In November 2020 Ethical Consumer viewed a questionnaire returned by Lush, and the company's 'People Care, EarthCare & Fair Share Buying Policy 2019' for information on how the company managed workers' rights in its supply chain.
The policy stated, "We require everyone in our supply chain (all direct and indirect suppliers of raw materials and packaging products and their subcontractors) to share and adhere to these policies."
Supply chain policy (rudimentary)
A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.
Lush had adequate policies on the following: forced labour, freedom of association, child labour and discrimination.
The company stated: "Working hours may exceed 60 hours in any seven-day period only in exceptional circumstances where all of the following are met: this is allowed by national law; this is allowed by a collective agreement freely negotiated with a workers’ organisation representing a significant portion of the workforce; appropriate safeguards are taken to protect the workers’ health and safety; and the employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies." In circumstances where a company was a member of the Ethical Trade Initiative (ETI), Ethical Consumer would consider such a clause adequate. However, as Lush was not a member of the ETI, Ethical Consumer considered this clause inadequate.
The company did not have an adequate clause regarding the payment of living wages as it required minimum wage only.
Overall, Lush was considered to have a rudimentary supply chain policy.
Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
In its questionnaire, Lush stated that it was not part of a multi-stakeholder initiative, but it did ensure that "all buyers globally receive training from the ETI", although it is not an ETI member. It also stated, "Where there are materials or areas that are of concern, we will look to utilise external expertise if needed'. Lush was therefore not considered to meet the first two criteria. The company's People Care, Earth Care, Fare Share Policy provided a link to the company's whistleblowing policy which stated that it applied to supplier employees (among other groups) and that anonymity would be protected where possible. It provided an email address but did not provide a telephone number nor state anything regarding language as such it was not considered adequate. Overall, Lush was considered to have poor stakeholder engagement.
Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The costs of the audit should be borne by the company.
In it's questionnaire, Lush stated that it did not commission third party audits as standard. "Wherever possible we look to create long term relationships directly with suppliers, growers and producers, visiting them ... to see first hand the working conditions." It also stated: "During 2020 we have completed the implementation of ‘Supplyshift’, which is a supplier engagement, management and responsible sourcing platform. It is a system that allows for internal auditing. It covers supply chain mapping, supplier benchmarking, risk analysis, reporting and supplier surveys." It also said it could be used for external auditing. However, it did not provide a clear audit schedule, commitment to audit its whole supply chain, audit results nor information on who bore the cost of audits. Its People Care, Earth Care, Fare Share Policy did outline a staged approach to instances of non compliance. Lush only had adequate policies addressing one of the above clauses. It was therefore considered to have a poor auditing and reporting.
Difficult issues (reasonable)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
Lush provided ongoing training on supply chain issues for buyers and procurement workers with the ETI.
It stated that it aimed to create long term relationships with its suppliers.
It also had specific policies relating to high risk commodities, for example it stated: "As cocoa is known to be a high risk commodity in terms of labour rights, Lush only buys Fair Trade, Organic certified cocoa."
Lush had policies around the problem of zero-hour contracts: "There shall be no zero-hour contracts unless it is the preferred choice of the employee"
Lush had policies to address the potential problems of homeworking. (These policies had been devised in the instance of a cooperative supplier wanting to implement some forms of homeworking): "We accept the presence of homeworking and subcontracting within our supply chain where mutually agreed. We want to work with our suppliers to ensure good labour conditions in our supply chains. We ask our suppliers to communicate this policy to all homeworkers / subcontractors and to declare to Lush where homeworking / subcontracting occurs in supply chains."
Regarding modern slavery, Lush stated that in 2020 it would undergo Stronger Together's Organisational Performance Assessment.
Overall, Lush was considered to have a reasonable approach to difficult issues.
Overall Lush received Ethical Consumer's middle rating for Supply Chain Management and lost half a mark in this category.
People Care etc Policy (2019)