PANGAIA’s people are the individuals that make up our teams and the partners across our value chain, from farmers, mills, and manufacturers, to our creative partners and logistic providers.
We recognize that true environmentalism is intersectional Intersectional Environmentalism is an inclusive form of environmentalism that advocates for the protection of all people and the planet. It identifies the ways in which injustices affecting marginalized communities and Mother Earth are interconnected. and that people and the planet are intrinsically linked. Within this, we acknowledge the injustices that exist within our societies and that some communities are disproportionately affected when facing socio-economical and environmental crises.
Our mission to build an Earth Positive business means exactly this: giving back to the planet more than we take. When it comes to people, this philosophy is grounded in a commitment to elevate human potential.
We have four principles that form the cornerstones of our ethical business relationships, within PANGAIA and beyond:
Our focus for the moment has been to embed ethical business principles into the way we work, and we will continue to build on this year on year. This report outlines the key milestones we reached last year. Even though we are making progress, we still have plenty of work to undertake on this front.
Our approach to ethical business and positively impacting lives applies to every person within our value chain. However, we also recognize that the biggest human rights risks are found within the part of the value chain that makes our product: the supply chain The system of people and things that are involved in getting a product from the place where it is made to the person who buys it.. Acknowledging the historic and systemic injustices that exist within our industry informs the actions we take day to day. This is why we prioritize our time and effort in investigating and responding to prevent or remedy social risks and challenges in the supply chain.
Our strategy for establishing supply chain partnerships in our first two years of operation has been to partner with a small number of suppliers who share our values of being collaborative, progressive, and accountable. We strive to go beyond the basic compliance standards and build on those outlined in our Code of Conduct. Our expectation is that all our supply chain partners provide safe working conditions, treat workers with respect, and conduct business in a fair manner.
We hope to build honest and long-lasting partnerships with suppliers. This has been especially important throughout the pandemic. Our close connections with our partners have been maintained with frequent contact and the ability to visit in person where allowed.
18 factories across:
Commitment to the protection and respect for all human rights and social wellbeing is enshrined in our internal values and practices as well as our external partner expectations. The cornerstone of our commitments to human rights is found in our Code of Conduct, which covers labor rights, safe working conditions, wages, discrimination, as well as how we monitor and remediate social issues.
8. No discrimination is practiced
Fairness and equality are crucial to ensure that each person can be treated in a dignified and respected manner.
9. No harsh or inhumane treatment is allowed
Simple – no abuse or disrespect (physically, sexually or mentally) to anyone.
10. Environmental protection
Protecting our planet and the natural resources is important, and we want everyone to share that responsibility. Fashion is known to be a big polluter, but we want that to change!
11. Responsible material sourcing
Finding out the origins of the materials used in a product is just as important as where they are put together. The over-extraction of natural resources is detrimental to our planet, so it is vital to monitor what resources are used and how much, to understand our impact.
12. Responsible chemical management
From dyeing to printing, the fashion industry uses many chemicals in the wet processes that are used to make products. These can negatively impact our water systems and be detrimental to people’s safety as well as pollute the planet.
13. Animal welfare
We use animal-based products like wool and cashmere so animals need to be treated with care and free from pain or distress. We also ban the use of certain materials as they just aren’t ethical.
14. Business integrity, transparency + remedy
Corruption and bribery can be rift however, we believe in fair business. Openness, honesty, and transparency are crucial!
Labor rights ensure that the people employed in our supply chain are treated with dignity and have decent work.* ILO, Decent Work (accessed January 2022). These rights ensure that people are free to choose work, that their hours are not excessive and that they have the freedom to unite together and bargain for improvements. For PANGAIA, the respect and protection of these rights is crucial for us and our business. We strive for full transparency of the conditions across our value chain and put due diligence processes, and where needed remediation, in place.
We’re proud of this:
We published PANGAIA’s first Modern Slavery Statement.
