California Transparency in Supply Chains Act

SKIMS Compliance Statement

SKIMS Body, Inc. ("SKIMS") is committed to ensuring transparency and ethical practices within its global supply chain to prevent modern slavery and human trafficking. As part of its commitment, SKIMS declares its support for the California Transparency in Supply Chains Act of 2010, and the United Kingdom (UK) Modern Slavery Act 2015. A summary of SKIMS’s measures concerning audits, internal accountability, and training is provided below. For more information on the company's organizational structure and its approach to social responsibility, please reach out to SKIMS’s Compliance Team at Compliance@Skims.com.

Verification Process

SKIMS is committed to upholding high ethical standards within its global supply chain and ensuring that, as a zero-tolerance policy, modern slavery and human trafficking are not present in any of its operations. SKIMS regularly engages in verification activities to identify and manage any potential risks, including through initial and annual social compliance audits conducted by third-party auditors. As such, SKIMS requires all suppliers to adhere to its Code of Conduct and Compliance Benchmarks (“Code of Conduct”) and Master Supply Agreement which contain policies and benchmarks that address forced labor and human trafficking through direct and indirect employment (i.e., use of labor brokers). As the basis of each supplier relationship, all suppliers must deploy the SKIMS Code of Conduct to their upstream factories and ensure adherence to the Code of Conduct throughout the supplier relationship. SKIMS monitors compliance with this Code of Conduct through its Social Responsibility Policy.

Supplier Audits

SKIMS maintains an ongoing monitoring system to identify and address potential supply chain risks through independent third-party social compliance audits. SKIMS engages third-party auditors to conduct fully announced and semi-announced (14-day window) audits on 100% of Tier 1 suppliers during onboarding and at a minimum, annually. SKIMS extends this auditing process to many of its Tier 2 suppliers as part of its ongoing efforts. In cases where audits result in a “red rating” (as defined in the SKIMS Social Responsibility Policy), SKIMS requires an onsite follow-up audit to verify remediation efforts and ensure improved audit ratings. SKIMS requires all of its suppliers to implement internal controls to ensure they comply with SKIMS’s Code of Conduct requirements.

Factory audits include five categories: labor rights, employee health & safety, environment, ethics, and management systems. The company’s labor standards comprise regulations relating to forced labor, child labor, labor brokers, working hours, wages and benefits, abuse and harassment, non-discrimination, and freedom of association. The SKIMS Code of Conduct provides detailed information on all audit categories and subcategories, including workers' rights relating to freedom of association and collective bargaining in accordance with the International Labor Organization (ILO) conventions on fundamental principles and rights at work. It also outlines the necessary measures and management system requirements to protect workers' rights. Modern slavery and human trafficking rules are captured under the forced labor topic of the same document. SKIMS will not work with any suppliers/factories that use any forced or involuntary labor, whether imprisoned, bonded, trafficked, indentured, or otherwise.

1 Tier 1 is composed of suppliers who manufacture or produce finished goods.
2 Tier 2 is composed of subcontractors and sub-suppliers (e.g., dyeing, material, fabric, trims) with stand-alone operations supplying to/not integrated with Tier 1.

Certification

As part of its supplier agreements, SKIMS requires that all suppliers certify their compliance with the SKIMS Code of Conduct, including that materials incorporated into the manufactured products comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business. Additionally, SKIMS requires its suppliers to provide a signed acknowledgement of SKIMS’s Xinjiang Production and US Sanction Letter, which outlines the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) prohibition on direct or indirect transactions involving goods from the Xinjiang region.

SKIMS considers non-compliance with its Code of Conduct on slavery and trafficking a zero-tolerance supplier violation. In such cases, SKIMS requires those suppliers to immediately implement corrective action plans to remediate identified non- conformances. SKIMS works with such suppliers to conduct a thorough root-cause analysis until the non-compliance is resolved and confirmed through follow-up audits. If a supplier fails to resolve the non-compliance after two follow-up audits, they will be subject to a disengagement process, resulting in their removal from the approved SKIMS Supplier-Factories List and termination of the supplier relationship.

Internal Accountability

SKIMS has established an internal compliance program to ensure that SKIMS employees, contractors, suppliers, and stakeholders strictly adhere to the SKIMS Code of Conduct.

Non-compliance with the SKIMS Code of Conduct regarding slavery and trafficking is considered a zero-tolerance offense.

• Consequences: SKIMS maintains a comprehensive range of consequences for employees or contractors found in violation of the SKIMS Code of Conduct. Repeated violations of the SKIMS Code of Conduct or failure to address prior violations may result in escalating penalties including verbal and written warnings, and ultimately, dismissal of employment.
• Reporting Procedures: SKIMS has established accessible reporting procedures to allow employees, suppliers, and stakeholders to report concerns or potential violations. This includes both an internal reporting system and a third- party compliance email reporting channel. These procedures are available in multiple languages, ensuring accessibility.
• No-Retaliation Policies: SKIMS upholds strict no-retaliation policies to protect individuals who report concerns or violations in good faith.

Training and Capacity Building

SKIMS believes in the importance of continuous education and capacity building and provides training to suppliers and applicable employees on identifying and mitigating risks related to human trafficking and slavery in its supply chain.

All SKIMS employees within the Global Sourcing, Planning, Procurement, and other teams responsible for supply chain management undergo periodic training on company standards as they relate to its global supply chain, including but not limited to recognizing and preventing forced labor, responsible purchasing practices, audits, and remediation procedures.

SKIMS’s dedicated Compliance Team plays a vital role in ensuring adherence to international standards regarding supply chain transparency and responsible sourcing. They regularly participate in external seminars, webinars, and training sessions providing insights and updates on current international standards and practices. This ongoing education enables SKIMS’s Compliance Team to stay informed about emerging issues, best practices, and regulatory developments related to supply chain transparency and responsible sourcing.

Revised: March 5, 2024