COP 7: DUE DILIGENCE 

Contact Information 

COMPANY NAME: Pyrrha 

DATE: November 18, 2024

REPORTING PERIOD: August 1st, 2023, to July 31st, 2024 (last Fiscal Year)

CONTACT: purchasing@pyrrha.com

STEP 1: ESTABLISH STRONG COMPANY MANAGEMENT SYSTEMS

Our Policies 

Pyrrha has the following Responsible Business Practices Policy and Supply Chain Policy in place with regard to our supply chain of gold, silver, diamonds, and coloured gemstones. These policies are communicated via email with suppliers when setting up new supplier relations and can be accessed via Pyrrha’s website (https://pyrrha.com/pages/responsible-business-practices-policy and https://pyrrha.com/pages/supply-chain-policy).

To support supply chain due diligence we commit to apply our annual due diligence process that is aligned with the code of practice requirements of the Responsible Jewellery Council. The senior manager responsible for overseeing supply chain due diligence is Laura Ward, Purchasing Manager, and the process is detailed in the Purchasing Manual.

Our Code of Conduct & KYC Questionnaire

Pyrrha has established a system of controls and transparency over our supply chain for precious metals, diamonds, and coloured gemstones that align with the Code of Practice guidelines from the Responsible Jewellery Council and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

When we identify a new supplier, we start by sending them our Supplier Code of Conduct for review and signature. The Supplier Code of Conduct outlines Pyrrha’s expectations for our business partners with respect to human rights (e.g. working conditions and prohibition of child labour, harassment, and discrimination) and the environment. We also share a questionnaire (the Code of Conduct Questionnaire), which requests information specific to the supplier’s business practices and ownership. All responses are kept on Pyrrha’s internal drive in unique supplier folders, and these efforts are summarized in our Supplier Database.

While we have always conducted research into new business partners to ensure we are values-aligned, over the past few years we have continued to strengthen our due diligence efforts with this internal documentation. Formalizing our polices and practices through becoming a member of the Responsible Jewellery Council, adding in timelines, and continuously reviewing our policies are just some of the ways we have improved our processes.

Each signed Code of Conduct Questionnaire is reviewed by our Purchasing Manager, and any red flags identified during this process follow the process as outlined in Step 2: Identify and Assess Risk in the Supply Chain.

To ensure that Pyrrha is capturing any changes to our suppliers’ business practices, we ask suppliers to review and re-sign our Code of Conduct and Code of Conduct Questionnaire every two years. In addition to this measure, we will be internally reviewing these documents on an annual basis to make sure that we are continuing to represent Pyrrha’s Responsible Business Practices policy, as well as capturing relevant information as we continue to improve our Due Diligence processes.

Our Grievance Mechanism 

Our grievance mechanism for internal stakeholders (i.e., employees) can be accessed via our website (https://pyrrha.com/pages/responsible-business-practices-policy). It is also found in our Employee Handbook and in our Policy Binder, which is in the common area of our Vancouver Studio.

Our external grievance mechanism is available via the Pyrrha website (https://pyrrha.com/pages/responsible-business-practices-policy). The employee responsible for these grievance mechanisms is the Director of Operations, who will work closely with the Purchasing Manager to address any concerns that come from Pyrrha’s supply chain.

In the reporting period, Pyrrha did not receive any grievances from internal or external stakeholders.

STEP 2: IDENTIFY AND ASSESS RISK IN THE SUPPLY CHAIN 

We assess our supplier’s due diligence practices upon initial contact with suppliers, and review and update our records each year. Initial screening of suppliers includes reviewing their website for information about the provenance of their materials and the due diligence efforts they undertake, as well as third-party certifications (e.g. RJC) that lend credence to these claims. We also engage with our contact for any clarifying questions that can’t be answered from their website. This helps to establish a relationship with the supplier that clearly outlines what our values and expectations are, which is formalized and solidified with our Code of Conduct and supplier Questionnaire. Especially in the case of diamonds and coloured gemstones, we enquire directly with our main contacts about the location of origin of specific stones we are interested in purchasing and ask for proof where available. All this information is noted in our Supplier Database and in individual supplier folders.

Our annual Due Diligence process starts by first confirming who our major suppliers were in the last fiscal year, based on spend. We then review documentation for all those suppliers to ensure we have signed Code of Conducts, completed questionnaires, and up-to-date information on the origin of their metals and stones. Any gaps in our database are investigated and filled in at this time. This process acts as a final check that we have all of the relevant information to be able to identify risks during our due diligence process.

To ensure we are spending the appropriate amount of time investigating where we have the most impact, we triage our suppliers by both annual spend and higher risk materials such as precious metals and precious stones. These are the supplies and suppliers that receive the most in-depth investigation.