In 2021, we introduced a Vendor Manual PANGAIA’s central document that gives partners clear instructions on how we work and the processes they need to complete to be onboarded, it includes key policies and guidance. and a formal vendor onboarding process. The manual includes our Code of Conduct, which is based on internationally agreed principles in the UN Charters, International Labour Organization’s Core Conventions, and is aligned with the ETI Base Code Ethical Trading Initiative (ETI) Base Code. An internationally recognized code of good labor practice. It is founded on the conventions of the International Labor Organization (ILO). PANGAIA’s Code of Conduct is based on the core ETI principles. and Fair Labor Association A collaborative effort of socially responsible companies, colleges, universities, and civil society organizations working towards solutions for abusive labor practices through tools, resources, training, due diligence, and independent assessments. standards. Compliance is monitored by site visits and through third-party audits An assessment of the social conditions in a workplace performed by an external auditor who independently verifies that working conditions are safe, fair, and compliant against a code of ethics.. We enlisted Intertek, a quality assurance auditor, to assess PANGAIA processes in comparison with industry standards. We have also established an internal escalation process in the event of non-compliances or of a zero-tolerance incident.
We have a zero tolerance approach to certain issues which we believe contravene the most basic of human rights and unethical practices. These issues include modern slavery of any form (including forced or bonded labor), child labor, abusive harassment, the risk to life or limb, the non-payment or payment under the legal minimum of wages, extreme environmental degradation, and bribery or corruption. While we are not naive to these practices existing in the fashion industry, we believe in having a strong stance that we shall not tolerate this type of exploitation if uncovered in our supply chain. We are developing tailored escalation and remediation processes and will be conducting PANGAIA-wide training on these topics to ensure our teams are well-equipped to adequately respond to such violations.
Auditing across the supply chain is a way of ensuring suppliers are complying with ethical standards and fair labor practices as defined by our Code of Conduct The detailed standards to which it holds its supplier(s) accountable.. They are a useful tool in gaining insight into our suppliers’ practices and potential risks in our supply chain – especially when we begin to work with a new partner. Annually requesting audits gives PANGAIA the opportunity to track progress through the years and to find out where there is still some work to do. Audits increase transparency and encourage PANGAIA to be accountable for the conditions in our supply chain. Once an audit is received, we review the report and assign a grading based on any non-compliances that have been found and the severity of these issues. To ensure we have consistency across our supply chain we have standardized our grading.
Introduced in 2021, all PANGAIA production sites (Tier 1) are required to have third-party social audits on an annual basis to ensure ethical trading and fair labor standards are met, as outlined in our Code of Conduct. We received third-party audits for 63% of our Tier 1 manufacturing sites, and we are working towards having 100% coverage of audits.
As our business has grown, we have expanded our supplier network. When sourcing from new regions, the Impact Team works with the Production, Product Development, Sourcing, Research & Development (R&D), and Partnerships teams before selecting suppliers. In addition to individual supplier vetting, we also assess conditions at a country level to understand the cultural, social, environmental, and economic context of working within any given country.
We want to ensure that every person who is interacting with our supply chain has the opportunity to engage with and understand social risks and issues that could exist. The Impact Team has organized a number of internal training sessions to deep dive into relevant topics. For example, we hosted living wage training for almost a third of PANGAIA employees to understand the context of wages in the garment industry, what a living wage is, and how important it is to strive towards. These training sessions are one way we are embedding responsible practices across our teams and helping create a common mindset that champions ethical business.
We're proud of this:
We visited 81% of our tier 1 factories last year (see below for what we mean by Tier 1!).
|Number of suppliers||Number of Tier 1 factories||13||18|
|Social compliance||% Tier 1 factories with social audit||0%||63%|
|% Audits conducted by third-party auditor||0%||63%|
|% Unannounced audits||Unknown N/A||5%|
|% Semi-announced audits||Unknown N/A||37%|
|% Fully announced audits||Unknown N/A||16%|
|Worker overview||Total number of workers in Tier 1 factories||Unknown N/A||1807|
|% Female workers||Unknown N/A||62%|
|% Male workers||Unknown N/A||38%|
|Worker representation||% Factories with formal worker representation (either worker committee or union)||Unknown N/A||75%|
|% Factories with an active collective bargaining agreement in place||Unknown N/A||58%|
Supply chains are a complex web of relationships, and we face the same obstacles as other companies operating in the global and fragmented fashion industry: visibility and transparency.
It is easy to see how traceability and transparency have become a problem in the industry, where each product element has its own supply chain with a different combination of individuals and companies across different countries. It gets very complicated, very quickly.
We are taking steps to share our supply chain and be honest about our impact.
