our approach

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1 OUR APPROACH TO CORPORATE RESPONSIBILITY TO JANUARY 2019 The document has been prepared as an additional report providing further information about our approach to Corporate Responsibility. It should be read in conjunction with our main Corporate Responsibility Report to January 2019, available at nextplc.co.uk

2 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Modern Slavery Environment Our Suppliers & Products Our People HUMAN RIGHTS AND MODERN SLAVERY 1. Our salient human rights issues explained Why it is important to NEXT Our key activities Salient Issue identified • member, we have helped develop etailer Consortium (BRC) As a British R Forced Labour & Modern Slavery Instances of forced labour or modern slavery in our supply chain can and signed up to the following new collaborations in 2018: take place in all countries, including the UK. With bonded labour comes a negative impact on all other labour rights and risks are higher if migrant − Ne w Retailer Protocol for Handling Reported Cases of Modern workers are employed. Slavery − Appar el and General Merchandise Public/Private Protocol to tackle labour exploitation in the UK supply chain • veloped our own: De − Bespok e online training for relevant NEXT employees − Ne w guidance booklet issued to over 150 third party brands • Engage with A CT (Action, Collaboration, Transformation) Fair Living Wages All workers in our supply chain should be entitled to fair wages. Retention of wages and the non payment of social security can both 18 ACT members have focused on Cambodia by engaging with • During 20 negatively impact fair wages to workers. stakeholders such as industry bodies and the Cambodian government in important areas, for example, living wage and collective bargaining orker interviews as part of our COP audit process Carry out w • Women represent the majority of workers in our supplier chain. In many Discrimination countries the risk of discrimination against women is greater in relation to • ttended Ethical Trading Initiative (ETI) Gender Learning Event series A equal opportunities, age or marital status. This can lead to harassment of which focused on practical solutions and making progress towards workers, and also impact upon a range of other human rights. It can be gender equality in supply chains difficult to identify in Code of Practice (COP) audits as it is less tangible than some of our other salient human rights issues. consultation workshops for the development of articipate in ETI P • In a number of countries we source from, including Cambodia, China, Freedom of Association (FoA) resources to approach FoA issues India and Turkey, the freedom to join an independent trade union is restricted either by law or not recognised by management attitudes Fr • om these workshops we have developed an approach for managing and practices. This restricts the ability for workers to have a voice within FoA issues if they arise in our supply chain their place of work and to contribute to the improvement of working conditions and practices. aining undertaken by COP team members • Chemical management tr Health & Safety Health and safety is a concern in all of our sourcing countries and across our own business operations. Fire and industrial accidents continue • Health & Saf ety risk awareness training delivered for new members of to be a risk within our extended supply chain, impacted by the quality COP team and management of appropriate building design and structure, fire prevention, machinery, chemicals and abrasives. PAGE 1

3 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Our Suppliers & Products Modern Slavery Environment Our People HUMAN RIGHTS AND MODERN SLAVERY CONTINUED 1. Our salient human rights issues explained continued Why it is important to NEXT Our key activities Salient Issue identified • Reviewing our child labour policy and guidance for suppliers Child Labour It is estimated that approximately 218 million children are currently working in the world, with more than 152 million in child labour and half • Identified 8 cases of child labour during the year, (11 children in total) 1 engaged in hazardous work . Each year our COP auditing team uncovers • Continue to implement our incident response procedures whereby we a small number of instances of persons too young to work within 2 3 engage a relevant NGO , such as LESN to consult with and support the factories making our products. child and their family. They will continue to monitor the situation until the child reaches legal working age to ensure they remain in education • During our COP audit we verify that clean drinking water is available Access to Clean Water We source products from parts of the world which encounter frequent for workers periods of water scarcity. Where this occurs, there is an increased risk that communities may not have access to clean, safe water which can • During 2018 NEXT joined ZDHC (Zero Discharge of Hazardous Chemicals) be linked to poor health. Our extended supply chain includes operations providing opportunities to work with our wet processers to prevent such as laundries, mills, dye houses, and tanneries; these facilities wastewater contamination. The first step towards the prevention of carry a particularly high risk of water contamination where untreated wastewater contamination is for facilities to avoid the use of restricted effluent can be discharged into rivers used by local communities. chemical substances by using chemical formulations that conform to the People negatively impacted can include both supply chain workers as 4 ZDHC MRSL . Facilities should then ensure wastewater is treated prior well as communities located close to sites manufacturing NEXT products. to discharge in a way that either removes the chemical physically or by chemical reaction or biological degradation • We are committed to