PANGAIA Modern Slavery Statement

This policy outlines PANGAIA’s initial Modern Slavery statement for the financial year ended December 2020 and is in accordance with:

UK legislation: Transparency in Supply Chains Provision (Section 54) of the Modern Slavery Act (2015) USA California legislation: The California Transparency in Supply Chains Act SB657
Australia legislation: The Modern Slavery Act 2018 (Federal Act)

The statement includes all PANGAIA brands associated with the PANGAIA Materials Sciences Limited company.

This policy will outline the processes and procedures being developed for better awareness of PANGAIA’s supply chain, as well as the steps PANGAIA plans to take in the current year (2021) to ensure modern slavery is not present within the supply chain and to help eradicate its presence in the industry.

Click here to download a copy of our statement 

From incorporation to the year ended December 2020, PANGAIA multiplied its employee base five-fold, and has doubled its vendor base. However, this growth has come in challenging times. Covid-19 and national lockdowns continued to impact our internal community, business partners and suppliers. We have further supported our employees by providing access to mental health, wellbeing and fitness services, and we honored our orders with suppliers. We have always prided ourselves on maintaining close relationships with all our supply chain partners, and our collaborations to pivot into personal protective equipment (PPE) manufacturing at the height of the Pandemic was testament to this.

As we look to 2021, we remain committed to supporting our partners in PANGAIA’s wider working community and this includes working to ensure that we are putting processes in place to safeguard against modern slavery, forced labor and human trafficking. Current onboarding practices for both employees and vendors follow a stringent ethical practice, but as a young company, making our first Modern Slavery statement, we see opportunities for continued improvement.

Our plan for the current year includes: supply transparency programs with existing and new partners; vendor evaluation, training and onboard; and internal policy definitions for clarity of expectations throughout the value chain to prevent modern slavery and human trafficking.

Modern slavery is a complex issue without any quick short-term solutions but by embedding knowledge and principles across every part of our company, we look to make it a shared priority and an issue we are deeply committed to. At PANGAIA, we believe in a regenerative society where sustainability runs through the entirety of our business, from our suppliers all the way to our customers.

This statement has been approved by the Board at time of signing and we are fully committed to driving forward responsible and ethical practices within the PANGAIA business and supply chain in 2021 and beyond.

Stral Zarkovic

Managing Director, PANGAIA

11 June 2021

Our business

PANGAIA is a private limited company, registered in England, with a head office in London. PANGAIA employs 113 staff, based out of office locations in London, UK, New York, USA and Switzerland. A research facility in Italy also supports with the development of patented and trademarked textile innovations. Looking beyond direct employee operations, we partner with a third-party provider to manage global distribution via its UK hub. This policy applies equally irrespective of the location of staff or our business. 

Our Business Structure and Supply Chain

At PANGAIA, our primary business model is the development and use of sustainable fabrics using smart technology and as many sustainable and recycled or recyclable elements as possible. These technologies and yarns are brought to market and articulated as apparel and lifestyle products. We have three registered trademarks to date: FLWRDWN™, PPRMINT™, C-FIBER™. We also work with supply chain partners to develop a generation of garments from recycled or 100% organic fibers.

Our PANGAIA products are manufactured within a global multi-layered supply chain of long-term business partners with whom the company has worked from its very inception.

Our tiers of suppliers are the following:

  • Tier 4: Cultivation
  • Tier 3: Fabric development
  • Tier 2: Dye application
  • Tier 1: Garment development
  • Tier 0: Warehousing

We have been carrying out extensive Lifecycle Assessment (LCA) work to better understand our supply chain, and to gain better transparency of our products, materials and their origins. Through our LCAs, we know the origins of 66% of our product range (in units sold). We started with our core ranges (organic cotton and recycled cotton blends) and these can now be traced back to Cultivation level (Tier 4). We have a target to achieve 80% transparency for FY21.

Our primary suppliers are in the European Union (Portugal, Italy), with additional manufacturing support on specialized products in the Middle East (Turkey). In 2020, we sourced our main raw materials as outlined below from the following sources:

  • Virgin cotton: Turkey, Uganda, Tanzania
  •  Recycled cotton: Turkey, Switzerland, Portugal
  • Virgin Cashmere: Outer Mongolia
  • Recycled Cashmere: Post consumer = USA and Canada. Pre consumer/Post industrial = Europe
  • Virgin Wool: Australia & New Zealand
  • FLWRDWN: USA, Italy, Germany
  • C-Fiber: Iceland, South Africa, Czech Republic
  • PPRMINT: Thailand
  • VEGEA: Italy

We expect and require (via contract) all our suppliers, both international and local, to comply with the terms of the Modern Slavery Act and our policies.

