1. Purpose

SKIMS recognizes the importance of social responsibility in its operations. This policy outlines the company’s commitment to ethical, sustainable, and responsible business practices. SKIMS aims to uphold the highest social and environmental stewardship standards while fostering positive relationships with our stakeholders.

2. Compliance with Legal and Ethical Standards

SKIMS is committed to full compliance with all applicable laws, regulations, and industry standards pertaining to labor, human rights, and environmental practices. This includes adherence to international norms such as the Fair Labor Organization Code of Conduct and Compliance Benchmarks, based on the International Labour Organization's (ILO) Standards and internationally accepted good labor practices, and the United Nation’s Universal Declaration of Human Rights.

3. Supply Chain Responsibility

SKIMS holds its suppliers to the same high standards we set for ourselves. All suppliers and supply chain partners are required to comply with the SKIMS Code of Conduct and Compliance Benchmarks (“Code of Conduct”), which encompasses labor, human rights, and environmental principles.

Ethical Standards

SKIMS will only work with suppliers/factories that conduct their business by a set of ethical standards compatible with SKIMS standards. It is strictly prohibited to offer or receive bribes, kickbacks, or any other similar unlawful or improper payments to or from our representatives, government officials, third parties, or any person or entity to obtain or retain business and/or direct and shape the outcome of third-party QC inspections and social compliance audits.

Communication and Transparency

SKIMS expects full transparency into a Supplier's operations, policies, processes, and records relevant to its employees and designated representative(s). Suppliers must disclose the identity, physical location, and ownership of all suppliers/factories that may come in contact with SKIMS products, including subcontractors and sub-suppliers. Suppliers providing fraudulent documentation or statements with a willful intent to deceive will be in direct violation of the Code and breach of the Agreement.

SKIMS is committed to ongoing evaluation, review, and improvement of our social responsibility practices. SKIMS will communicate and engage openly with stakeholders about internal social responsibility efforts and gather feedback to ensure that SKIMS meets and exceeds their expectations. SKIMS encourages dialogue with stakeholders to foster mutual understanding and trust.

Gift Policy

SKIMS prohibits their suppliers/factories from giving gifts of any sort, no matter the value, including any monetary consideration, gift card, or "personal loan," to any employee for any reason at any time.

Security

SKIMS requires suppliers/factories to maintain facility security procedures to guard against the introduction of illegal substances or non-manifest cargo into outbound shipments. All Suppliers/factories must cooperate with local, national, and foreign customs and drug enforcement agencies to guard against illegal shipments.

Documentation and Monitoring

At its discretion, SKIMS and its designated vendors (including third parties) may engage in monitoring activities to confirm compliance with the Code of Conduct, including announced or unannounced onsite inspections of manufacturing and sourcing factories, sub-suppliers, employer-provided housing, reviews of books and records relating to employment matters, and confidential employee and management interviews. All documentation demonstrating compliance with this Code of Conduct shall be maintained for at least three years.

4. Supplier Onboarding Process

SKIMS requires all suppliers involved in manufacturing and sourcing SKIMS products to complete the onboarding process before issuing a purchase order (PO). Suppliers must acknowledge and accept our terms and conditions. All Tier 1 (finished goods manufacturing) and Tier 2 (material and fabric mills, trims and components, laundry, dyehouse) suppliers must complete a third-party social responsibility audit, which results in a designated rating based on the suppliers' adherence to our Code of Conduct, compliance benchmarks, and additional policies.

The following steps must be completed to be considered by SKIMS as an authorized vendor:

A SKIMS sourcing team member (Product Development, Production, Design) must give the initial approval via email to onboard a new supplier, factory, subcontractor, or sub-supplier.

An onboarding email thread should be started with the Sourcing team: SVP of Global Sourcing, Sr. Manager, Product Integrity and Compliance, Sr. Director of Production, Director of Production, and other relevant SKIMS partner(s) who are involved in the onboarding decision.

• Email Subject: SKIMS New Supplier Onboarding | [insert supplier/factory name]
• Suppliers shall review and complete the following onboarding documents.
• Mutual Non-Disclosure Agreement
• Vendor Onboarding Form
• W8 Form - Must include a bank letter reference (International) / W9 Form (USA)
• Master Supplier Agreement (MSA) – Declaration (pg. 9 and 14)
• Supplier Questionnaire – fully complete

Suppliers must participate in an initial social compliance audit by our third-party auditing firm, QIMA. After that, audits are completed annually.

The Sr. Manager of Product Integrity and Compliance reviews the audit rating and issues a recommendation to the SVP of Global Sourcing.

Email is sent to the supplier informing a decision to authorize, re-audit, or non-authorization.

5. Social and Environmental Audits

An audit evaluates a factory’s compliance with local laws related to general working conditions, including management systems, labor practices, working hours, wages and benefits, health and safety, disciplinary procedures, discrimination, environmental practices, and other monitoring requirements.

Audit Preparation

All suppliers/factories must complete the SKIMS Supplier Questionnaire to ensure alignment against our Code of Conduct and local and international social, environmental, and labor practices. This pre-sourcing tool assesses the supplier's status and determines whether they will continue onboarding. SKIMS reviews all documentation provided and advises the supplier to schedule an audit.

Booking an Audit

1. To book an ethical audit through QIMA,log in here.
2. Once logged in, click on the green +"Book Now" in the top left corner and click "Ethical Audit."
3. On the booking page, select "Initial Audit."
4. Select "Semi-Announced"
5. The QIMA coordinator will provide a 7–14-day window.
6. Suppliers can email support@qima.com for questions, concerns, or clarifications.

