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SP&L approach | Chloé US

SP&L APPROACH

Vision 2025: to measure, evaluate and visualise our positive social impact throughout our value chain.

At Chloé, we believe that creating strategies and action plans starts with impact measurement. Measuring social impact means gaining a better insight into the potentially positive impacts that organisations can have on their stakeholders throughout their value chains – from raw material extraction to a product’s end of life. We believe that better measurement will facilitate constant improvements.

This was our rationale for creating the Social Profit & Loss approach (SP&L), a methodology developed in partnership with The Institut Français de la Mode (IFM) and the Conservatoire National des Arts et Métiers (CNAM), and reviewed externally by the consulting firm PricewaterhouseCoopers (PwC). The SP&L is a business management tool that aims to integrate positive social impact into performance reports and accounting frameworks, alongside environmental and financial performance criteria.

The SP&L approach enables organisations to measure, evaluate, and visualise their positive impact on their stakeholders, and to draft tailor-made action plans to make immediate and long-term improvements to their own practices, as well as their suppliers’. This involves measuring the organisation’s impact on their teams, main suppliers, supplier’s employees, and local communities.

COMPLEMENTARITY WITH EXISTING IMPACT EVALUATION TOOLS AND RESOURCES

EP&L: The development of our SP&L approach is a first iteration inspired by the EP&L approach (Environmental Profit & Loss), a pioneering methodology created by Kering, which enables both the evaluation and valorisation of environmental impact throughout supply chains and operations within the fashion industry.

Social auditing: The SP&L tool is designed to complement social auditing, a standardised tool for evaluating the regulatory compliance of a business’ social, environmental and ethical practices.

B Corp: The SP&L tool is inspired by the work of B Lab, which certifies B Corporations, and was created in the context of Chloé achieving B Corp status. In order to facilitate access to data on positive social impact, the SP&L process involves a systematic social data collection from both operations and the supply chain.

MAIN USES FOR THE SP&L APPROACH

1. Informing decision-making by systematically providing social insights alongside other performance criteria, within reporting and accounting frameworks.

2. Monitoring and supporting social practice improvements over time with suppliers.

3. Optimising the conditions in which products are created to guarantee clients a traceable and responsible offer.

OPEN-SOURCE

Chloé believes transparency and collaboration is central to advancing industry practices. We have created the SP&L to further the collective discussion around positive social impact. The SP&L methodology and its implementation formats therefore are open sourced.

Below we have outlined the main steps for approaching the SP&L methodology. This information is of particular relevance for organisations that want to better understand and/or implement SP&L.

KEY STEPS

0. Organising social audits

1. Positive social impact data collection and verification for both operations and suppliers

2. Measure and evaluate positive social practices*

3. Visualise positive social impacts, as well as the impact of suppliers, and products

4. Integrate the results in performance and accounting reports

5. Discuss the approach and its results with stakeholders, and draft tailor-made action plans for improving their positive social practices

*For employees and suppliers: gender equality, diversity and inclusion, living wage, training, well-being, and job quality. For local communities: the creation of local opportunities, and implementation of policies to protect local communities (the list is non-exhaustive).

SOCIAL AUDITING

A prerequisite for starting any commercial relationship with Chloé is to comply with Richemont’s Code of Conduct. This agreement also applies to subcontracting, and to textile, leather and the production of semi-finished goods. Chloé reserves the right to request social audits by an independent external service provider, mobilising the SMETA standard. Measuring positive social impact complements these measures at a supply chain level.

DATA COLLECTION AND VERIFICATION PROCESSES

We collect social impact data using a digital survey to be completed by teams as well as suppliers. The survey covers positive social impact on two stakeholders (direct and indirect employees, and local communities); eight impact categories (gender equality, living wage, diversity and inclusion, training, well-being, job quality, local opportunities creation, and policies protecting local communities), through 72 metrics.

A verification process by a consulting firm specialising in social auditing takes place annually to ensure data integrity.

POSITIVE IMPACT MEASUREMENT AND EVALUATION

The positive social impact performance evaluation mobilises a score, scaling from 1 to 5, with (1) being the lowest level of positive practices and (5) representing best practices. Three scores are systematically given: a global score, an impact category score (on gender equality for instance), and an individual practice score (on women’s representation in management for instance). These positive impact performance scores provide additional insights and nuance when it comes to visualising an organisation’s impact on its stakeholders. The collected data is automatically evaluated via a cloud computing platform. You will find all the necessary information regarding the implementation process for your IT systems here.

Resources: Evaluation template, GitHub

IMPACT VISUALISATION

A dashboarding tool, linked to the evaluation tool, provides a multi-level visualisation of positive social impact including the aggregated impact, supplier’s impact and product’s impact. Impact visualisation is instrumental to informing decision-making, and in supporting suppliers when it comes to improving their immediate and long-term social practices.

Resources: Visualisation schematization

RESULT INTEGRATION AND IMPACT VALUATION

SP&L aims to provide the necessary resources to create multi-criteria performance analysis (social, environmental, financial) and establish accounting formats that integrate social impact.

SP&L enables us to integrate positive social impact performance scores to existing performance reporting frameworks in order to gain additional insights into the impact organisations have through their activities, and to better guide the decisions we make.

SP&L also provides organisations with the means of measuring the immediate and long-term efficient allocation of resources – data that can be valued and monetized.

METHODOLOGY NOTE

Chloé’s first SP&L approach methodology can be found here. The methodology note was created after a first peer review, and was critically assessed by PwC. An industry consultation was organised in 2022, coordinated by PwC and the Fédération de la Haute Couture et de la Mode (FHCM).
For all questions regarding our approach, content or the implementation of the methodology, please contact our Sustainability team: sustainability@chloe.com.

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