Our policies

At PANGAIA, we are committed to the prevention of human trafficking and slavery throughout our supply chain. We are committed to the highest level of business integrity and comply with local regulations, internal staff and workers within the supply chain.

Our policy and procedures as it relates to the Modern Slavery Act, outlines the obligations of staff to ensure consistent procurement and manufacturing practices across our supply chain. At PANGAIA there is zero- tolerance approach to forced and/or child labor, human trafficking, and slavery.

We expect all suppliers, regardless of location, to share our commitment to eradicating modern slavery within the supply chain in accordance with the United Nations Universal Declaration of Human Rights, and the Workplace Standards developed under the United Nations convention.

Suppliers are required to abide by the following guidance policies:

  1. Business partners and/or Suppliers must not use forced and/or child labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise

  2. Suppliers shall not threaten workers with, or subject them to, harsh or inhumane treatment, including, but not limited to, verbal abuse and harassment, psychological harassment, mental and physical coercion or oppression, or sexual harassment.

  3. Suppliers must comply with all applicable national, local and other relevant laws and regulations, including conventions of the International Labor Organization (“ILO”) and the United Nations (“UN”). Where there are differences or conflicts with this document and local law, the higher standard should prevail.

  4. Suppliers shall clearly define regular working hours and ensure full and timely payment of wages for time worked. All wages and other payments by Suppliers must meet applicable statutory provisions and/or mandatory local standards.

  5. Suppliers shall compensate workers for overtime hours as required by applicable law.

See PANGAIA’s Code of Conduct which suppliers are required to uphold as a partner of PANGAIA.

If slavery or human trafficking is identified within the PANGAIA group of suppliers at any stage within our supply chain, business relationships will be impacted from either the request for immediate remedial action where we will work with NGOs or third parties to help remedy the situation and protect the victims and livelihoods; to the possible termination of services if we are unable to remedy the breach of conduct through a collaborative approach. Where applicable, the supplier may also be reported to local NGOs, and Government and law enforcement bodies to attempt to remedy the situation.

Our policies are underpinned by:

At PANGAIA, preference is also given to partners who are aligned to our ethical values and who have been accredited by third parties such as BSCI or Control Union.

Through partnering with the following organizations, we are also working to uphold the highest standards with our suppliers and sourcing partners:

Intertek

At PANGAIA, we have embarked on a journey with Intertek Consulting for the development of quality, compliance, sustainability, governance and social conduct standards and requirements to be applied to our products, production, and in the processes we uphold with our suppliers. Intertek is known to be a leading global quality, standards, and testing organization. Our partnership with the consulting arm of Intertek will draw on Intertek’s global expertise to develop policies, procedures, and minimum standards to be compiled in PANGAIA’s Supplier manual.

GOTS

GOTS is recognized as the world’s leading processing standard for textiles made from organic fibers. At PANGAIA, we prioritize GOTS certified choices whenever available, which prescribes not only high-level environmental standards across the entire supply chain of organic textiles but also requires compliance with social criteria as well.

Global Recycled Standard

Run by Textile Exchange, the GRS is an international, voluntary, full product standard that sets requirements for third-party certification of recycled content. As well as covering environmental and chemical compliance, the standard encompasses social practices.

Implementation and Governance

Within PANGAIA, the Modern Slavery Act policy is enforced by the Senior Vice President, Business who reports directly into the board and has the responsibility to ensure that the business operations comply with its legal and ethical obligations.

Primary day-to-day responsibility for the implementation of this policy, monitoring its application and ensuring that the appropriate control systems are in place, and updated as appropriate, to ensure effectiveness is the joint responsibility of the Sourcing, Production, & and Impact teams.

All leadership functions within the organization are responsible for ensuring compliance to the policy in the day-to-day performance of their duties and operation of the business.

All staff, working with PANGAIA in any capacity including agents, contractors, external consultants, must read and comply with this policy and this is an obligation under their contracts with PANGAIA. All suppliers to PANGAIA are required to avoid any activity that might lead to, or create, a breach of this Policy, and this is an obligation under their contracts with PANGAIA.

Reporting

The prevention, detection, and reporting of Modern Slavery in any part of the PANGAIA’s supply chain is the responsibility of all those working within its confines.

Should a risk, breach or incident of slave labor or human trafficking become apparent, communication flows are in place to ensure that the information is cascaded to the Chief Impact Officer and Sourcing and Production Director and the SVP Business who, in turn, engages the Board. Appropriate action can be taken at every level in the business.

