Ethics OBSD Business Partner Toolkit MAY 2023 FINAL - Copy

[Audio] Scenario 3 – Anti-Harassment During an employee interview of a responsible sourcing audit, factory workers indicated that a line supervisor has been yelling at workers and calling them lazy and slow for not meeting production quotas. Workers indicated that they do not report the issue to their HR because they are afraid that they will get into trouble. Manager Is this ok?.

[Audio] Is this acceptable in the workplace? It’s never ok to treat workers disrespectfully, as everyone must be treated with dignity and respect. Suppliers must never engage in, condone or tolerate verbal abuse or any other inappropriate behavior that demeans or harms worker well-being. Business partners are required to provide adequate grievance mechanisms that allow employees to voice concerns and report grievances anonymously without fear of retaliation. All workers must be protected from dismissal, penalties and any other kind of reprisal for reporting grievances in good faith. Report immediately using one of the Ethics channels. Contact [email protected] to discuss or report concerns.

[Audio] Maintaining Trust. Maintaining Trust.

[Audio] Unauthorized Subcontracting Business Partner Scenarios h t.

[Audio] Unauthorized Subcontracting Vendors and Factories Must: Ensure all factories understand & meet Target’s standards Refer to SOVE or contact Responsible Sourcing for questions Provide information about the subcontractors you plan to use If you have questions or concerns regarding capacity, always rs. contact your sourcing partne.

[Audio] Unauthorized Subcontracting Any factory used must be disclosed, registered, understand and comply with all applicable Target requirements • • • • • Provide required information about all subcontractors prior to using Ensure factories understand and can meet Target requirements and standards Comply with product testing and unannounced compliance audits Reach out to sourcing partners when you have a question or concern about capacity Contact [email protected] subcontracting if you suspect or any know about unauthorized Contact [email protected] to discuss or report concerns.

[Audio] Scenario 1 – Unauthorized Subcontracting A factory took too many orders for multiple clients and have now exceeded their maximum capacity. In order to deliver Target’s products within shipping window, the factory products at a nearby factory, with Target. owner decided to even though they subcontract some of the never disclosed this action Is this acceptable?.

[Audio] Scenario 1 – Unauthorized Subcontracting Is it ok to move production to another factory without seeking Target approval to meet the delivery dates? It is never ok to change production locations without Target’s approval. Transparency is critical for our business, especially when it comes to production decisions. Communicate any challenges to Responsible Sourcing Partners immediately to determine next steps together. Use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 2 – Unauthorized Subcontracting ABC Vendor is new to Target business and owns a factory that is producing Target branded alcohol wipes. The products are produced and packaged at their factory. After the product is packaged, the product is sent to location B to be sterilized and shipped directly from this location to the port. The vendor assumes that location B does not need to be disclosed and does not want to ask Target RS because they are embarrassed and don't want to be a burden. Is this acceptable?.

[Audio] What are the disclosure requirements for location B? All production factories/locations that fall within the scope of Target’s Responsible Sourcing and Sustainability program must be disclosed to and approved by Target before production begins. Contact: [email protected] Refer to Partners Online to review the detailed disclosure requirements and examples. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 3 – Fair Treatment - SOVE Target received an anonymous email advising that for the past six months, factory Y has been requiring overtime to be worked on a weekly basis and workers were compensated at their regular wage rate instead of the legally required overtime wage rate. Investigators reviewed the results of factory Y’s most recent social audit and it didn’t reveal any issues related to wages and working hours. During the onsite visit, investigators uncovered that factory Y was maintaining two different sets of wage and hour records and production records; one set for social audits and the other set was the “real” version. Is this acceptable?.

[Audio] Scenario 3 – Fair Treatment - SOVE Is this situation acceptable? No. Target requires that all workers are treated fairly, paid properly safe and healthy work environment. and provided with a Business Partners must ensure that all factories keep accurate and detailed records as relates to employee wages, working hours, benefits, grievances and any other relevant it information in order to demonstrate compliance with local laws and Target's SOVE. Use one of the Ethics reporting channels to report this immediately Contact [email protected] to discuss or report concerns.

[Audio] Scenario 4 – Fair Treatment - SOVE During a spot check audit at factory B, auditors discovered job postings for supervisory roles that required potential candidates must be between the ages of 25-30 years old, and with no children. When asked about the job postings during employee interviews, several workers shared frustration that they had worked at the factory for many years and were qualified for supervisory roles. However, they were never given the opportunity because senior management considered older workers to be slow learners, while workers with children wouldn’t be able to work longer hours. Is this acceptable?.

[Audio] Is it acceptable to determine promotions based on age or child status? No, it’s never acceptable to discriminate against anyone based on their age, child status any other characteristic unrelated to a worker’s ability to perform the required work. or Target requires all factories to maintain a discrimination-free workplace, and make employment and promotion decisions based only on an individual's ability to perform the work required by the job. Characteristics such as race, color, sex, pregnancy status, gender identity, marital status, political opinions, religion, age, disability, sexual orientation, social origin or national origin should never prevent someone for a role that they are qualified for. Contact [email protected] to discuss or report concerns.

