The Woody Group - Social Report 2019

FINANCIAL YEAR 2019

SOCIAL REPORT

SOCIAL REPORT

2019 WRITTEN BY

Ieva Roze De Neve CSR DEPARTMENT APPROVED BY

Steven Van De Velde MANAGING DIRECTOR

EDITED BY

Nelle Matthys CSR MANAGER

FAIR WEAR FOUNDATION MEMBER SINCE JUNE 2019

https://www.fairwear.org/brands/woody https://www.fairwear.org/brands/lords-and-lilies

This Social Report was written by Ieva Roze De Neve and edited by Nelle Matthys, a member of The Woody Group’s CSR staff and the CSR Manager. This paper reports on the period of January 2019 to January 2020.

http://thewoodygroup.com/ Images used in this Report:

The images used in this report may be subject to copyright.

SOCIAL REPORT 2019

PAGE 01 OF 26

Contents Introduction............................................................................................................05 Summary & Organisational Chart......................................................................06 1. Sourcing strategy................................................................................................07 1.1. Sourcing strategy & pricing......................................................................07 1.2. Organisation of the sourcing department...........................................09 1.3. Production cycle.........................................................................................09 1.4. Supplier relations........................................................................................11 1.5. Integration monitoring activities and sourcing decisions...............13 2. Coherent system for monitoring and remediation....................................14 2.1. Monitoring examples................................................................................16 3. Complaints handling..........................................................................................18 4. Training and capacity building........................................................................20 4.1. Activities to inform staff members.........................................................20 4.2. Activities to inform agents & manufacturers and workers..............21 5. Information management................................................................................22 6. Transparency & communication....................................................................22 7. Stakeholder Engagement..................................................................................23 8. Corporate Social Responsibility.....................................................................24 8.1. Close the Loop ambassadorship..............................................................24 8.2 Curbing of the plastic soup.......................................................................24 8.3. Woodyloop....................................................................................................25 8.4. Philanthropy.................................................................................................25 8.5 Other changes at our headquarters to boost our positive impact..26

SOCIAL REPORT 2019

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List of Abriviations AQAT

Audit Quality Assessment Tool

CAP'S

Corrective Action Plan's

COLP

Code of Labour Practices

CSR

Corporate Social Responsibility

FWF

Fair Wear Foundation

ILS

International Labour Standards

LxL

Lords x Lilies

MOQ

Minimum Order Quantity

TWG

The Woody Group

WIS

Workers Info Sheet

SOCIAL REPORT 2019

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"Everyone says that sustainability is about taking care of the world, but actually sustainability is to take care of human beings."

MEHMET BATUR CEO

SOCIAL REPORT 2019

PAGE 04 OF 26

Introduction

"Woody means family, Woody means fun, Woody means sharing friendship" Mehmet Batur CEO

Brief introduction of our brands.

The Woody Group is a Multi Brand Company specializing in High Quality Home and Night Wear for Women, Men and Children. The

1 000 000

Pyjama's Sold

Woody Groups flagship brand is Woody. A Leader in Quality Home and Nightwear since 1993. Woody offers Fun, Wholesome and Cheeky Designs for the Whole Family.

The Woody Groups brand Lords x Lilies is Specialized in Women and offers a wide

+/- 350

Retailers Carrying the Brand's

variety of beautiful garments and accessories, which are known for the quality of the fabric and the designs.

All styles, artworks and fabrics are designed

5

Own Shops

in Belgium, exclusively for The Woody Group.

SOCIAL REPORT 2019

PAGE 05 OF 26

Summary 2019 brought many new projects and initiatives.

This year TWG did a social compliance audit at the factory of our partner, who is responsible

For the first time we became members of an multi

stakeholder

organisation

Fair

for 85% of our total production.

Wear

Foundation, to further analyse and improve and

Furthermore,

we

better the working conditions throughout our

information

supply chain.

company and

introduced

managing

new

system

supplier

within

our

new tools for monitoring,

remediation and complaint handling.

