George: Doing the right thing 2011 2011 Doing the Right Thing 2011 Contents page 03 Section 1 Our Beliefs page 08 Section 2 Delivering on our commitments page 11 Section 3 Community Projects page 16 Section 4 Evaluating our success Doing the Right Thing 2011 Executive summary Success…but not at any price Why you can shop at George with a clear conscience... We’re proud of our Our pilot scheme in Bangladesh has been so successful we’re going to roll reputation for quality it out in factories in India and China. clothing at affordable It has achieved: prices. But we’re equally proud that our success 1 A 14 per cent increase in wages goes hand in hand with 2 A 10 per cent drop in absenteeism this guarantee: 3 A 5 per cent drop in labour turnover 4 A 17 per cent increase in efficiency From factory to wardrobe, we care passionately about the people who make our products. That’s just the start. This report sets out our commitment for the next two We work with more than 720 factories years. in 23 countries and although we don’t directly employ the people in them By 2013, our biggest suppliers must we take responsibility for protecting provide us with open costings about and promoting their welfare. human labour and full transparency on workers’ pay and rights. We work with NGOs and charities to improve workers’ rights, reduce By always doing the right thing, we working hours, improve working guarantee our customers can shop at conditions, increase skills and George with a clear conscience. provide health and education benefits. Doing the Right Thing 2011 Our Beliefs This year, George Sharing the progress we’ve made in how we work with our overseas will celebrate a suppliers shows our customers they watershed – the have a real reason to put their 21st birthday of our brand. ongoing trust in us for another 21 Reaching this milestone years. gives us an opportunity to This update represents the first step celebrate and a chance to in what is a complex journey. We’ve made some fundamental changes to reflect on our journey so far the way we’re working with our – not only on the success suppliers to create new levels of we’ve achieved, but also transparency within our supply chain. on our wider influence and From 2013, we will require all global impact as a company. suppliers working on core volume lines to share open costings on human Throughout those 21 years, we’ve labour. This is something that’s never remained true to a set of beliefs been done before and it’s a change founded on the importance of value, for the better; a change we’re Andrew Moore quality and trust and importantly on committed to help them make over MD, George at Asda doing the right thing. As a clothing the next two years. retailer, we recognise that our business relies on a supply chain that We also want to share how we are reaches across continents, improving workers’ rights, promoting encompassing factories and workers female empowerment, delivering in 23 countries. health and education, and at the same time delivering quality and value for As a responsible business, it’s our our customers. priority to ensure we treat people fairly, and show our customers they It hasn’t been an easy journey and we can trust us to do the right thing so don’t pretend we have all the answers. they can shop with us with a clear But with this update, we want to conscience. highlight the important progress we’ve achieved so far and to share our Because we’re part of Asda, offering hopes and aims in building George our customers quality, stylish clothing into a sustainable that’s fantastic value for money is in business for the future. our blood. The trust we have built with our customers over the past 21 years is of paramount importance to us. Doing the Right Thing 2011 Our Beliefs In 1990, George Davies Our Commitments established the George at Asda brand, the first 1 High quality at an supermarket clothing brand in the UK. Throughout its affordable price 21-year history, George has remained true to its beliefs : 2 Style that lasts – in The George Beliefs: • The George brand stands for quality, style and value durability and in design • We put our customers first every day • We care for our colleagues every day • We strive to be the best we can be every day 3 Customer involvement We also believe passionately in and influence within the doing the right thing. Our vision for sustainability is to ensure that George business is recognised as a trusted and innovative leader in ethical sourcing and environmental protection. Through Asda, we were a founder 4 A sustainable approach member of the Ethical Trading Initiative (ETI) and although this was from factory to wardrobe a great starting point on which to base