Rapha Racing Ltd Modern Slavery Statement

This statement has been published in accordance with the Modern Slavery Act 2015. It sets out the steps taken by Rapha Racing Ltd (Rapha) during the year ending 31st January 2020 to prevent modern slavery and human trafficking in its business and supply chain. This is the 3rd iteration of this report, approved by the board of directors on 13.07.2020.

Introduction to Rapha

Rapha was established in 2004 as an online retail company, and has since expanded to include physical retail spaces known as Clubhouses. These can currently be found in 21 vibrant cycling locations around the world, as well as temporary Pop-Ups and Mobile Clubhouses out on the road.

At Rapha, we have built a reputation for maintaining the highest possible quality and the most technically advanced production techniques in cycling apparel manufacturing, with a nod to the nostalgia and culture of road cycling. To achieve consistent high standards, Rapha works only with the best in the industry, delivering products ranging from vintage merino tracksuits to WorldTour-winning racing apparel. Rapha is headquartered in London, where it was founded, and has regional offices in the US, Australia, Japan and Hong Kong. In addition, Rapha has a non-retail presence in Switzerland, France and Singapore. Rapha has 468 employees. The company is privately owned by Carpegna Ltd (UK registered), which owns 100% of the share capital of Rapha Racing Ltd. The company is owned by a number of private shareholders and companies, the ultimate controlling party being Lawrence Classics LLC, incorporated in the USA. Rapha’s board consists of four directors: Simon Mottram, Nicholas Evans, Matthew Tarver and, Steuart Walton.

Transparency within Rapha’s Supply Chain

For this period, Rapha worked with 33 tier 1 (finished goods) suppliers globally, in 11 countries, including those located in China, Vietnam, Italy, Portugal and the USA. Rapha worked with 41 nominated tier 2 (textile formation) suppliers across the globe in 9 countries. Our suppliers represent leaders in their field and are an integral and valued part of realising our product vision. Our suppliers typically provide excellent working conditions for their employees, due to their reputation and high standards of workmanship. In the year leading up to January 2020, we mapped our tier 1 and tier 2 supply chain, which we will expand to include tier 2 subcontractors. We recorded 30,788 workers in our tier 1 supply chain, and we improved internal reporting by building a dashboard scoring suppliers by social and environmental performance. This includes monitoring the percentage of business Rapha makes up with each supplier, because we recognise that as our volumes grow, our level of responsibility increases. This knowledge empowers us to understand the impact our purchasing practice has on our suppliers’ ability to protect the welfare of their workforce.

As we continue to grow, we understand the very real risk of forced labour, fraud or coercion among employees in global business supply chains, and are committed to help combat modern slavery wherever possible. We understand the slavery risk in each of our sourcing countries and do not source from the 47 highest risk countries in the world according to the Global Slavery Index. The majority of our sourcing countries are low risk or low-medium risk, with the exception of Turkey, which is medium-high, and we understand the unique factors contributing to modern slavery risk in that country. In the future we aim to publish the percentage split of spend per country, to evidence our consideration of modern slavery risk in sourcing countries when allocating orders.

Supply Chain Values and Process

At Rapha, we insist that our suppliers share our fundamental ethics and values. These values are presented in our Code of Conduct, which is in line with the Ethical Trading Initiative’s (ETI) Base Code, and the conventions of the International Labour Organisation (ILO), including the ILO Indicators of Forced Labour. All our suppliers and subcontractors are asked to sign this document during the initial on-boarding process, along with an annual refresh. It covers but is not limited to Rapha's expectations of Anti-Bribery, Worker Discrimination, Working Hours, Freedom of Association and Child Labour.Before committing to production with a new supplier or facility, we carry out a 3rd party social audit which includes health & safety checks, cleanliness, broken needle policies, timekeeping procedures and social facilities. If any non-compliance is found the supplier must present a remediation plan and timeline, followed by a second audit to give evidence for the improvements made.We then work closely with our suppliers to ensure these high levels of working standards are maintained.

During this period we conducted an assessment of our existing policies related to Modern Slavery. These findings, in conjunction with legal consultation, have helped inform a wider more stringent Master Service Agreement that has been rolled out to all Tier 1 suppliers. This Master Service Agreement expands on and strengthens our Code of Conduct and enforces our position on conditions and working practices related to Modern Slavery. It has been designed to give support and stability to our suppliers, including delivery lead times and cost agreements. By return, it specifies that subcontracting must be approved by Rapha; supporting our efforts to map all our tier 1 and 2 subcontractors. This document is now integral to our ongoing supplier partnerships and in the rare instance that a Rapha supplier would not be willing to agree to this document, we will mutually agree a time to part ways.