Our CSR and the one of our suppliers plays increasingly higher role on TWG's business and

TWG's work didn't stop there, together with

sourcing decisions.

different partners we became ambassadors of Close the Loop trajectory and started our

When we work with suppliers, we are looking to

circular pyjama project, the Woodyloop.

develop long- term relationships and continue doing this. In case we need a new supplier, we

In the meantime also sustainability at the

look at the strength of their CSR.

office was addressed and brought small but significant changes.

Although we look for suppliers who are already actively developing in the area of CSR, we are

In the upcoming year TWG wants to develop on

fully willing to cooperate if any issues were

transparency and communication both within

found, for example in social compliance or

our company and towards our stakeholders.

environmental side.

Mehmet Batur

Organisational Structure

Production

Team in

OWNER +CEO

Turkey

Steven Van De Velde

GENERAL MANAGER

IT

Department

CSR &

Styling

Sales

Marketing

Customer

Logistics &

Finance &

HR

Production

Department

Department

Department

Service

Inventory

Acconcting

Department

Department

SOCIAL REPORT 2019

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Summary

1 . S o u r c i n g

S t r a t e g y

1.1. Sourcing strategy & Pricing In 2019 our brands were carried by +/- 350 retailers in Europe and Turkey. Above that we also have 5 of our own stores, all located in Flanders, Belgium.

All the products in our assortment have been designed by our styling team in Belgium. The production on the other hand is handled by our partners in China, India and Turkey.

In 2019 our goods were produced in South & East Asia and Turkey. As every year, our goal was to keep our supply chain as consolidated as possible. All of our brands have only small number of suppliers, giving us a good overview of our supply chain.

This year, over 85% of our products were produced by our main partner in Turkey, who has produced for TWG, for more than 10 years. This partner is specialized in knits, a material widely used in our flagship brand’s Woody pyjamas. Furthermore, they are also very trustworthy, agile and have fast reaction times.

As for collections, both of our brands are working with spring/summer, winter/ autumn collections. 2019 was a very special year for TWG, as we celebrated 25 years.

To

occasion

commemorate a

special

25

collection was also made.

SOCIAL REPORT 2019

this

special

years

Woody

Our factory is part of our group and is only producing for our brand which is giving us an enormous reactivity on the market.

On the other hand TWG has most number of suppliers, including tail-end

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suppliers in China and India. Both are the world’s leading textile markets, with unmatched expertise and geographical advantages.

Our China main supplier is the specialist of very warm winter fabrics made in fluffy and super soft polyester quality. Materials which are all made in China.

When producing these qualities in SouthEast Asia, there is a geographical advantage, which allows us to cut down transportation distance necessary between the mills and producers. This lowers transportation time and energy consumption.

The number of suppliers TWG has in China has stayed the same, despite us adding a new one. That’s because unfortunately it was necessary for us to end our business relationship with another.

Ending a relationship with a supplier in

China is often based on the difficulties we have as small brand with small order quantities. For China even our biggest orders are very small as the scale is not comparable. So that's also why we only work with very small Chinese suppliers.

In year 2018 TWG started sourcing in India, after a year of sourcing there, we chose to continue our relationship with only one of the two producers there. This producer is very committed to implementing and maintaining FWF’s COLP, which are now also part of TWG’s official Suppliers Handbook. Because of their motivation and the presence of another FWF member, TWG has the trust to build long term relationship at this supplier.

Our sourcing department is aware of different risks that come with each country and thus we always look for producers with whom we could develop a long-term relationship and who are open to a dialogue.

In Photo: Production team in Turkey SOCIAL REPORT 2019

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When it comes to pricing and making sure our buying prices are fair, our companies strategy is quite simple. We as a small player, with small order quantities at most of it’s suppliers, avoid price negotiations

with

our

suppliers

and

agree to the price they set at their end. If a supplier says that our MOQ is too low we pay an extra fee. In general TWG also pays 30% deposit to finance the material purchase.

