NYSE: CHS Price: $9.92 Change: -0.29 (-2.84%) Volume: 1,809,106 20 min delay 01/23/1804:00 PM

Corporate Social Responsibility

Chico’s FAS, Inc., including its brands Chico’s, White House Black Market and Soma (the “ Company”), believes that every person has a right to safe, decent and humane working conditions. We expect our suppliers to understand and comply with our Terms of Commitment to Ethical Souring (“Terms”). The Terms set forth our expectations for our suppliers regarding social, health and safety, environmental, and ethical performance. While we do not own the factories in which our merchandise is made, we are committed to forging strong partnerships with our suppliers so that what we sell is made in factories and under working conditions that are consistent with the Terms. With our complex supply chain, it is important for our continued success that we work with suppliers who operate responsibly and demonstrate a commitment to transparency and continuous improvement. We have implemented written guidelines, formal processes and management oversight so that our Terms are not only words on paper, but a way of doing business at Chico’s FAS, Inc.

CSR Governance

Our commitment to CSR begins at the top: oversight of the program rests with our Chief Executive Officer (“CEO”). Updates are provided to the CEO, Chief Financial Officer, and the Audit Committee of our Board of Directors on a wide variety of compliance matters including supplier compliance. Day-to-day responsibility for our CSR program is owned by our Vice President of Global Compliance and Risk Management, who is responsible for organizational alignment and managing our CSR partnerships with internal and external stakeholders. The Global Compliance Department fosters a culture of transparency and seeks to continuously improve compliance with applicable legal and regulatory requirements and Company expectations.

Assessing and Addressing Factory Conditions

The Company manufactures in approximately 30 countries all around the world. The top 6 countries in which we manufacture are China, Vietnam, Indonesia, Sri Lanka, India and the United States, with at least 4% of our global manufacturing produced in each country.

We have developed a comprehensive process to train, monitor, audit and work with suppliers, always striving for transparency and continuous improvement.

Monitoring and Auditing
  • For factory activation, an initial audit is performed by an experienced third-party auditor.
  • If an audit determines there are major deficiencies in a factory, either we disallow production in that factory or we work with the supplier to formulate a corrective action plan (CAP).
  • Follow-up and annual audits are performed based on the initial noncompliance findings.

From time to time, we will terminate our relationship with factories that are unable or unwilling to improve their performance in order to meet our CSR expectations.

Production Risk Assessments

We conduct risk assessments of our supply chain and of the countries in which our product is produced. This process enables our sourcing team to make informed decisions about where our goods are manufactured. Because of CSR concerns, we do not currently authorize production in Bangladesh or Pakistan.

Supplier and Brand Collaboration

At Chico’s FAS, Inc., we realize the significant advantages in collaborating with industry groups, trade organizations and other retailers to advance our high compliance standards. Our Global Compliance Department is actively engaged in the communication with, and education of, our suppliers through the use of tools such as our Vendor Extranet, field visits, monthly conference calls with key suppliers, participation in multi-brand compliance summits and worker engagement programs. In addition to other social, safety and environmental training sessions, fire safety continues to be a priority across our supply chain. We partner with various industry associations to promote local fire safety training opportunities and encourage our suppliers to participate in these sessions.

Measuring Factory Improvements

Our comprehensive monitoring program continues to provide us with insight into the complex challenges of workplace conditions, environmental opportunities, safety, security and ethical business practices. The Company utilizes global benchmarks and our historical auditing data to measure factory performance. Our Vendor Scorecard provides our partners with a report of a facility’s performance from a compliance perspective. Our program includes a support system that can help factories tackle challenging labor, health and safety, environment, human rights, ethics and security issues. We are proud of our progress furthering our factory compliance programs.Our emphasis on workplace conditions has demonstrated measurable improvement within our factory base. We encourage a relationship with our suppliers that is built on transparency and recognize they have been a key component of our accomplishments.

Supply Chain Security

As part of our continued commitment to the safety and security of our supply chain, in 2003, Chico’s FAS, Inc. voluntarily partnered with US Customs and Border Protection (CBP) in the Customs – Trade Partnership Against Terrorism (C-TPAT) program earning the highest status (Tier 3) awarded by CBP. We are proud to report we have been able to maintain our Tier 3 status.

Sustainability and the Enviroment
  • Stores
    • Utilizing low flush toilets, high efficiency mechaincals and low VOC paints and adhesives
    • Providing MSDS for chemical and beauty products
  • National Store Support Center
    • Constructing a Green building certificed by Florida Green Building Coalition
    • Utilizing light sensors for energy efficiency
    • Providing MSDS for chemical and beauty products
  • Distribution Center
    • Utilizing light sensors for energy efficiency
    • Providing MSDS for chemical and beauty products
    • Recycing the inbound cartons for outbound shipments

Ongoing CSR program objectives:
  • Communication
    • Fire Safety
    • Supply Chain Security
  • Focus
    • Risk Assessments
    • Continuous Improvement
  • CSR Engagement
    • Key Suppliers
    • Industry Trade Organizations

Souricing from approximately 30 Countries and 614 Factories

Global Compliance Factory Data (Calendar Year) 2014 2015
Total Approved / Active Factory Base 588 614
Approved New Factories 93 194
CHS Brands Initial Audits 114 161
% of New CHS Brands Factories Audited 123% 83%
% CHS Brands Follow Up Audits 25% 43%