our ethical standard we want to continue to develop and deliver the highest standards possible. Doing the Right Thing 2011 Delivering on our commitments: From 2013, we will require all global suppliers working on core volume lines to share open costings on human labour with full transparency on worker pay, including workers’ rights. We are committed to helping them make that change over the next two years. How will we do that? 1 Through Lean manufacturing 2 Standard Minute Value 3 Engagement of local NGOs and unions with international expertise on workers’ rights Delivering on our commitments 1 Lean Manufacturing About one in eight of the 721 The Aim factories we work with are based in • Empower the local workforce Bangladesh. Following a listening through improved skill levels group with the international • Increase earning potential for development agency ActionAid and workers, enabling them to enter a number of Bangladesh factory skilled pay-band levels workers in 2008, we committed to a • Reduce working hours to ensure a 12-month pilot project designed to better work/life balance increase factory productivity, improve worker skills, drive social The Result improvements, raise pay, improve The pilot was incredibly successful, quality, and reduce working hours, with factories achieving on average: labour turnover and absenteeism. • 14.2 per cent increase in workers’ wages We partnered with the local Dhaka- • Reduction of 7-10 hours wasted based arm of GTZ – the German time per week, per worker government’s overseas development • 17 per cent improvement in department – to help improve the efficiency productivity and efficiency of a • 5 per cent reduction in labour number of our Bangladeshi factories turnover by reducing waste, what’s known as • 10 per cent decrease in absenteeism lean manufacturing. Working with four key factories, we introduced a pilot programme to retrain workers; improve and reengineer production flow; and reduce both product damage and downtime. We are now rolling out the Lean manufacturing process on continuity lines across 17 factories in Bangladesh. The programme will then be rolled out to factories in India and China. Delivering on our commitments Labour Turnover 25% 20% Progress report on factories 15% that have participated in 10% Lean Factory pilot program. 5% The graphs show the detail behind the progress taking 0% place to date on wages, absenteeism, labour turnover and efficiency. Lenny Valiant Toyo KDS Before Lean After Lean 2010 Lean 2011 Wages % Wage Increase 9000 60% 8000 50% 7000 40% 6000 30% 5000 20% 4000 3000 10% 2000 0% Lenny Valiant Toyo KDS Lenny Valiant Toyo KDS Avergare wage (before Lean) After Lean 2010 Lean 2011 Total including benefits % wage increase % wage increase Feb 2011 vs before LEAN % increase including benefits % Productivity Increase Productivity 180% 9000 160% 8000 140% 7000 120% 100% 6000 80% 5000 60% 4000 40% 3000 20% 0% 2000 Lenny Valiant Toyo KDS Lenny Valiant Toyo KDS After Lean 2010 Lean 2011 Before Lean After Lean 2010 Lean 2011 % Absenteeism Improvement Absenteeism 80% 14% 60% 12% 40% 10% 20% 8% 0% 6% -20% 4% -40% -60% 2% -80% 0% Lenny Valiant Toyo KDS Lenny Valiant Toyo KDS After Lean 2010 Lean 2011 Before Lean After Lean 2010 Lean 2011 Delivering on our commitments 2 Standard Minute Value George has always been committed to For example, if the SMV for sewing in doing the right thing for all of its sleeves is 10p and it takes two minutes, colleagues, customers and suppliers. the cost per garment is 20p. Factory Although workers in the factories we owners usually calculate labour costs out source from are not directly employed of what’s left after they’ve accounted by us, we recognise that we have a for the price of commodities, freight and shared responsibility with other their profit margin. However, the George retailers to these workers to protect team will now work directly with and promote their welfare. factory owners and insist that cost prices to George buyers include Following the launch of ActionAid’s accurate labour costs upfront. This report, we have been investigating an helps us to check that workers are innovative new benchmark called being paid a fair rate for the job. ‘Standard Minute Value’. This process means factory owners can show accurate labour costs when quoting the cost of a garment. It’s a pioneering approach that defines an internationally-recognised method of accurately calculating, and therefore paying for, the work that goes into making a single garment. 3 Workers’ right s/NGO Engagement We are embarking on an impact assessment an international NGO using local unions in factories using lean manufacturing to see how further improvements can be achieved.