Strengthening Minerals Due Diligence: Practical Tools and Case StudiesHosted by United States Fashion Industry Association (USFIA), Responsible Business Alliance (RBA), and Signet Jewelers Ltd.

January 18, 20182:00 P.M. Eastern/11:00 A.M. Pacific

At any time during the presentation, you may enter your questions here:

An Overview of the Responsible Minerals Initiative (RMI) for Supply Chain and Compliance ProfessionalsUnited States Fashion Industry Association (USFIA)January 18, 2018

RBA Structure

Founded in 2004 the Responsible Business Alliance is the world’s largest industry coalition dedicated to electronics supply chain responsibility.

Provide companies with tools and resources to make sourcing decisions that improve regulatory compliance and support responsible sourcing from conflict-affected and high-risk areas.

RMI Mission

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

VDA, AIAG, USFIA, JEITA Assent Compliance, Gensuite, iPoint, Source Intelligence, SupplierSoft, Total Parts Plus

RMI Multi-Industry Membership

Natural Evolution

2007 – Extractives Workgroup

Electronics IndustryNGO-drivenTin, Tantalum, CobaltDRCConflictNew initiative

2014 - CFSI

Multi-industryDFA, OECD-driven3TGCovered CountriesConflictDFA Compliance

2017 - RMI

Multi-industryDFA + EUOECD-aligned3TG+Global CAHRAsGlobal Raw Materials Due Diligence

Development of RMI sensing & prioritization process:

Supply Chain Indicators: Volume, Criticality, Availability of Recycled MaterialKey Risk Indicators: ASM Production, Child Labor and Forced Labor, Occupational Health & Safety, Armed Conflict, Weak Governance, Environmental, Chemical Processing

Sensing and Prioritization – 3TG +

RMI Audit Program – Responsible Minerals Assurance Process (RMAP)

What is the Responsible Minerals Assurance Process?

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

RMAP (formerly CFSP) Smelter and Refiner Audits help companies demonstrate reasonable due diligence, country of origin inquiry, identify/mitigate risks, meet legal requirements.

Suppliers

Mines

Smelters & Refiners

CompaniesFinished Products

Raw Materials

RMAPIndependent 3rd Party Audit System in place to source responsiblyDemonstrated with evidenceOECD-aligned

Upstream CoC/Due DiligenceiTSCi, BSP, Just GoldIndependent 3rd Party Evaluations

Downstream Due Diligence Supplier mapping (CMRT)Supplier audits (Downstream Audit Program) Risk Assessment (RRA)Public reporting

Percentage of Global Smelter and Refiner Participation in Due Diligence Programs

0

25

50

75

100

2010 2011 2012 2013 2014 2015 2016 2017 2018

Tantalum smelter % participation Tin smelter % participation Tungsten smelter % participation Gold smelter % participation

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

OECD Alignment Assessment

Five programsScope

Required for RMI approval in the EU frameworkEU

Audit program harmonization for smelters so they do not need additional audits to export to EU

Efficiency

Aligns existing integrated programs (e.g. upstream assurance mechanisms with smelter audits)

Alignment

RMI Tools and Resources

Public Smelter and Refiner Lists

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

Updated multiple times/week

Responsible Minerals Assurance Program RCOI Data

Under revision to be inclusive of Conflict-Affected and High-Risk Areas globally

Public Minerals Reporting Template

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

General “Minerals” Reporting Template under discussion and development

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

RMI Smelter Database

Public RMI eLearning Academy

Contact us for an account learning@conflictfreesmelter.org

FREE!

Course assignments and team libraries can be customized

Add your own materials, create your own quizzes

Risk Readiness Assessment (RRA)

• A self-assessment and self-reporting tool to communicate and share risk management practices and performance using benchmarked industry norms.

• A tool to help companies obtain accurate and relevant information practices to inform sourcing policies.

• Currently includes downstream companies, 3TG and Cobalt smelters, refiners, and mining companies.

Current Uptake

164 upstream companies

165 RRAs completed

Cobalt processors added in October

60 Downstream Companies

UpcomingUpgrades

Translations (Japanese, Chinese, Bahasa)

Connect to training resources in the

platform

Aggregated reports and analysis

Issue Areas

Governance Labor & Working Conditions

Environment Community Business & Human Rights

1. Legal Compliance, Engagement2. Business Integrity3. Stakeholder Engagement4. Business Relationships

5. Child Labor6. Forced Labor7. Freedom of Association and Collective Bargaining8. Discrimination9. Gender Equality10. Working Hours11. Remuneration12. Occupational Health and Safety

13. Environmental Risk Management 14. Greenhouse Gas (GHG) Emissions15. Energy Consumption16. Fresh Water Management and Conservation17. Waste Management18. Tailings Management 19. Pollution20. Biodiversity and Protected Areas 21. Mine Closure and Reclamation

22. Community Health and Safety23. Community Development24 Artisanal and Small Scale Mining

25. UN Guiding Principles on Business and Human Rights26. Security and Human Rights 27. Indigenous Peoples Rights28. Land acquisition and resettlement 29. Cultural Heritage30. Conflict Minerals31. Grievance Mechanism

Standards Comparison

Recognizes existing standards commonly used in the materials value chain.