For the year of 2020 one of TWG’s goals is to have a better overview of garments cost breakdown

and

have

more

As we became members of the FWF, TWG have integrated their social compliance monitoring tools in the organization of the sourcing department. Also during the year of 2019 the 8 ILS have successfully been implemented in the TWG’s Suppliers Handbook which is part of our order system.

We prefer to work directly with our suppliers without any intermediates, to keep close contact with our product.

Only for one of our Chinese factories we work with an agent.

price

transparency.

1.2. Organisation of the sourcing department At our company sourcing decisions are made by our Production & CSR Manager and the Collection & Planning Manager.

They always visit a location before we start a business relationship and conduct interim

visits

throughout

the

relationship.

This in-person interaction and visits are an important cornerstone of TWG’s strategy of monitoring social compliance, work conditions and quality.

When our company is in search for a new supplier, we look at multiple parameters such as the quality of the workmanship, price-quality ratio and CSR engagement.

SOCIAL REPORT 2019

In Photo: Transferring of the Woody animal print on the pyjamas

1.3 Production Cycle As mentioned before, our brands Woody and Lords x Lilies have two main collections per year, a Spring/ Summer and a Autumn/Winter collection. When there are special events, such as Olympics and Anniversaries TWG also produces small and pre-sold capsule collections.

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In Photo: Making of Slippers at the Chinese production unit

Our Collection Manager is aware of the capacity during the planning of the collection, which is done following the season and according to the fabric specialization of the factory.

Collections are made by the factories in the original fabrics and each colorway is physically sampled. This avoids surprises during the production, as same fabrics in other colors can react very differently.

Each color combo has his own different artwork which makes it unique. Samples are delivered to TWG with an according price quotation.

This is done so our customers can see the real product during the sales period in TWG showroom, in Ghent.

They see exactly what they are going to buy. The Woody Group is ordering only pre-sold pieces and a small B2B working stock in bulk production. Since 2018 we have an online shop which is considered as physical store.

SOCIAL REPORT 2019

A month before the end of the sales period, all the production locations receive a forecast order.

That's the moment all our suppliers can start to plan their fabric and material orders at the mills. Also, they reserve the cut, trim and make capacity on their production lines. Planning is done respecting our priorities and requested delivery times, as much as possible.

If needed, this is the moment a supplier will negotiate an extra fee for a small order quantity.

During this time they also inspect the details, so when the purchase order is sent, all material orders go easy and fast.

There is more communication with our East suppliers, as they make much more specific and rotating products such as socks, toys and slippers.

For the production locations in India and China the typical lead time is 90-120 day's.

If there is a delay, we can adapt the date of PAGE 10 OF 26

delivery

or

opt

for

a

different

transportation mode. For example, we had a delay problem with one of our producers

in

India,

which

we

just

accepted. To guarantee that garments arrive on time TWG changed from SEA shipment to AIR freight.

With our partner in Turkey we work hand in hand to have the work done. It's a full partnership in which also our computer systems

are

exchanging

information.

They have full access to our PLM-system and

have

software

to

make

their

production planning following the arrival of the materials.

This planning is uploaded in our logistics system and on the B2B website.

Furthermore, if there are any delays, they have the power to adjust the delivery date directly, which is introduced and adapted automatically.

In Turkey we work a lot with repeated fabrics, removing a layer of complexity.

Consequently, the lead times in Turkey are shorter with the best lead time being 60 days.

During spring, the factory in Turkey also observes

the

Ramadan,

which

in

our

The high quality materials are very well chosen. As we only produce the sold garments, avoiding unused stocks and left overs.

This is our long term business model which helps us to be financially solid and sustainable.

1.4 Supplier Relations Although we have a very small number of suppliers within our supply chain and most relationships longer than five years, change in suppliers is very hard to avoid.