We identified an opportunity to conduct an in-depth review of our supply base, to identify potential human rights and modern slavery risks. Building on our increasing knowledge and learnings, we redesigned our social audit process from the ground up. During the audit standard selection process, we designed a methodology to assess the major social audit standards, based on their thoroughness and accuracy in assessing suppliers’ abilities to meet the ETI Base Code and ILO Conventions. We conducted interviews with each audit standard, to understand how audit teams were structured, and how audits were carried out including the number of days taken and quality of information gathered. We recognise that to rely on data gathered by a third-party auditor, the integrity of the information must be assessed to prevent cognitive bias influencing the result.

We concluded that the best method to proceed with is a self-assessment tool that suppliers use to gather information, which can then be collated and used by brands to conduct their own analysis. This method frees factories up from fulfilling multiple different audit standards required by individual brands, and allows more time to focus on remedial action and capacity building. The tool used is the Facility Social Labour Module (FSLM) – part of the Higg Index suite of tools, which is provided to Rapha through its membership to the Sustainable Apparel Coalition (SAC).

During this period, Rapha became members of the Sustainable Apparel Coalition (SAC) In the coming financial year, we plan to onboard strategic suppliers and centralise social audits through this platform. Once complete, Rapha will harness this data to build a picture of supply chain human rights risks, and carry out remedial action and capacity building where necessary.

Rapha has shared a working relationship with many suppliers since the formation of the company. To maintain relationship integrity, wherever possible, we encourage face to face communication between our staff and suppliers at all levels of seniority. We send regular forecasts to enable our suppliers to effectively plan capacity and staffing levels, and update our suppliers on changes to the wider business model, and Rapha’s projected growth. We encourage open discussion with our suppliers to avoid unrealistic cost targets and lead times; factors which may cause or contribute to modern slavery. We are working towards standardising our ways of working in purchasing across all product streams, to provide better transparency on buying practices. Our staff regularly visit our suppliers in person, touring the factory and its facilities. This allows us to assess first-hand the conditions of the facility on a regular basis. Our staff are acutely aware of the standards we deem acceptable and their feedback following a visit contributes to the ongoing assessment of our suppliers. To date, there have been no instances of exiting a factory due to poor working conditions.

To further improve engagement and accountability, communication with our Tier 1 suppliers is divided between the members of our Supply Chain Team. In this period, we also divided Tier 2 suppliers between the team. We have expanded the team to ensure we are better resourced than ever to support our supply chain. This ensures that all orders, quality inspections and social audits are requested and received by the same individual, giving them a holistic understanding of a supplier’s performance and any grievances they may have. This depth of relationship allows for the highest quality of communication. It also gives us the capacity to adopt new and more effective ways of working.

As Rapha grows as a business, we are committed to acknowledging our responsibility as a manufacturer. In 2018 we created a dedicated full-time position – the Sustainability Lead, and in 2019 created the Sustainability page on our website – providing a dedicated space to provide transparency on our supply chain practices.

Looking Forward

The focus going forward will be on mapping; to extend our information base deeper into supply chain and wider within business, and transparency.

We will work on internal training, and in the mid-long term extend this to our suppliers. Firstly, we will conduct in house training to build our expertise and guide suppliers through the FSLM self-assessment process, and we will build upon this once we have identified the future need for training when this data has been gathered.

The completion of our first round of FSLM self-assessments will also allow us to identify areas where we can work with suppliers to improve their social sustainability.

COVID-19 Supply Chain Response

This report details the actions undertaken by Rapha during the Coronavirus outbreak of 2020.

We recognise that some workers in our supply chain may be more vulnerable to modern slavery during the coronavirus pandemic.

At the forefront of our approach was an endeavour to make no cancellations to orders already in production, and to minimise cancellations overall. We asked for approval on all date changes and where necessary, paid our suppliers up front to cover materials costs as well as making early payments for stock wherever possible.

We engaged with each of our suppliers individually to understand whether the changing conditions are affecting their ability to adhere to our code of conduct, which includes health and safety of workers, and payment of statutory sick pay. We asked for their feedback on their current working conditions, including health and safety measures, working from home and social distancing measures.

Changes to orders were necessary due to the changing sales environment. We conducted an internal training session on responsible purchasing practices amid the Covid-19 outbreak with our supply chain and merchandising (order planning) teams. We opened a dialogue with all suppliers, asking for their feedback on how changes to our orders were impacting them, including cashflow, workers’ wages, and grievance systems (as per our code of conduct) and tailored our approach to ensure each supplier felt the process was fair. It is important to Rapha that we maintain a spirit of equal partnership with our suppliers, and encourage open and honest communication at all times; we strongly believe this facilitates mutually beneficial cooperation.

As sales recovered, we reinstated orders which were cancelled or postponed, working closely with suppliers to make sure capacity was manageable, and are continuing to monitor the situation.

Going forward we are continuing to monitor the situation closely with regular contact with our suppliers. We have sent a survey to all suppliers to gather feedback on our purchasing practices during the pandemic, so we can continuously improve.

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