The tool is based on the comparison of over 50+ standards across 31 risk areas.

Risk Readiness Assessment

RMI Latest Developments

Responsible Sourcing of Cobalt

• Cobalt working group launched early 2017:• Materiality to RMI member industries;• Salient risk in cobalt supply chains;• Opportunity to leverage existing RMI tools & resources.

• Objective: Provide tools and resources to enable RMI members to exercise due diligence in accordance with OECD Due Diligence Guidance;

• Collaboration with cobalt stakeholders including: • Responsible Cobalt Initiative;• Global Battery Alliance;• Cobalt Institute;• Upstream mechanisms.

http://www.responsiblemineralsinitiative.org/emerging-risks/cobalt/

Indonesia Tin Working Group

TWG Members: Definition of supply chain expectations (focus on OHS and land reclamation) & sensing on risks and strategy for offshore mining

Stakeholder Engagement

Tools Pilot Projects

- Local stakeholders: TWG Associate and Local Advisory Committee

- Int’l stakeholders: RMI multi-stakeholder call, bilateral engagement

EPRM funding: Pilot projects on OHS Capacity Building and land reclamation

€ 395,000 EPRM grant

http://www.responsiblemineralsinitiative.org/emerging-risks/indonesia-tin-working-group/

2017 Publications

www.responsiblemineralsinitiative.org/training-and-resources/publications-and-guidance/

• Throughout 2017 Trump Administration and Congressional Republicans have signaled their intent to repeal Dodd-Frank 1502, including:

o Jan 31 Public statement by Acting SEC Chairman Michael S. Piwowar on “Reconsideration of Conflict Minerals Rule Implementation”

o April 7 SEC statement ”light of the uncertainty regarding how the SEC will resolve those issues and related issues raised by commenters in the recent open comment period on the Rule, the Division has indicated that it will not recommend enforcement action to the Commission if registrants, including those that are subject to paragraph (c) of Item 1.01 of Form SD, only file disclosure under the provisions of paragraphs (a) and (b) of Item 1.01 of Form SD.”

o H.R.10 - Financial CHOICE Act of 2017 passed the House in June and is currently stalled in the Senate.

o HR 3354 - Appropriations Bill for various agencies passed the House in September and is now in the Senate, an amendment was added prohibiting the use of funds by the SEC for conflict minerals reporting

o HR 4248 - would amend the Securities Exchange Act of 1934 to repeal certain disclosure requirements related to conflict minerals, and for other purposes. The Bill passed mark-up at the House Financial Services Committee early this month (32-27), but no clear path forward beyond House at this time.

Dodd Frank 1502

EU RegulationRegulation entered into force 8 June 2017 and will apply to EU importers as of 1 January 2021

Main elements

1. Mandatory due diligence for European Union importers of 3TG minerals and metals where annual import volumes exceed thresholds

2. Global geographical scope: due diligence irrespective of origin

Main elements3. Obligations for EU importers consistent with the 5-step framework for risk based due diligence set

out in the OECD Due Diligence Guidance

4. EU Recognition of supply chain due diligence industry schemes largely based on OECD methodology and criteria

5. Member States competent authorities ex-post checks

6. EU list of global responsible smelters/refiners

7. Review in 2023, and every three years thereafter

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EU Regulation

Responsible Minerals Initiative | www.responsiblemineralsinitiative.org | @RBAllianceOrg| @GeSIConnect

For further inquires:

rmi@responsiblebusiness.org

Responsible Sourcing in the Jewelry Industry

United States Fashion Industry Association (USFIA) and the Responsible Business Alliance

David BouffardSignet Vice President, Corporate Affairs

January 18, 2018

Agenda• About Signet Jewelers

• CSR at Signet

• Consumer expectations in the 21st Century

• Signet Responsible Sourcing

• Jewelry Supply Chain Challenges

• Signet Responsible Sourcing Protocols –Timeline of Development and Implementation

• Consultation & Collaboration

• Signet supplier requirements

• Responsible Sourcing for Everyone

• Key Learnings

Confidential and Proprietary Property of Signet Jewelers2

Signet: the World’s Largest Retailer of Diamond Jewelry

Note: Sales and store numbers for Fiscal 2016

Ernest Jones #2 in the U.K.Sales: ~$323 millionStores: 204

Kay Jewelers #1 Jewelry store in the U.S.Sales: ~$2.54 billion Stores: 1,192 in 50 states

Jared The Galleria Of Jewelry #1 U.S. Off-Mall Specialty JewelerSales: ~$1.23 billion Stores: 275 in 41 states

