Ethical Labor Practices

Our Nordstrom Product Group (NPG) social responsibility program is rooted in transparency and continuous improvement. We work to foster candid, collaborative and ongoing partnerships that help our suppliers improve their processes, policies and standards over time. By maintaining an open dialogue with our suppliers, we receive more accurate information about the working state of factories, which lets us offer more relevant training and other support for sustainable improvements.

We partner with organizations like Better Work and BSR's HERproject to receive and respond to feedback from the people who work in factories where our products are made. Better Work helps us gain insight into a factory's continuous improvement efforts. Through this partnership, we can better understand systemic challenges and local context that impact factory workers and management. HERproject is a women's empowerment initiative that strives to improve the lives of low-income supply chain workers. Since 2007, Nordstrom and HERproject have launched worker empowerment training programs in 27 factories around the world. The trainings are focused on topics like health, finances, communication and literacy.

To ensure our NPG employees are familiar with our Partnership Guidelines, they participate in an annual training. This training is also required for all NPG suppliers.

We also offer an eLearning program to factories that focuses on topics like excessive working hours, worker engagement, supply chain management, and wages and benefits. Factory management and staff take the trainings as part of their improvement plans.

As a first step toward sustainable change for systemic issues, and to mitigate human rights risks in our supply chain, we conduct semi-announced audits of the factories that make NPG products to ensure compliance with our Partnership Guidelines. These audits include an in-person, full factory inspection, including dormitories if offered, and worker interviews. Audits always take place before we begin production with a factory and on a regular, ongoing basis. The timing between ongoing audits ranges from six months to three years, based on when a factory was most recently audited, the level of support the factory requires to meet compliance challenges and the risk level due to its location. In high-risk countries, a Nordstrom Customs Trade Partnership Against Terrorism (CTPAT) is conducted.

When issues are found during an audit, our team works with factories to develop and implement a remediation plan, along with a timeline for change. Most issues found in audits are minor health and safety issues, which can be remedied quickly. For example, if the auditor finds that boxes are blocking an aisle, this issue can be resolved within 24 hours. If we learn that wage records do not separate standard hours from overtime hours or other benefits, we create a remediation and continuous improvement plan to ensure all hours worked are recorded, with types of pay and benefits itemized accurately.

There are times when an audit may reveal more critical issues that we categorize as zero tolerance. In those instances, Nordstrom will immediately stop production with the factory until the situation is resolved. If a factory is unwilling or unable to address a zero-tolerance issue, we will stop working with them altogether. Whenever we make the difficult decision to leave a factory, our team continues to work with and provide resources to that factory for an additional six months to help its leaders address the issues that triggered our exit.

After an audit is completed, the factory receives an overall rating based on the number and severity of issues found. The NPG team works with the factory to improve all issues by requesting records and photo verification of improvements until the corrective action plan is complete.

NPG typically makes up a small portion of a factory's overall business. To make audits more efficient for our suppliers, and to help ensure any necessary improvements are made, we look for opportunities to collaborate with other manufacturers and retailers doing business in the same factories as Nordstrom. This also helps lower costs for our suppliers by reducing the number of audits conducted at their factories.

We work with our branded vendor partners to ensure they're producing their items in responsible and sustainable ways. We require that each of our vendors adheres to our Partnership Guidelines, which outline the requirements we have for them around employment, workers' rights, environmental standards and work environments.

Because NPG is small compared to other manufacturers, we find value in partnering with other manufacturers within factories and through industrywide initiatives.

• Some of our partnerships and programs include:
  American Apparel & Footwear Association (AAFA) – Nordstrom is a member of the AAFA, which enables a collaborative forum to promote best practices and innovation between apparel and footwear brands, suppliers and customers.
• ILO Better Work – We are a member of ILO Better Work, a collaborative program focused on improving worker-management cooperation, working conditions and dialogue among the factory, Better Work and buyers.
• BSR (Business for Social Responsibility) – We've collaborated with BSR since 1998 to improve conditions in factories, create sustainable environmental practices and develop long-term solutions that exceed basic compliance monitoring, including through HERproject.
• Sustainable Apparel Coalition (SAC) – Nordstrom is a founding member of SAC, which works to reduce the social and environmental impacts of apparel and footwear products. In addition to other tools and resources, SAC created the Higg Index, a tool to measure the social and environmental performance of factories over time.
• Nirapon – In 2019, we joined Nirapon to continue developing worker support and building safety initiatives that began through the Alliance for Bangladesh Worker Safety.

In November 2018, Nordstrom signed the  Commitment to Responsible Recruitment, an industry effort to address potential forced labor risks for migrant workers in the global supply chain.

Nordstrom's private-label division is committed to working with global supply chain partners to create conditions that ensure:

• No workers pay for their job. This includes costs associated with recruitment, migration and employment.
• Workers retain control of their travel documents and have full freedom of movement. Workers have the right to maintain custody of their personal identity documents whenever they are not needed to meet legal requirements.
• All workers are informed of the basic terms of their employment prior to leaving home. Workers will be provided with documentation or training to help them understand the workplace environment, the job role they are committing to and the terms and conditions of work before accepting the position.

Nordstrom works continuously with any suppliers that employ foreign migrant workers to understand how to best manage the challenges and to ensure that all communication and paperwork is understood prior to any worker leaving their country to start their job.

Please refer to our Partnership Guidelines and our Factory Guide for all our requirements when working with Nordstrom Product Group and all Nordstrom Made products.

We work across our business and with external experts and partners to identify and prioritize risks and opportunities related to our social responsibility and environmental sustainability impacts in our operations and in our supply chain, including with our suppliers and their employees.

We conduct materiality assessments and other risk assessments regularly, with input from human rights and sustainability experts, customers, employees and other stakeholders. We assess new risks and opportunities as circumstances arise and as we continue to learn more about the global impact of our business and our industry.

Through our Human Rights Commitment and our Nordstrom Partnership Guidelines, we're taking steps to manage risks, including forced labor, harassment and abuse, discrimination, wages and benefits, hours and overtime, child labor and young workers, health and safety, fire and building safety, freedom of association, grievance mechanisms, subcontracting and more.

We communicate risks, feedback and progress using channels that are relevant for a given stakeholder group. We regularly share information in ongoing meetings with our executive leaders and Board of Directors, including program updates, reporting and external feedback. We share information with customers through public reporting and on our website. We communicate with suppliers and other business partners directly, including through email, by phone and through in-person and online meetings. This includes communicating throughout our remediation process, through which we provide resources to suppliers to support sustainable changes related to any social or environmental issues identified through our auditing process.

Our employees, customers, suppliers, agents and communities have access to our anonymous ethics hotline, which is accessible in more than 80 languages. In 2019, we received 243 submissions and closed 163 of them. The remainder are active/ongoing.