In August 2018 Ethical Consumer sent WH Smith a questionnaire requesting information about its supply chain management policies and practices. The company replied with its Ethical Trading Code of Conduct and links to its Corporate Responsibility report 2017.
SUPPLY CHAIN POLICY - GOOD
Ethical Consumer deemed it necessary for all companies to have a supply chain policy. A strong policy would include the following commitments: no use of a child under 15 (or 14 if ILO exempt), no use of forced labour, no discrimination by race, sex or for any other reason, permit freedom of association, pay a living wage, restrict working hours to 48 hours plus 12 overtime (ideally specifying these hours and that this is without exception). WH Smith's Ethical Trading Code of Conduct had all of these things, therefore its supply chain policy was considered to be good.
STAKEHOLDER ENGAGEMENT - RUDIMENTARY
WH Smith Plc stated in its response to Ethical Consumer that it was a member of Ethical Trade Initiative. The company's Corporate Responsibility report and Modern Slavery statement referred to a confidential worker hotline that used popular social media and administered by a third party NGO partner. However, there appeared to be no external input into the verification of audits.
WH Smith's stakeholder engagement was therefore considered to be rudimentary.
AUDITING AND REPORTING - RUDIMENTARY
Regarding auditing and reporting, WH Smith in its response to Ethical Consumer's questionnaire stated:
"We have an in-house audit and supplier engagement team based with our sourcing teams in China. We focus on WHSmith branded goods – mainly stationery items - and have an extensive programme of auditing of suppliers in place. Our team audit our own-brand suppliers at least every two years for compliance with our Code of Conduct (based on the Ethical Trading Initiative’s Base Code), grading them Bronze, Silver and Gold. A factory must achieve our Bronze grading or above if we are to work with them. We use a mix of announced and unannounced audits. We are increasing the number of unannounced audits to ensure that we are seeing as true a picture as possible of the factory conditions. Our audit schedule is designed on the basis of what we find during our visits – so suppliers with lower performance levels will be visited more frequently than those who receive a gold rating. We agree a corrective action plan with each supplier following the audit to ensure that issues are remedied, and track follow-up activity after the audit to ensure that non-conformances are addressed."
In its Corporate Responsibility report, WH Smith said that 'health and safety practice' was the most frequent issue identified in audits but it gave no further information or analysis of audit results. The company's auditing strategy appeared to only cover first tier suppliers and no mention was made of whether WH Smith bore the costs of the audits. WH Smith's auditing and reporting was therefore considered to be rudimentary.
DIFFICULT ISSUES - REASONABLE
The company's Corporate Responsibilty report stated that WH Smith employed a mixture of announced and unannounced audits and that it was increasing the number of unannounced audits "to ensure that we are seeing as true a picture as possible of the factory conditiosn".
In its questionnaire response WH Smith also highlighted its Worker Representative project:
"The aim of this initiative is to establish worker committees within our supplier factories in China where factory management and workers can engage on issues and work collaboratively on solutions to those issues. We have worked with 14 suppliers where we have good long-standing relationships, and have provided them with a toolkit to help them to establish better worker representation. The toolkit includes how to go about setting up a committee, how to elect worker representatives, how to draw up an agenda, how to run meetings so that worker voices are heard and how to address any issues raised. The aim is for factory management and workers to identify and resolve difficult issues in their organisation."
WH Smith's approach to difficult issues was therefore considered to be reasonable.
Since WH Smith's supply chain policy was considered good, its stakeholder engagement and auditing and reporting were considered rudimentary, and its approach to difficult issues was considered reasonable, the company received Ethical Consumer's best rating for Supply Chain Management.
Ethical Trading Code of Conduct (16 August 2018)