In December 2019 Ethical Consumer received a questionnaire response from Sainsbury's and attached or linked information on the company's supply chain management, namely, 'Supplier Policy on Ethical Trade' (July 2019), Sainsbury's Values Update 2019, Sainsbury’s Argos Site standard, and the Sainsbury's Argos Code of Conduct (issued November 2018).
Supply chain policy (rudimentary)
Sainsbury's Argos Code of Conduct included adequate provisions on forced labour, working hours, living wages, freedom of association and discrimination. The clause on child labour did not define the age of a child restricted from working, but it stated "Under the code of conduct, all our suppliers must comply with the ETI Base Code", and was a member. For this reason it was considered adequate. It also stated, "The Standards which apply to all of our suppliers".
However, it did not mention its Habitat business. In Sainsbury's 2018 Annual Report it had stated: "Following the acquisition of Home Retail Group in 2016, we have focused on integrating Argos into our Sustainability Plan and will be looking at Habitat next." Sainsbury's does not appear to have yet applied its Sustainability Plan across the whole Home Retail Group. Sainsbury's supply chain policy was considered to be rudimentary as it did not appear to cover its full supply chain including that for Habitat.
Stakeholder engagement (rudimentary)
Ethical Consumer viewed the Ethical Trading Initiative's website in October 2019 and found that Sainsbury’s was listed as a full member of the multi-stakeholder initiative.
While the company is one of the largest retailers in the UK of Fairtrade certified own branded products it announced in 2017 that it was going to stop using the certification scheme and use its own – Fairly Traded label, which has attracted criticisms for its lack of independence.
Regarding a complaint hotline for workers’ within its supply chain to report violations of its code of conduct, Sainsbury's stated in its questionnaire response: "We use an independent hotline, Sainsbury's RightLine... in our Fairly Traded tea pilot across Malawi and Rwanda ... local parties receive information via Short Message Service (SMS) to dedicated local numbers, translate these into English and pass them to RightLine."
"As literacy remains an issue for farming populations, we are also trialling Computer Assisted Telephone Interview surveys in Malawi. ... The surveys are coordinated by Geopoll, a full-service research provider utilising a mobile survey platform that can be multi-modal and has extensive experience globally conducting survey research. ... Farmers can provide feedback through the surveys for free, with credit returned to respondents’ phones."
Overall the company was considered to have a rudimentary approach to stakeholder engagement.
Auditing and reporting (rudimentary)
Attached to the questionnaire response was a Sainsbury’s Argos Site standard, and the response also linked to
Sainsbury's 'Supplier Policy on Ethical Trading', which stated: "We recognise the importance of being aware of labour practices in our supply chains and the need to monitor, evaluate and act on information about our suppliers’, sites’ and growers’ performance. To do this, we use a range of tools including independent, third party audits of suppliers and sites, self-assessment questionnaires and confidential mechanisms for workers to highlight issues. We view worker and supplier communication as critical for identifying and resolving supply chain issues."
It stated that all suppliers must:
"Ensure all production sites have a 2-pillar SMETA ethical audit according to their risk rating carried out by a Sainsbury’s approved audit body and other Sainsbury’s requirements:
High risk: every 12 months
Medium risk: every 24 months
Low risk: at TM discretion
New site: within 12 months prior to being registered on Evolve
"Suppliers must directly commission any audit. We also accept Social Accountability International (SA8000) and SIZA audits." The policy included definitions of high, medium and low risk, based on previous compliance with the policy.
The policy also stated that the company would implement corrective action plans for non-compliance, and outlined time frames within which any non-compliance or whistleblower complaint had to be referred to the company. No information about audit costs could be found, however Sainsbury's 2016 questionnaire stated that these would be borne by the supplier.
Although Sainsbury's had a remediation strategy, no results could be found from inspections, and for low risk suppliers there was no specific audit schedule. It had a scheduled and transparent audit plan. This 'Supplier Policy on Ethical Trading' was referred to in its questionnaire response as its Food Audit. The document itself referred to Food/ Drink/ Household/ Health & Beauty. It still appeared to be limited to the Sainsbury's supermarket business rather than including Argos or Habitat. However, the Sainsbury’s Argos Site standard was also attached. This stated that "each site must complete a SMETA audit for Sainsbury’s every 12months". It outlined the process of Corrective Action Plans, and that verifying action on issues raised "must be verified by the 3rd party audit company... at the suppliers cost."
As the company had a schedule and remediation policy, but disclosed no audit results and did not cover audit costs, it was considered to have a rudimentary approach to auditing and reporting.
Difficult issues (rudimentary)
Sainsbury's Supplier Policy on Ethical Trade stated "We are committed to providing guidance, training and support to suppliers where needed and to ensuring workers in our supply chain are aware of the provisions of the Base Code and our commitment to ethical trade." It also stated “We recognise the contribution that stable business relationships make to the observance of good labour practices and endeavour to establish long-term and productive relationships with our suppliers.” It also stated that labour agencies should be audited by suppliers at least annually for compliance with national laws, and recommended using a third-party auditor to do this.
Sainsbury's was considered to have a rudimentary approach to difficult issues.
As Sainsbury's had a rudimentary approach to all four sections it received Ethical Consumer's middle rating for its Supply Chain Management.
2019 Supplier Policy on Ethical Trade – Sainsbury’s Brand (22 October 2019)