Integrity of the supply chain

The lines of action followed by Inditex to ensure a stable and sustainable supply chain include making sure that the Group has accurate knowledge on its suppliers, performing exhaustive assessments of suppliers and helping them to improve and optimize the working conditions of their employees.

Members of Inditex Sustainability team.

The integrity of the supply chain is directly linked to the protection of human rights established in the United Nations Guiding Principles on Business and Human Rights and various Sustainable Development Goals (SDGs).

Inditex’s commitment and duty to ensuring the responsible management of the supply chain involves identifying working areas where the Group can contribute to improving conditions in the sector in each of the countries where it operates, creating sustainable and productive environments and contributing to vitally important aims such as reducing inequality (SDG 10), the protection of health and wellbeing (SDG 3), or the promotion of decent work and inclusive and sustainable economic growth (SDG 8).

Inditex’s Code of Conduct for Manufacturers and Suppliers, and its Compliance Programme that ensures their implementation are the cornerstones of Inditex’s efforts to manage and strengthen the supply chain. As part of this, in 2013 Inditex approved its Strategic Plan for a Stable and Sustainable Supply Chain 2014-2018, which continues to expand on the Group’s work in this sphere.

Inditex’s CSR policy

On 9 December 2015, Inditex’s Board of Directors approved Inditex’s Corporate Social Responsibility Policy, which sets out the principles that the Group adheres to in its relations with stakeholders, fostering the inclusion of sustainable practices in its business model. The policy covers:

  • The principles governing relations with stakeholders: The policy establishes the priorities and foundations for ongoing dialogue and transparency with Inditex’s main stakeholders
  • Monitoring and consulting mechanisms: The Group has a Committee of Ethics, internal body reporting to the Board of Directors, that ensures compliance with the Code of Conduct and a Social Council that is the advisory body that tackles sustainability.
  • Communication of CSR practices: Transparency is a fundamental principle that inspires Inditex in all of its communication activities. In order to achieve transparency, the Group utilizes of various communication tools that include the corporate website and Annual Report.
Ethics Committee and Social Council

Strategic Plan for a Stable and Sustainable Supply Chain 2014-2018

The United Nations Guiding Principles on Business and Human Rights of 2011 and the Sustainable Development Goals approved by General Assembly in 2015 have set the sustainability agenda for the coming years. Inditex is committed to contributing to efforts to protect human rights and achieve the SDGs. To this end, it advocates a model of sustainability that guides its activities as a responsible and company committed to social progress.

Inditex aims to offer fashion products produced with rigorous respect for human rights in all of the Group’s actions and compliance with the most demanding environmental and health and safety standards, based on transparency and ongoing dialogue with stakeholders.

Principles that inspire Inditex in its sustainability policies and programmes:

  • The United Nations Universal Declaration of Human Rights
  • United Nations Guiding Principles on Business and Human Rights, which developed the “Protect, Respect and Remedy” Framework principles informally known as the Ruggie Framework. .
  • Principles of the United Nations Global Compact.
  • Fundamental labour standards deriving from the Conventions and Recommendations of the International Labour Organization.
  • ETI Base Code of the Ethical Trading Initiative.
  • Framework Agreement with IndustriALL Global Union

“In this new scenario, the private sector plays a fundamental role in the success of each of the global Sustainable Development Goals’’

Ban Ki-moon – General Secretary of the United Nations

Inditex’s Strategic Plan for a stable and sustainable supply chain 2014-2018 stems from the Group’s conviction that companies have a vital role in promoting and protecting human rights, fundamental labour rights, and the standards set by the most relevant institutions on sustainability. This plan sets out the four main lines of action in responsible management of the supply chain: identification, assessment, optimization and sustainability. It also establishes measurable strategic objectives for 2018 for each of these lines of action.

Since the Strategic Plan was implemented in 2014, Inditex has steadily advanced towards fulfilling the goals it contains, working to develop each of the different lines of action.

Strategic Plan for a Stable and Sustainable Supply Chain 2014-2018

LINES OF ACTION IDENTIFICATION Monitoring Capacity building Continualimprovement Stakeholder engagement ASSESSMENT OPTIMIZATION SUSTAINABILITY Traceability Compliance programme Effective auditing Trainingfor auditors Worker participation Trainingfor suppliers Mature relationshipswith suppliersand a holisticapproach Audit qualitymanagement Corrective Action Plans Consolidationof the supply chain Effective and efficient reference partners with whomInditex can share good practices and create shared strategies

During 2015, the team of more than 100 people that make up Inditex’s Sustainability Department worked to implement the plan at the internal level along with other departments within the company and with the support of stakeholders. Each of the objectives covers different concepts, from forging relationships with suppliers based on trust and cooperation to worker participation and in continual improvement, among others.

Degree of compliance with strategic objectives

0% 25% 50% 75% 100% LINE OF ACTION STRATEGIC OBJECTIVE 2014-2018 DEGREE OF COMPLIANCE 2015 2014 IDENTIFICATION - Verification of the traceability of 100% of production - Regular and systematic training for all auditors using the “train the trainer” system - Auditing system designed to evaluate and improve management methods ASSESSMENT - Ensuring sustainable compliance with the Code of Conduct for Manufacturers and Suppliers - Workers freely chosen as representatives throughout the supply chain - Corrective Action Plans targeted at improving management systems, with self-assessment and worker participation OPTIMIZATION - Alignment and inclusion of the sustainability strategy in the Group’s business model - Regular training programme for 100% of suppliers and manufacturers - Establish and maintain stable relationships of trust with suppliers