As highlighted in our 2024 Report, ESG evaluations have become an important consideration when identifying and appointing strategic business partners. These assessments are integrated into our vendor selection process to help ensure that prospective partners meet our expectations for environmental responsibility, social practices, and regulatory compliance.

The evaluation process starts with a detailed questionnaire that all prospective vendors must complete. The information collected enables us to assess potential partners more effectively and determine whether their practices are consistent with our ESG expectations. Key areas covered by the assessment include:

Enhancing ESG Performance Among Strategic Business Partners
We maintain close relationships with our supply chain partners to help ensure that they meet our required standards while encouraging continuous improvement in their ESG performance. Several measures have been established to support this objective:

Applying the Global SMETA Standard
During 2024, social and environmental audits were conducted across all strategic business partners using the globally recognized SMETA standard. These assessments provided an additional means of evaluating partners' sustainability practices and identifying opportunities for improvement.

The results of the SMETA audits were systematically reviewed, with any identified non-compliance incorporated into corrective action plans for the relevant strategic business partners. Particular attention is given to issues involving forced labor and child labor, as Caesarstone maintains a zero-tolerance approach toward such violations.

Monitoring ESG Performance Across the Supply Chain
During the year, we strengthened our focus on monitoring ESG performance across our broader value chain. These efforts are creating a foundation for deeper engagement with strategic partners and for establishing more effective ways of measuring and improving ESG performance as part of our wider sustainability strategy.

We have established processes and systems for tracking environmental indicators including electricity, fuel, and water consumption, along with waste management and raw material utilization. By extending these expectations to our strategic business partners, we aim to promote the same high environmental standards throughout the supply chain that we apply within our own operations and that our stakeholders expect from us.

As our ESG management framework continues to develop and we work toward our sustainability objectives, we recognize that managing an extended supply chain also carries a responsibility to promote strong environmental performance, protect worker health and safety, and strengthen governance through effective monitoring and continuous improvement.

Eastman has achieved a significant milestone with the Global Recycled Standard (GRS) certification awarded to its Naia™ Renew cellulosic fiber. This certification acknowledges Naia™ Renew's recycled content, supply chain transparency, adherence to social and environmental standards, and chemical limitations. The Naia™ team is thrilled to announce the production of the first batch of GRS-certified yarn, slated for delivery to a sustainable brand aligned with Naia™'s mission of democratizing sustainable textiles.
 
Jason Keller, Naia™'s product manager, expressed pride in the team's years of effort culminating in GRS certification. Meeting customer demand for GRS certification required dedicated work, and now, offering a certified sustainable product instills confidence and trust in collaborating brands.
 
The GRS certification, administered by Textile Exchange, holds immense significance in advancing sustainability within the fashion and textiles sector. Through thorough audits by independent assessors like SCS Global Services, GRS certification ensures transparency, environmental stewardship, social responsibility, and chemical safety across the supply chain. Eastman's attainment of GRS certification underscores its unwavering commitment to sustainability, fostering credibility with stakeholders.
 
Textile Exchange's decision to expand the scope of GRS certification with its Alternative Volume Reconciliation (VR2) policy update in June 2023 is noteworthy. This update accommodates a broader array of chemical recycling methods, including gasification utilized in Eastman's carbon renewal technology. By integrating gasification into GRS certification, the textile industry gains a more comprehensive approach to sustainable textile production.
 
Lacey Johnson, Eastman manufacturing technologist, highlighted the pivotal role of collaboration in driving innovation. Eastman's partnership with Textile Exchange and other industry stakeholders proved instrumental in advocating for the inclusion of molecular recycling technologies like gasification in GRS certification. This collaborative effort represents a significant stride toward advancing Naia™ and the broader textile sustainability landscape.
 
However, collaboration extends beyond this point. The real strength lies in brands and retailers adopting certified materials. When sustainable brands integrate certified fibers such as Naia™ Renew into their products, they convey a compelling message to consumers: sustainability is essential. By including these materials in their product offerings, brands not only contribute to a greener future but also motivate others to do the same.
 
Addressing the issue of textile waste
The textile industry increasingly emphasizes circular materials as a solution to tackle waste pollution, particularly textile waste. Eastman's molecular recycling complements mechanical recycling by offering a solution for challenging-to-recycle waste materials, including textiles affected by factors such as fiber blends, chemicals, and additives. Naia™ Renew, made from 60% sustainably sourced wood pulp and 40% GRS-certified waste materials, exemplifies Eastman's dedication to repurposing waste materials destined for landfills into valuable resources.
 
With Naia™ Renew, we pave the way toward a more sustainable future for fashion and textiles.