Identification of Risks and Management

At PANGAIA, we are dedicated to the continual improvement of the internal governance processes and procedures and the development of the framework to evaluate suppliers within the supply chain.

As a young business, lack of transparency across our supply chain has been an initial risk. From the conception of our company, we have had close relationships with all of our Tier 0 and Tier 1 suppliers, however greater traceability and visibility of our Tier 2, 3 and 4 suppliers have come by fostering those relationships and carrying out thorough Life Cycle Assessments (LCA). Until we have LCAs for 100% of our product range, it is not possible to fully analyze the extent of risk in each strand of our supply chain.

Currently, we have visibility of 66% of our product offering, with LCAs of our core ranges, including those using cotton which we considered to be an area of significant risk. Our cotton has not been traced back to areas where forced and/or child labor or human trafficking is prevalent, but we are closely monitoring the situation. By the end of financial year ending 2021, we aim to have completed 80% of our product range for greater visibility and risk management as required. All LCAs have been published on our website.

To help bring the traceability of our products to life and to provide our customers with greater transparency, we are introducing digital passports to our products (as QR codes) which will describe the components and supply chain associated with our garments.

Looking across our entire supplier base, the recent implementation of our Supplier Code of Conduct, and the development of a stringent corporate social responsibility program enables the evaluation of business activities and the identification of the presence of associated contextual risk factors. These contextual risks can be split into three categories:

  1. Country and sector;

  2. Workforce demographics; and

  3. Characteristics of risk management controls

Where multiple risk factors are present, a more stringent evaluation of the suppliers and their working environment will be developed to eliminate the supply chain risk.

Based on the partial mapping of the supply chain completed thus far to identify the supplier tiers and the risks associated to each supplier and the effect on the supply chain. Salient risks include:

Turkey:
A small proportion of our production is currently being carried out in Turkey – a country which is considered high-risk in our industry due to the Syrian refugee crisis. Many Syrian refugees are documented and are actively working in the textiles industry, but many remain undocumented. Women and young workers are particularly at risk of forced and/or child labor as a result.

We are engaging directly with the factory on a regular basis to address and counter this risk. In 2021, our plan of work with Intertek includes enhancing the governance in this region by carrying out third party audits of vendors, as well as diversifying our vendor counter sourcing.

Thailand:
We source PPRMINT
TM from Thailand, accounting for a small proportion of our total raw materials. We have identified Thailand as being a country with heightened risk, due to multiple factors, including but not limited to the prevalence of debt bondage and the vulnerabilities of Rohingya refugee workers.
Our teams have direct relationships with the factory and are supporting them in their GOTS application.

UK:
To date, our activities in the UK were limited to warehousing with 
XPO Logistics. Despite the UK ranking lower on the measure of prevalence for Modern Slavery as per the Global Slavery Index, 2018, there has been heightened awareness of abuses in UK manufacturing and warehouse facilities over the past year, and instances in our industry have been increasing. In our own practices, we are in daily contact with our warehouse partners to help the teams prioritize workloads, address any issues, celebrate achievements and ensure we are constantly making and updating our commitments towards the wellbeing and inclusion of their teams. Historically and going forward, a member of PANGAIA’s Operations team will visit XPO once per month on average, unless Covid-19 restrictions are in place. We have a close and valued partnership with XPO, and are building a long lasting relationship with the team on site. We provide benefits such as access to employee discounts, Covid-19 testing, and rewards for long-service and good initiatives.

Covid-19:
Through our close vendor relationships, PANGAIA became aware of the impact of Covid-19 in the reduction of orders and capacity. However, to maintain the relationship and ensure income security for supply chain partners during the height of the Pandemic, orders were not cancelled, and order levels were maintained to the typical capacity. We also kept dialogue with our suppliers to ensure safety and well-being was preserved as a priority. Where possible, we pivoted to making masks and PPE in the supplier facilities, to contribute to global Covid-19 relief efforts through its manufacturing activities.

In 2021, we intend to continue the mapping of our supply chain, as well as the implementation of more stringent supplier evaluations to identify the risks sooner for early mitigation. Where we have identified vendors in regions at greater risk of modern slavery, measures are being developed for frequent social auditing, including unannounced visits, to provide assurance that PANGAIA’s standards and policies are continually being upheld.

Due diligence process

We have taken numerous steps to identify and evaluate the risk of slavery and human trafficking in the supply chain. This includes the following:


• The establishment of a human rights due diligence framework to ensure the fair treatment of workers.