After a lot of consideration, in 2019 TWG decided to end business relationship with two of it’s suppliers and to start one new relationship, as we were in search on new product results and new relationships.

In case of the first supplier we stopped the relationship because repeated company visits demonstrated a mismatch between their certificates, promises and the actual situation.

Furthermore, the quality of the products produced, was repeatedly below satisfactory. This led to loss of trust regarding a fruitful cooperation and their capabilities to produce to our standards.

is

considered during the planning.

In summary our pre-sales system is providing us a low risk bulk order. Our experienced long term suppliers are very

SOCIAL REPORT 2019

familiar with or specialized functional products.

Additionally, our orders were too small to have any leverage, compared to the capacity of their location.

When all these elements were weighted, we made the difficult decision of ending PAGE 11 OF 26

the business relationship after only one year of working together.

In the case of the second production location, there were similar issues.

Although this was a longer cooperation, our orders were too small and only for winter seasons. So each time ordering these accessories, such as socks it was a struggle with the MOQ's. The contact and communication went not very smoothly.

and how to create a responsible exit strategy and mitigate the effects on workers.

To further improve, TWG has invested extra resources in hiring support staff to create new supplier social compliance evaluation and monitoring system for current and new suppliers.

Again, after a careful consideration and much discussion we decided that it was our duty to end this relationship.

On the more positive side, as mentioned before, TWG also added one new supplier to it’s portfolio and explored possibilities to work with agents.

Whenever a new supplier is needed, we check our "future suppliers list" to see if we have a recommended factory for this kind of article. Future suppliers list was built by gathering all information from sourcing fairs and the network of the Collection and Production managers.

In case of our newest Chinese Supplier, which was added in year 2019, they were chosen because of their specific know how, their technology and central location.The supplier change also allows TWG to have improved quality and very good material quality.

Obviously as we became members of FWF it had a great influence on our supplier relationships.

Our new FWF membership has allowed us to develop new insights on tools to avoid

In Photo: Embroidery Machine at the Production unit in Turkey

and mediate such a scenario in the future SOCIAL REPORT 2019

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1.5.Integration monitoring activities and sourcing decisions In 2019 the integration of monitoring activities was still a work in progress. As a new FWF member, that joined mid-year 2019, there is still a lot to learn and achieve.

As the first step, TWG created a Supplier’s Handbook that fully covers the FWF’s COLP’s. Signing this document obliges our suppliers to endorse and implement the 8 ILS. As one of our Indian suppliers shared their FWF audit from 2019, we took that as

SOCIAL REPORT 2019

opportunity to learn more about FWF standards for audits, audit quality assessment and CAP’s.

Even before our FWF membership we would evaluate our Turkish partner's social compliance by visiting our Production location in Turkey and pay attention to: The way people come to work Sanitary conditions Health & Safety Conditions Well-being of the workers Lastly, we have developed a criteria for evaluating our suppliers. These criteria are based on compliance with the COLP, price fluctuations, delivery, price-quality ratio and communication.

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2 . C o h e r e n t

s y s t e m

f o r

m o n i t o r i n g

a n d

r e m e d i a t i o n

Audits & CAP's During the year 2019 TWG was working with one Indian supplier who had been audited by FWF, as one of its other customer brands is already an active FWF member.

This producer was more than collaborative and shared their last audit report and the CAP’s with us. Among other things this also inspired us take up an FWF membership of our own.

Once our own FWF membership was established, we decided to take more action and responsibility.

By the end of 2019 we had ordered two audits, one for our partner in Turkey, who accounts for more than 85% of our production and produces exclusively for TWG, and one for our biggest Indian supplier.

At the end of the year 2019 the audit at the Turkish partner's location could finally take place and was executed by a local and

SOCIAL REPORT 2019

independent auditor. In this case we chose to use a company called Wethica.