[Audio] h Product Quality t Business Partner Scenarios.

[Audio] Scenario 1 – Product Quality A third-party auditor selected a black seal sample for testing. As a factory worker you know that the sample selected will not pass testing, testing. so you switch a sample with one that would pass the Is this acceptable?.

[Audio] A third-party auditor selected a black seal sample for testing. As a factory worker you know that the sample selected will not pass testing, so you switch a sample with one that would pass the testing. Is this ok? No. It's never acceptable to misrepresent product quality as our guests depend on us to provide safe, quality products that meet all determined specifications and requirements. It is critical to meet Target’s agreed upon product standards, and never would compromise the product or your integrity. do anything that Use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 2 – Product Quality During a virtual inspection you discover that one carton from the samples selected doesn’t have the appropriate labeling. (it The third party inspector also noticed that a carton is short by one unit of required 4 units). As the video zooms into that the carton now has 4 pieces. contains 3 focus, you units instead now observe What should I do?.

[Audio] Scenario 2 – Product Quality How should this situation be managed when agreed upon information is not correct and information provided is inaccurate? Address the situation promptly by partnering with PSQA to seek resolution immediately, and use one of the ethics reporting channels to report any time you observe, hear or suspect unethical activity. All vendors & factories are expected to be upfront and transparent, and communicate accurate details for all product, packed goods and any issues. We depend on you to be truthful, and provide accurate information to maintain trust throughout every business transaction. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 3 – Product Quality 3rd Product is ready to ship following party testing, however you noticed that the product has incorrect law labels that do not meet U.S legal regulatory requirements. Is this ok?.

[Audio] Is it ok to ship the products with incorrect law already approved in testing? labels because it was No, labels must be accurate, labeled truthfully and include the appropriate attributes. Target guests put their trust in us and in return we put our trust in you to ensure all legal and agreed upon requirements are met. Third party testing labs must follow the testing protocol & update vendors promptly with any potential issues. Report this information immediately to your Sourcing partners and use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] h Audits Business Partner Scenarios t. Audits Business Partner Scenarios.

[Audio] Scenario 3 – Audits During an Audit, you believe the auditor is being “unreasonable” with the identification of defects. Tomorrow is the last date for shipment. Getting this shipment out on time is very important, but it appears that the Audit will fail and miss the shipment date. Due to the challenging environment your factory is under cost pressures, and a failed Audit would result in additional costs for re-Audit. How should we manage?.

[Audio] What is the best way to manage missing meet the ship dates? an unreasonable Audit when in jeopardy of Once the Audit is complete, escalate the issue for resolution to PSQA immediately. the situation and work with your PSQA team to find an appropriate resolution. Share Additionally, report the situation to [email protected] immediately to ensure any concerns can be properly investigated. Contact [email protected] to discuss or report concerns.

[Audio] h Inspections Business Partner Scenarios t.

[Audio] Scenario 1 – Inspections poll During a RS assessment at a factory, the assessor found a product line running that with hand embroidery and a unique print design in production. While gathering more information about the product, the assessor learned that the vendor/factory had not completed the required a.) Quickly complete information the required b.) Share this information with responsible sourcing c.) Contact [email protected] your concerns d.) All of the above R. S questionnaire details on POL and have not taken authorization of the printing unit on VMM. to report W hat should you do?.

[Audio] During a RS assessment at a factory, the assessor found a product line running with hand embroidery and a unique print design in production. a.) Quickly complete information the required While gathering more information about the p. roduct, the assessor learned that the vendor/factory has not completed the required RS questionnaire details on POL, and have not taken authorization of the printing unit on VMM. b.) Share this information with responsible sourcing c.) Contact [email protected] to report your concerns d.) All of the above.

[Audio] Scenario 2 – Inspections A third-party inspector visits your facility and wants to conduct a surprise factory visit, but there’s another inspector already in the factory performing the inspection. Is this acceptable?.

[Audio] A third-party inspector arrives to conduct a surprise factory visit, but there’s already another inspector, what should I do? Even if another inspector is on the premises, it is important to allow them to inspect as long as they have the appropriate and valid paperwork, and reasons for the inspection. The inspector may be performing an audit to “check the checker” to monitor their work to meet Target’s standards and requirements. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 3 – Inspections During an inspection, with the identification Getting this shipment you believe the inspector is being “unreasonable” of defects. Tomorrow is the last date for shipment. out on time is very important, but it appears that the inspection will fail and miss the shipment date. Due to the challenging environment your factory is under cost pressures, and a failed inspection would result in additional costs for re-inspection. How should we manage?.

