The Warehouse Ethical Sourcing Report 2021
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ETHICAL SOURCING REPORT 2021 2 CONTENTS INTRODUCTION APPENDICES 04. CEO introduction 22. 2019 – 2020 KPI table 05. Programme at a glance 23. Factory policy poster 06. Top 20 source countries 24. Apparel tier 1 factory list 2020 SUMMARY 26. Apparel tier 2 factory list 08. 2020 summary 36. Apparel brand list 10. Her Project updates 37. Other categories factory list Getting the most from this report 12. COVID-19 updates 49. Country wage & working hour table A brief overview of our programme and progress in 2020 can be viewed on pages 5 and 8. Our key areas of focus 13. Responding to forced labour risks and achievements can be found on pages 10 to 20. SUSTAINABLE MATERIALS Finally, the appendices from page 22 reveal performance trends over the past two years, and feature our factory 16. Better Cotton Initiative policy poster, brand and factory lists and source country wage and working hour data. 17. Forest Stewardship Council OUR POLICY IN PRACTICE 19. Policy in practice ETHICAL SOURCING REPORT 2021 INTRODUCTION. ETHICAL SOURCING REPORT 2021 4 CEO’S INTRODUCTION. APPENDICES programme. I believe, given our scale and challenges and achievements to date, diversity, this is the leading programme as well the road ahead. We invite both of its kind within the New Zealand retail your encouragement and suggestions for Ethical Sourcing is just one programme sector. improvement. within The Warehouse’s suite of “Sustainable & affordable” initiatives. Within The Warehouse Group’s 2020 Finally, I want to express my sincere Sustainable & affordable is The POLICY IN PRACTICE POLICY Annual Report, I pledged that COVID-19 gratitude to our ethical sourcing Warehouse’s guiding statement and will not slow down our commitment specialists and their colleagues within branding device representing our to becoming one of New Zealand’s our 200 person strong sourcing team. aspiration to become one of New Zealand’s most sustainable companies while The results in this report are testament most sustainable companies while still continuing to deliver great value to our to their hard work and strong supplier delivering great value to our customers. customers. Ethical Sourcing is an collaborations through a unique and indispensable element of this, along with challenging year. our parallel commitments to climate change action and carbon neutrality, Kia Kaha. SUSTAINABLE SUSTAINABLE MATERIALS community engagement, waste reduction As l look back on the extraordinary and sustainable procurement – to name Nick Grayston disruption and challenges that COVID-19 a few. Group Chief Executive Officer brought to our business in 2020, The Warehouse Group I’m really proud to tell you that the Ethical and sustainable sourcing is momentum of The Warehouse’s Ethical a complex sector and while we have Sourcing Programme has continued made considerable progress through 2020 SUMMARY unabated. our programme, there is still a long way to go as we look for new ways to drive In fact, as I hope you will see in this positive change in our supply chain. report, in many ways 2020 was a The goal of this report is to provide benchmark year for the evolution of our full transparency about our journey, INTRODUCTION ETHICAL SOURCING REPORT 2021 5 PROGRAMME AT A GLANCE. APPENDICES In 2020 The Warehouse’s private label vendor responsibility. The Warehouse’s own 170 208 88% 1 Newly qualified products were sourced from 489 factories internal ethical sourcing experts delivered Audits Audit primarily located in China, Bangladesh, 23 supplier responsibility trainings to factories transparency India, Vietnam, Malaysia, and Pakistan.2 our largest vendors and trading houses, 47 About 246,000 workers were involved enabling them to take greater responsibility Worker feedback and POLICY IN PRACTICE POLICY in this production. 170 new factories for factory standards. helpline trainings A 86% 98% (67% of applicants) qualified ot enter our ud e it Average overall Production ic a supply chain via third party Labour and Our due diligence and investigative o n audit score traceability v d Environmental Audits. work revealed one case of underage r ction d e du ba u 2200 k o s e labour and 22 instances of unauthorised r r e o P d Worker i Our audit transparency rating – an subcontracting. l W i interviewees g important indicator of the reliability of e n audit disclosures – improved to 88%. 208 In such zero tolerance instances we always c e audits were completed in the year. Our follow a strict protocol to protect the Active qualification processes and the linkage of welfare of any underage worker and apply factories order data to production sources means commercial disciplines and penalties, 489 SUSTAINABLE SUSTAINABLE MATERIALS that we can currently trace 98% of our including business termination. r e product range to a qualified actorf y. We i Z l 1 p 268 continue to place strong emphasis on the More than 2000 workers were interviewed e r p Underage o 246,000 Corrective action execution of any corrective action plans by our own staff or third parties to ensure u worker findings t Production s t plan oversight generated by external audits. 