Supplier Responsibility

Tiffany & Co. facilities—including diamond cutting and polishing, jewelry crafting and distribution—operate at the highest standards. No less rigorous are the standards used to evaluate Tiffany & Co. vendors. Tiffany & Co. established a multidimensional Social Accountability Program that includes comprehensive guidelines for the manufacturing processes of materials we procure, designed to ensure that our vendors and suppliers are held to the same exacting standards that Tiffany & Co. is proud to uphold.

For example, the Tiffany & Co. Social Accountability Program helps to ensure that our suppliers protect basic human rights. This program reviews our suppliers’ performance in relation to: hours of work, wages and benefits, health and safety, freedom of association and collective bargaining, transparency, child labor, forced labor, harassment or abuse, disciplinary practices, discrimination and environmental protection.

Our suppliers are expected, at a minimum, to conduct business in an ethical manner and to comply with all applicable laws and regulations. Our Vendor Code of Conduct communicates our values and expectations for our business partners. In 2010, we modified our supplier requirements so that suppliers review the Vendor Code of Conduct on an annual basis.

To ensure that our suppliers meet Tiffany & Co. standards, we have implemented a multiphase assessment process of our supply chain:

1. Vendors are required, when applicable, to complete a self-assessment of their performance against our Vendor Code of Conduct.
2. Tiffany & Co. performs internal audits of our vendors.
3. Tiffany & Co. contracts with a third-party social responsibility auditing firm to provide audits on our suppliers.

Tiffany & Co. third-party audits are conducted over a two-year cycle. During the Fiscal Years 2010 and 2011 cycle, 23% of all vendors were classified as high-risk, determined by a vendor self-assessment, industry and geographic location. In Fiscal Year 2010, Tiffany & Co. audited 50% of the high-risk suppliers. 95% of these audits were conducted externally and 5% were conducted by Tiffany & Co. internal audit teams. The remaining high-risk suppliers were either terminated in Fiscal Year 2010 or have audits planned in Fiscal Year 2011, in order to perform audits on all of our high-risk suppliers during the two-year audit cycle.

When suppliers are found to be in noncompliance with Tiffany & Co. requirements, every effort is made to work with the vendors to correct their noncompliance. If the vendor continues to fail to meet our requirements, the relationship is terminated.

This three-tier system ensures that suppliers meet the rigorous demands of Tiffany & Co.’s Vendor Code of Conduct plus applicable laws and regulations.

As referenced above, Tiffany has a comprehensive supply chain auditing program which addresses the risks of human trafficking and slavery. Our audits are conducted both internally and by a third party. Third-party verification is required of all of our high-risk suppliers, determined by a vendor self-assessment, industry and geographic location.

Audits are conducted to evaluate compliance with the Tiffany Vendor Code of Conduct as well as local and international labor laws and regulations.

If a nonconformance is found, we have a corrective actions process to resolve the nonconformance. If nonconformances persist, Tiffany ceases to do business with the supplier.

Tiffany supply chain management have received training on our Social Accountability Program, which includes mitigating risks of human trafficking and slavery within our supply chain.