Next : Modern Slavery Transparency Statement (modern slavery transparency 2025)

About this update from Next Plc

MODERN SLAVERY TRANSPARENCY STATEMENT 2 02 4 -2 5 Key Activities NEXT GROUP MODERN SLAVERY Introduction STATEMENT TO JANUARY 2025 in 2024/25 Page 1 Page 2 INTRODUCTION Our Business & Commitment Page 3 Governance Risk Assessment Framework & Policies & Due Diligence Page 5 Page 7 Training & Collaboration Page 11 It continues to be a priority for NEXT to ensure that we trade ethically, source responsibly and work to prevent modern slavery and human trafficking throughout our organisation and in our supply chain. We take any allegation of human rights abuse in all its forms seriously and will not tolerate human rights abuse against individuals within NEXT's own organisation or our supply chain. Modern slavery can take many different forms and is a complex issue. NEXT has taken steps to identify areas where there are risks of modern slavery occurring within our business and supply chain and we are working to eliminate that possibility. During the year we encountered issues relating to child labour, freedom of movement and migrant labour. You can read more about how we investigated and remediated these on page 8. This is our 8 th statement made under the Modern Slavery Act 2015 and constitutes our Group modern slavery statement for the 2024/25 financial year. It highlights the key activities we have undertaken during the year and aims to provide useful information to understand our commitment as a responsible retailer to reduce those modern slavery risks that could be connected to our business. This statement has been prepared on behalf of NEXT plc and its following group companies: Lipsy Limited, Next Distribution Limited, Next Holdings Limited, Next Retail Limited and Next Beauty Limited and is approved by the Board of NEXT plc. Jonathan Blanchard Chief Financial Officer, NEXT plc 27 March 2025 1 Introduction Our Business NEXT GROUP MODERN SLAVERY Key Activities STATEMENT TO JANUARY 2025 in 2024/25 & Commitment KEY ACTIVITIES IN 2024/25 Governance Risk Assessment Framework & Policies & Due Diligence Training & Collaboration SUPPLY CHAIN TRANSPARENCY Updated Tier 1 and Tier 2 factory listing published on nextplc.co.uk/corporate- responsibility/our-suppliers and the Open Supply Hub, a public platform for supply chain data. Updated our Tier 3 sites listing published on nextplc.co.uk/corporate-responsibility/our- suppliers . 2,402 Code of Practice (COP) audits performed in the year across 35 countries. ACTIVE MANAGEMENT & REMEDIATION Following the successful roll out of grievance mechanisms in Pakistan, India, Myanmar and Morocco, we expanded the implementation by adding another five countries (UAE, Vietnam, Sri Lanka, Cambodia and Turkey). Worked with 11 factories to successfully remediate modern slavery issues. A further 16 sites are being supported through an agreed remediation process. Disengaged 10 factories where remediation on issues relating to modern slavery had not been achieved: to an acceptable level; or within acceptable time frames; or the factory did not demonstrate willingness to improve. 6 of these cases were in relation to wage retention. TRAINING & AWARENESS 718 new NEXT UK employees completed our bespoke online Modern Slavery training during the year. This course explains what modern slavery is, why it's relevant to NEXT, our company policy along with employees' responsibilities and what it means for them. The course is also completed by our employees globally. Online portal for third parties continues to grow with over 1,700 users. We have dedicated sections for freight forwarders, branded component suppliers, third party brands, Home brands and Lipsy third party suppliers. COLLABORATION Maintained support of Unseen - the UK modern slavery and exploitation helpline. They supported us in hosting an event in the UK for our labour providers and cleaning contractors on modern slavery risks in the non-product supply chain. Carried out in-person supplier presentations in Morocco, Vietnam, Cambodia, Sri Lanka, Turkey, China and the UK. The event in Turkey was a collaboration with a UK retailer. Extended our Code of Practice audit approach with our Total Platform partner brands Joules and FatFace, joining JoJo Maman Bébé and Reiss. 2 NEXT GROUP MODERN SLAVERY Introduction Key Activities Our Business Governance Risk Assessment STATEMENT TO JANUARY 2025 in 2024/25 & Commitment Framework & Policies & Due Diligence OUR BUSINESS & COMMITMENT Training & Collaboration OUR BUSINESS NEXT is a UK based retailer offering beautifully designed, excellent quality clothing, footwear, accessories, homeware and beauty products. The Group is primarily comprised of: NEXT Distribution 8 UK warehouses, 7 UK depots and 3 international hubs which are fully integrated with our cost-efficient distribution facilities. Our distribution network serves our Retail stores and Online customer deliveries for both NEXT and third- party branded products. We also facilitate the induction of products held in third-party warehouses into NEXT's distribution network for onward delivery to customers. NEXT Online Over 9.6 million UK Online customer 4.1 million overseas customers Well-Connected