1. TRACEABILITY OF THE SUPPLY CHAIN

Each and every one of the suppliers in the Inditex supply chain is subject to policies and standards such as:

Inditex Policy on Human Rights
Inditex Code of Conduct for Manufacturers and Suppliers
Inditex product health and safety standards Clear to Wear (CtW) and Safe to Wear (StW)
Global Environmental Sustainability Strategy, including Water, Energy and Biodiversity strategies

This is integral to our business model and compliance requires the cooperation of all areas, which is why Inditex's sustainability teams work closely with all suppliers and factories. Knowing and identifying all the links in our supply chain is the basis for being able to control and improve it.

R&D in Traceability

In recent years, the technology and systems developed at Inditex have grown exponentially in quantity and quality and we now have specific programmes for sustainably managing the supply chain. These internal developments have allowed us to adapt management systems to our business model and to stay in constant contact with suppliers and their factories. They have also allowed the purchasing team to be involved in order to promote responsible purchasing practices. This means we can be sure that only suppliers that meet sustainability criteria are part of our chain.

Inditex has specific mechanisms for analizing the supply chain in depth, even before starting a business relationship with a supplier.

In 2016, the pre-assessment audit system, which constitutes the first evaluation of the conditions of each factory, was fully integrated into our corporate systems. This ensures traceability from the start and guarantees that both supplier and purchasing teams are aware of the result and the access, or non-access- to our supply chain.

Our next objective will be the integration of traceability audits used to verify the traceability of the supply chain, based on the analysis of information gathered through the manufacturer management system. This progress makes it possible to integrate all audits into a single, more efficient system.

(*) Textile, footwear and accessory factories declared by suppliers in the manufacturer management system for orders in 2016. For those factories involved in more than one process, figures refer to the main process performed.

Transparency of our supply chain

Communication to IndustriALL Global Union of the Inditex supply chain. We regularly share the complete list of our supply chain at all levels and processes with IndustriALL, including purchasing volumes and sustainability compliance levels. Inditex is the only company in its sector that provides this information to a union and facilitates union access to all suppliers, which is a sign of commitment to transparency and respect for freedom our association and collective bargaining.
Publication of wet process factories. We publish the list of direct and indirect wet process plants (dyeing, tanning, washing, printing) declared by our suppliers, in line with the Right to Kno to provide the public with access to information on environmental protection. [Available at www.wateractionplan.com]
Communication to the International Labour Organization (ILO). Inditex regularly provides the ILO with information on its supply chain in countries where the Better Work Programme operates, such as Vietnam, Cambodia and Indonesia. We work with them on advising and improving the conditions of the factories in these countries.
Communication with clients. As part of our commitment to transparency, we inform our customers –on request– of the place where the garments were made. In this regard, in 2016 we answered 110 customer queries regarding the source of our products. In this field we also have specific projects in some countries, such as Fabricado no Brasil (Made in Brazil); these will increase in the future.

This commitment has been acknowledged by various non-profit organizations. Among the most relevant are:

Ethical Consumer and Fashion Revolution. Inditex is one of the top three companies in the Fashion Transparency Index; this index evaluates the transparency of the supply chain of the 40 largest global retailers.
Know the Chain. Inditex has been named as ‘Leader’ in the Know the Chain ‘Transparency Snapshot: A Pilot Benchmark Report', in which different companies are evaluated in terms of transparency.
Baptist World Aid Australia. The Australian Fashion Report 2016 shows the valuation of different retailers in several aspects, including transparency. The report places Inditex in category 'A', the highest level, achieved by only seven of the 87 companies evaluated worldwide.