Dialogue is not only important with suppliers but also with other brands. This led TWG to sharing the responsibilities and costs of the Indian supplier’s audit scheduled in early 2020.

Together, we have more leverage in the production location, if any CAP’s are necessary and can create better solutions by combining our knowhow. For this audit we chose to enlist the FWF. At the very end of the year 2019 we received our very first CAP, for the Turkish partner, before we could implement it, we requested a Turkish translation, so all workers could understand it.

As this was an independent audit, we made use of FWF’s Audit Quality Assessment Tool, which allowed us to examine the quality of any audit on Social Compliance.

Furthermore, TWG shared the audit report with our Turkish partner and its results were discussed in person.

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Visits

FWF Code of Labour Practices Most of our suppliers were introduced to the FWF COLP in person by our CSR & Production manager.

In Photo: CSR & Production manager with suppliers

During the year 2019 our CSR & Production Manager and our Collection & Planning Manager visited 7 of TWG's 9 production locations, as well as both of our prospective supplies for 2020.

All of our current suppliers have received a Suppliers questionnaire and a WIS in their local language with the 8 ILS, the complaints procedure and the complaint hotline phone number.

During these visits our managers do a visual inspection of the location, take photos for documentation and talk to the local management.

At the end of 2019 we also developed country specific check lists for Turkey, China and India with easy to follow instructions.

This checklist is essentially a mix of questions, which cover: Factory Information Fire and Electrical Safety Chemical and Equipment Safety Building Safety Working Conditions Country specific questions Legal minimum wage questions These questionnaires allow us to have a more systematic approach to monitoring.

SOCIAL REPORT 2019

In Photo: Example of Photo's

PAGE 15 OF 26

In Photo: Factory in Turkey

2.1. Monitoring Examples Turkey TEKUMUT Hazir giyim Teksil Our Turkish partners factory is located in the beautiful Province of Düzce, in the northwest region of country, which is also known for their spectacular waterfalls.

improved and collaboration.

offered

their

full

Even though no complaints have been received through the FWF complaint line, the workers had a opportunity to give them directly to the Wethica auditor and later these complaints were incorporated in the CAP’s.

During 2019 we sourced more than 85% of our products in this location. TWG's CEO visits the location at least once a month.

As we joined FWF in 2019, we introduced the 8 ILS’s, FWF worker information sheets and complaint lines hotlines.

As Tekumut is our main supplier and produces exclusively for TWG, we found it important to audit them on their social compliance by the end of 2019. This decision was made in consultation with the factory, who were very eager to participate.

After we received the results, we first discussed them in person during the managements visit to Belgium and afterwards sent them with the factory management.

The audit shed light on some concerns, that the management also agreed could be SOCIAL REPORT 2019

In Photo: Factory in Turkey

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Main findings of the Audit LP1: Employment is freely chosen

LP5: Payment of a living wage

The audit found that all the employment in the factory is freely chosen and the only improvements necessary are a explicit 'No Forced Labour" policy and additional supervisor training.

The audit concluded that the factory meets legal and industry standards and there are no deductions because of disciplinary action. The payments are done in a appropriate way and on time.

As already mentioned at discrimination section, the premiums, new beginner wages and promotions need written down criteria and scales.

Additionally, the overtime payment is much higher than in the sector and is included in the overall social security premium calculations.

LP2: Freedom of association and the right to collective bargaining There are workers representatives whom have been elected in accordance with the Turkish OHS laws and the votes have been properly recorded.

The Worker Representatives can join monthly management meetings and OHS meeting's every second month. Nevertheless the audit found that not all workers requirements and needs are met and the worker information system about their rights and complaints needs improvement.

LP3: No discrimination in employment From all the aspects of employment relationship the audit found that the factory should introduce written criteria and scales for the two wage premiums.

Furthermore, the audit concluded that the factory should introduce written criteria and scales for new beginner wage definition and worker promotion.