Store Network Over 800 stores in UK and Eire (includes Reiss, Joules and FatFace stores) Over 200 franchised stores (includes Reiss, Joules and FatFace franchised stores) In 37 countries. Our stores play an important role in supporting our Online customers; nearly half of our UK Online orders are collected instore and the majority of returns are through our stores. Digital Marketing Systems The development of online marketing systems to target products and brands to customers. Our systems have the ability to manage significant amounts of data and incorporate sophisticated search facilities and web based marketing tools that link with our email and social marketing systems. Consumer Credit NEXT Finance has built a high quality receivables book with customer credit balances of £1.5bn . The ability to sell products on credit has proven to be an attractive service to customers which benefits Online sales and Group profitability. The customer receivables are a valuable asset, adding to the Group's financial strength. Call Centres NEXT operates multi-language call centres in the UK and overseas to support its worldwide customer service operations for Retail, Online and NEXT Finance. Supply Chain NEXT has a well established supply chain that is supported by our overseas sourcing operation, NEXT Sourcing Limited (NSL). NSL provides buying, sourcing and design skills which support our product teams in the UK. NEXT Employees Around 50,000 employees globally Continuous improvement lies at the heart of our business. We aim to conduct our business in an ethical manner and to develop positive relationships with our suppliers to raise standards of working conditions in the factories where our products are made. 3 Introduction Key Activities Governance Risk Assessment NEXT GROUP MODERN SLAVERY Our Business STATEMENT TO JANUARY 2025 in 2024/25 & Commitment Framework & Policies & Due Diligence OUR BUSINESS & COMMITMENT Training & Collaboration OUR PRODUCT SUPPLY CHAIN We source from 35 countries. We have 711 active Tier 1* product suppliers We are a team of 53 directly employed people based in our key sourcing locations. There are 3 'pillars' to our work: Auditing, Engagement and Projects & Programmes, all of which support our approach to protecting workers in our supply chain. During the year our in-house COP team carried out 2,402 audits. *For details of our supply chain tiers, please refer to 'Our Customer and Products' section of our Corporate Responsibility Report at nextplc.co.uk/corporate-responsibility/our-suppliers . Our top 10 sourcing countries are: China Great Britain 27% 794 factories 2% 45 factories Myanmar Turkey 2% 16 factories 5% 143 factories Vietnam 4% 54 factories Pakistan Cambodia 3% 42 factories 5% 65 factories India Bangladesh 11% 217 factories 33% 198 factories Sri Lanka 4% 50 factories OUR COMMITMENT NEXT is committed to finding and preventing modern slavery and human trafficking throughout our business and supply chain and to understanding the modern slavery risks that may be present. We do this by: Finding effective methods to work to eliminate slavery and human trafficking practices in our supply chain. We are working towards full transparency of our supply chain. Ensuring our policies and procedures are reviewed regularly and that we have development and training processes in place to enable our internal teams to have appropriate awareness and understanding of the issues and our responsibilities. Ensuring new suppliers understand our requirements before they commence working with us, and that existing suppliers comply with those requirements. Ensuring the people who provide the products and services we buy and use are treated fairly, and that their fundamental human rights are protected and respected. 4 Introduction Key Activities Our Business Risk Assessment NEXT GROUP MODERN SLAVERY Governance STATEMENT TO JANUARY 2025 in 2024/25 & Commitment Framework & Policies & Due Diligence GOVERNANCE FRAMEWORK & POLICIES Training & Collaboration OUR GOVERNANCE FRAMEWORK NEXT PLC BOARD CHIEF FINANCIAL OFFICER NEXT PLC AUDIT COMMITTEE ESG STEERING GROUP (Covers Modern Slavery and Code of Practice Issues) A robust governance structure and clear risk management and internal controls framework, both of which are embedded throughout the business, are core to our approach. Our ESG Steering Group is responsible for prioritising actions and helping to monitor emerging ESG risks. Updates on ESG activities were provided during the year to the Audit Committee which has ESG as a standing agenda item at each of its meetings. On a day to day basis, significant issues seen by the COP team as part of their work are discussed with the executive directors where appropriate. As part of the NEXT risk management process, detailed risk registers are maintained by 20 distinct operational and functional areas, where local business risks are identified, assessed and managed, which include risks relating to human rights, modern slavery and bribery. Specific corporate responsibility risks are recorded, considered and managed as part of this process. In addition, the impact of corporate responsibility risk factors is included, where appropriate, in the NEXT plc directors' assessment and review