As supply chains continue to expand globally and remain exposed to geopolitical, regulatory and environmental pressures, oversight of upstream risks has become a defining feature of resilient business models. For portfolio companies with complex supplier networks, supply chain practices can be closely linked to brand reputation, operational continuity and long-term value creation. We therefore continue to focus on strengthening practices that support resilient and sustainable supply chains.

The regulatory landscape governing supply chains and human rights due diligence is evolving rapidly. Legislative developments such as the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD) and the EU Deforestation Regulation (EUDR) are reshaping expectations across Europe. These are complemented by national frameworks such as the German Supply Chain Act (LkSG), as well as international measures including the US Uyghur Forced Labor Prevention Act (UFLPA) and the California Transparency in Supply Chains Act, which impose disclosure and due diligence requirements on in-scope companies with exposure to global markets.

In 2025, Oakley strengthened its approach by embedding enhanced human rights due diligence into transactions where human rights considerations were identified as material, strengthening regulatory monitoring, and formalising supply chain expectations for portfolio companies with material supply chain exposure. Together, these initiatives support a more consistent, portfolio-wide approach aligned with evolving regulatory expectations and recognised international standards.

a) Strengthening human rights due diligence

During 2025, we formalised an adviser-led human rights due diligence process for transactions where human rights were identified as a material topic. For investments with complex sourcing models, Oakley engaged specialist consultants to conduct in-depth assessments, supply chain risk mapping, policy and process analysis, and structured engagement with management teams, as part of due diligence. This provides earlier visibility on material risks and supports informed diligence discussions and post-investment planning.

b) Monitoring the evolving regulatory landscape

Alongside transaction-level due diligence, Oakley conducted a regulatory risk assessment for portfolio companies focused on supply chain and human rights-related legislation across key jurisdictions. This helps portfolio companies track enacted and emerging legislation and anticipate evolving reporting and due diligence expectations. By consolidating developments, we can better support preparation for disclosure, traceability and risk mitigation requirements and embed regulatory preparedness into longer-term planning.

c) Formalising supply chain expectations

In 2025, we formalised a structured set of supply chain expectations for portfolio companies with material supply chain exposure as part of a wider supply chain analysis project (see Spotlight: Building a structured supply chain strategy). The framework (see below) provides a consistent reference point from which practices can be strengthened over the course of our holding period. Progress will be monitored annually through our sustainability survey, alongside ongoing engagement with management teams.