Sustainability Report 2025

Our policy statement forms the foundation of our actions. It is publicly accessible and has been supplemented by guidelines on human rights, child labour, discrimination, health and environmental protection. The values and principles set out in the policy statement are underpinned by concrete measures for managing human-rights-related and environment-related risks. An overview of prioritised risks and established due diligence processes can be found in the following chapters of this report.

Our measures include, among others:

• Regular external audits (e.g. Sedex SMETA)
• On-site visits by our own auditors
• Mandatory certification (e.g. Oeko-Tex Step, GOTS, GRS)
• Establishment of a grievance management system
• Deployment of sustainability coordinators at our own production plants in Egypt & Turkey; with further Tier 1 suppliers, complementary measures are carried out (e.g. audits, questionnaires, individual consultations)

Our risk analysis (as of July 2025) prioritises human-rights-related and environment-related risks on two levels:

Special protection mechanisms exist for these groups, e.g.:

• On-site contact persons
• human rights policy & anti-discrimination guidelines
• confidential & multilingual communication
• Awareness-raising among managers

All grievances were classified as factually justified, without direct causation by Weberei Pahl. All concerns were documented, processed and measures were initiated (e.g. installation of fan heaters, lighting, childcare solutions).

Effectiveness is assessed on the basis of the following criteria:

• Share of Tier 1 suppliers with preventive occupational health and safety measures
• Frequency and recurrence of topics
• Implementation rate of measures
• Processing time & feedback

Progress & effectiveness: In recent years, we have been able to observe that grievances are increasingly being processed more quickly and that measures are being implemented promptly. Recurring concerns have declined, which indicates a sustainable effect of the steps taken. Preventive measures, such as occupational safety training and improved safety standards, have contributed to stabilising the number of grievances in the area of occupational safety. These observations confirm that both preventive and remedial measures achieve tangible progress.

Securing and promoting living wages remains a central objective of Weberei Pahl. On the basis of the current risk analysis (2025), the topic was confirmed as a prioritised human-rights risk in both production countries – Turkey and Egypt. The analysis shows that wage stability and purchasing power depend significantly on inflation, exchange rates and regional living costs. Thanks to our close, family-organised structure, necessary adjustments can be implemented quickly and negative consequences for employees can be effectively mitigated.

• Formalisation of the documentation of wage assessments (annual comparative report per plant).
• Further expansion of supplier communication on living wages.
• Examination of industry initiatives for joint data collection and exchange

Our goal is to be able to trace all main materials back to countries of origin and sustainable practices in the medium term. An elevated monitoring standard applies to sensitive supplier relationships. The sustainability coordinators actively accompany this process for our own production sites and capture risk-based data points on origin. With further Tier 1 suppliers, origin data is increasingly secured through audits, certificates and individual supplier conversations.

The content has been designed so that it is comprehensible for different target groups (customers, business partners, auditors, the public). The structure is based on core elements of the Grüner Knopf and follows the principle "Do good and talk about it".

In both the text and the tone, attention was paid to clear language and transparency. Content is not promotional but descriptive and documented in a comprehensible manner. The key documents are clearly named, downloadable and provided with a revision status.

The KPIs are reviewed annually and documented internally. For better traceability, the assessment follows a traffic-light system:

• green = fulfilled
• yellow = in implementation / partially fulfilled
• red = not yet fulfilled, measures initiated

In individual areas – such as the traceability of wages at Tier 2 level – there is still a need for development. Initial measures have been started here, which are continuously accompanied by our sustainability coordination.

This system allows continuous progress monitoring in the sense of the PDCA cycle (Plan – Do – Check – Act).

Target systems are derived from:

• the internal risk and measure plans
• external standards such as GOTS, Oeko-Tex Step or SMETA
• strategic targets set by the management

Target achievement is assessed on the basis of the internal traffic-light system and reflected at regular intervals with the sustainability coordinators at our own plants. For further Tier 1 suppliers, progress assessment takes place via project-related feedback, audit results and measure feedback. Particularly in areas with a structural need for development (e.g. origin transparency Tier 2+), measures are pursued according to the principle of "continuous progress".

This systematic progress and target assessment is an integral part of our annual sustainability review.