Transparency and traceability are a key focus for us. Our priority in 2021 was to assess business practices across our supply chain, so we conducted a traceability assessment of our direct-to-consumer (DTC) products. We have signed the Transparency Pledge The Apparel and Footwear Supply Chain Transparency Pledge was created in 2016 by a coalition of human rights and labor rights organizations as a common minimum standard of supply chain disclosure. : a commitment to publish details of our supply chain manufacturers in Tier 1 and Tier 2. We also contributed data to the Open Apparel Registry, which we see as a vital route to improving facility transparency and brand accountability in the industry.
A note on our Supply Chain Tiers:
Our supply chain is divided into Tiers 0 to 5, which represent general production processes moving from raw ingredients to a finished product.
|Tier Name||Tier Description||Facility/Process Example||Level of Transparency|
|Tier 0: Office, Retail & Distribution Center||Distribution, retailing, offices, research.||Warehouse, stores, offices, research centers.||Fully mapped|
|Tier 1: Finished Product||Factory which cuts, sews, and finishes product and ships to PANGAIA.||Stitching, assembly, quality control, packing, approved CMT subcontractors (indirect relationships).||Fully mapped|
|Tier 2: Material Processes or Product Enhancements||Provider of one or more processes to materials or enhancements to the product.||Printer, dye house, fabric treatment, electroplating, laundry/wash house, embroiderer, pleating, tooling, cutting, lasering, embossing, embellishment, quilting, firing.||Partially mapped|
|Tier 3: Material Production and Component Supplier||Material manufacturing and processing, and component production.||Mill (spinning, knitting, weaving), tannery, hardware, components, trims, moulding (shoe soles), labels, packaging, casting.||Partially mapped|
|Tier 4: Fiber Processing||Processor of raw fibers or ingredients or feedstock.||Fiber producer, refiner, ginner, recycling/sorting center, smelting, refiners.||Not Yet mapped - some oversight|
|Tier 5: Raw Fiber, Ingredients of Feedstock source||Origin of raw fibers, ingredients of feedstock.||Cultivation (farm, forest, mine oil field), recycling collection.||Not Yet mapped - some oversight|
For PANGAIA, our Tier 1 facilities (see definitions above) are located in 6 key countries, in order of volume importance: Portugal (where 87% of our collection is produced), Italy (5%), Bulgaria (4%), Turkey (3%), Romania (1%) and China (<0.5%, water bottles only). From our initial visits, we found that our Tier 2 processing facilities are found close to key Tier 1 sites and are therefore in the same countries. We have a strong buying relationship with our key mills in Portugal and Italy and will be undergoing a process to map more mills connected with our production and better monitor working conditions and environmental practices.
We're proud of this:
Mapped our Tier 1 supply chain partners determining production in six key countries.
We are committed to knowing our partners throughout every stage of our supply chain, but visibility decreases as we dive deeper into the tiers.
Getting visibility to the cultivation and raw material stage of our supply chain (known as Tier 5) is notoriously difficult, but we are progressing on this front. For some of our raw materials, we directly purchase from cultivators. We have close relationships with these producers, and where feasible, a member of the PANGAIA team has visited the sites to understand their practices and innovations. From our connections further down the supply chain, we are improving our understanding of the context and needs of the communities around our supply base. Practices such as wild harvesting or waste picking is usually a form of informal employment, which gives people from disadvantaged communities a supplementary income to support themselves and their families. While this is a positive stream of income to support livelihoods, the risks and impacts on the people working in these communities are not fully understood. We aim to dedicate more time and resources to understanding and supporting these communities so we can be confident we are positively impacting their quality of life through decent work.
One of the key focus thematics for us will be wages and livelihoods. We will be developing a living wage and living income roadmap in 2022.
We are committed to building on the work we have already carried out by broadening and deepening our visibility into our supply chain by mapping beyond Tier 1 to include Tier 2 processing facilities and Tier 3 mills connected with our production. We will also work to obtain the highest levels of accuracy possible and fill gaps in mapping.
Broaden our policies and practices to ensure better monitoring of working conditions and environmental practices. These will include the development of policies that cover non-standard employment and specific demographics such as migrant workers.
We want to collaborate more widely with human rights advocates and workers' rights stakeholders to learn from the incredible expertise within their respective fields. We would like to find collaborative partners to support on the ground programmatic responses and invest in projects that have a positive impact on the welfare and lives of those people touched by our supply chain or the apparel industry.
