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California Transparency in Supply Chains Act

The California Transparency in Supply Chains Act of 2010 (SB 657), effective January 1, 2012, requires manufacturers and retailers above a certain size doing business in California to disclose their efforts (if any) to eradicate human trafficking and slavery from their direct supply chains. In support of this law, Big 5 Sporting Goods has provided the following disclosures:

Verification: We self-conduct annual verification of our private-label product supply chain to evaluate and address risks of human trafficking and slavery through various means including, but not limited to, reviewing factory profile information and external resources such as the U.S. Department of State's Trafficking in Persons Report and other information provided by third party trade associations.

Auditing: We annually require all of our private-label product factories to undergo announced audits to evaluate compliance with our Vendor Code of Conduct. These audits are conducted by an accredited independent supply chain assessment body, such as Intertek, and typically include, but are not limited to, individual or group interviews with factory supervisors and employees, factory tours for health and safety risks, and review of local wage and hour compliance. We also will accept audits conducted by other internationally accredited organizations, such as the Worldwide Responsible Apparel Production (WRAP) and Business Social Compliance Initiative (BSCI), provided these audits meet our internal criteria as stated in our Vendor Code of Conduct.

Certification: We require our private-label product manufacturers and most other vendors to certify that: (1) materials incorporated into the product produced for us comply with the laws regarding slavery and human trafficking of the country in which they are doing business; (2) they will comply with all other applicable laws and regulations including, but not limited to, labor, wages, and workplace health and safety; and (3) they are in compliance with our Vendor Code of Conduct. We also require our private-label product manufacturers to authorize us, and third party auditors acting on our behalf, to conduct audits (announced or unannounced) of the manufacturer's factory. Alleged violations of our policies are investigated and, if confirmed, appropriate corrective action would be taken, up to and including termination of employment or the business relationship.

Internal Accountability: Annually, all Big 5 employees are required to verify that they have read and understood our Code of Business Conduct and Ethics which, in part, requires employees to perform their duties in compliance with all applicable laws and regulations and requires employees to be familiar with the laws, rules and regulations that impact his or her specific duties. Employees are required to report all violations to a department vice president or supervisor, among others. Further, our private-label product manufacturers and most vendors are required to comply with our Vendor Code of Conduct which, among other things, prohibits the use of human trafficking and slavery throughout the supply chain. Alleged violations of our policies are investigated and, if confirmed, appropriate corrective action is taken, up to and including termination of employment or the business relationship. Failure to report known violations may also result in disciplinary action.

Training: We provide our employees who have direct responsibility in supply chain management with education and training on mitigating the risk of human trafficking and slavery within the supply chain. We are members of the National Retail Federation and the American Apparel and Footwear Association and work with other third party organizations with extensive experience and knowledge in the field of ethical sourcing. Our employees with direct responsibility in supply chain management also participate in relevant training programs, review white papers and other educational materials, and attend seminars provided by these or other organizations.