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The responsible management of the supply chain

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The Luxottica Responsible Sourcing and Manufacturing program

For Luxottica, the supply chain is fundamental for guaranteeing the high quality of its products and services and contributes to maintaining and enhancing the reputation of the Group. Ethical, labor, human rights, safety, and environmental aspects are thoroughly considered along the manufacturing and distribution supply chain, from the selection of suppliers to their systematic monitoring and the organization of training and awareness initiatives.

In 2013 the Company created the Luxottica Responsible Sourcing and Manufacturing (LRSM) program to ensure that its principles on business ethics, labor, human rights, safety and the environment are upheld by every supplier of raw materials, components, finished products (including also Oakley’s Apparel, Footwear and Accessories business, AFA) and, from 2019, logistics services. The program also applies to Luxottica’s production and distribution sites and builds upon the Code of Ethics, local laws and regulations and the above-mentioned principles (also known as “LRSM principles” available here).

At the same time, the program mitigates the reputational and business continuity risks of the Company’s supply chain, which is fundamental for guaranteeing the consistency of the services and the high quality of its products.

Given its interdepartmental nature, the program brings together representatives of the Sourcing, Internal Audit, Manufacturing, Quality, Risk Management, Compliance & Asset Protection and Sustainability departments in a Steering Committee which periodically evaluates the status of the program and discusses further steps to take.

The Zero tolerance mechanism in the supplier evaluation

Luxottica implemented a “Zero Tolerance” 1 mechanism to prevent the risk of serious cases of suppliers’ non-compliance with sensitive topics, including child labor, use of forced labor and corruption actions, when selecting and monitoring suppliers. This mechanism requires immediate action from the supplier to comply with the rule and implies its phase out in the event of non-compliance. The Company, in fact, requests suppliers to close all issues raised during the audit by an agreed deadline, giving priority to zero tolerance and non-compliances with local laws, international frameworks (e.g. ILO Conventions) and minimum recognized management practices (e.g. ISO standards).

A third-party oversees suppliers’ compliance with the Company's standards and LRSM principles as well as the adoption of corrective actions in the event of non-compliance with the Company's Code of Ethics and/or local regulations.

Training and awareness initiatives

To support and strengthen the LRSM program and ensure alignment with its principles and standards, Luxottica has in place training initiatives for both its suppliers and employees.

By combining the success of previous training workshops in China (2018) and Italy (2019) with the restrictions imposed by the COVID-19 pandemic, in 2020 Luxottica worked on two online training modules: the first one addresses suppliers and is available through an external portal; whereas the second one is intended for the Company’s employees and is available on Luxottica University.

For further information see the LUXOTTICA RESPONSIBLE SOURCING & MANUFACTURING PRINCIPLES” document.

1 The  “Zero tolerance” criteria relate to: 1) the use of child labor (under 16 years of age); 2) conditions that seriously endanger health and safety; 3) particularly harmful environmental impact; 4) use of forced or undeclared labor or imprisonment; 5) access to sites denied to auditors for the second time; 6) acts of corruption, money laundering and illicit trade; 7) persistence of non-compliance or failure to meet requests to take immediate action to comply with rules.