Issue No. 07

September 2022

Supply Chain ESG Newsletter

In this issue:

Ø August Audit Summary

Ø Q2 Supplier Scorecard Meetings

Ø New Supplier Onboarding: City Spark

Ø Supplier Training (N.A completed)

Ø VN 3rd Party Audit Successfully Completed

Ø Supplier Diversity Program Update

Ø ESG News Around the World in July

A Note from the Social Compliance Team

August has flown by in a flash! For kids, it means summer break is over, but for us, it means we are closer to the end of the year! We accomplished a lot in August: 3^rd party audits, new supplier onboarding, scorecard meetings, supplier training, etc. And we really started to gain momentum in conducting onsite audits, despite the challenges we faced with abrupt situations like COVID outbreaks and social turmoil as we are trying to catch up with our audit plan. Check out the details and as always, we hope you enjoy reading it!

YTD Audits and CAP Updates

Region	Audits Done (YTD)		CAP Update
	Onsite	Remote	2022 Audits		2021 Audits
	Onsite	Remote	Closed in Aug.	Opened in Aug.	Closed in Aug.	Still Open
N.A.	13	4	4	5	0	4
Asia	5	5	17	36	8	46

Audit Plan for Next Month

Region	Supplier Name	Location	Audit Date
N.A.	Reliable Container	MX	2022/9/22
	Maaplin	MX	2022/9/22
	TMI Products	MX	2022/9/27
	SSP	MX	2022/9/27
Asia	Wanxiang	Hangzhou	2022/9/6
	Lumi	Ningbo	2022/9/8
	Genius Champion	Huizhou	2022/9/13
	City Spark	Xiamen	2022/9/16
	Samhongsa	Qingdao	2022/9/21
	Lant	Qingdao	2022/9/23

I admire companies that have a purpose, passion, and performance. I am a fan of Unilever under its CEO Paul Polman, not only for the company's insights into women and men when they buy beauty products or skin products (the DOVE woman, the AXE man), but also as a company seeking to achieve both growth and practicing social responsibility.

--- Philip Kotler

August Audit Summary

August has been a very busy month for Social Compliance Audits in North America! The month kicked off with a visit to Nefab Los Angeles (they acquired Reflex). Later in the month, two onsite ‘Remote Audit’ verification visits (Ureblock and AMS) were successfully completed in Tecate and Tijuana respectively. And finally, in the last week of August four re-verifications audits were completed in Tijuana. While everyone is still cautious of COVID – it is GREAT to get back to visiting Suppliers in person!

Q2 Supplier Scorecard Meetings

It was great to resume the quarterly scorecard meetings with our key suppliers after they were on pause for a few quarters! These meetings give us unique opportunities to have vital conversations with suppliers on their performance regarding all of the different metrics that matter to Exemplis. Both North America and Asia had meetings with key suppliers in the last couple of weeks with action items to follow up later.

New Supplier Onboarding: City Spark
City Spark Co. Ltd is a potential new backpack supplier for Timbuk2. The quality and compliance team introduced our assessment requirements and process to the supplier in early August. The supplier has proved to be easy to work with. A remote assessment, which turned out to be great, has been done with all the documents and records that they are able to provide.

N.A. Supplier Training Completed

On August 15^th, the 2022 Exemplis Social Compliance Training for North American Suppliers was completed. Six, weekly training sessions were offered to Suppliers to learn more about different aspects of Social Compliance. All training materials were sent to the Suppliers regardless if they attended the weekly training or not. Participation was fair, and we are excited to build next year’s training materials based on responses from the Supplier engagement training assessment. [More…]

VN 3rd Party Audit Successfully Completed

As noted earlier, we used Elevate as the 3^rd party to conduct a Social Compliance audit of Timbuk2’s Vietnam factory Kodex. The audit was successfully completed in late July. Kodex received a Bronze score the under ExemCare rating and we engaged with them for their corrective actions on the non-compliance findings. As of the end of August, they have closed out 9 of the 10 Non-Compliance findings.

Supplier Diversity Questionnaire Update

The Supplier Diversity Questionnaire has been completed and approved by the Legal Department. The questionnaire will begin to be rolled out to Suppliers in the United States in September. Supplier Diversity is an important initiative and the survey will help to ensure that Exemplis is capturing accurate data Additionally, the federal government, state government agencies, and even local governments require companies that do business with them to adopt and implement supplier diversity programs. Many government contracts impose specific levels of contracting with diverse businesses as a contract requirement.

