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Social Compliance

We require that we ourselves and
our business partners meet a
wide variety of laws, rules, and
country-specific regulations.

Esprit operates in over 40 countries worldwide, has apprroximately 11,000 of its own employees and around 400,000 people are employed in supplier facilities for the Esprit supply chain. Therefore we require that we ourselves and our business partners meet a wide variety of laws, rules and country-specific regulations. Esprit endorses lawful and ethical business practices and zero tolerance for unethical or illegal conduct in our day-to-day business.

The core of our conviction in lawful and ethical business practices and in "doing things right" is reflected in Esprit's Code of Conduct and policies, which are available for employees and suppliers. The Code of Conduct specifies our core values and main principles by providing visible behavioral guidelines. Furthermore, Esprit's policies, such as our Anti-Corruption Policy, establish the rules of conduct and outline our individual responsibilities in particular areas, circumstances, or situations to support day-to-day decision-making throughout the Esprit Group.

Responsible Sourcing

To make sure that our suppliers meet our social standards, we have implemented, beside other procedures, a thorough Social Compliance-On-boarding Process. Before we start any business collaboration, our Supplier Code of Conduct is shared with the potential supplier and must be accepted and signed prior to their engagement as part of our general supplier agreement. The Supplier Code of Conduct references the Core Conventions of the International Labour Organization (ILO) and the ILO Declaration on Fundamental Principles and Rights at Work.

Esprit Supplier Code of Conduct main principles

  1. Ethics: anti-corruption & fair business practices
  2. Legal compliance
  3. No child labor
  4. No forced, bonded, indentured, or prison labor
  5. Freedom of association and collective bargaining
  6. No discrimination, harassment, or abuse
  7. Wages and benefits: fair and legal compensation
  8. Working hours: no involuntary or excessive overtime
  9. Safe and healthy working conditions
  10. Responsible treatment of animals, use of chemical substances, and the environment
  11. Implementation of management systems

The Esprit Social Compliance-On-boarding-Process

In our Social Compliance-On-boarding-Process, we collaborate with third parties such as the Business Social Compliance Initiative (BSCI) and Better Work. Beyond their commitment to the Esprit Supplier Code of Conduct standards, we want to ensure that the working conditions at our suppliers’ facilities are aligned with our expectations. Therefore, we take on responsibility not merely to choose factories that are already in full compliance with our standards, but to ensure steady improvement in the factories that we use.

Comprehensive, rigorous audits are fundamental in improving factory working conditions because they tell us where problems lie and what needs to be fixed. To achieve the right balance of audit quality, follow-up remediation work, and recognition of the effort by multiple factory customers, Esprit relies on a combination of BSCI audits, Better Work audits, and internal audits.

Proposal
of new
factory

Detection
of supplier
profile

Social
compliance
assessment

Supplier
approval and
implementation
into internal
systems

Start
of
production

Comprehensive, rigorous
audits are fundamental in
improving factory working
conditions.

Esprit's Social & Environmental Sustainability Team

To support our suppliers in achieving the required standards, Esprit has a Social & Environmental Sustainability team in place, based at our headquarters in Germany as well as in Bangladesh, China, Hong Kong, Turkey, and Vietnam. The team assesses social compliance in supplier factories through formal audits and unannounced visits. Esprit's audit process does not stop once new suppliers are on-boarded. We also visit factories to assist management in implementing recommendations from previous audits. The goal for us is to assess each factory at least once a year, and more often where warranted.

Esprit supplier audits FY 2014/15

Non-Compliance

Non-compliance with the Esprit Supplier Code of Conduct and legal requirements can lead – depending on the seriousness of the violation and the willingness of factory management to respond – to the termination of the business collaboration with immediate effect. However we aim to establish a fair, stable, and long-term relationship with our suppliers. As we see it, pulling out of factories does not solve problems. We prefer to develop solutions for compliance violations along with our suppliers wherever possible.

Bangladesh Accord on Fire and Building Safety

The Bangladesh Accord on Building and Fire Safety was established after the collapse of the Rana Plaza building complex in 2013, which killed 1,134 mostly factory workers and injured more than 2,500. This disaster caused the question if the textile industry puts enough efforts ensuring worker safety. Esprit is committed to avoid that such a tragedy can ever happen again. Although Esprit products were not made in any of the six factories in Rana Plaza, we were one of the first brands that signed onto the Bangladesh Accord on Fire and Building Safety.

The Accord is a 5-year independent and legally binding agreement between brands, retailers and trade unions. Its dedication is to assuring safe factory buildings in Bangladesh. The Accord process has focused on the findings of structural, electrical and fire safety audits of all of Esprit factories in Bangladesh. By the end of FY 15/16 all 39 factories that Esprit works with in Bangladesh had finished their remediation programs. 15 factories had completed over 90% of their audit findings and the average completion rate for all Esprit supplier factories as of end of FY 15/16 was 79%. We expect all Esprit supplier factories have completed all of the required work by December 31, 2017. Our Social & Environmental Sustainability team supports factories in this ongoing progress continously.

Living wage

Esprit feels strongly that the workers making its product should be able to live on the money they earn. To ensure this, Esprit not only requires that the legal minimum wage be paid, but that wages be enough to meet basic needs, including food, clothing, housing education, and healthcare, as well as allowing for a reasonable amount of discretionary income for unexpected costs and savings. By working with our suppliers, as well as industry peers, Esprit supports improvements, and assures that jobs in our industry truly become the road out of poverty that we want them to be.

For many years, the topic of living wage has been controversial. The question of how to calculate living wage is not settled and it has essentially brought the work to deliver an industry-wide, agreed living wage to a standstill. Rather than calculating a living wage, Esprit believes it is best achieved by facilitating the development of nation- and industry-wide collective bargaining agreements in key garment and textile producing countries, where workers’ representatives and factory management can negotiate wages and any other aspect of working conditions deemed appropriate by both parties.

Therefore, Esprit joined the ACT (Action, Collaboration and Transformation) program in September 2015 to ensure fair living wages for all employees in the supply chain. In this program, 17 other brands and IndustriALL Global Union work together to increase wages, while maintaining the overall health of the industry that supplies the workers’ job. As a key part of this effort, ACT also strives to improve brand purchasing practices and to provide expertise to enhance factory productivity to support increased wages within a healthy local textile industry.
Allowing workers to negotiate wages on their own behalf is to Esprit really the only viable long-term solution to this difficult problem.