In July 2020 Ethical Consumer viewed several documents on the company's website, including the company's Sustainability Report 2019 and a document called: 'The Co-op’s Sound Sourcing Code of Conduct', dated to December 2017. Ethical Consumer also viewed the company's completed Ethical Consumer questionnaire dated December 2019, which, in the absence of information to the contrary, was assumed to contain currently accurate information. On the basis of this, the company was rated as follows:

Supply chain policy (reasonable)
The Sound Sourcing document, based on the Ethical Trading Initiative Base Code, included adequate provisions on the following ILO conventions: forced labour, child labour, freedom of association and non-discrimination. The company also had adequate clauses on payment of living wages as it stated, "In any event wages should always be enough to meet basic needs and to provide some discretionary income."

Regarding working hours, it 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.'
Usually Ethical Consumer expects working weeks over 60 hours to be prohibited under any circumstances, but since the Ethical Trade Initiative amended its provision on working hours to allow exceptional circumstances, Ethical Consumer allows an equivalent exception for ETI members.

The code applied to all suppliers, which were defined as "A person, firm, factory or organisation who/which forms a commercial link with the Co-operative Group Limited to provide goods or services." This was not considered to be an explicit statement that the supply chain policy covered the entire supply chain including at least some depth.

The Co-op was considered to have a reasonable supply chain policy.

Stakeholder engagement (rudimentary)
The Co-op stated that it was a member of the Ethical Trading Initiative (ETI) which is a multi-stakeholder initiative.

The company also stocked a wide range of Fairtrade products under its own brand which verified labour standards within its supply chain. The Co-op was a founder member of Stronger Together, a retailer alliance providing training and resources to tackle modern slavery in supply chains. The company was also a member of FNET, the Food Network for Ethical Trade, which aims to improve human rights in global food supply chains through establishing a common approach to managing ethical trade. No evidence was found of systematic NGO/union verification of audits.

The company provided information on a whistleblowing service for its own staff. The Sustainability Report 2019 also stated of the hotline "It also allows suppliers to report on any wrongdoing in relation to the Co-op." There was no further detail explaining whether this was a free, anonymous, own language service for supply chain workers to report issues.

Co-op was considered to have a rudimentary approach to stakeholder engagement.

Auditing and Reporting (reasonable)
Ethical Consumer viewed the Co-op's Sustainability Report 2019, which reported on the company's CSR activities. It stated, "We identify suppliers for audit using a risk-based approach determined by supplier responses to Sedex self-assessment questionnaires, worker profiles, use of temporary workers, country of origin and industry sector, and external intelligence from experts, Trades Unions and NGOs."

In response to questions about supply chain auditing, the 2019 questionnaire stated "All Co-op own brand suppliers are risk assessed to determine if they require an audit. As a condition of trade, we require all own-brand suppliers to join the Suppliers Ethical Data Exchange (Sedex) a web-based database where suppliers post labour standards information, including self-assessments and site audit reports, and based on this information with a number of other risk factors, sites are assigned as high, medium or low risk. Tier 1 High risk sites must undergo an ethical audit at least every 2 years, with some sites undergoing annual audits where serious issues are raised. Medium and low risk sites may be brought into an audit cycle pending internal quarterly desktop reviews, which take account of a number of ethical risk and commercial factors.

We also include Tier 2 sites within high risk supply chains in scope of our monitoring programme. This includes sites in protein, produce and some non-food supply chains." Though not all Tier 1 suppliers were audited, the entire breadth and some depth of the supply chain was included in the monitoring process that decided which were the highest risk. The Sustainability Report 2019 data stated that 100% of high-risk Tier 1 sites had been audited in three out of the last four years.

Audit results were disclosed in the Sustainability Report 2019. However these were not at adequate as the data was not at the supplier level.

In the questionnaire, the company stated: "We take a collaborative approach to remediation and will work with the supplier to provide the support they need to resolve the issue. This approach allows our suppliers to be transparent and open with us if they do face challenges, and in our 2017 modern slavery statement we shared an example of how we worked with a supplier to address a suspected case of modern slavery at one of their growers (page 8 here). Any other issues found are monitored and must be corrected with evidence submitted on Sedex within 6 months of the audit. " This was regarded as a staged plan in relation to issues of non-compliance.

The Co-op was considered to have a reasonable approach to auditing and reporting. The company showed committment to auditing its whole supply chain, was considered to have a schedule of auditing for suppliers and a plan for staged remediation, but did not give full disclosure of audit results or provide details of who paid for the audits.

Difficult issues (rudimentary)
In the questionnaire the company stated that they had a preference for long-term arrangements with their suppliers and they provided mandatory training for buying teams. Training and engagement also extended to suppliers where they held events and forums covering difficult supply chain issues.

The Co-op had not addressed audit fraud and unannounced audits, outlined any measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.

It was considered to have a rudimentary approach to difficult issues overall.

Overall the Co-op received a best Ethical Consumer rating for its Supply Chain Management.

Reference:

Sustainability Report 2019 (2019)

In July 2020 Ethical Consumer viewed the Co-operative Group's website and found on its Sales Restricted Prodcts page (https://www.coop.co.uk/product-information/sales-restricted-products) that the Co-operative Group retailed tobacco products. As a result the Co-operative lost a whole mark under Irresponsible Marketing.

