In January 2020 Ethical Consumer viewed Groupe Danone's website for the company's supply chain management policy. Danone's latest "Sustainability Principles for Business Partners" was downloaded, updated in 2017, which contained a suppliers code of conduct. There was a wider discussion of supply chain management on the company's website. On the basis of this, the company was rated as follows:
Supply chain policy (reasonable)
Danone made it compulsory for its suppliers to sign up to the Sustainable Development Principles (social, environmental and ethical) when entering into contracts, and these principles also covered their own suppliers and sub-contractors.
The code included adequate clauses on child labour, forced labour, discrimination and freedom of association. The clause on working hours stated that employees must have at least one day off each week. The clause on wages stated that employees should "receive a decent wage, as compared to standard pay practices in their country." Danone was considered to have a reasonable supply chain policy.
Stakeholder engagement (rudimentary)
Danone did not appear to be part of a multi-stakeholder initiative. It did not mention any systematic input from NGOs, although it had signed various conventions with the International Union of Food and Allied Workers. The Sustainability Principles stated "To report a concern, there is also a dedicated and secured reporting tool available called DANONE ETHICS LINE (www.danoneethicsline.com) that may be used. This reporting tool can be used anonymously. Anyone who genuinely reports a concern shall be protected from any retaliation." However, it was not stated whether suppliers employees were able to use this line in their own language, or whether they were required to be told of its existence.
The company was considered to have a rudimentary approach to stakeholder engagement.
Auditing and reporting (poor)
Danone stated on its website "In accordance with the RESPECT program, the tier 1 suppliers identified as high-risk undergo SMETA audits (Sedex Members Ethical Trade Audit) by a certified third-party organization... In 2017, 195 SMETA audits were conducted on Danone tier 1 suppliers, commissioned either by Danone or by peers."
The website further stated that there were 54 cases in which some action needed to be taken, all of which were resolved.
Very little further information could be found, however. There was no detail on the audit schedule, who paid for the audits or the remediation process, and no committment to audit the whole supply chain. So the companies auditing and reporting was rated as poor.
Difficulty issues (poor)
Danone did not appear to be addressing any of the difficult issues found within supply chains such as illegal freedom of association, payment of a living wage, audit fraud or purchasing practices.
Overall Danone received Ethical Consumer worst rating for Supply Chain Management.
Danone website (8 January 2020)