ensuring we protect our customers and employees’ Our operations are highly reliant on our IT systems and there is a Privacy & Data Security privacy and dedicate significant resource to the development, growing risk of cyber crime and therefore the need for us to protect our maintenance and security of our systems customers, employees and business data from the risk of data loss, and in particular personal data. The General Data Protection Regulations • Systems vulnerability and penetration testing is carried out regularly to (GDPR) came into effect from May 2018, and further increased awareness ensure data is protected from corruption or unauthorised access or use and responsibilities for ensuring personal data is secure. • We have extensive employee training and awareness programmes in place with regards to GDPR and information security 1. United Nations data www.un.org – June 2018 2. Non Governmental Organisation 3. LESN – see page 6 for more information 4. Manufacturing Restricted Substance List PAGE 2

4 OUR APPROACH TO CORPORATE RESPONSIBILITY Our Customers Human Rights TO JANUARY 2019 Modern Slavery Environment Our People Our Suppliers & Products HUMAN RIGHTS AND MODERN SLAVERY CONTINUED 2. UN Guiding Principles Reporting Framework Index Our CR Report and Our Approach Report aim to align with the UN Guiding Principles Reporting Framework. The Reporting Index is designed to identify how and where the framework disclosures are addressed. The table below shows where you can find the relevant information as we have referenced the page numbers and policies to demonstrate our alignment. For full details on the framework, please visit www.ungpreporting.org Section of the framework Page location in our CR Report Page location in our CR Report Section of the framework PART C: MANAGEMENT OF SALIENT HUMAN RIGHTS ISSUES PART A: GOVERNANCE OF RESPECT FOR HUMAN RIGHTS 9–11, 12–15, Our Approach 3, 4, A1 POLICY COMMITMENT 9–11 C2 STAKEHOLDER ENGAGEMENT 5, 6, 7 A1.1 9–11 C2.1 9–11 A1.2 9–11, 12–15, Our Approach 1 15, Our Approach 6 C2.2 9 A1.3 12, 15, Our Approach 1 C2.3 2, 3, 7, 9–11, Our Approach 1 A2 EMBEDDING RESPECT FOR HUMAN RIGHTS C3 ASSESSING IMPACTS 9–11 A2.1 9–11 C3.1 None Identified 8, 9–11 A2.2 15, Our Approach 1 C3.2 12 A2.3 12 C4 INTEGRATING FINDINGS AND TAKING ACTION 2, 12 A2.4 C4.1 12, 15 9–11 A2.5 C4.2 2, 8, 12 PART B: DEFENDING THE FOCUS OF REPORTING C4.3 12–15, Our Approach 1, 3 B1 STATEMENT OF SALIENT ISSUES 9 12–15, Our Approach 3 C5 TRACKING PERFORMANCE B2 DETERMINATION OF SALIENT ISSUES 9–11, Our Approach 1 15, Our Approach C5.1 Not Applicable B3 CHOICE OF FOCAL GEOGRAPHIES 12–15, Our Approach 3 C6 REMEDIATION B4 ADDITIONAL SEVERE IMPACTS 6, 16–19, Our Approach 4, 5, 6, 7 C6.1 Our Approach 3, Whistleblowing Policy PART C: MANAGEMENT OF SALIENT HUMAN RIGHTS ISSUES odern C1 SPECIFIC POLICIES 9–11, Our Approach 3 M C6.2 12–15, Our Approach 3 Slavery Transparency Statement C6.3 12–15, Our Approach 3 12–15 C1.1 C6.4 12–15, Our Approach 1 C6.5 Our Approach 1 PAGE 3

5 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Our Suppliers & Products Environment Modern Slavery Our People OUR SUPPLIERS 3. Our Auditing Approach Our aim is to ensure new suppliers understand our requirements before they commence working with NEXT and existing suppliers take responsibility for maintaining compliance within all their production locations. The COP audit provides a picture of how well a supplier and its factory are complying with our requirements. The audit day typically involves the following: • Opening meeting with key participants in the audit day e.g. management, worker representatives, business owner • Site tour • Documentation review • Worker interviews – we speak to workers confidentially, both individually and in groups, and include a cross-section of ages, job roles, gender and length of service. Our team speak the workers’ language wherever possible and we also engage translators. We know this is critical to building a relationship of trust between the auditor and the workers • Closing meeting – the auditor provides verbal feedback on any action points that have been identified and agrees the Corrective Action Plan (CAP) A CAP report summarising all findings, agreed actions and remediation timescales is provided to the factory for them to implement. The NEXT team then works with the supplier and factory to implement these. This helps build the relationship between NEXT and its supplier, and helps convey to the supplier that NEXT is here to support progress over the longer-term. 4. Partnering for Change During 2018, we continued our collaborative work to improve the human rights of workers in our supply chain. The risks to vulnerable groups such as displaced people, migrant workers or refugees seeking refuge from conflict and looking for work is still increasing. We have continued to work within this area by providing support, and where possible, offering remediation. By maintaining good direct relationships and collaborating with shared information and resources with other retailers, brands, trade unions and NGOs we can work together in partnership to deliver real benefits to workers. Some examples of our collaborative work are: Organisations Background and Benefits Activities in 2018 NEXT has worked with 134 factories and at the end of the year 96% of the Accord The Accord performs independent factory inspections in Bangladesh focusing remediation actions had been satisfactorily completed with the support of our on three key areas; fire risk, electrical installations and structural condition in-country COP team of buildings ACT aims to develop mechanisms which link purchasing practices and support ACT is the first initiative on living wages in the garment sector that provides ACT suppliers to provide their workers with a living wage and working conditions that both a means of negotiating better working conditions as well as productivity meet the retailers and brands requirements. improvements. ACT is currently underway in Cambodia. ACT members have agreed the following principles: ACT members commit to supporting productivity improvements and reviewing their own internal buying practices and their potential impact on workers. • Agreement that a living wage should be reached through collective bargaining between employers, workers and their representatives at a national industry level • Workers must be free to exercise their right to organise and bargain collectively in accordance with International Labour Organisation (ILO) Conventions • All participants to assume their respective responsibilities in achieving freedom of association; collective bargaining and living wages PAGE 4