Next, we update a list of Conflict-Affected and High Risk Areas that we have created, in alignment with OECD guidance. We compare our list of CAHRAs to the point of origin for our metals and gemstones, and identify and document any potential red flags using guidance from the RJC Risk Assessment Toolkit.

This year, we have expanded our capacity of assessing and determining CAHRAs to include more closely monitoring sanctions imposed by the Government of Canada. This way Pyrrha can better track the changes to specific sanctions during our quarterly CAHRA updates, rather than on an annual basis during our annual supplier database update. This decision was made in response to rapidly changing sanctions imposed on Russian diamonds that affected the jewelry industry directly. These specific sanctions took effect in March 2024, and have been amended as recently as September 2024.

This expanded step allows Pyrrha to have better systems of control on conducting deeper Due Diligence on CAHRAs and identify potential risks. We are always looking for continual improvement of our processes.

The vast majority of Pyrrha’s purchasing is done with one major supplier of recycled gold and silver located in Canada, and one supplier of silver chains located in Italy. The first supplier is in good standing with the LBMA, and both suppliers are member of the Responsible Jewellery Council. Our due diligence efforts confirmed that the raw metals we purchase are 100% recycled and originate in Canada and the US. This makes the majority of our supply chain very low risk.

We recognize the role that Gold has as a conflict mineral in many parts of the world. All refiners Pyrrha purchases recycled 24K gold from are on the LMBA good refiners list, and 14K manufactured items Pyrrha purchases are manufactured in non-conflict countries. Many of Pyrrha’s suppliers of manufactured 14K items hold RJC memberships or similar certifications. For those that don’t hold such certifications, Pyrrha is committed to engaging with them to encourage further upstream due diligence efforts. This is done through longstanding relationships, as well as our supplier Code of Conduct that is signed upon the start of the business relationship, as well as every 2 years to ensure any changes in the business practices or relationship are captured.

Our diamonds and coloured gemstones have been purchased from three suppliers in the past year. Our diamonds are considered melee, meaning that extensive information is not always available for each individual stone, but information is supplied in aggregate for these stones. We have confirmed with our suppliers that the diamonds we purchase do not originate from or pass through Russia, as per current Canadian sanctions.

STEP 3: DESIGN AND IMPLEMENT A STRATEGY TO RESPOND TO IDENTIFIED RISKS (if applicable)

TO RESPOND TO IDENTIFIED RISKS (if applicable)

The senior manager who receives the findings our risk assessment is our Director of Operations. All identified risks are reported to the Director of Operations, and discussed and followed up on in alignment with the RJC Code of Practice guidelines. We have downloaded and saved the RJC Due Diligence Toolkit, which we have used to create our own templates to create a Risk Management Plan tailored to each risk identified.

Pyrrha’s main strategy when a high-impact risk is identified is to temporarily pause purchasing from that supply chain while we work to gain more information in order to respond appropriately. If we identify a low risk, we continue the business relationship while we conduct our mitigation efforts. Mitigation efforts include speaking with our suppliers to gather more information about the source and movement of supplies as far up the supply chain as possible, conducting risk assessments on upstream suppliers where possible, and encouraging our suppliers to conduct their own supply chain assessments. If it is found that we are causing, contributing, or linked with any red flags identified, we will disengage if we are unable to successfully mitigate the situation.

During the reporting period, Pyrrha has not identified any major red flags in the supply chain. Analyzing potential risks surrounding labour practices within the supply chain is mitigated by engaging with suppliers directly on questions of labour practices within our Code of Conduct Questionnaire. In instances where language can be a barrier in understanding and accessing this information, Pyrrha is committed to working with suppliers in the form of additional time allowances, rewording and reframing questions as needed, and using translations if necessary.

Pyrrha is committed to using our influence in the jewelry industry to help support suppliers in strengthening their due diligence in the supply chain where needed, in an effort to continue to mitigate risks. We are also committed to updating and improving our processes on an ongoing basis.

Training 

Pyrrha provided the training regarding our due diligence activities to our Purchasing Manager throughout summer 2022. This training included reviewing the RJC Guidance Document, completing the COP 7 Walk Through, and reviewing OECD Due Diligence guidance. We now have a Training Checklist and an updated Purchasing Manual that includes training resources.

Reporting

We commit to publishing an annual update to this report each year going forward.

CARRY OUT A THIRD PARTY AUDIT (OPTIONAL INFORMATION)

Pyrrha joined the RJC in November 2021 and received a 3 Year Certification April 6, 2023. Our latest third-party RJC audit was conducted in September 2022 to achieve this certification. Our current certification is valid until April 6, 2026. Our next audit has not been scheduled, but is expected to take place in the Fall of 2025.