

management.

that third-party contractors shall pay workers at least the legal

minimum wage or the prevailing industry wage, whichever is

higher, for regular working hours (not including overtime). Addi-

tionally, they shall timely increase the minimum wage standard

according to the local law and regulation within legally required

time limits.

Audit

All non-compliances, including breaches of our Code of Conduct

All non-compliances, including breaches of our Code of Conduct

All non-compliances related to our third-party contractors,

process

and/or human rights issues, are recorded and tracked in our

and/or human rights issues, are recorded and tracked in our

including breaches of our Code of Conduct and/or human rights

Corporate Social Responsibility data platform. Audit results

Corporate Social Responsibility data platform. Audit results are cat-

issues, are recorded and tracked in our Corporate Social Respon-

are categorized from Green to Black based on the number

egorized from Green to Black based on the number and severity

sibility data platform. Audit results are categorized from Green to

and severity of the findings against our Code of Conduct and

of the findings against our Code of Conduct and the benchmarks

Black based on the number and severity of the findings against

the benchmarks outlined in our Social & Sustainable Compli-

outlined in our Social & Sustainable Compliance Guidebook.

our Code of Conduct and the benchmarks outlined in our Social

ance Guidebook. Green and Yellow ratings may be cleared for

Green and Yellow ratings may be cleared for continued business,

& Sustainable Compliance Guidebook. Green and Yellow ratings

continued business, Orange and Red requires improvement within

Orange and Red requires improvement within a set timeframe,

may be cleared for continued business, Orange and Red requires

a set timeframe, and a Black rating results in termination of the

and a Black rating results in termination of the contract once open

improvement within a set timeframe, and a Black rating will result

contract once open orders are completed. If a third-party con-

orders are completed. If a third-party contractor or our operated

in termination of the contract once open orders are completed. If

tractor or our operated facility receives an Orange or Red rating

facility receives an Orange or Red rating following an audit, our

a third-party contractor or our operated facility receives an Orange

following an audit, our internal Social Compliance team will work

internal Social Compliance team will work with the facility’s man-

or Red rating following an audit, our internal Social Compliance

with the facility’s management to remediate any issues found and

agement to remediate any issues found and establish an action

team will work with the facility’s management to remediate any

establish an action plan. The following is an example of a Minor

plan. The following is an example of a Major non-compliance from

issue found and establish an action plan. The following is an

non-compliance Orange rating, resulting from a 2022 internal

an internal audit with Orange rating.

example of a Moderate non-compliance which was remediated

audit in our own facilities in Nicaragua.

accordingly as per our social compliance process.

METRIC

SASB CODE

DATA RESPONSE

Case #1 (own facility): work contracts

Case #2 (own facility): environment / chemical safety

Case #1 (contractor facility): compensation

Case

An important step in the auditing process is conducting documen-

An important step in the auditing process is conducting a thorough

Worker interviews are an integral part of the Gildan audit process

tation review. Examples of some of the documents reviewed in

facility walkthrough. The main purpose of this is to identify any

because they provide an opportunity to validate the information

this case included the following: employee contracts, disciplinary

present or potential non-compliances related to the facility’s

and findings revealed through management interviews, facility in-

notices, pay-slips, payment of employee benefits, permits, and all

day-to-day operations, as well as to guarantee worker safety and

spections, and documentation review. During the review of payroll

required legal licenses and certifications. While conducting the

well-being. During the facility walkthrough, the Social Compliance

in one of our contractor facilities in Asia, our auditor identified that

documentation review, our Social Compliance team identified the

team identified the following:

the factory did not follow a new regulation announced by local

following:

• The colour service / dye weighting room was in poor condi-

government two months prior to the visit. The new regulation

involved increasing employees’ minimum wage by 12.5%, which

• Employee contract language was too complicated to under-

tions: disorganized, unclean and in need of housekeeping.

was verified through worker interviews. The auditor selected a

stand, which could lead to misunderstanding or misinterpreta-

• Lack of warning / security signs.

sample of employees, introduced the purpose of the interview,

tion.

