The Board recognises that the long term profitability of the business depends, amongst other things, on appropriate protection of the Group's assets, reputation and brand names and is subject to the long-term sustainability of the supply chain. The risk register and the process for the review of internal controls therefore include these issues and the potential impact on the business of Corporate Responsibility ("CR") and sustainability issues.
The Board considers that the principal CR issues which face the French Connection Group are:
- the provision of a safe and healthy environment for our employees and retail customers
- the business's direct and indirect impact on the environment; and
- the employment, environmental and social practices of the business's suppliers
Safe and healthy environment
The business complies with locally applicable health and safety regulations in the countries in which it operates. This includes the provision and maintenance of safe environments for our employees, appropriate design of our stores, health and safety training for appropriate personnel, electrical installation reviews, risk assessments and risk monitoring in our offices, stores and warehouses.
Impact on the environment
The use of resources to manufacture and supply our products generates the major impact on the environment of our business. The source of the raw materials and the manufacture of the finished products is spread globally and provides employment, income and personal security at many different points in the process. We recognise, however, that our products utilise global resources some of which are limited in their nature. Manufactured items of clothing utilise similar amounts of resource, irrespective of the final retail price and we are proud that our products are designed to be of a quality that will provide repeated use over an extended time-frame therefore making good use of the resources invested.
In terms of environmental impacts at the point of delivery of our products we are aware that the use of disposable packaging and the use of power in our premises can be managed. In the UK, the business meets its responsibilities under the packaging waste regulations through membership of Valpak. The use of packaging internally has been reviewed and re-useable boxes have now replaced the use of disposable cardboard boxes for internal distribution. Further, we source our wooden hangers from sustainable sources and do not give them away with the products. Power for the business's larger stand-alone sites in the UK is bought from suppliers whose power generation has a limited impact on the environment through use of wind power, bio-mass and other environmentally low-impact generation sources.
The Group has used third party manufacturing facilities around the world for over thirty years but has specifically avoided suppliers or regions where the employment or environmental practices are known to be below acceptable standards. The Group requires all of its product suppliers to abide by its guidelines contained in the Supplier Guide. Our staff visit the factories we use for garment production on a regular basis and consider the environment and work practices during those visits, however currently our ability to formally audit the facilities is limited. Our Supplier Guide and the employment standards required of our suppliers accord with industry standards including inter alia that employees should: be given a safe and healthy environment to work in; be given the right to free association; be paid a fair wage; have freedom of association; not be forced or bonded labour; be of an appropriate age; and work only reasonable hours.
The Board recognises that it is not possible to provide absolute assurance that standards expected of our suppliers are adhered to. Where transgressions are identified we would work with the supplier to develop an appropriate remediation programme. However we will not hesitate to stop using any supplier who we identify is persistently operating in contravention of our standards or failing to implement agreed remediation programmes.
There are a number of other CR topics, such as business ethics, animal testing and use of chemicals, which are subject to set standards within the business.