6 OUR APPROACH TO CORPORATE RESPONSIBILITY Our Customers Human Rights TO JANUARY 2019 Modern Slavery Our Suppliers & Products Our People Environment OUR SUPPLIERS CONTINUED Organisations Background and Benefits Activities in 2018 We continue to work with the NGO AIDER in India to support and protect The crèche is run by AIDER, and currently supports around 60 children of AIDER vulnerable homeworkers with a programme which aims to improve homeworkers in the region of Badarpur, India. In addition, up to 85 students can transparency in this part of our supply chain via: attend the computer centre at the crèche, where they can study for a certificate in basic computer and typing skills and a further 40–50 students can now attend • The introduction of simple passbooks and dockets allows homeworkers a new tuition centre focusing on academic skills. to track the work they have done and have greater visibility of the wages they receive • An ID card allows workers to qualify as an artisan and allows potential employers to recognise their skills and abilities • Community support through funding of a crèche to support homeworkers and their families. The facility also provides access to computer training and regular consultations/clinics with healthcare professionals British Retail Consortium Brands’ ethical experts work collaboratively on the welfare and treatment of Our participation in the BRC Ethical Labour Working Group has supported the (BRC) workers in the retail supply chain to develop and agree ways of working. development of two key protocols this year: 1. The Retailer Protocol for Handling Reported Cases of Modern Slavery, which establishes principles of good practice for retailers responding to reported cases of forced labour, human trafficking and other forms of modern slavery in the UK supply chain. 2. The General Merchandise Public/Private Protocol which aims to tackle labour exploitation in the UK supply chain. It recognises the intent of the Labour Market Enforcement Bodies (LMEB) and Apparel and General Merchandise (AGM) brands to work together and share information with the overarching aim to protect vulnerable and exploited workers. ETI During the year we have worked with and contributed to the ETI on: The ETI is an alliance of companies, NGOs and trade unions, working collaboratively to ensure working conditions and rights of workers producing for • Innovation Fund project in relation to the leather footwear industry in India. the UK market meet or exceed international labour standards. NEXT continues • Freedom of Association resources to be a committed member of the ETI which we joined in 2002. The ETI is one • Modern Slavery Working Group of the principle ethical communities NEXT regularly engages with multiple stakeholders through meetings and working groups focusing on specific issues. • India Platform – a tripartite group to facilitate discussions and action around some of the supply chain issues in India 15 UK manufacturing sites used by NEXT have received a independent FF audit Fast Forward (FF) The FF Programme is an industry initiative focusing on human rights risks in the during the year. supply chain, with retailers working collaboratively together to tackle labour exploitation, with the aim to improve and build a sustainable UK manufacturing Building sustainability in UK supply base. FF aims to measure and improve labour standards, increase supplier transparency and protect vulnerable workers in the UK. PAGE 5

7 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Our People & Products Our Suppliers Environment Modern Slavery OUR SUPPLIERS CONTINUED Activities in 2018 Organisations Background and Benefits During the year NEXT supported progress with the trade unions and their NEXT joined the BFC Transportation Working Group programme in 2017. Better Factories responsibilities to workers to ensure a competitive, safe and integrated industry. Cambodia (BFC) Through the programme, since 2017, BFC has assessed over 555 factories Continued collaboration between BFC and the government to ensure strong and supported 163 factories with specific training and an advisory service. enforcement against factories continually showing low compliance rates (such For factories which manufacture for NEXT, once the initial assessment has been as putting on hold or suspending export licences). carried out, the NEXT COP team undertake any follow up audits to ensure corrective actions are completed. KA DAV NEXT work with KADAV, based in Istanbul, Turkey, supporting their KADAV is a women’s solidarity NGO in Turkey which supports community work training centre which assists people with vocational training and social aid. in areas such as gender-based violence, migrant women and female labour Syrian women can access day care for pre-school children, learn the basics rights. Syrian refugees continue to migrate to Turkey, one of our key sourcing of the Turkish language and attend training workshops on skills to enable markets. Many have travelled to garment production hubs such as Istanbul self-employment and gain access to social workers, textile machines, trainers where they seek employment in order