This incorporates:

  • The elimination of child labor
  • Review to ensure employment is freely chosen

  • Fair compensation for time worked and/or Paid Living wages, where applicable

  • Working conditions are safe and hygienic

  • Working hours not are not excessive

  • No discrimination practices

  • Regular employment provided

  • Freedom of association and the right to collectively bargain

  • No hard labor or inhumane treatment is allowed

See PANGAIA’s Code of Conduct in the Supplier Manual for details.

    • Monitor review and report improvement

      • Ensure evidence is credible, verifiable, and relevant

      • Analyze evidence, learn lessons, priorities next actions and long-term prevention

    • Mitigate the risk and remediation of the workplace

      • Identify and act on changes to working practices

      • Enable workers to access their right to freedom of association and collective bargaining

     

    Communication of all breaches will be cascaded as appropriate within PANGAIA for appropriate action to be taken.

    If evidence of human trafficking or slavery practices are identified at a potential new supplier, we will request immediate remediation and work with NGOs or third parties to help remedy the situation and protect the victims and livelihoods, before the supply partnership with PANGAIA is allowed to move forward. PANGAIA recognizes that business relationships may be impacted, including possible termination of services, if we are unable to resolve the breaches of conduct through a collaborative approach.

    • Once suppliers have been onboarded, they are typically assessed on an ongoing basis by members of the Sourcing and Impact teams. Covid-19 has limited the ability of our teams to perform such visits, however vendor visits are expected to increase in frequency when travel restrictions are eased. Reports on the supplier’s workplace conditions will be incorporated to evaluate and create a baseline for vendor conditions and an outline of remedial actions required to address where appropriate.

    Monitoring and Assessments

    PANGAIA has put in place the above processes as well as initiated the development of additional procedures for awareness and transparency in the supply chain that address risk identification and mitigation as required.

    Current processes in place include the screening of vendors against PANGAIA core standards and values which are heavily biased towards employee rights, and environmental protection. These requirements are captured in the following existing documents:

    • Code of Conduct
    • Zero tolerance and Supplier Evaluation and Transparency Assessment
    • Vendor screening against a Scorecard which covers social, environmental standards

    Our screening practices are conducted by the Production and Sourcing teams, with oversite and escalation to the Impact team when required. These teams meet monthly to review existing vendor landscapes and plan for future onboarding

    Human Rights Assessment

    Due to the infancy of the business, we have yet to carry out a human rights assessment, but this is a priority for the business. However, the initiation of the Lifecycle assessment in FY20 was an essential step in providing insight into the supply chain which will, in turn, help inform our human rights assessment. We hope to achieve 80% transparency across all tiers (1-4) in 2021.

    A supplier onboarding and education program is also being developed to outline all the requirements, expectations, and ethical practices vendors will need to abide by. Suppliers will be required to participate in continual refreshers on the updates or improvements within the PANGAIA program and throughout its supply chain.

    Training and Awareness

    In a continued effort to obtain the highest level of awareness within PANGAIA and the supply chain, we are developing a cross-function training program for all employees, agents, contractors, external consultants, third party representatives, and suppliers within the supply chain.
    Training will focus on :

    • PANGAIA’s policies
    • Modern Slavery Guidance
    • Workplace standards
    • Human Rights Due Diligence
    • Responsible business conduct according to The Organization for Economic Co-operation and Development (OECD) guidance for Multi-National Enterprises (MNEs) on responsible business conduct.
    • The Ethical Sourcing practices and focused Modern Slavery training will be provided to all suppliers (irrespective of their Tier) to ensure comprehension and awareness of the PANGAIA policies.
    • We will also work to leverage the new digital tools available to us through our intranet to improve access and availability to modern slavery and human trafficking resources for our internal PANGAIA teams

    Looking ahead

    At PANGAIA, we are committed to making our impact visible – sharing our goals and progress with our stakeholders, investors and customers at every step. We are working to increase awareness around transparency with our customers through the introduction of digital passports that will exist as QR codes on our garments. This technology will give consumers greater visibility of where their product was made, and through this, we can raise awareness of conscious consumption and the importance of responsible production.

    In 2021, we plan to:

    • Achieve 80% transparency and mapping of suppliers across all stages of our supply chain and continue to make this data publicly available through our website and digital product passports.
    • Develop a mandatory cross-functional training for all employees, contractors and supply chain partners.
    • Adopt the digital tools available to us through our new intranet to increase accessibility of information and resources relating to modern slavery and human trafficking.
    • Work with third parties including Intertek to deliver a social auditing program. Effectiveness going forward will be evaluated through the frequency and results of social audits and training sessions completed.

    Resources we have used to support our work around Modern Slavery:

    The Walk Free Global Slavery Index Respect

    International Labour Organization

    Ethical Trading Initiative

    Anti-Slavery