Ethical Sourcing
Update: Bangladesh

"For the multinational retailers like Tesco who source from Bangladesh, we must help it to change in a positive way, a way which sustains and improves the livelihoods of all those who work in the industry."

Tesco Group Commercial Director Kevin Grace blogs about Tesco and the Bangladesh garment industry.
Read the full article here.

Trading Fairly

Supporting decent labour standards in Tesco's supply chain

Throughout the world, our customers want safe, affordable products. Many also want to know that what they buy is sourced to robust ethical and environmental standards.

We believe it is possible to provide for all our customers, whatever their needs, whilst upholding strong standards across our business and in our supply chains.

Millions of people who work in our supply chain rely on us for their livelihoods, and our trade makes an important contribution to the communities of many more. In turn, we rely on our suppliers to provide us with products our customers want. Ensuring good labour standards throughout our supply chain is not only the right thing to do, but also makes good business sense.

'Trading Fairly', Tesco's ethical trading programme is a core element of our promise to buy and sell our products responsibly and exists,

"so our customers can know that everything they buy is produced under decent conditions, and
everyone involved is treated fairly".
The ETI Base Code

We are a founder member of the Ethical Trading Initiative (ETI) and we expect all of our suppliers to meet the standards set out under the ETI Base Code and ensure their workers the rights within it. For more information see www.ethicaltrade.org.

Working with our suppliers

What do we do?

We are able to bring exceptional value to our customers by buying directly through our network of international sourcing teams and building long term relationships with our suppliers, working closely with them to ensure our products are sourced responsibly.

How do we do it?

Trading Fairly is fully integrated within Tesco's commercial division, forming a key part of our broader approach to corporate responsibility. Its objectives and activities are delivered by a wide range of commercial staff, overseen by a specialist ethical trading team including dedicated local staff in key supplying countries.

It covers everything we source for our own-label including Tesco brands such as F&F and Tesco branded products in UK stores, and goods and services not for re-sale to customers. Given our growing international business, we continue to strengthen our ethical trade systems for countries in which we operate outside the UK.

The challenges

Trading Fairly is a long term commitment for Tesco and its suppliers. While those operating in developed markets mostly meet the provisions of the Base Code, compliance in other markets remains more challenging. In supporting our suppliers, wherever they are based, to achieve the standards that we expect, we make substantial investments in people and resources. Our ethical trade managers in Bangladesh, China, South Africa and South America work closely with our suppliers and local stakeholders to address issues important to workers. Where suppliers show a commitment to addressing issues and improving standards they can expect our support, however those that refuse to engage can expect us to review and in some cases terminate our business with them.

For more information on our Trading Fairly process please see www.tescoplc.com

Tesco 'Ethical Champions'

Although our Buyers in commercial teams have a key role to play in supporting Trading Fairly, it always helps to have individuals who can spread best practice and identify and act on issues early. Our 'Ethical Champions' support Trading Fairly on a day-to-day basis , working closely with commercial teams to review the potential impact of decisions, escalate complex issues and ensure our suppliers are adequately supported. We now have over 50 Ethical Champions across our UK and international businesses, many of whom hold Technical roles within their category, and as such are ideally placed to take a strategic view of supplier management and on-going development.

Investing for the future

Alongside our day-to-day programme, we fund projects to address specific local needs, build our understanding of issues and support our suppliers core capacity to deal with ethical trading challenges. In the clothing category two such initiatives include:

Bangladesh Skills Foundation

We are in the process of establishing a new skills training business in Bangladesh to improve working conditions, productivity and efficiency in ready-made garment (RMG) factories, a major opportunity given that many operate at relatively low efficiency compared to those in other countries.

Supported by local suppliers, industry associations, Government, NGOs, Union representatives and academic experts, the Skills Foundation seeks to support better businesses and great jobs by helping boost participating factories efficiency, making them more cost effective and better equipped to compete in the global textile market.

The Skills Foundation also aims to improve conditions and basic wages through courses in human resource management and professional skills training. The business will be open to all Bangladesh RMG factories whether or not they supply Tesco. The initiative is funded by Tesco, with a match funded grant from UKaid's Responsible and Accountable Garment Sector (RAGS) Challenge Fund.

RAGS Benefits for Business and Workers

With co-funding from the UK Government's Responsible and Accountable Garment Sector (RAGS) Challenge Fund, Tesco has started working with five other UK retailers with an interest in the garments sector to pilot a model approach to helping suppliers build better, more efficient and profitable businesses which provide better jobs for workers.

Focusing specifically on initiatives to improve productivity and efficiency, this RAGS project aims to work closely with suppliers to improve communication in the workplace between managers and the workforce.

F&F and the communities in our supply chain

In 2009 we launched the sell-out 'Buy One, Give One' range, in which we donated a school uniform to a child in Kenya for every school uniform bought by our UK customers. 12,000 children received sparkling new school uniforms through the scheme.

Extending the 'Buy One, Give One' programme into 2010 and 2011

Following the huge success of 2009, we expanded the 'Buy One, Give One' programme to Bangladesh and Sri Lanka. As children went back to school in the UK with new Tesco uniforms, 100,000 brand new uniforms were donated to children in need in Kenya, Bangladesh and Sri Lanka, giving them the opportunity to gain access to education and giving them a chance for a brighter future.

"Thank you for giving my daughter the gift that means she can attend school and be proud," - Sri Lankan mother

Family support for garment workers

In 2009/10 we developed or improved creche facilities for our key suppliers in Bangladesh. The creche's have allowed workers to make childcare arrangements so they can go to work, while their children have a high standard of care.

"I used to pay part of my salary to a lady to take care of my baby, now I don't have to and it's a big help to my family" - Factory Worker

Giving to charities in the UK

We continue to donate our entire UK end of line and unsold clothing and accessories to charities, including Cancer Research and Birth Defects Foundation (BDF).
F&F and the Environment

We have committed to reducing our supply chain emissions by 30% by 2020 and our customers emissions by 50%.

Carbon and Water Management:

We are working with our internal expert Climate Change team on several projects with our suppliers to produce targets and develop measures to effectively manage water and carbon reductions with our suppliers.

We are a member of the Better Cotton Initiative (BCI). 'BCI exists to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector's future'

Since 2009 through reusing and recycling our hangers, we have stopped 1,700 tonnes of plastic going into landfill. Hangers collected at the till point are then sent back to the garment factories where they came from to be re-used, and non-reusable hangers are recycled in the UK.

Supporting our suppliers for cleaner, greener garments:

A key part of our commitment to reduce supply chain emissions by 30% by 2020 is the Tesco Knowledge Hub. The Knowledge Hub is an online community for our global suppliers to share their experiences and solve problems to help share best practice and make progress efficiently.

Supporting our garment factory suppliers:

All our suppliers have used our Green Factory Guide since 2008, which helps our suppliers run their factories in a more efficient way. The Guide gives advice on how to save energy and water, reduce emissions and in turn helps us to give great value for our customers.

Supporting our garment processors:

We also have our Green Processor Guidelines to compliment the Green Factory Guide. The Green Processor Guidelines provide practical support for our dyehouses, printers, laundries and other wet finishing processors to reduce the environmental impacts of their products and processes.

Customer support:

If it's not Dirty, Wash at 30°:
We are working with other categories in Tesco, such as detergents and washing machines, to help our customers reduce their laundry emissions. 'If it's not Dirty, Wash at 30°' launched in 2011 and provides our customers with simple laundry hints and tips that makes a big impact on the environment.

To learn more about Tesco's wider approach to corporate social responsibility across our whole business please visit:
http://www.tesco.com/greenerliving/