Headlam Group plc (‘Headlam’ or the ‘Company’) is committed to trading ethically, with zero tolerance for Modern Slavery (including human rights violations, child and forced labour or human trafficking in any form) in both its operations and supply chain.

This is Headlam’s Modern Slavery and human trafficking statement for the financial year ended 31 December 2023 and is published in compliance with the Modern Slavery Act 2015 (the 'Act').  It sets out the steps taken by Headlam and its UK subsidiaries to prevent human trafficking and slavery in its business and supply chain.  The Modern Slavery Statement is published on Headlam’s website (www.headlam.com) and additionally on each of the websites of the various trading businesses operated by the Company and its UK subsidiaries.  It has also been uploaded to the Government’s online registry.

The Chief Executive has responsibility for this statement on behalf of the Board, supported by the Chief Financial Officer, the Buying & Merchandising Director, the Head of ESG and the Responsible Sourcing Lead.

Operating for over 30 years, Headlam is Europe's leading floorcoverings distributor, providing the channel between suppliers and trade customers of floorcoverings.

Headlam works with suppliers across the globe, manufacturing a diverse range of floorcovering products, and provides them with a cost-efficient and effective route to market for their products into the highly fragmented customer base. Alongside long-established processing and distribution expertise, suppliers benefit from Headlam’s marketing and customer servicing into the most extensive customer base.

The Company’s customer base covers both the residential and commercial sectors, with the principal customer groups being independent retailers and smaller flooring contractors alongside other groups such as larger retailers, housebuilders, specifiers, and local authorities.

Headlam is focused on providing customers with a market-leading service through:

• The broadest product offering
• Unrivalled product knowledge and tailored solutions
• Sales team and marketing support
• Ecommerce support
• Nationwide delivery and collection service.

In 2023, Headlam worked with over 259 suppliers from 25 countries and fulfilled approximately over 3 million customer orders.
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In 2023, purchases from suppliers in the EU (including the UK) accounted for approximately 94% of total purchases (based on actual purchase prices from suppliers).  According to the Company’s risk assessment the greatest risk of modern slavery and human trafficking arises from non-EU parts of the supply chain (‘Higher Risk Areas’) which represent 6% of total purchases during 2023.

Headlam is committed to ensuring that there is no Modern Slavery or human trafficking in its supply chain or in any part of its business.  This reflects the Company’s commitment to acting ethically and with integrity in all its business relationships and to implement and enforce effective systems and controls to minimise the possibility of Modern Slavery and human trafficking occurring within its supply chains.

The Company’s Code of Conduct outlines that failure to abide with its provisions may result in the termination of the trading relationship with Headlam and immediate cancellation of all outstanding orders, and that non-compliance issues raised by regular audits and inspections will be subject to rectification to ensure full compliance.

Headlam Group plc is a registered member of SEDEX (Supplier, Ethical Data Exchange), an online platform which allows suppliers and manufacturers to register and provide their company and supply chain information and upload ethical audit reports and complete a Self-Assessment questionnaire, which can be viewed by their customers.

Headlam committed in the previous statement to recruiting an ESG manager, they are now in position and have since appointed a Responsible Sourcing Lead directly accountable for managing our supply chain risk, which continues to remain a priority.  
 
Following the role out of our Supplier Code of Conduct in 2022, during 2023 we continued to strengthen our approach to Supplier due diligence, determining supplier risk and expectations for corrective action plans for areas needing performance improvement.
Headlam Suppliers are prioritised for due diligence using a risk- based approach, as follows:

• Spend – The Headlam spend with a supplier is a measure of the depth and scope of the supplier partnership
• Geography – Headlam will use the most current Global Slavery Index to determine supplier risk. The risk will be assessed based o the supplier corporate office location, the site location and/or where the raw material supply chain originates.

This assessment then determines the timing of the due diligence assessments which leads to the supplier assessment scores and any recommended Corrective Action Plans to aid the improvement of supplier performance.

Our strategy for Modern Slavery training involves raising awareness across our business of the issues and giving confidence to our suppliers and colleagues to raise concerns.  Modern Slavery is a hidden crime and therefore empowering our colleagues who work within our supply chain, manage teams or agency workers and third-party contracts is essential to eliminating it throughout the supply chain.

During 2023, Headlam continued to rollout the Supplier Code of Conduct to suppliers.  Headlam hosted another Supplier conference, inviting our top 30 strategic suppliers to collaboratively talk about the importance of ESG and our plans to obtain and review ethical audits on 80% of manufacturers producing products under a Headlam brand from 2024.

Ongoing support and resources are provided to the Company’s employees interacting with suppliers to better help them identify slavery or human trafficking practices.  Training has previously been provided by management as part of equipping our colleagues to perform specific roles.  Modern Slavery Awareness training is a standard part of colleague induction.

Additionally, employees are protected by certain policies the Company has in place, including Anti-Corruption and Bribery, Fraud and Anti-Money Laundering and the Speak Up Policy and these were reviewed and approved by the Board during 2023 to ensure they remained appropriate.

The Company’s Speak Up Policy sets out the formal process by which an employee may, in confidence, raise concerns about possible improprieties in financial reporting or other matters, including any concerns relating to Modern Slavery.  Under the Speak up Policy, colleagues have direct access to an external managed help line that they can use to report any concerns should they feel they are unable to raise their concern with management.

Headlam Group plc and its subsidiaries will continue to assess suppliers and address any gaps in suppliers’ performance and will continue the roll out the self-assessment questionnaires to current and new suppliers.  The creation of an onboarding process will allow us to perform due diligence prior to engaging in any purchases with a potential new supplier.

Due to the success of the supplier conference, we will be hosting another in 2024 to further discuss the ESG actions and our ongoing plans with our strategic suppliers.  Headlam has recruited a Head of ESG to develop and oversee all aspects of our environmental, social, and corporate governance policies and procedures.

• Explore memberships for an appropriate third party to support in protecting Headlam’s operations, supply chains and communities against Modern Slavery and labour exploitation.
• Review Headlam’s supply base risk and look to commission an appropriate third party to conduct a number of Modern Slavery audits in key risk areas.
• Continue to review existing policies and processes and look to strengthen them to mitigate Modern Slavery risks.
• Provide more detailed and enhanced training for targeted colleagues on Modern Slavery.
• Obtain an ethical audit for 80% of our own label factories and ensure there is no critical risk.