ESG News Around the World

‘Dirty ol’ coal’ is making a comeback and consumption to return to record levels

8/1: Coal prices are soaring and global coal consumption is expected to return to record levels reached almost 10 years ago as the global energy supply crunch continues. While investors in coal stocks are having a field day, curbs on carbon emissions are taking a backseat as markets and governments scramble to stock up on traditional energy supply amid bottlenecks caused by the Ukraine war, analysts say. [More...]

Hundreds of Reuters journalists strike over contract negotiations
8/4: Roughly 300 Reuters journalists based in the U.S. walked off the job Thursday morning as part of a 24-hour strike protesting stalled contract negotiations. The strike, the first at Reuters in more than 30 years, coincided with the company’s second-quarter earnings call, which revealed that total revenue was up 5% at $1.61 billion. [More...]

China’s Latest Renewables Plan Could Bridge Global 1.5°C Gap, Expert Says

8/7: China’s fourteenth five-year plan (14FYP) shows the country could build enough wind and solar capacity to reach its emissions peak ahead of schedule, but continuing coal investments raise doubts.“To the extent that the new 14FYP for renewables can meet or overperform on its goals, it would also contribute to China’s effort to peak carbon emissions early and help bridge the global emission reduction gap towards a 1.5°C pathway,”. [More...]

Taps have run dry in a major Mexico city for months. Similar crisis looms in the US
8/15: About 300 miles southwest of San Antonio, water taps have run dry in a major Mexico City. Thousands of residents wake up at dawn to check their taps and fill up containers. Others line up with large jugs, bottles, and buckets at cisterns around the city, where fights have broken out when people try to jump the line. [More...]

Sustainable Supply Chains: Expeditors' First 100% Electric Truck

8/17: Expeditors announced that their long and robust partnership with service provider R. Nagel Transport has reached another milestone. As of July 2022, R. Nagel Transport has deployed their first DAF CF electric truck, which will exclusively drive for Expeditors. This 100% electric truck will be the showpiece of their dedicated fleet for pickups and deliveries within the Amsterdam Schiphol Airport area. [More...]

Biden Signs Largest-Ever US Climate Investment into Law
8/17: President Biden signed the Inflation Reduction Act on Wednesday, codifying into law a major package of climate, health care, and tax legislation. The new law includes the U.S.’ largest ever set of climate-focused investments, allocating nearly $370 billion to areas including renewable energy and industrial decarbonization solutions. [More...]

China hit by longest and strongest heatwave on record

8/23: Millions of Chinese people are suffering as intense heat drags on for more than two months, bringing drought, power shortages, wildfires, and crop failures. China has suffered its most intense and sustained heatwave on record this summer, causing wildfires, power outages, and crop failures. The heatwave across much of northwest, central, and southeast China has lasted 72 days and counting. [More...]

Polystyrene recycled into valuable chemical with new scientific breakthrough

8/25: Polystyrene has been turned into a valuable chemical found in seaweed – by exposing it to sunlight. The indestructible plastic is found in everything from takeaway containers to TV packaging. It’s rarely recycled due to the costly and complex processes required. Now scientists have broken it down using a simple and inexpensive technique that combines UV (ultraviolet) rays and a chemical catalyst. [More...]

Chinese island plans to ban sales of fossil fuel-powered vehicles by 2030
8/25: (CNN)The island of Hainan in southern China plans to ban the sale of fossil fuel-powered vehicles by 2030, aiming to become the first province in the country to do so, according to provincial authorities. In a statement, the provincial government vowed to be "at the forefront of the country," and become a "top student in the carbon neutralization work." [More...]

China launches first network for senior talent to help elderly people
8/26: China has established its first network for senior talent in an effort to promote employment, education and nursing care for elderly people as the country increases investment in old-age care. The network, which was officially launched on Wednesday, has more than 40 columns, covering talent policy, investigation and research, and recruitment information. [More...]

Apple wants to make smartphones from “waste”
8/27: In a recent interview, Apple CEO, Tim Cook reveals that Apple’s long-term goal is to not have to use any resources on the earth to make products. The company aims to produce smartphones from ‘waste’ or recycled products. Cook said that it is important for Apple to produce products in an environmentally friendly way. [More...]

IKEA Tianjin Dongli: "zero energy consumption" shopping mall
8/31: The photovoltaic power generation project of IKEA Tianjin Dongli Shopping Center was completed and connected to the grid for power generation. The reporter saw at the scene that in the parking lot of nearly 30,000 square meters, rows and rows of steel lifts stand, the tops are covered with photovoltaic panels. Parking at the bottom, power generation on the upper floor. [More...]

This material is intended for internal use only.

Thank you for reading!

For questions and suggestions, please email:

bzhang@exemplis.com & ckolste@exemplis.com