of NEXT's principal risks. NEXT's principal risks are detailed in the Strategic Report section of our latest Annual Report at nextplc.co.uk DUE DILIGENCE Our COP auditing process is a vital due diligence tool as it delivers assurance that our suppliers and their factories understand their responsibility to comply with our ethical standards. Details of our Principle Standards and Auditing Standards are available at nextplc.co.uk/corporate-responsibility/ code-of-practice . We also invest time and resources to support effective communication and work collaboratively with our suppliers to prevent issues arising or help resolve issues we have identified. We use the UN Guiding Principle Reporting Framework to help us build a more detailed picture and better understand the salient human rights issues across our business (i.e. those human rights that stand out because they are at risk of the most severe negative impact through the Company's activities or business relationships). POLICIES NEXT has clear policies and monitoring processes in place combined with robust supply chain management. We review and update these policies and practices regularly as we learn from our experiences. They are designed to ensure that people are treated with dignity and respect and include internationally recognised human rights principles and indicators encompassed in the Universal Declaration of Human Rights and the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work. . 5 Introduction Key Activities Our Business Risk Assessment NEXT GROUP MODERN SLAVERY Governance STATEMENT TO JANUARY 2025 in 2024/25 & Commitment Framework & Policies & Due Diligence GOVERNANCE FRAMEWORK & POLICIES Training & Collaboration NEXT's business policies relating to third party relationships and modern slavery are published on our corporate website at nextplc.co.uk/about-next/corporate- governance/policies : Human Rights and Modern Slavery Whistleblowing for NEXT's third parties Code of Practice Principle Standards and Auditing Standards (see COP link above) Health and Safety Anti-Bribery & Anti-Corruption We also have the following employee related policy: Whistleblowing for employees The NEXT COP Principle Standards (see COP link above) comprise: No forced labour or modern slavery Freedom of association and the right to collective bargaining Safe and healthy working conditions No child labour Fair wages and benefits Lawful working conditions No discrimination practiced Employment security Respectful treatment of workers We also have additional policies on our supplier portal system covering specific supply chain issues: Migrant Labour Child Labour Agency Labour Homeworker Laundry Management Wage Retention Shared Premises During the year we have revised our auditing standards and communicated these to our suppliers via our supplier portal. We also developed a new Heat Stress Guidance document, designed to support our suppliers and factories in managing one of the known climate impacts in the supply chain. We will continue to work with suppliers on this issue during the year ahead. 6 NEXT GROUP MODERN SLAVERY Introduction Key Activities Our Business STATEMENT TO JANUARY 2025 in 2024/25 & Commitment RISK ASSESSMENT & DUE DILIGENCE Governance Risk Assessment Training & Framework & Policies & Due Diligence Collaboration WHERE ARE OUR HIGHEST RISKS? We believe those areas which give rise to the highest modern slavery risk are: NEXT's own branded product supply chain NEXT's suppliers who subcontract manufacturing processes e.g. dyeing and finishing Specific country risks where modern slavery is higher e.g. India (restriction of freedom of movement), China (state-imposed forced labour), Myanmar (child labour) Specific goods or services not for resale e.g. logistics service providers, cleaning services, employment agencies, waste recycling, warehousing. Our salient human rights risks are as follows: Freedom of association and collective bargaining Health and safety (including mental health) Children's rights Modern slavery (including wage retention) Wage levels Harassment and discrimination Water, sanitation and health Working hours Further information on our latest salient risks are available in our Corporate Responsibility report at nextplc.co.uk . KEY ACTIVITIES THIS YEAR Supplier presentations were carried out in Morocco, Vietnam, Cambodia, Sri Lanka, Turkey, China and the UK, covering topics such as sourcing country challenges, supplier compliance performance, supply chain risk areas and developing issues such as climate change impacts on workers. They also provide the opportunity for valuable conversations with our suppliers to understand each others' focus areas and improve ways of working together. We also held in-person events for suppliers to our Total Platform partners Fatface to introduce them to the Code of Practice approach. These events took place in China and India, alongside online meetings and one-to-one sessions where necessary. In-person supplier events are planned for Italy and India during 2025. Our intention is to continue to carry out in-person supplier events in our top ten sourcing countries on a regular basis. Unauthorised subcontracting We have identified 26 cases of unauthorised subcontracting (subcontractors who have been engaged without our approval and therefore without us carrying out an audit) in our product supply chain through our auditing work. Where such cases are identified, we work with the supplier and factory to highlight the risks of subcontracting to unauthorised sites. The number of identified cases is only one less compared to last year, reflecting that the issue is still prevalent in our supply chain. We have highlighted this as an ongoing concern in our in-country supplier presentations, reiterating the importance we place on transparency and maintaining accurate production location details. As our COP teams are carrying out the vast majority of audits on an unannounced basis, they are better able to identify unauthorised subcontracting cases and work with suppliers to remediate. Third-party branded suppliers Our bespoke supplier platform was launched in 2020 as a communication tool with both new and established suppliers. We continue to provide content for our suppliers and have tailored the content for different supplier categories. The platform also allows us to track the suppliers who have accessed the portal in a given time period, as well as the content that they have viewed. The primary benefit of the platform is the instant delivery of information straight to the brands, ensuring that all third-party brands sold via NEXT are privy to information needed to understand our expectations in relation to ethical standards. Forced labour We continue to closely monitor developments in relation to allegations of forced labour in the Xinj iang Autonomous Region (XUAR) of Western China. Our Cotton Sourcing Policy includes a ban on the use of cotton from the XUAR. We do not directly source products from the XUAR at Tier 1 (product factory), Tier 2 (subcontractor to a Tier 1) or Tier 3 (fabric/ yarn suppliers and spinners). Our work to ensure that products made or sourced for NEXT are free from forced labour is undertaken by our COP team and covers Tier 1 and 2 suppliers. Traceability of our full supply chain is a key area of focus given we do not directly source raw materials. We are working closely with our suppliers and industry stakeholders to find the most effective and accurate ways to trace our supply chain to Tier 5 (raw materials). We also work collaboratively with relevant NGOs and multi-stakeholder initiatives such as the Ethical Trading Initiative and the British Retail Consortium to share knowledge of challenges and solutions. 7 NEXT GROUP MODERN SLAVERY Introduction Key Activities Our Business STATEMENT TO JANUARY 2025 in 2024/25 & Commitment RISK ASSESSMENT & DUE DILIGENCE Governance Risk Assessment Training & Framework & Policies & Due Diligence Collaboration We continue to map the raw material sources of our suppliers to provide confidence that the materials used in our products are sourced responsibly in line with our Responsible Sourcing Approach. We take allegations of forced labour in our supply chain extremely seriously and take appropriate steps to investigate them. There are significant challenges in investigating issues of this nature. We are engaging with relevant internal and external stakeholders including the Ethical Trading Initiative and British Retail Consortium to explore proportionate and appropriate next steps. DUE DILIGENCE & ACTION TAKEN Concerns regarding modern slavery generally originate from one of the following sources: COP audits Whistleblowing (with third party platforms, such as 'This is My Back Yard' (TIMBY) Employee or third party communications During the year we received grievances via TIMBY operating in Myanmar, India and Pakistan: Myanmar - 40 grievances received, 12 were not related to NEXT's active supply chain or we did not receive sufficient information to investigate, 28 were resolved India - 22 grievances received, 21 remediated and the remaining 1 case is still in ongoing remediation Pakistan - 49 cases received, 44 remediated and the remaining 5 cases are undergoing further investigation or remediation UAE - 7 grievances received and 7 remediated Vietnam, Sri Lanka, Turkey and Cambodia the grievance mechanisms are at the implementation stage We finalised and circulated a Grievance Mechanism Policy to our suppliers at the end of this year, which outlines our approach to implementing effective grievance mechanisms in our supply chain. The pilot and wider roll-out has included conversations with our suppliers and factories to understand any questions or concerns and to consider their input on implementation. Our COP regional teams will continue to embed our approach through 2025. If our employees are visiting a factory as part of their role and identify something of concern, they can contact our COP team directly. On the occasions when this has happened we have been able to put an appropriate response or action plan in place. This reflects the positive engagement of our employees and their awareness of modern slavery issues which supports the work of the COP team. During the year we have reviewed any such concerns and agreed actions accordingly. We continue to produce internal incident reporting which provides clear visibility of where risks arise, both geographically and by category. Incidents and associated reporting are reviewed by the ESG Steering Group where actions are agreed and progress tracked. Whistleblowing incidents are reported to the Audit Committee of NEXT plc. During 2024/25 all audits were on-site visits. 