Reference:

www.coop.co.uk (15 January 2020)

In July 2020 Ethical Consumer viewed a page entitled 'Trading with illegal settlements or occupied territories' on the Co-operative website, www.co-operative.coop.

This stated: “Since 2009, The Co-operative Group has operated a Human Rights and Trade Policy, which sets out the exceptional circumstances under which we will withdraw trade from a state, area or settlement. One such circumstance is where there is a broad international consensus that the status of a designated region or state is illegal. While there are many disputed territories throughout the world, there are currently only two examples of such illegal areas: the Israeli settlements in the Palestinian Occupied Territories and the Moroccan settlements in Western Sahara. On this basis, we do not source any produce or own-brand products from the Israeli settlements. In April 2012, our Board determined that, going forward, we will additionally no longer engage with any supplier of produce known to be sourcing from the Israeli settlements. We can categorically state that this position does not constitute a boycott of Israeli businesses. We remain committed to sourcing produce from and trading with Israeli suppliers that do not source from the settlements."

This was considered to be a positive policy addressing a Human Rights issue.

Reference:

www.co-operative.coop/ethics/ethical-policies (26 April 2018)

In January 2019 Ethical Consumer viewed an article on the Guardian website titled: 'Former Co-op executive wins her equal pay and unfair dismissal claims', and dated November 2018.

It reported that, "Sam Walker, a company director in charge of HR, argued that she was dismissed after raising issues about her own pay and warning leading figures in the company that it could be paying men and women at a different rate for the same roles.

The tribunal did not agree with Walker’s claim that her sacking was a result of discrimination, but ruled that the Co-op “directly discriminated against the claimant on the ground of sex”, after deeming her work only 'partially achieved' when she had not been given an adequate year-end appraisal. The tribunal heard she was paid less than other board members in 2014 and told this was because she was newly promoted, but an independent assessment of executive roles by the Hay Group in January 2015 rated her role at least as high or higher than other male executives.

The Co-operative Group will now face a legal bill, after an employment tribunal found in Walker’s favour.

The Co-operative lost half a mark under Workers' Rights

Reference:

Former Co-op executive wins her equal pay and unfair dismissal claims (16 November 2018)

In November 2017 Ethical Consumer viewed a report on the Business and Human Rights Resources website titled, 'Brazil/UK: JBS supplied beef to UK retailers from Brazilian farm being investigated for forced labour; comments from Waitrose, NHS, Marks & Spencer, Co-op, Sainsbury’s, Lidl and Princes', and dated June 2017. The report stated:

'an investigation by the Guardian...and Repórter Brasil show[e]... that JBS, one of the world's largest meat processing companies, previously purchased cattle from a farm under federal investigation for using workers as modern-day slaves. JBS says it ceased buying from the farm on discovering the alleged link to labour abuses...Its produce is used in tinned corned beef sold by major retailers including Waitrose, Marks & Spencer, Co-Op, Sainsbury's, Lidl and Princes....

In... June 2016,...police officers discovered men forced to live in inhumane and degrading conditions, with no shelter and no toilets or drinking water...[W]orkers were in debt bondage, with payments for food and protective equipment illegally deducted from their wages. The farm owner, Antônio José Junqueira Vilela Filho, had previously been fined...for deforesti[on]... the Co-op also said they were conducting internal supply chain investigations.'

The company lost half a mark in the Workers' Rights category.

Reference:

Brazil/UK: JBS supplied beef to UK retailers from Brazilian farm being investigated for forced labou

In July 2020 Ethical Consumer viewed the Co-operative Group 2019 Annual Report which stated that "all the cocoa used as an ingredient in Co-op products is Fairtrade".

The company's most recent questionnaire response had added more detail. In response to a question about its cocoa sourcing the company stated:
100% certified by the Fairtrade Foundation since May 2017
All Co-op block chocolate has been 100% Fairtrade since 2002 - they work with Divine and Kuapa Kokoo.
In 2016, Co-op moved all own-brand Easter eggs to Fairtrade.
Since May 2017, all Co-op own-brand cocoa has been sourced on Fairtrade terms (even when used as an ingredient). In 2017, Co-op moved all chocolate confectionery to All That Can Be Fairtrade.
It was working closely with the Fairtrade Foundation on their ‘She Deserves’ campaign which is around the ask to ensure a Living Wage for farmers.
FLO-CERT audits all Fairtrade supply chains and we work with the Fairtrade Foundation to verify our cocoa sourcing work.

In West Africa, as part of our commitment to Fairtrade cocoa, we are investing in the funding of Fairtrade Africa’s Women’s Leadership School. The Leadership School is working with women from seven farmer groups in Cote D’Ivoire. The women will be trained in business skills such as decision making, managing resources, and leadership, so that they can go on to take up more important roles in their farmer organisations and communities.

As the company was sourcing 100% certified cocoa it was not marked down in the Workers' Rights category for likelihood of forced or child labour in its cocoa supply chains.

Reference:

2019 Annual Report (24 July 2020)