Total Annual Pro-Forma Sales: Approximately $6.4 billion

Zales JewelersA leading brand in jewelry retailing in the U.S.Sales: ~$1.26 billionStores: 751 in 50 states and Puerto Rico

Peoples Jewellers #1 in CanadaSales: ~$205 millionStores: 143 in 9 provinces

About Signet: the World’s Largest Retailer of Diamond Jewelry

H.Samuel #1 in the U.K.Sales: ~$323 millionStores: 304

Corporate Social Responsibility at Signet

People CharitableGiving

ResponsibleSourcing

EnvironmentalStewardship

Four Pillars

• Provenance of products is important to consumers, especially millennials

• They want to be assured that companies and industries seriously manage supply chains so that the products they buy are not associated with human rights abuses or environmental damage.

• Many industries have been actively managing these issues for years:

– Timber: Forest Stewardship Council– Clothing: Fair Labor Association– Tea: Ethical Tea Cooperative– Fish: Marine Stewardship Council

• The jewelry industry also understands and has been addressing theproactive management of these issues

Consumer Expectations in the 21st Century

Signet Responsible Sourcing Overview

• Signet believes that a responsible supply chain is fundamental to the reputation of the jewelry industry and its future.

• Signet has been active in the development of harmonized industry guidance and standards,

• Conflict-free sourcing has been a part of a broader initiative around responsible sourcing.

Challenges of the Global Jewelry Supply Chain

Primary Risk Points

Diamond Choke Point

Gold / MetalsChoke Point

The objective is to ensure all Signet jewelrymaterials are responsibly sourced as defined byreference to the OECD Due Diligence Guidance(DDG) for Responsible Supply Chains ofMinerals from Conflict-Affected and High RiskAreas.

Signet’s commitment to responsible sourcing is a two-pronged approach…

Signet Responsible Sourcing: Two-Pronged Approach

Responsible Jewellery Council (RJC) membership and RJC certification reassures Signet of our suppliers’ responsible business practices.

Compliance with Signet’s Responsible Sourcing Protocols (SRSPs) reassures Signet of the integrity of our supply chain and the products we sell.

For Companies For Products

Signet Responsible Sourcing Protocols Timeline

OECD Due Diligence Guidance – Applicable to All Minerals

Development and Implementation

2010 (July) Dodd-Frank Wall Street Reform and

Consumer Protection Act(Section 1502)

2011 2012 2013 2014 2015 2016 2017 2018

Diamonds

2019 2020

Signet Jewelers – conducts 3 years rigorous 3TG supply chain

due diligence

Silver & PGMs Colored Gemstones3TG

2010

Voluntary protocols; supplier compliance mandatoryLegal Imperative

Formation of RJC

2005

Consultation and Collaboration

Governments

US State DepartmentUK Foreign and Commonwealth OfficeOECD

ProducersALROSADe BeersDominionRio Tinto

Trade Organizations

World Federation of Diamond BoursesResponsible Jewellery CouncilUnited States Jewelry CouncilJewelers of AmericaInternational Diamond Manufacturers AssociationDiamond Manufacturers & Importers AssociationWorld Gold CouncilLondon Bullion Market AssociationConflict Free Smelters InitiativeGem Jewellery Export Promotion Council - India

Audit Companies Bureau VeritasSCSSGSUL

SuppliersCivil Society Banks

Global WitnessPartnership Africa CanadaDiamond Development InitiativeEnoughResolveHuman Rights Watch

40 of Signet’s leading diamond manufacturers85 of Signet’s leading gold suppliers

ABN AMROStandard Chartered

SRSP compliance criteria and requirements, include but are not limited to:

Compliance with Signet’s Responsible Sourcing Protocols (SRSPs) –Guideline

• For additional information and documentation examples for the Gold, 3Ts, and Diamonds SRSPs, please visit www.signetresponsiblesourcing.com, “Signet Documents”

Confidential and Proprietary Property of Signet Jewelers7

• Signet is an contributing and activemember of the Responsible Artisanal GoldSolutions Forum (RAGSF)

• Signet is working with the DiamondDevelopment Initiative (DDI) to bringmobile schools to children of artisanalmining families in the DemocraticRepublic of Congo

Responsible Sourcing for Everyone

Signet Support for Artisanal Mining: Transforming Natural Resources into Human Resources

Our Progress: Key Learnings

• Collaboration is key

• Involve all stakeholders as much as possible

• Help all actors in the industry understand why progress is in their own interest

• Identify and isolate bad actors

• Establishing clear governance, transparency and processes

• Be patient

Significant Progress Has Been Made, But There is Still Work To Do

Thank You!

For additional questions or information, please contactDavid Bouffard: davidb@jewels.com

@DavidABouffardWebsite: www.signetjewelers.com

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Thank you for attending!

For additional questions and information:

Email: info@usfashionindustry.comTwitter: @usfashionPhone: +1-202-419-0444