As a result of these findings, a sustainable action plan for the

informed workers of the confidential nature of the interview,

• The contract also included language such as “the employee is

verified workers’ information, covered the aspects of the working

facility was implemented. This plan included conducting a root

obligated to” instead of “the employee is committed to,” which

conditions outlined in the Gildan audit tool, and paid particular

cause analysis to identify additional measures to mitigate potential

could potentially be misinterpreted as forced labour.

attention to the area of concern. Regarding the auditor’s question

incidents in the future.

about minimum wage, all the sampled workers were not aware

• Finally, the contract did not specify whether the amount of

that the government had increased the minimum wage standard.

money would be compensated on a daily, weekly, or monthly

basis.

Root cause

Although minor non-compliances do not require a root

Our Social Compliance and Health & Safety departments worked

Gildan’s Social Compliance and the third-party contractor’s Human

analysis

cause analysis, Social Compliance and Human Resources

collaboratively to understand the cause of this problem and

Resources departments worked collaboratively to understand the

departments determined that there was an inadequate review of

concluded that the primary root cause was inadequate planning

cause of this problem and concluded that the facility delayed the

documentation by leadership, leading to work contracts being

and organization. In addition, the root causes were due to a lack of

increase of the minimum wage to its workers.

easily misinterpreted.

leadership and poor supervision.

Remediation

Gildan is committed to maintaining a fair and healthy workplace

Gildan is committed to maintaining a safe and healthy workplace.

To remediate this action, the third-party contractor and the Social

plan

environment. Therefore, these were the actions taken to complete

Therefore, these were the actions taken to complete the facility’s

Compliance department worked collaboratively to conduct the

the facility’s remediation plan:

remediation plan:

following actions:

• A complete review of employees’ contracts to ensure there is

• A thorough cleaning and organization of the colour service /

1.

The contractor immediately paid all the adjustments to workers

no complicated wording or phrases and avoid misunderstand-

dye weighting room was completed.

in compliance with updated minimum wages.

ings regarding workers’ commitments with the Company.

• All the missing warning / security signs were placed in the

2.

The contractor posted the notification on the bulletin board

• Clearly define the rate of compensation so it can be easily

required areas.

regarding the increased minimum wage and announced

understood by the employee.

• The Health & Safety department made a commitment to

the new minimum wage standard to all workers during the

following weekly meeting.

undertake routine inspections to guarantee that these areas

would always be kept clean and in order.

3.

The contractor’s Human Resources department prepared a

timeline to closely follow the latest updates on laws and regula-

tions from local government.

4.

The contractor’s Human Resources department created a

manageable training system to timely notify all workers of the

updates regarding their compensation and benefits.

METRIC

SASB CODE

DATA RESPONSE

Case #1 (own facility): work contracts

Case #2 (own facility): environment / chemical safety

Case #1 (contractor facility): compensation

Follow-up

To monitor this non-compliance and as a general best practice,

As a follow-up to this case and as a general best practice, our

Our Social Compliance department will keep monitoring this

our Social Compliance team reminded facility management in our

Social Compliance team reminded facility management in our own

matter to ensure third-party contractors continuously implement

own facilities of the importance of maintaining healthy and safe

facilities of the importance of maintaining healthy and safe work

sustainable improvements as required by Gildan’s Social Compli-

work environments. Amongst the practices to be completed by

environments. Amongst the practices to be completed by the

ance Program and statutory law.

the facility is to ensure that all work contracts, documentation, and

facility is to ensure that all areas, especially those where chemicals

policies utilize clear and understandable wording to mitigate any

are handled, are kept clean, and that all require warning and

risk of confusion or misinterpretation.

security signs are kept in a visible location.

Lessons

Our Social Compliance and Human Resources departments

Our Social Compliance and Health & Safety departments worked

Through constant communication and capacity-building, the

learned

worked collaboratively with facility management to identify

collaboratively with facility management to identify sustainable

Social Compliance team supported the third-party contractor to

sustainable solutions to this issue. The facility learned the

solutions to this issue. The facility learned that to keep a healthy

ensure workers’ Compensation and Benefits are well managed at

importance of ensuring that all documentation implements

work environment for workers, it must ensure that work areas are

the facility, including, but not limited to, guaranteeing workers a

language that is easy to follow and understand in order to reduce

organized and clean, and warning / danger signs are in place.

minimum wage, ensuring a timely review of laws and regulations,

any potential misunderstandings and assumptions from the

and implementing a manageable training system for employees

interested parties.

regarding their compensation and benefits.