People

Good & Reliable Partnerships

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:

Support Human Rights & Decent Work

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.

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.

Highlights

We’re proud of this:

We published PANGAIA’s first Modern Slavery Statement.

Due Diligence & Verification

In 2021, we introduced a Vendor Manual 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 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 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 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.

A note on Zero Tolerance

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.

Audit methodology

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 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.

A note on our geographical expansion

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!).

What our audits tell us

Transparent & Open

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 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.

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.

This is who makes up PANGAIA:

105 respondents

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.