to support their families. and translators. KADAV have provided specific training sessions on both child marriage and child labour issues to raise awareness and knowledge. This year they also produced and distributed posters on child labour risks. LESN Where underage workers are identified, as part of the remediation process, NEXT continues to partner with the Chinese NGO LESN, who provide training LESN work with the supplier to ensure that there is sufficient support for the and support where cases of underage workers are identified. Their focus is on child and their family, that there is a return to education for the child, and supporting identified underage workers, as well as aiming to prevent occurrence ongoing monitoring is in place to ensure that the child stays in education. through raising awareness and training. Shift Our work has ranged from an understanding of the value of human rights Shift (a not for profit organisation) based in Boston, USA, provide support and through the adoption of the UNGPs, to using the measure of salient risk as the expertise to help us understand how human rights and modern slavery can core ethical approach with our supply chains. impact our business and how we can work to further develop our approach and embed the UN Guiding Principles into our organisation. Shift has provided guidance on specific areas of development throughout our business. NEXT values the Business Learning Programme sessions working with Shift and other global brands, providing valuable understanding of emerging human rights risks and possible solutions in a global context. United Work To date, United Work have assisted over 50 individuals to find employment in United Work are an independent organisation based in Turkey who support Turkish factories where NEXT product is made. Syrian refugees registered with the Turkish Ministry of Internal Affairs to find long term employment. During 2018 NEXT became an official partner of Unseen. Unseen Unseen is a UK based charity providing the UK-wide Modern Slavery Helpline. Through sponsoring the hotline we gain insight of potential modern slavery risks and how forced labour situations are being reported. This collaborative approach is important to help us mitigate risks and manage emerging threats. During 2018 Unseen has taken 7,400 calls indicating 7,100 potential victims. PAGE 6

8 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Our Suppliers Modern Slavery Environment & Products Our People OUR CUSTOMERS AND PRODUCTS working groups responsible for developing standards to Timber 5. Product Safety and Legislation Compliance ensure the safety of children’s clothing. Our Childrenswear Working closely with our buyers, designers and suppliers, our NEXT is committed to the responsible sourcing of timber division focuses on safety throughout all stages of team of specialist technologists is responsible for ensuring: products. We aim to reduce our impact and to increase social development and production; starting at the design stage and environmental benefits by only using responsibly sourced • All products sold by NEXT are safe and comply with with a risk assessment to ensure all products achieve the timber and paper relevant legislation standards we require. As part of our 2025 Responsible Sourcing Strategy, and in • Our suppliers meet the required safety and performance Our safety standards are based as a minimum, on the highest we are committed to Timber Sourcing Policy line with our standards detailed in our product specific technical manuals legal European standards. If we are not satisfied with a working with our suppliers to deliver 100% of our products • We work with and use the expertise of independent safety product’s safety, or if a product fails to comply with legal from Responsible or Certified Responsible sources by 2025 specialists to ensure the products we sell achieve the requirements, NEXT has an established procedure in place to required standards Manmade Cellulosic Fibres and Wood Pulp recall a product as the safety of our customers is our priority. Through the Product Safety Forum, chaired by our Business Roadmap Towards • In July 2018, Next committed to the Suppliers to NEXT have direct access via our online Risk Manager, any product recalls are reviewed to ensure the as set Responsible Viscose and Modal Fibre Manufacturing supplier portal to our full range of technical manuals and corrective actions undertaken are robust. out by the . This Roadmap Changing Markets Foundation quality, safety, ethical and responsible sourcing standards aims to minimise the effects of harmful chemicals 1 and requirements. Our in-house UKAS1/SATRA accredited product testing in the manufacturing process by viscose and modal laboratory, based at Head Office, is used to undertake In order to have visibility and monitor the development of manufacturers’ adopting closed-loop production systems testing for our Product teams to support their assessment both new legislation and changes to existing legislation at a by 2023–25. These systems aim to recycle chemicals used decisions and product reviews to ensure products perform to United Kingdom, European and global level, we work closely during production and prevent negative impacts on human our requirements. with trade associations, British Standards and government health and the environment. Through this commitment departments. We also contribute to and support legislation 1. United Kingdom Accreditation Service NEXT will work with its supply chain to improve their development by giving our views and ideas. We are members viscose and modal manufacturing processes to support 6. Responsible Sourcing and Raw Materials Policies of various industry committees and groups, such as the the fibre manufacturers in meeting the requirements of British Standards Institute Technical Committees and the Cotton Sourcing the Roadmap as they work towards a