Key Achievements of the Withdrawal Agreement:

• The company agreed to revise and publish its Code of Conduct for Business Partners and its Human Rights Statement to include enhanced, human rights-related disclosures, including those with respect to its policies regarding freedom of association and collective bargaining.

• The company agreed to sign the Transparency Pledge by Clean Clothes Campaign, and committed to publish its known manufacturing sites.

• The company agreed to continue to disclose regions of its subsidiaries’ direct suppliers in tiers 1 and 2 of the Company’s supply chain.

• The company committed to make good faith efforts to respect workers' rights in all tiers of its supply chain, engage in responsible purchasing practices, and request information from suppliers and conduct audits to ensure compliance with these human rights commitments.

  
  The company also agreed to meet with Tulipshare to provide an update on its progress in these commitments.

Why It's Important:

Capri Holdings (Capri) lags in transparency disclosures and remediation procedures when compared to peers. Companies that do not adequately mitigate human rights violations in their supply chains are exposing themselves and their investors to material financial risk.

Unlike Capri, competitor Burberry discloses information on its tracing of raw materials, the percentage of its first-tier and raw material suppliers covered by collective bargaining agreements, strengthened migrant worker policies and a wellbeing tool that engages workers.

While Capri has an audit program covering issues including wage, hour and labour laws and health, safety and environmental regulation, the Company does not mention anything about ensuring its manufacturers have an age verification process. In fact, Corporate Human Rights Benchmark scores Capri with zeros on each of the six indicators regarding human rights due diligence.

Further, Capri does not provide a supplier list or data on purchasing practices, data on improvements of freedom of association and remediation procedures for supply chain workers in high-risk sourcing areas such as China. The Company also does not disclose the steps it has taken to address the risks of alleged Uyghur forced labour across its supply chain tiers.

Capri’s Code of Conduct for Business Partners states its own operation and business partners should respect the legal rights of employees to freely and without harassment participate in worker organisations, shall not use any form of slave, forced, prison, or child labour, and disallow any form of discrimination. Nonetheless, there is no evidence to respect the right to collective bargaining and Capri also does not mention the International Labour Organisation Declaration, including in its own operations.

Capri states that it has a “responsibility to those who work with us” and that “the success of our company is directly linked to the sustainability of the world around us.” Shareholders agree and encourage the Company to take steps to ensure workers in its supply chains are aware of their rights and are able to exercise their rights of freedom of association and collective bargaining.

Failure to adopt and implement policies that mitigate these exposures may subject Capri and its investors to significant systemic and company specific risks.