[Audio] What is the best way to manage an unreasonable inspection when in jeopardy of passing testing to meet the ship dates? Once the inspection is complete, ask the inspector to seal the samples. Contact PSQA immediately to share the situation and work with your PSQA and Responsible find an appropriate resolution. Sourcing to Use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] Inspections Scenario 4 – You are visited by an inspector for your first factory assessment. The inspector advises there are a number of issues that will prevent the factory from passing, and suggests you hire his brother, guide the factory to meet Target’s standards. who is an expert, and will Is this acceptable?.

[Audio] Scenario 4 – Inspections Is it ok to hire the inspector’s family member to consult with the factory to meet Target standards? No, it is never ok for a Target team member or third party business partner to suggest hiring a family member or “friend.” Using a relationship to influence business or secure advantage over others creates a direct conflict of interest, and is strictly prohibited. Work with PSQA partners to understand expectations and meet requirements. Report this immediately using one of the Ethics reporting options. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 5 – Inspections poll An apparel vendor on Target’s matrix was recently awarded a program that has a defined and agreed upon print process. a.) No, the vendor must adhere to the agreed upon print method b.) Yes, because it will save the vendor and Target money in the end c) Yes, as long as no one knows that a different print method was used d) Maybe, if it looks exactly the same as what was agreed upon During an inspection, the auditor was surprised to find that the print method was changed from the agreed upon print. When asked, the vendor stated that the aesthetics of the product and functionality are being maintained. I s this okay?.

[Audio] An apparel vendor on Target’s matrix was recently awarded a program that has a defined and agreed upon print process. During an inspection, the auditor was surprised to find that the print method was c. hanged from the agreed upon print. When asked, the vendor stated that the aesthetics of the product and functionality are being maintained..

[Audio] Scenario 6 – Inspections A Target PSQA member discovered that a vendor claimed FTUSA artwork the product label even though the vendor is not FTUSA certified. on Investigations revealed that the vendor did not use an approved Target packaging supplier, and instead used artwork available with the printer. Is this ok?.

[Audio] Is it ok to use FTUSA labels, or artwork from another source rather than Target approved platforms or suppliers? No, it is never ok to provide misleading information on any labels or packaging. Attributes must be accurate and validated through testing. It is illegal to share false claims. Our guests depend on us to provide truthful and accurate information, and we depend on you. Label artwork must only be purchased from approved Target suppliers. Contact Responsible Sourcing Partners to determine what steps need to be taken. one of the Ethics reporting channels to report this immediately. Use Contact [email protected] to discuss or report concerns.

[Audio] Confidentiality, h t Security & Privacy Business Partner Scenarios.

[Audio] Scenario 1 - Confidentiality, Security & Privacy A factory received a cancellation notice of their Target orders. Most of these cancelled orders had already been produced and stored in the factory. Target also paid the equivalent compensation according to the actual situation of the goods. However, now the factory needs to get rid room for their production. The factory is considering through other channels. of these goods to make selling these goods Is this ok?.

[Audio] Are you able to sell Target’s products using unauthorized channels? selling No. Without Target’s written authorization, it is never ok to sell Target products through any other channels. Target retains the right to choose how to manage the product for some product designs, brands, intellectual property rights. Always discuss with your Target partners before selling any products and never sell through any unauthorized channels (such as Alibaba, JD.com). Contact [email protected] to understand requirements and request approval. If you discover or hear about products with Target labels being sold in the marketplace, use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] Scenario 2 - Confidentiality, Security & Privacy During a metal detection process, the inspector suspects a mix-up of sample pulls on the other side of the metal detector. When the inspector moves inside the packing area, he finds some production pieces lying next to the sample pull, while unauthorized people are in the vicinity of the sample pull. The inspector suspects a sample pull mix-up and escalates to PSQA. Is this ok?.

[Audio] What is the best way to facilitate material and people movement during an inspection. While an inspection is going on, moving pieces from running production in the inspection area or metal detection area must be avoided. Only authorized persons should handle sample pulls and facilitate the inspection to avoid any confusion or mistakes due to lack of awareness. Contact your PSQA partners discuss, and use one of the Ethics reporting channels to report this immediately. to Contact [email protected] to discuss or report concerns.

[Audio] Scenario 3 - Confidentiality, Security & Privacy A Target team member is visiting a flea market and notices Universal Thread woven tops being sold with labels intact. a Target brand, This observation is reported back to OBS&D partners who worked with Global Investigations partners to confirm that Target’s de-labeling process was not followed. Is this ok?.

[Audio] What is the best way to dispose of stock and leftover inventory? Aways discuss with your Target partners before selling any products and never sell through any unauthorized channels (such as Alibaba, JD.com). Contact [email protected] to understand requirements and request approval. If you discover or hear about products with Target labels being sold in the marketplace, use one of the Ethics reporting channels to report this immediately. Contact [email protected] to discuss or report concerns.

[Audio] t e g r a T Questions? o t ue r t s y a w l a s i h t email: [email protected].