268 such we were integrating their voices into any o d n l n e e workers a plans were being tracked to completion corrective actions we asked factories to ra m n n p c io lo by our internal team. In support of these undertake. Our team presented a new e at e fi di v improvements, factories completed over training on worker feedback and helpline n e de 22 din em 2037 23 2020 SUMMARY R 2000 e–Learning lessons on topics such mechanisms to 47 leading vendors and Unauthorised gs Elearning Supplier as audit preparedness, working hour factories. subcontracting lessons responsibility control, transparency and ethics, and findings trainings INTRODUCTION 1. Factories with orders >USD 50K in the period. 2. See supply chain map on page 6 and factory lists pages 24. ETHICAL SOURCING REPORT 2021 6 TOP 20 SOURCE APPENDICES COUNTRIES. 0.96% UK 2.36% 65.43% USA China The Warehouse’s supply chain China remains the largest source comprises a network of country by a big margin with its 1.91% POLICY IN PRACTICE POLICY India New Zealand and Australian based unparalleled category mix, integrated agents and suppliers, and our own raw material and component supply direct sourcing offices in Asia. Our chain and efficient logistics and merchandise consists of both national infrastructure. We are developing 5.15% Bangladesh and international brands, and The new sources in India, Bangladesh and 8.14% Warehouse’s own private label ranges. Pakistan especially in apparel and NZ Made home textiles. In 2020 about 47% of sales were derived from our own branded New Zealand remains an important Sourcing office staff members 5.94% merchandise. Our ethical sourcing source country for food, beverage and Shanghai 120 Dhaka 23 Australia policy and all relevant New Zealand everyday grocery items. Delhi 12 Auckland 35 SUSTAINABLE SUSTAINABLE MATERIALS laws and regulations apply to all suppliers. The assurance mechanisms described in this report are deployed only to our private label suppliers Source countries Share of Sales Source countries Share of Sales Source countries Share of Sales and their Tier 1 (final manufacture) factories.1 China 65.43% Thailand 1.16% Italy 0.44% The accompanying map and table New Zealand Made 8.14% United Kingdom 0.96% Switzerland 0.38% 2020 SUMMARY illustrates the top 20 source countries Australia 5.94% Vietnam 0.89% Poland 0.34% for all products sold in The Warehouse, Bangladesh 5.15% Malaysia 0.75% Indonesia 0.34% and the location of our direct sourcing teams including quality and ethical United States of America 2.36% Pakistan 0.60% Belgium 0.24% sourcing specialists. India 1.91% Germany 0.52% Canada 0.21% New Zealand Assembled 1.90% France 0.47% INTRODUCTION 1. A list of these factories can be found on pages 24-37. ETHICAL SOURCING REPORT 2021 7 2020 SUMMARY. ETHICAL SOURCING REPORT 2021 8 APPENDICES Despite COVID-19 disruptions to our overall at 56% over 54 plans - reflecting orf close is the challenge posed by the very Chinese supply chain early in 2020, and most part persistence of high average weekly small percentage of factories at the tail of later elsewhere in Asia, activities reached working hours in Bangladesh. our supply chain with low order volumes an all time high and helped to deliver very Underpinning these tangible improvements – usually small factories that have some promising outcomes for our f actories. is all the supplier training and development unique capability. The cost of an external POLICY IN PRACTICE POLICY work undertaken by our internal teams in audit is too high for this kind of supplier - Our 2020 new factory entrant numbers China and South Asia. This includes factory given the low value of their business with us. were down year-on-year as audit activity enrollment in our e–Learning curriculum, For this reason previously they would not paused due to COVID-19 lockdowns. We supplier workshops both in person and have had any kind of formal assessment. For took special care to ensure that worker rights virtually, and factory visits. In some cases, these cases we have adapted our audit into a were not comprised by COVID-19 by regular multiple forms of engagement are needed to simplified self-assessment which we require surveys of factories in India and Bangladesh create the supplier motivation and capability them to complete along with some e– on their COVID-19 lockdown status, the needed to effect change. Learning lessons. Our internal team review maintenance of their payroll obligations, and these self-assessments and randomly select their adherence to industry COVID-19 safety An opportunity we had identified in our some candidates for an onsite assessment by protocols.