closed-loop system British Retail Consortium. Through these we are able to which ensures emissions controls and chemical recovery • NEXT does not support the use of cotton from Uzbekistan participate with other stakeholders in policy debates, to rates are in line with the EU Best Available Technique or Turkmenistan in our textile products contribute to their development and ensure NEXT product (BAT) standards • It is our expectation that our suppliers will not knowingly is compliant with relevant legislation. • We have mapped our supply chain to trace our largest source cotton from Uzbekistan and they make efforts to Our product safety standards have been developed to viscose and modal fibre manufacturers with over half of our communicate our concern for this issue down the supply comply with relevant consumer legislation and compliance fibres coming from Lenzing, the Aditya Birla Group and the chain. We will continue this ban until we have seen evidence requirements. Technologists in our Product teams work Tangshan Sanyou Group that progress has been made to end the use of child labour closely with our suppliers to provide expert guidance so in the Uzbek cotton industry. Turkmenistan has been CanopyStyle through their Canopy • NEXT is working with the right materials are chosen to manufacture high quality, identified with having issues relating to decent work that Initiative to ensure these wood-based fabrics are durable products in factories with robust product safety are similar issues to Uzbekistan. We understand that cotton responsibly sourced. We are committed to ensure by end processes. Our technologists from UK Head Office and is an internationally traded commodity and that raw cotton 2020 cellulosic fibres used in our products do not come our global sourcing offices visit our suppliers to monitor sources are not always easily identifiable from ancient and endangered forests, endangered species production. Products are inspected upon receipt into our or illegal sources and respects the rights and wishes of • Our new 2025 target is to source 100% of our cotton UK warehouse to ensure they meets our specifications. indigenous communities through our Protecting Forests from responsible sources which we define as Better The safety of children is an issue that is of very high through Fabric Choices Policy Cotton Initiative, recycled, Certified Organic or Fairtrade importance for many retailers and suppliers. Through BSI Certified cotton (British Standards Institute) and CEN (European Committee for Standardisation), NEXT is an active participant in the PAGE 7

9 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Environment Our People & Products Our Suppliers Modern Slavery CONTINUED OUR CUSTOMERS AND PRODUCTS 1 The main principles of our Chemical Management Standards Animal Welfare timber fibres • We will also work to prioritise sourcing FSC ® and training are: and support innovative sustainable materials. These provide • NEXT is committed to sourcing its products responsibly alternatives to traditional forest products, such as recycled − using cleaner chemicals leading to Clean Chemistry: and to continually work towards improving animal welfare materials, and alternative feedstock such as agricultural cleaner production, effluent and emissions in relation to the animal derived components used in our residues. These result in the protection of the remaining products. Our Animal Welfare Policy states that NEXT will − encourage chemical manufacturers Transparency: ancient and endangered forests and the people and animals not use: to provide full disclosure of chemicals being used on within them NEXT products − Animal products from animals bred and slaughtered Chemical Management specifically for the purpose of producing non- encourage manufacturers to maintain a − Traceability: food products Restricted Substance • We have developed our chemical inventory of all chemicals used Standards (RSS) requirements from EU legal standards, − Animal products from endangered or threatened species, Trust: with these principles of clean chemistry in place − recommendations by industry experts, pressure group 3 4 as defined by CITES or IUCN red list trust is built with suppliers within our supply chain focus and customer feedback. Our RSS requirements have − Animal products from animals caught from the • As part of our ongoing due diligence programme, we select been updated to be in line with changes that have come wild, including wild animals culled for population or products each month for testing in accordance with the into force from new legislation during the year other control requirements of our RSS, and test the products via two • Our RSS continually developed in anticipation of independent laboratories. Our suppliers are advised of the − Real fur; NEXT is a Fur Free Alliance listed retailer emerging legislation and other information concerning results, and if the products fail our requirements, they are − Feather or down obtained from live plucking or new potentially hazardous chemicals, not yet captured withdrawn from sale and may be recalled from customers force feeding by legislation 2 • In line with REACh REACh Update: , we registered all − Hair from angora rabbits or mohair goats • We keep ourselves updated with the latest information relevant chemicals NEXT imports into the EU in finished about hazardous chemicals and continually review − Merino wool from sheep that are mulesed products where we import over 1 tonne per year per information from pressure groups, authorities and − Feather or down from ostrich, marabou storks chemical, before the REACh deadline of 31st May 2018 scientific reports or peacocks • Our suppliers are kept up to date with these developments, 7. Recycling unwanted products so changes in legislation can be implemented quickly Mattress recycling for customers • Our Chemical Management Standards programme is aimed at