On the other side, the factory can also be proud to have application forms with no discriminatory questions, no gender preferences and desecrate health checks and documentation.

LP6: Reasonable hours of work The cleaning staff circular knit night shifts were found to have minor violations in overtime. This is known by the factory management and as the overtime is minor, it could be easly addressed.

It's important to note that the overtime payment is 50% higher, than in the sector and is included in the overall social security premium calculations.

LP7: Safe and healthy working conditions As per benchmarking the Health & Safety conditons are better than most factories in the local area and Turkey.

Nevertheless, there is always space for improvement and the factory received a list of small changes and adjustments that need to happen to improve the health and safety conditions further .

LP4: No exploitation of child labour

LP8: Legally binding employment relation

The audit concluded that there is no exploitation of child labour present and the youngest worker is 21 years old.

To be even more complaint the factory was advised to introduce a written policy and definitions on "Prevention of child labour". Also, a remediation plan for late discovery of child labour should be created.

Additionally the auditor also recommended for the factory to not only check the original identification document, but also to develop a robust age calculation method.

Everyone at the factory has a legaly binding employment relation and there were no problems found.

SOCIAL REPORT 2019

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3 . C o m p l a i n t s

p r o c e d u r e

FWF Complaints procedure Since June of 2019 TWG became a member of FWF, we further committed to working together with our suppliers to assure that the people who make our garments can have a voice when their rights are not respected.

sure our supplier’s workers are informed about the complaints handling mechanism we: Request a photo that the Workers Info Sheets are placed in a visible and often visited place in the Factory Visit the Factories Conduct Social Audits Since becoming a FWF member we haven’t received any complaints. In case TWG would receive a complaint though the Fair Wear information sharing system, the employee in charge of FWF projects implementation would immediately contact the Production & CSR Manager who then would contact the supplier. We chose for this flow, because of the great rapport our Production & CSR Manager has with TWG's suppliers, a relationship that has in some cases been built for more than ten years.

As a brand we are not afraid of having difficult conversations with our suppliers and are committed to supporting them throughout the remediation process.

Comments & Complaints box at TEKUMUT factory In Photo: 2019 WIS & Complaints procedure in Turkish

FWF complaints procedure goes hand in hand with our philosophy and goals. It provides clear steps and a contact number for workers who are not satisfied or feel like their rights are being violated. To make

SOCIAL REPORT 2019

Even before TWGs membership, our partner TEKUMUT Hazir giyim Teksil facilitated a complaint procedure by means of a Suggestion box for its workers. Now that TWG is a member of FWF these workers have even more options. They can either give a complaint in the box, which goes directly to management or they can

PAGE 18 OF 26

confidentiality and anonymously report an issue to FWF through the complaint's hotline. During the factory audit in 2019 the workers gave feedback about the placement of the suggestion box and their knowledge of the FWF procedure.

This highlighted that the workers would prefer the box to be in a more discrete spot and they could benefit from an education program about the Complaint Hotline.

In Photo:Suggestion box in our Turkish factory

After receiving this information, we discussed the workers feedback with the owner of the factory and they immediately agreed to search for a new location for the box.

In Photo: Factory in Turkey

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4 . T r a i n i n g

&

C a p a c i t y

B u i l d i n g

In Photo: TWG's Staff in Belgium

4.1. Activities to inform staff members We are not a big company, and are fortunate to have very motivated employees.

As TWG became members of the FWF, we chose for a more personal approach, informing the staff through internal meetings.

Also, the Managing Director and CEO have been actively informing our staff in Belgium and Turkey, as well as discussing our membership.

In Photo: TWG's Staff in Belgium SOCIAL REPORT 2019

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Additionally, as TWG's CSR department's duty is to present its strategy, goals and achievements during every general staff meeting, so all the employees are not only aware of TWG's FWF membership, but also all the other actions that TWG is undertaking to stay a future proof, sustainable and socially responsible business.

