csc
Transparency in Supply Chain Statement
Reporting for January through December 2017
The California Transparency in Supply Chains Act of 2010 (SB 657), and the United Kingdom Modern Slavery Act of 2015 require certain businesses to provide disclosures concerning their efforts to address the issues of slavery and human trafficking in their supply chains, to provide consumers the ability to make better and more informed choices about the products they buy and companies they support. Columbia Sportswear Company (CSC) believes modern slavery and human trafficking are egregious issues; we are committed to doing due diligence within our operations to minimize the risk of these issues in our supply chain.

Company Information
Founded in 1938 in Portland, Oregon, as a small, family-owned, regional hat distributor and incorporated in 1961, CSC has grown to become a global leader in designing, sourcing, marketing, and distributing outdoor and active lifestyle apparel, footwear, accessories, and equipment. We design, source, market, and distribute outdoor and active lifestyle apparel, footwear, accessories, and equipment for use in a wide range of outdoor and active lifestyle activities under four primary brands: Columbia®, SOREL®, Mountain Hardwear®, and pr Ana®. We operate worldwide through our consolidated subsidiaries in Europe, Korea, Japan, and Canada, our China joint venture, and sales to independent international distributors who operate within the EMEA and LAAP regions. A list of our subsidiaries can be found in our 2017 Form 10-K, exhibit 21.1.

Sourcing and Manufacturing
CSC does not own or operate manufacturing facilities. Virtually all of our products are manufactured to our specifications by contract manufacturers located outside the United States. We seek to establish and maintain long-term relationships with key manufacturing partners who share our values. We manage our supply chain from a global and regional perspective and adjust as needed to changes in the global production environment, including political risks, factory capacity, import limitations and costs, raw material costs, availability and cost of labor, and transportation costs. Our apparel, accessories and equipment are manufactured in 19 countries, with Vietnam and China accounting for approximately 64% of our 2017 apparel, accessories and equipment production. Our footwear is manufactured in four countries, with China and Vietnam accounting for substantially all of our 2017 footwear production.

In 2017, we maintained 10 manufacturing liaison offices in a total of seven Asian countries. Personnel in these manufacturing liaison offices are direct employees of CSC and are responsible for overseeing production at our contract manufacturers. We believe that having employees physically located in these regions enhances our ability to monitor factories for compliance with our policies, procedures and standards related to labor practices.

Slavery and Human Trafficking Standards
CSC is committed to ensuring that our products are manufactured in factories that operate with fair and safe working conditions and sustainable business practices. To demonstrate this responsibility, we value and strive for long term partnerships with factories to monitor and ensure continuous improvement in alignment with our Standards of Manufacturing Practices (SMP) (aka Code of Conduct). CSC's SMP includes a standard that addresses forced labor, where all suppliers are required to demonstrate that they do not use forced labor, whether in the form of prison, indentured, slave, bonded, trafficked or any other form of compulsory labor. CSC defines slavery and human trafficking as used by U.S. Department of State:

We maintain and enforce internal accountability procedures for employees and contractors regarding company standards around slavery and human trafficking. In the case of non­compliance, we reserve the right to examine the specific situation and develop the best possible strategy for resolution. If cases of non-compliance are not resolved within a timely manner, we may terminate the business relationship. While we wish to aid in the resolution of incidences of human trafficking and slavery within our supply chain, it is not possible to effectively solve the issue of noncompliance without the cooperation of the supplier.

Certification and Auditing
CSC requires all finished goods suppliers to sign a supply agreement, which specifies that a vendor has read and understands the Columbia Sportswear Company Standards of Manufacturing Practices Policy and shall ensure that its facilities and the facilities of its subcontractors are maintained in accordance with the SMP Policy standards.

CSC complies with the UN Guiding Principles on Business and Human Rights (UNGPs), which specify that due diligence processes should 'include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.' All finished goods suppliers are audited against our SMP and local law on an unannounced basis, allowing us to see the factory conditions as they are on a typical day. Audits include specific criteria around risks for forced labor or human trafficking including the employment of vulnerable worker groups such as foreign migrants, interns and temporary workers and high-risk practices such as payment of recruitment fees or restrictions on freedom of movement. New factories are audited and must meet our minimum standards before production can begin. A re-audit will occur anywhere from 30 days to one year later, depending on the findings in the previous audit. In 2017, 83% of our direct sourced finished goods suppliers received at least one Social Compliance audit. Audits are performed by a combination of our internal CR staff as well as Columbia Sportswear authorized third party audit firms. We work with the suppliers to develop a Corrective Action Plan (CAP) to remediate issues identified during the audit.
CSC is a member of the Fair Labor Association (FLA), who performed two independent assessments at randomly selected CSC finished goods suppliers. The FLA validates the quality of our remediation due diligence of those assessments, and publicly posts the results to their website.

Training CSC regularly trains all internal supply chain management staff on slavery and human trafficking, with a particular focus on mitigating risks, to ensure they are knowledgeable and aware of the issues and concerns surrounding our supply chain. We also provide training on our SMP during new employee orientation, and offer several trainings on our SMP throughout the year for all CSC staff.
This statement covers January 1, 2017 to December 31, 2017, and has been approved by Columbia Sportswear Company Limited.
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