suppliers further back in our supply chain e.g. fabric mills • Mattresses are a difficult waste stream to manage with and suppliers carrying out wet processing such as dyeing, most old mattresses going to landfill. We offer a solution printing, finishing, laundering of textiles and tanning and where customers can request we remove and recycle their dyeing of leather old mattress when their new mattress is being delivered • The issue of pollution from global manufacturing sites • During the year, working with our specialist provider The is one NEXT takes seriously, and during 2018, NEXT has Furniture Recycling Group (TFRG) we have been able to continued to train our suppliers by providing specially recycle over 3,600 mattresses diverting over 128 tonnes designed online Chemical Management training modules from landfill developed to help educate suppliers on good practices to • Since August 2014, working with TFRG we have helped reduce and eliminate, wherever possible, the discharge of 1. Forest Stewardship Council our customers to divert a total of 18,400 mattresses from hazardous chemicals from their production processes into 2. landfill which, if laid end to end, would stretch for over Registration, Evaluation, Authorisation and Restriction of Chemicals the environment. The training will continue into 2019 as it is 28 miles 3. Convention on International Trade in Endangered Species of Wild Fauna and Flora offered to more of our supply chain 4. International Union for Conservation of Nature and Natural Resources PAGE 8

10 OUR APPROACH TO CORPORATE RESPONSIBILITY Our Customers Human Rights TO JANUARY 2019 Environment Our People & Products Our Suppliers Modern Slavery OUR PEOPLE Management System which is split into zones and allows for 8. How we support our employees 11. Mental Wellbeing Charter greater control of the use of resources to ensure efficiency. Our employees are key to achieving the business objectives At NEXT we want to have a culture that promotes and enables us all to achieve positive mental wellbeing. When we and working at NEXT means working in an inspiring, fast 10. Health and Safety talk about mental wellbeing we mean: paced, exciting and developing environment. NEXT has Our 2018–2020 safety objectives set out our planned risk established policies for recruitment, diversity and equal improvements, which along with the day to day health and opportunities, training and development. Our priority is to “where you are able to achieve your potential, cope with safety objectives help us achieve our goal of becoming provide a working environment in which our employees can normal day to day pressures, thrive and be productive in a healthier and safer place for everyone – employees, develop to achieve their full potential, both professionally and all aspects of your life.” customers, contractors and visitors. Our priorities are to: personally. We aim to invest time and resource to support, engage and motivate our employees so they feel valued, are • Increase focus and training for site managers World Health Organisation definition for mental wellbeing able to develop rewarding careers and want to stay with us. • Avoid unnecessary safety rules and controls by ensuring We recruit and promote from within wherever possible. NEXT is an inspiring, exciting and rewarding place to work we get the safety requirements for the business right at and we want everyone to feel able to be creative, productive the start We are committed to achieving excellence in the areas of and engaged. health and safety, welfare and the protection of employees • Communications to be clear so safety rules and procedures within their working environment. As our business continues are easy to understand by all NEXT aims to: to develop, by retaining and inspiring effective and • Accident reporting to be designed to understand the • Encourage an environment where mental wellbeing is committed employees we can continue to deliver excellent real cause of the accident and identify how to prevent discussed openly and in a way that is non-judgemental, quality products and provide a great customer experience. re-occurrence eliminating stigma, fear and discrimination 9. Head Office Child Care Nursery • Safety training to be regularly reviewed and improved • Give easy access to information or services which are where required Our architect designed and purpose built, state of the needed to make helpful decisions about mental wellbeing art Head Office Child Care Nursery called “NEXT Steps” • Review how we monitor safety management including • Help everyone to recognise that for some people continues to go from strength to strength. This is part of our prevention techniques maintaining positive mental wellbeing can be a challenge on-going commitment to supporting our employees with • Improve effectiveness of floor walks to identify and rectify • Put mental wellbeing on a par with physical health their pre-school childcare arrangements. any issues found in a timely manner • Ensure that support is provided with respect, dignity The nursery was registered by Ofsted in October 2013, and • Continue to support our health and wellbeing programmes and honesty during November 2017 received an unannounced Ofsted visit and increase our focus on how we help and manage those • Treat people fairly and with care and compassion and achieved an “Outstanding” rating. suffering from mental ill-health • Listen to people, taking into account how they feel; It currently has over 240 children registered to attend. • Focus on the controls in place for our higher risk activities respecting that they may want to maintain confidentiality if As required, the nursery is run in accordance with all Ofsted and hazards they are struggling Early Years Foundation Stage and safeguarding requirements, • Encourage and enable everyone to take responsibility by and accidents are recorded and reported through standard making their own wellbeing choices NEXT procedures. • Regularly monitor performance, assess progress and Sustainability is a key feature of the nursery’s design. take action to improve the opportunities for positive Features such as photovoltaic cells on the roof, rainwater mental wellbeing harvesting, underfloor heating, extensive natural ventilation and point of use water heating have all provided a highly efficient building. A self-contained water treatment plant recycles waste water and feeds it back into the main water network. The nursery is fitted with an intelligent Building PAGE 9