A special attention was paid to informing the employees who communicate directly to the suppliers.

The FWF materials have been a invaluable resource in training and educating our staffon country specific issues and the different options for monitoring and remediation.

4.2 Activities to inform agents manufacturers and workers In 2019 we collaborated with only one agent.

During the year we were in talks with two other agents who would source for us in China. As always before starting any relationship TWG visits the potential partner. In this case it was TWG's Collection & Planning Manager who visited the potential agents.

For example, in 2019 as we became FWF members TWG immediately informed and discussed the membership with the agent as well as our producers.

As we looked for a new agent, they too were immediately informed about our

SOCIAL REPORT 2019

commitments, what we expect from them if they agree to work with us as well as complementary FWF resources. This happens in a form of: Explaining the purpose of FWF Explaining where to find more information about FWF and how to register at the Factory Guide platform Providing and explaining the FWF COLP Explanation and introduction of workers info sheets and how to use them Providing Workers Info sheets in all the languages used in the region Providing a Questionnaire for suppliers of own production As a FWF member we oblige our agent’s to communicate our FWF membership to any parties involved.

The same procedure manufacturers too.

counts

for

We also make it clear that, when visiting the site, an agent must help us with fallowup and filling in any checklists, such as Health and Safety and Workers Rights.

For this purpose, a special checklist was created in Autumn/Winter of 2019, specifically for China and India. In these checklists TWG provides some additional data, such as the legal wage in each country and questions country specific issues.

From the interim feedback we have received, working with an FWF member brand is seen as an added value in the agent’s eyes and they are very enthusiastic about complying with the ILS as well as a possibility of an social audit.

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5 .

I n f o r m a t i o n

m a n a g e m e n t

The information of our production locations is stored both within our own IT system and the one of FWF's member hub.

Additionally, the TWG's CRS department have created a system for monitoring it's suppliers Social Compliance, Policy evaluation, On-boarding WEP's, Certificates, Lead Times, Visits and Subcontractors.

Each country TWG sources form, has its own file where country specific information, FWF webinars and international guidelines, such as OSHA sewing factory ergonomics are gathered.

TWG also has a specific person designated to continuously follow up and update information in all the systems.

6 . T r a n s p a r e n c y

&

In Photo: FWF member hub

c o m m u n i c a t i o n

To begin with TWG's corporate website has a whole page dedicated to Sustainability, where anyone and especially B2B clients can read more about our initiatives, production locations and projects, including our FWF membership.

Furthermore, we also communicate through our Woody World web shop which is used for our B2C sales and reaches even wider audience.

During the year 2019 our company made a Sustainable Strategy Plan for 2020-2025, together with an external expert, who has many years of experience in Sustainability Strategy.

In this Plan we have paid special attention to access our transparency and communication, which can be greatly improved.

Especially our direct communication to consumers.

In 2019 TWG fulfilled and became an ambassador of the Close the Loop trajectory. As an ambassador we have our own page on the initiatives website, where our FWF membership is also discussed.

To find TWG's page on the Close the Loop Website follow the link in the bottom of the page.

https://www.close-the-loop.be/nl/ambassadeurs/ambassadeur/2/the-woody-group

SOCIAL REPORT 2019

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7 .

S t a k e h o l d e r

E n g a g e m e n t

Although TWG did not collaborate with any NGO’s during the year 2019, our decisions were made taking into account country specific studies and country specific risk guidance documents made by FWF and based on variety of sources including NGO's.

For example as most of TWG's production is in Turkey, the CSR department used the guidelines of Risks related to Turkish factories employing Syrian refugees and Guidance on Turkish garment factories employing Syrian refugees to develop a company policy and remediation plan, if any refugees would be found.

practices in its spinning mills, called the 'Sumangali Scheme', a practice that prays on mainly young girls, children and juvenile workers. Sumangali Scheme is a form of forced labour.