5% of our audits were announced, which were the first audits carried out at TP partner brand sites. 95% were unannounced. During these audits we identified 37 cases of modern slavery related risks, of which, 11 have been successfully remediated, 16 have an ongoing agreed plan to remediate and 10 factories have been disengaged. Our priority is to support factories to resolve issues, but we will not continue to work with them indefinitely if there is no willingness to improve.reporting which provides clear visibility of where risks arise, both geographically and by category. Incidents and associated reporting are reviewed by the ESG Steering Group where actions are agreed and progress tracked. Whistleblowing incidents are reported to the Audit Committee of NEXT plc. FOCUS ON MYANMAR Acknowledging that Myanmar has a higher country risk for modern slavery, we have implemented additional due diligence measures including: Unannounced audits every 8 weeks Further on-the-ground resource Engagement with external organisations such as the European Chamber of Commerce (see CRR Partnering for Change) Hosting 2 dedicated supplier engagement sessions for our supply base in Myanmar, one in September and one in December 2024, covering the following topics: Human rights challenges Grievance mechanisms including how NEXT uses the app TIMBY in Myanmar Heat Stress and climate impacts on workers Business update 8 NEXT GROUP MODERN SLAVERY Introduction Key Activities Our Business STATEMENT TO JANUARY 2025 in 2024/25 & Commitment RISK ASSESSMENT & DUE DILIGENCE Governance Risk Assessment Training & Framework & Policies & Due Diligence Collaboration We continue to work with our suppliers and factories in-country, supporting them with remediation measures where necessary and communicating regularly to ensure collaboration. FOCUS ON CHILD LABOUR During the year, we identified 2 cases of child labour in our global supply base as part of our audit process, 1 case in Myanmar and 1 case in China. Myanmar case: 4 children aged 14 and 15 years old were found during our audit at a factory in April 2024. The factory was committed to working on addressing the issue and agreed to follow our Child Labour remediation plan which the NEXT COP team monitors on a monthly basis. The factory HR team visits the children and their families on a monthly basis and ensures transfer of the stipends - regular financial support which removes the need for the child to be working - to the families. 1 child reached 16 years old in August 2024. 3 children are still under monitoring and will continue to receive the monthly stipends until they are 16. China case: One child labour case was found at a COP audit in April 2024. The factory agreed to take our Child Labour remediation plan and the NEXT COP team in China monitors the remediation every month. The child was 15 years 11 months at the time of the audit, the factory paid off his salary together with one month stipend. The boy reached 16 years old in May 2024 and NEXT contacted the boy to confirm this, therefore this case is now closed. One case of historical child labour was also identified during the audit at this site (where an individual was hired when they were not of legal working age but at the time of the audit had reached 16). The supplier has made changes to its internal process, based on learning from the historical and live case, to prevent a similar case occurring in the future. We continue to engage with our suppliers on child labour risks and encourage them to use the tools available to them via our supplier portal to carry out appropriate due diligence prior to introducing a new site to NEXT and as a means of continuous monitoring with existing sites. Focus on restriction of freedom of movement One of the indicators of modern slavery is restriction of freedom of movement, where individuals have limited opportunities to move freely. During the year, our engagement with factories in Egypt increased and therefore our presence on the ground to complete our Code of Practice audits. In auditing these new sites, our team identified an issue of restriction on the use of toilets in 3 factories in Egypt, which is a critical non-conformity in our Auditing Standards. One to one meetings were held with factory management in each case to understand their perspective and agree a plan to remediate the situation in an appropriate way. Our COP team worked closely with factory management and our suppliers, taking time to understand their concerns and agreeing next steps collectively. In all 3 cases, restrictions have been lifted and our teams have verified that improved ways of working have been implemented. Our approach is not to walk away from these serious issues, but to work with our suppliers and factories to agree a remediation plan. Active sites will continue to be monitored by our regional COP team, including unannounced visits to ensure that improvements are maintained. 9

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