11 OUR APPROACH TO CORPORATE RESPONSIBILITY Our Customers Human Rights TO JANUARY 2019 Environment Our People & Products Our Suppliers Modern Slavery OUR PEOPLE CONTINUED Retail Local schools and colleges Health, Welfare and Wellbeing • We continue to evolve our range of training and • Working with schools located near our warehouses, During the year, NEXT spent over £1 million on health, welfare development for everyone from team members through to we have held recruitment workshops, careers fairs and and wellbeing including: store and Area Managers competitions to highlight careers opportunities. This also • Menopause awareness and support included invites to visit our warehouses to understand more • In 2018 we have developed a new Area Manager • Workshops to support employees affected directly or about the roles we offer programme that supports our senior managers to be indirectly by suicide their best. This initiative provides modules tailored for Collaborating with The Princes Trust, we trialled a ‘Get • • Employee Assistance Programme – confidential and freely each individual, covering both business and personal skills Hired Day’ at one of our warehouses. This initiative is being available service and competencies explored for further NEXT sites as a future talent and recruitment pipeline • Additional pre-emptive training for our Mental Health First Aiders Employment programme with the Prison Service • Supporting our EU Nationals through the EU Settlement • One of our warehouse sites has introduced an employment Scheme, by giving guidance to questions and providing programme in association with a local prison. The aim of workshop with trained staff on hand to help them make this new programme is to support a small number of low their applications using devices provided by the business risk prisoners to gain employment experience whilst still completing their sentence. This initiative aims to support 12. Training and Development rehabilitation at the end of the prison sentence and provide Some examples of our training and development across the meaningful employment business are: Head Office Project SEARCH • NEXT continues to offer graduates positions on our trainee • Working with Doncaster Council to give young adults schemes in Buying, Merchandising and Design. Our award- with learning difficulties a year long work experience winning ‘next walk this way’ campaign targets the student programme within our warehouses. Now in its 3rd year, population at 20 careers fairs across the UK and through a we are currently helping 22 students across three of our standalone Instagram page warehouse sites. We aim to build skills and experience • NEXT have hosted on-campus mock assessment centres at in NEXT whilst students continue to study their school 8 universities across the UK in 2018 with this number ready curriculum. The programme is aimed at 16–24 year olds with to increase in 2019 severe learning difficulties who otherwise might never get • NEXT continue to sponsor and support the Fashion Retail an opportunity for full-time paid employment Academy with 4 successful work placements being offered Life Long Learning positions on our Trainee Buyer scheme • Our link with the Union of Shop, Distribution and Allied • Within our IT Teams we work with 10 universities to offer Workers (USDAW) Lifelong Learning continues to grow graduate position opportunities and develop with a range of courses being offered • During the year we launched a new leadership programme including Maths, English and IT. Over 345 of our team have for top talent in our middle and senior management called participated in courses during the year, and for key courses ‘Inspiring Leaders’ at Head Office NEXT has committed to matching the learners’ time invested to support their learning ambition PAGE 10

12 OUR APPROACH TO CORPORATE RESPONSIBILITY Our Customers Human Rights TO JANUARY 2019 & Products Our Suppliers Our People Environment Modern Slavery ENVIRONMENT is a priority for the business, both for our Driving safely 13. Measuring our Climate Impacts 14. Distribution Efficiency drivers as well as other road users. In addition to the • With over 50% of our UK Online customers choosing to We aim to make our operations more efficient and work to training and assessments undertaken by our drivers we use reduce our impact through, for example, reducing energy have their order delivered to a retail store to collect, we are equipment to support them whilst driving, such as: consumption and waste. able to maximise efficiencies achieved by our fleet • In-cab cameras linked to the vehicle’s telematics provide • Double-deck trailers are used for direct deliveries to our Our global direct carbon footprint includes emissions from: an alert back at the depot should an incident occur during distribution centres around the UK, as well as our stores • – stores and warehouses in the UK and Eire Properties the journey both in the UK and Eire to maximise efficiency as we can our UK Head Office, our global offices, customer contact move up to 50% more products and increase fuel efficiency • An early warning system for lane departure that can centres, NEXT Steps nursery and owned manufacturing also warn the driver about hazards around their vehicle, • Around 85% of Online customers prefer to return their