How we work with our suppliers
At Esprit, we focus on long-term business partnerships with a small number of top performing suppliers.
This allows us to build a community, and to support each of our supply chain partners to meet our standards. We have strict requirements that suppliers must fulfill before and during cooperation with us. We expect our suppliers to deliver products that meet our Minimum Requirements and to be willing to continuously work with us towards improvements.
All suppliers are committed to our Esprit Minimum Requirements, which are an integral part of our supplier contracts.
In 2015, Esprit created the Esprit Minimum Requirements Steering Committee (EMRSC) in order to agree upon and regularly update an overarching framework of minimum requirements that is aligned between the three departments within the company that have a direct impact on sustainability in supply chains: Quality Assurance, Social Sustainability, Environmental Sustainability & Product Safety.
The Esprit Minimum Requirements include the following:
- Esprit Supplier Code of Conduct
- Esprit Material Quality Requirements
- Esprit Restricted Substances List (RSL) and Manufacturing Restricted Substances List (MRSL), including limits of hazardous substances in the wastewater
Cascading the minimum requirements into our supply chain
The factories producing our finished products (Tier 1) are responsible for sourcing components such as fabrics, trims and accessories; all components of our products must meet our minimum requirements. Our Tier 1 partners must cascade our requirements through their own supply chains, they must ensure that their subcontractors (Tier 2, Tier 3) are aware of and in compliance with our standards.
By involving our direct suppliers in the assessments we conduct in the deeper supply chain, we contribute to increased quality, safety and compliance along the entire supply chain.
We have strict requirements that suppliers must fulfill before starting to work with us. An absolute prerequisite is the disclosure of our direct suppliers’ supply chain, so that we can assess not only the suppliers we are directly working with (Tier 1), but also our suppliers’ subcontractors (Tier 2) and, starting August 2018, our viscose producers (Tier 3).
Besides being a member of several key industry initiatives that conduct monitoring and assessment on behalf of their member brands, we have our own audit teams that visit our suppliers regularly.
Esprit Social Compliance Audits:
To ensure that the all production facilities used by Esprit operate in accordance with the Esprit "Supplier Code of Conduct", the Esprit social sustainability team regularly conducts both unannounced and announced audits at the facilities where Esprit products are manufactured.
Esprit Capacity Assessments:
Our environmental sustainability teams, which are based in the production countries, assess our Tier 2 suppliers’ performance in environmental and chemical management as well as proper process control. This approach helps us ensure compliance with our RSL & MRSL and our Material Quality Requirements.
Technical workmanship assessments
The right equipment and machinery, combined with knowledge and experience of a supplier and factory staff is needed in order to make products in the right quality. Our Quality Assurance (QA) team audits every supplier (Tier 1) to make sure that its factory complies with our technical standards with regards to organization and management, capacity and equipment. During these visits, our QA team also trains factory staff and management on our quality requirements and procedures. Our technical workmanship audits are done periodically, depending on the score of the initial audit. After every audit factory management receives a plan for corrective measurements which is checked by the QA team during the next audit.
Each supplier assessment is followed by a corrective action plan and later regular follow-up assessments, to verify if necessary improvements have been implemented.
No “cut & run”
We don’t believe that pulling orders from suppliers is the right means of remedy.We want to support our suppliers to improve while upholding the business relationship. After each audit, we develop a Corrective Action plan (CAP) together with the supplier. We conduct regular re-audits to verify improvement. A cooperation is only ended as a last resort, means if improvements are not made, or that there is a lack of willingness to address the issues.
Overall, we want to empower our suppliers as being self-responsible business partners. We want them to develop a sense for what is sustainable, responsible and safe. This is why we do not only rely on audits but increasingly build on self-assessments by our suppliers. To this end, we are member of the Sustainable Apparel Coalition (SAC) and advocate the HIGG index facility modules throughout our entire supply chain.
Rewarding sustainable suppliers
We incentivize and reward good sustainability performance. Every six months we evaluate our suppliers’ sustainability performance based on social and environmental criteria and assign them a score in the Vendor Scorecard. Our buying teams take this score into account when placing orders. Like this our suppliers are incentivized to ensure fair and safe working conditions or to scale up their efforts to offer sustainable materials.