Nelly sees it as both an opportunity and an obligation to act sustainably from an economic, social and environmental perspective. As a company, we want to assume our responsibility through sustainability work that covers the entire chain, including responsibility for customers. We do this by, among other things, working in accordance with accepted guidelines in this area, the UN Guiding Principles on Business and Human Rights and by addressing the challenges of the fashion industry to contribute to positive impact in the value chain. A fairer fashion industry is an important part of Nelly's sustainability work. To address the challenges of the fashion industry, we are constantly looking for relevant partners. We also work to continuously improve our work towards our own employees.

Responsible supply chain

As a company in the apparel industry with a value chain that includes a large number of brands, suppliers and factories, we have assessed that our greatest risk of negative impact is in the supply chain. Nelly wants to work with suppliers who, like us, care about human rights and good working conditions, and therefore our primary focus is on working with risk assessment, requirements, audits and supply chain measures.

Risk analysis and evaluation prior to contracting new suppliers

Before new suppliers are contracted for own brands, a human rights risk assessment is carried out, including information gathering from the supplier, review of previous audit findings and action plans and, if possible, site visits. Based on this risk analysis, an action plan is drawn up at the start of the cooperation. For the supplier to be approved, the action plan must be dealt with within the specified time period. If a supplier is not willing to comply with the UN Guiding Principles on Human Rights and is not willing to work on continuous improvement, no cooperation will be initiated.

Requirement to respect human rights in conditions and code of conduct for suppliers

Nelly has been a member of Amfori since 2018. All suppliers of Nelly's own brands, which account for approximately 40% of Nelly's sales, have signed the Amfori BSCI Code of Conduct and committed to comply with the Code's guidelines in their operations as well as to pass it on to their subcontractors when starting a collaboration. The Code is based on internationally recognized conventions, declarations and guidelines and includes prohibitions on child and forced labor, as well as regulating issues such as fair wages and working hours, the right to union bargaining, and health and safety in the workplace. Read the code here

For external brands, human rights and fair labor standards are ensured through clauses in our purchasing agreements.

Monitoring of social responsibility in the supply chain and management of non-conformities

To manage risks in the supply chain and to ensure compliance with the Code of Conduct, we conduct audits of our suppliers' operations with the help of third-party partners such as Amfori and Sedex. Our own brands are manufactured by 24 suppliers who in turn use 43 manufacturing units (Tier 1 factories). 41 of these factories are located in the risk countries of China, Turkey, India and Morocco and 2 in the UK, classified as low risk by Amfori. All suppliers in risk countries are regularly audited with the aim that all first-tier suppliers in risk countries will have a valid audit result by 2022. Audits are conducted annually or every two years depending on the audit result, with C- Acceptable results being audited annually and B Good and A- Very Good every two years. Read more about audit results below.

Audits identify deviations from the requirements of the Code of Conduct. In case of serious deviations, so-called Zero Tolerance, immediate action is taken in the form of a tripartite meeting initiated by Amfori and the purchasing company together with the manufacturer. The purpose of the meeting is to protect the worker and to create a rapid action plan for improvement. Examples of Zero Tolerance deviations are forced labor, child labor, discrimination, violence, abuse or bribery. No Zero Tolerance deviations were identified in the 2021 audits.

Amfori BSCI inspections are rated on a scale from A (highest) to E (lowest). All manufacturers are expected to work on continuous improvement. In case of a C or worse result, an action plan is developed for identified non-conformities. The purpose of the action plan is to identify the root cause of the non-conformity and to identify action or training that can lead to improvement. In 2021, 84% of Nelly's private label suppliers were audited and the most deficiencies were found in the areas of Decent Working Conditions, which may include, for example, excessive working hours or overtime, and Health & Safety, which may include, for example, lack of fire safety or lack of use of protective equipment. It is mainly in these areas that Nelly is prioritizing improvements.

Revision result 2021:

A – Very good: 7%

B – Good: 13%

C – Acceptable: 77%

D –Insufficient: 3%

E – Unacceptable: 0%

Partnerships for better conditions in the supply chain

We work with Better cotton, Textlile Exchange and Amfori on human rights. Read more about our partnerships here

Transparency

We are convinced that transparency in the supply chain contributes to a more sustainable future. Nelly does not own any factories, but we are responsible for monitoring working conditions, and we demand action if we find any shortcomings. Together with our suppliers, we create improvements through motivation, training, and follow-up.

Annually, we publish a list of manufacturing units (Tier 1 factories) used for our own brands. To further increase transparency towards customers, work has been carried out to register factories by purchase order in order to be able to publish the manufacturing unit by product for own brands in 2022.

See the factory list for Nelly's own production here

Employees

Of course, Nelly's respect for and commitment to human rights and fair working conditions also extends to the direct activities of Nelly's employees.

We work to maintain a healthy workplace through a systematic approach to health and safety, based on caring and healthy values. To ensure that we conduct our business with shared values and ethical foundations, we have a Code of Conduct that all employees are required to read as part of their introduction to Nelly. Processes for employee reviews, goal management and monitoring of physical and psychosocial work environment are well established and systematically run by the People organization and implemented by managers in the organization. The entire company is covered by collective agreements.

To ensure a good internal environment, Nelly has a whistleblower policy to ensure that employees and business partners feel comfortable reporting suspicions of wrongdoing. Whistleblowing is expected by employees when appropriate. Suspicion reports can be made anonymously, and the information will be investigated. In 2021, Nelly had no reports of wrongdoing.

Nelly has an Equality and Diversity Policy and Action Plan that complements the Code of Conduct. There is also a health and safety policy and a policy and action plan on harassment and bullying. These policies are important in addressing social ill health and are available on the company's intranet. All employees should read these as part of their introduction.

Weekly digital employee surveys are conducted to measure the temperature of issues affecting the working environment and to take quick action. For example, it is possible to report cases of harassment or discrimination.

The workstations at Nelly are designed to be ergonomically adapted to the needs of the individual employee. For example, screens and workstations can be adjusted according to the employee's height.