This describes the actions we will take to develop the skills, abilities, processes, and resources that our partners need to progress towards the best ethical and social practices. This will start to be rolled out in 2022 and will follow industry guidance to elevate good work to benefit workers.
Our future ambition is to closely knit together our business relationships with investment into the local communities around where our suppliers are based. We aim to positively impact the surrounding areas along with the families of the workers who produce PANGAIA. Once this approach is developed, we will share our plans and progress.
At PANGAIA, we are a global collective of individuals bound by a common desire to use business as a force for good. The progress towards our Earth Positive mission is a testament to the people who bring unique creative and cultural perspectives, and skills to our community.
In 2021, we grew from 84 colleagues to 143. Read on to find out who makes up our global team. As we grow, we are reflecting on our practices and ways to welcome a more diverse team, build a more inclusive culture, improve the employee experience and continue to facilitate a supportive environment where people are encouraged to reach their full potential. We appreciate that we can do better and look forward to sharing our updates with you as we go.
We're proud of this:
Our global team is 73% female and made up of over 20 nationalities, speaking over 30 languages.
In April 2021, we conducted our first employee sentiment survey. The results revealed a consensus of a feeling of fulfillment through purpose-led work, but also that our teams had felt the impact of the uncharted success we experienced over the last year. Our collective had given everything to achieve our mission, and so we heard that we needed to give back to help them recharge and support us all in moving to the next phase of our journey. We consulted our collective to understand what would help, and as a result, introduced workshops to support mental well-being, gifted days which we all took off together, planned more time to disconnect from work and engage with one another through events and town halls, and moved to a new office space that was designed to feel like home.
One of the significant components of the feedback was around how we communicate with one another, and ensure that we are up to date with what is going on at PANGAIA, and also how we can connect, share, and have fun. Therefore we introduced our internal communication platform HIVE. HIVE is where we can communicate what we are up to, share activity, external campaigns, and interesting and relevant content, as well as enable teams to create spaces to bond and work together more effectively.
We have seen an initial registration rate of 90% to the platform, exceeding our goals. We also understood from the survey, and from talking to our collective, that more was needed to support our business as we grow. It was clear we needed to define how we would build strong foundations in how we attract, develop, and retain our talent, along with setting frameworks and foundations from which our collective can thrive. We also considered how we would continue to enhance our internal experience, from onboarding, communication and engagement, and our approach to inclusion, all of which are at the heart of what we do. From here we planned how this will drive performance, development and talent, and reward and recognition, to truly elevate the potential of every member of our collective.
In 2021, we introduced our Retrospective & Feedback process. This provided a new structure for every employee to meet with their managers to share accomplishments, discuss challenges to then set goals for the coming year, and define what support they would need to get there.
To encourage positive and inclusive conversations, we arranged workshops on how we give and receive feedback from one another, to support not only the retrospective conversations but also apply to daily life at PANGAIA. We plan to continue developing our skills in this space to enhance our culture and community.
Alongside this, we ran our first formal salary review and promotions process following 2 years of rapid growth. It was important for us to benchmark and ensure fair pay for our expanded teams. At the heart of our approach was also the desire to involve and engage leaders and individuals in the process, consulting and involving them in the decision, and supporting individuals with feedback, and recommendations, to support their career growth throughout this coming year.
Our people team also embarked on procuring an integrated HR system. The aim of this is to ensure that our data is the best it can be in order for us to make effective decisions to support our collective. The implementation phase will take place in 2022.
In addition, the People team launched manager peer groups, and facilitated sessions across our manager and leadership population. These have been created as a safe space where our leaders can learn from one another, as well as collectively talk about the challenges they face, and come together on solutions and opportunities in order to enhance our culture and ways of working. Building the skills, knowledge, and behaviors in our leaders to advance our culture.
But more importantly, we realized that to elevate human potential, we needed to reprioritize some of the commitments to inclusivity made in 2020. This led us to focus on one goal: to create the right infrastructure to thrive.
We also reconsidered our approach to diversity, equity, and inclusion and positioned the DEI Council The DEI council is a rotating independent, objective working committee that advances PANGAIA's culture and DEI initiatives by working on business/cultural challenges that are incorporated into PANGAIA's operations. as an integral driver of change across the organization. Going forward, council members will be involved in addressing business challenges and will recommend actions to influence PANGAIA’s culture, behavior, processes, and norms. We call this integrated approach DEI fluency.