BIC_REGISTRATION_DOCUMENT_2017

OUR ENVIRONMENTAL, SOCIAL, AND SOCIETAL RESPONSIBILITY Our societal responsibility

Social audits in the Advertising and Promotional Products business SEDEX platform and SMETA audits BIC Graphic Europe joined the SEDEX platform in 2012. SEDEX, the Supplier Ethical Data Exchange, is a not-for-profit organization dedicated to driving improvements in responsible and ethical business practices along the supply chain. Being a member of SEDEX provides the added benefit of having a confidential platform for sharing social compliance audit reports and related information and participation in working groups. The SEDEX Members Ethical Trade Audits (SMETA) standard combines several reputable standardization programs including the ILO Convention, ETI (Ethical Trading Initiative) Base Code, SA 8000 and ISO 14001. An audit was conducted to SMETA standards in 2017 on the Tarragona (Spain) facilities. Progress made in 2017 ♦ In 2017, 26 Consumer Products contract manufacturers were audited, representing 33%, along with five Advertising and Promotional Products (BIC Graphic) contract manufacturers, representing 6% in high risk countries. The Consumer Products audits conducted in 2017 revealed 22 major, 156 moderate and 168 minor deficiencies, and 25 corrective action plans were implemented. The four biggest areas of deficiency were found in management systems and working hours: The facility has comprehensive employee safety processes and 1. procedures in a written manual that support adherence to social compliance requirements, but they are not all being properly implemented. 23% The facility has comprehensive working hour and wages 2. management processes and procedures in a written manual that support adherence to social compliance requirements, but they are not all being properly implemented. 20% The facility has comprehensive emergency preparedness 3. processes and procedures in a written manual that support adherence to social compliance requirements, but they are not all being properly implemented. 17% Total overtime hours exceeds allowable limits under applicable 4. law or agreement. 13% Performance ♦ In 2017, 40% of contract manufacturers were audited; other manufacturers were audited in 2016 or will be in 2018 according to the two-years audit cycle. The rating system measures the level of performance of each contract manufacturer based on the social indicators of the BIC Group Code of Conduct.

Contract manufacturers are audited and rated on each criterion and then given an overall score. This platform allows the Group to closely monitor a contract manufacturer’s performance in relation to each indicator. Deficiencies in each evaluation criterion are rated as major, moderate or minor, thus allowing the implementation of targeted corrective action plans where needed. It also includes global benchmarks for each country and each Group business sector. All contract manufacturers are audited over a two-year cycle, during which improvement programs will be implemented based on deficiencies identified during the assessment. BIC sees social responsibility as a partnership that requires shared values. In this spirit, BIC favors a common commitment to improvement rather than breaking off relations with a partner. The box below explains the main steps in the evaluation of contract manufacturers. Self-assessments have been conducted by all BIC factories since ● 2006. The responses are analyzed by independent auditors. Each factory Director is required to implement a corrective action plan in cooperation with the Human Resources Department. 1 The BIC contract manufacturer signs the BIC Group Code of Conduct. 2. An independent external monitoring agency conducts an initial assessment of the contract manufacturer. 3. BIC presents a corrective action plan (CAP) to the contract manufacturer. 4. The contract manufacturer implements the CAP within an agreed, reasonable time frame. 5. The Auditor conducts follow-up assessment(s) to confirm implementation of the CAP. 6. Ongoing assessments are conducted every two years. THE SIX STEPS FOR EVALUATING CONTRACT D MANUFACTURERS:

SA 8000 CERTIFICATION FOR THE BIC AMAZONIA D FACTORY

In 2010, the BIC Amazonia factory obtained SA 8000 social benchmarking certification on a voluntary basis. In 2013 and in 2016, this certification was renewed for a further three-year period. Examples of results achieved include: improvement in relations between management and employees; greater transparency in the HR process, in relation to internal recruitment, training and skills development; and the rollout of best practices to subcontractors working directly at BIC sites.

Two-thirds of BIC’s Asian subcontractors D for the Consumer Products business have maintained close relationships with the Group for at least five years

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BIC GROUP - 2017 REGISTRATION DOCUMENT