All the staff who visits the location have studied the FWF's Sumangali Scheme and India's Bonded Labour System guidance documents.

If this or any other violation of workers rights would be found by TWG, FWF or any other stakeholder, TWG would begin immediate remediation efforts.

In India, one of our producers is located in Tamil Nadu, a region which became infamous because of the recruitment

In Photo: Worker at one of our Indian factories

SOCIAL REPORT 2019

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8 . C o r p o r a t e

S o c i a l

R e s p o n s i b i l i t y

In Photo: 'Vaderklapdag', an initiative supported by TWG, for more information you can visit: WWW.VADERKLAP.BE

8.1. Close the Loop ambassadorship For TWG CSR reflects its love and commitment to sustainable materials, happy and healthy workers, children and nature.

As mentioned earlier, in 2019 our company finished the Close the loop Trajectory of DC Flanders and Circular Flanders.

This platform wants to stimulate the fashion industry to move away from a linear system (take-make-waste) and embrace the circular model: this focuses on clothing with a long life and the avoidance of waste.

We produce high quality garments so that they can last for years. We mainly work with pure single-jersey cotton that is knitted, stitched and packaged in Turkey.

SOCIAL REPORT 2019

The underwear of the Woody collection is also Oeko-tex certified, which guarantees the use of harmless fabrics. The textile prints of the Woody animals are made in Belgium with water-based inks, safe for people and the environment.

8.2 Curbing of the plastic soup

To limit the production of plastic, we made a number of concrete adjustments: The price labels have recently been printed on FSC paper We choose recycled cardboard as packaging material as much as possible Plastic gadgets that were previously given with the purchase of Woody pajamas (balloons, key rings ...) were replaced by a 10 euro cent contribution for higher purpose.

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The packaging boxes for the Woody underwear have been adapted to a more environmentally friendly version We replaced the plastic Woody toothbrushes, which you often get as a gift when buying pyjamas, with ecological bamboo toothbrushes

8.3. Woodyloop In the end of 2019 TWG also started the Woodyloop project. We want to innovate our business model to a circular one, where all the Woody pyjamas can get a second life.

Together with our partner Sibille Diederichs GCV we are combining our know-how to analyse, develop and to implement a circular life for our pyjamas, closing our pyjamas material cycle.

In Photo: The New and Improved Toothbrush

The gray Woody backpacks clients got when buying pajamas are being replaced by more environmentally friendly ones: the new dark blue backpacks are made from recycled PET bottles

The project includes a take back of our pyjama's, through our own Points of Sale and sorting of them in three distinct categories: 1. For Higher Purpose 2. For Upcycling 3. For Fiberization

8.4. Philanthropy For every Pyjama sold, TWG donates 10 euro-cents to an local, Belgian initiative that works with children, sleep or animals.

We realize that not everyone has the privilege of sleeping in a comfortable bed every evening, with warm pajamas, in a safe environment.

In Photo: The New PET Backpack

Therefore it's our goal to lead the way and positively contribute to our community.In 2019 the donations went to the Red Nose Day among other charities.

To ensure a long and a sustainable life for our pyjama's, TWG has developed easy to follow and fool-prof washing instructions.

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In Photo: TWG's Headquarters

8.5 Other changes at our headquarters to boost our positive impact Switching to environmentally friendly cleaning products We return all of our used Coffee Capsules for recycling We use a Ghent based, local Coffee producer for our employees coffee, who visits the coffee plantations on a regular bases

We are switching from bottled water to a system that among other things purifies tap water The decorations of our showroom are donated to the ' de Kringwinkel' a thrift shop that also serves as a social employment provider for people who offers a job, education and future perspective to more than 5000 people who get little to no opportunities on the normal labor market.

We compost at our office We return all used Ink cartridges

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Contact Info The Woody Group Overzet 14a 9000 Gent, België Tel.: 09/217.00.89 www.thewoodygroup.com