Audit Process

The following is a simple outline of the audit process. While all auditors do not necessarily follow this order, all steps are completed during the onsite evaluation. Further steps or documents could be required to understand the factory's status completely.

Opening Meeting: auditor meets with factory management and supporting personnel to provide an overview of the day’s agenda, request documents, and do employee selection.

Factory Tour: auditor and factory management tour the entire factory to verify manufacturing processes, health, safety, labor, and environmental practices.

Employee Interviews: done individually and in groups and must be confidential and private.

Document Review: policies and procedures, employee files, training, wage and hour records

Closing Meeting: auditor meets with factory management to discuss findings noted during the audit and sign the corrective action plan (CAP).

Factory Rating and Authorization

Once the audit is complete, QIMA provides the factory with a Corrective Action Plan (CAP) that details findings and observations noted during the inspection. QIMA will notify the SKIMS team with a final rating and a copy of the audit report.

Green Rating: Authorized for Production

1. Factory meets standards. The Merchandising and Production team can place POs in NetSuite.
2. Re-audit is due within 12 months.

Amber Rating: Conditional Authorization

1. Factory has several major findings, but they can be verified through supporting evidence via email (i.e., photos, policies, training documents). Sr. Manager of Product Integrity and Compliance reviews the audit report and corrective action plan (CAP) and makes an authorization recommendation based on the severity of findings.
2. Desktop Review (DR) is required – and must be scheduled within three (3) months of the initial audit date.

Red Rating: Not Authorized for Production

1. Factory has a zero-tolerance and/or several critical/major findings, in which corrective and preventative actions must be verified onsite by a QIMA auditor.
2. Follow-up audit is required – and must be scheduled within one (1) month.

6. Zero-Tolerance Violations

SKIMS acknowledges that factories are imperfect and social compliance programs are based on improvement plans. However, SKIMS has a zero-tolerance policy for violating workers' fundamental human rights or risks to their health. Zero-tolerance violations include, but are not limited to, imminent safety risks, human rights violations, bribery, denial of access, and unauthorized subcontracting. Factories found to be in breach of these critical areas will have their authorization revoked. SKIMS’ priority is to ensure that workers are not at risk and will support the factory during disengagement to minimize any negative impact.

7. Subcontracting

SKIMS strictly prohibits using unauthorized facilities to produce apparel, merchandise, or components by any supplier/vendor/factory. Written consent from SKIMS is required should an authorized supplier/factory need a subcontractor during the manufacturing process, which is contingent on the subcontractor’s commitment to comply with the SKIMS Code of Conduct. This applies to all aspects of samples, manufacturing, or finishing of garments, components, or raw materials bearing SKIMS' or its Customers/Brands' intellectual property.

Subcontractor Information Disclosure

The Supplier must provide SKIMS with the names, locations, and work details proposed for all potential subcontractors. Nominated subcontractors must adhere to the company's onboarding protocols, subject to full approval from the brand.Adequatetime is needed to complete this process before any production is placed.

The primary supplier/factory assumes full responsibility for the quality, timeliness, and all other aspects of work performed. This encompasses the actions or omissions of its authorized subcontractor in connection with fulfilling obligations under this Agreement or any Purchase Order.

7. Remediation and Continuous Improvement

SKIMS aims to motivate its suppliers to continuously improve and is dedicated to working directly with suppliers/vendors on remediation efforts. To achieve this, SKIMS has assigned a Sr. Manager of Product Integrity and Compliance to work directly with suppliers throughout the remediation process.

Corrective Action Plan (CAP):

Corrective Action Plans (CAP) disclose all findings and observations noted during the audit and recommendations from the auditor to remedy each noncompliance. Suppliers should work closely with their factories to determine the root cause of the finding(s), establish corrective and preventative actions, and an estimated timeline for completion. Supporting photos and documentation must be submitted to validate the status of each finding.

The CAP is comprised of the following categories completed by the auditor and the factory:

1. Clause Category
2. Finding Description
3. Root Cause Analysis
4. Corrective and Preventative Action
5. Estimated Date of Completion
6. Supporting Evidence

Suppliers must submit their completed CAP to the SKIMS team no more than two weeks after the audit. CAPS must not be sent to any outside party without the written approval of a SKIMS Global Sourcing team member.

CAP Review

Once a factory has completed its CAP, the Sr. Manager of Product Integrity and Compliance determines if the CAP is accepted or rejected. The factory needs to maintain transparency and communicate difficulties they might encounter, which can affect their CAP completion.

Accepted CAP – Factory provided a thorough analysis for each non-compliance issue, and their plan has clear steps to remediate each finding within the specified time frame.

Rejected CAP – Factory did not fully complete the CAP template (i.e., left blanks) or did not provide sufficient details for each category within the CAP.

SKIMS will consider the CAP closed once the factory has completed its CAP and provided all necessary evidence to validate that all the findings have been adequately corrected. Closed CAPs shall be filed for future reference to see if all preventive actions were successful for all future audits.

8. Accountability

All employees, suppliers, factories, and partners are expected to uphold the principles outlined in this policy. Violations will be addressed promptly, and appropriate corrective action will be taken. This policy is reviewed regularly to ensure it remains relevant and effective in guiding SKIMS's social responsibility efforts.