facility in Sri Lanka read road signs and even apply the vehicle brakes unwanted orders back to a store as it is more convenient for Distribution – our distribution of products to Retail stores • where necessary them. We aim to maximise efficiency of returning vehicles or customers’ homes in the UK and Eire in NEXT owned from stores to warehouses by carrying returned items as • A safety feature to help eliminate the danger of a forward and third-party vehicles; delivery of Online products to our well as back hauling waste materials to our recycling centre, collision, ensuring the NEXT lorry maintains a safe distance International customers via third-party providers and collecting deliveries from some of our UK suppliers from the vehicle in front by scanning the road ahead. If the Waste • – from our UK and Eire stores, UK warehouses, UK vehicle in front brakes heavily or another vehicle cuts in Driver Training is crucial to the overall efficiency of the fleet Head Office, our global offices, customer contact centres front of the NEXT vehicle it will automatically slow down or and we operate a number of initiatives such as: and owned manufacturing facility in Sri Lanka even stop • A four seater training vehicle which supports team • – by NEXT employees globally including air, Business travel training and allows the trainers to provide their support 15. Waste and Recycling rail and road travel more efficiently Our in-house recycling centre located at one of our UK The diagram in our Reporting Principles document details warehouses receives materials for recycling from around 400 • Improving driver style and fuel efficiency with one-to- the scope of our direct carbon footprint and our approach of our stores. The materials include cardboard, polythene, one training for reporting. We measure and report our impacts where returned carrier bags, Online packaging, broken clothes • Engines fitted with three minute cut off mechanism to we either have direct control or significant influence across hangers, polystyrene and used gift cards. Once the materials save fuel Scopes 1, 2 and 3. are received they are segregated and baled, before being • Driver performance analysis against planned route, distance sent for recycling. Improved procedures within the recycling and fuel used centre have ensured we have been able to control how these • Trial vehicles, trailers, accessories and systems that materials are handled when they are received to ensure we potentially offer improved efficiencies use of alternative maximise the quantity to be recycled. fuels, performance and driver safety and based on the We have reused and recycled the Clothes hanger recycling: results achieved will invest to improve the fleet in the future coat hangers on which our product is displayed in our Retail stores for a number of years in collaboration with our hanger supplier. In 2018, 171 tonnes of hangers were able to be re- used within the supply chain and 169 tonnes were granulated to be remade into new hangers. PAGE 11

13 OUR APPROACH TO CORPORATE RESPONSIBILITY Human Rights Our Customers TO JANUARY 2019 Modern Slavery & Products Our People Our Suppliers Environment CONTINUED ENVIRONMENT 17. Packaging 16 Product Lifecycle Management We are working to reduce the amount of packaging used on Our unsold or returned stock falls into 3 categories, being our products and to eliminate the materials which cannot items which are: be recycled. 1. Never sold – Products which are not sold in our stores or Online at full price are discounted in our mid season, Our carrier bags are classed as reusable bags in line with the Black Friday or end of season sales. Remaining products Carrier Bag Legislation as we will take back worn out bags are then sold through our own discount routes, both from our customers and replace them whilst recycling the online and in our Clearance stores, before being sold to worn out bag. NEXT authorised third party wholesalers who then sell We have explored and rejected using carrier bags and other the products within their operations. In addition, we work film packaging made from oxo-degradable materials (which with charity partners to whom we donate unwanted incorporate a chemical additive to initiate degradation by products either for reuse to help people in need directly light, heat, mechanical stress and moisture over a period of or to be sold to generate funds. time) as they are not suitable for recycling with mainstream – All returns are inspected, the 2. Returned as faulty plastics as they cause contamination and wider environmental fault categorised and findings fed back to our team of impacts are uncertain. technologists to work with our suppliers to eliminate We recognise the most effective way to reduce the similar faults occurring on future products. The faulty environmental impact of carrier bags is to: items, if possible, are either sold through our Clearance • Reduce the consumption by encouraging consumer operation or donated to charity partners who are able to behaviour change and reuse reuse them within their operations. • Communicate and support the reuse message in a – A significant percentage of clothes we 3. Online returns consistent manner send out to our Online customers is returned to us in line • Be transparent to show that all charges collected are with a customer’s consumer rights under the Distance donated to good causes. Details of the charities supported Selling Regulations. This is a very normal part of doing here can be found business online. Items that are returned are inspected, refurbished and available to be sold. The items are returned for various reasons including being ordered for choice, not liked, incorrect/wrong or a small percentage are returned as faulty product. The faulty products are segregated to be sold through our Clearance operation (as detailed in 2 above). PAGE 12

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