In November 2020 Ethical Consumer received a completed questionnaire from Neal's Yard which contained a response to a question regarding how the company managed workers rights issues in its supply chain.
Supply chain policy (good)
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.
The company had a document titled "Do Good: Ethical Supplier and Supply Chain Guiding Principles". This contained adequate standards on forced labour, freedom of association, child labour, living wages, working hours and discrimination. It stated that all suppliers were required to acknowledge the receipt of the Do Good principles. It was considered to have a good supply chain policy.
Stakeholder engagement (rudimentary)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative (ETI), 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.
The company stated that it had become a member of the ETI in November 2020. The company stated that its aim was to source 100% of its natural ingredients from suppliers who were certified by Fairtrade Foundation, Fair for Life or FairWild. It also used mainly organic ingredients certified by the Soil Association. Neal’s Yard was therefore considered to have some verification of labour standards within much of its supply chain. The company's modern slavery statement mentioned a whistleblowing system but not enough detail was provided to ascertain if it met Ethical Consumer's criteria. Neal's Yard was considered to have rudimentary 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 company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
The company stated that it required suppliers to sign up to SEDEX and also stated: "From October 2018 we are rolling out 360-degree supplier performance reviews, beginning with the top 10 suppliers by spend in each category – packaging, raw materials, and subcontractors. The process involves scoring our suppliers on range of soft competencies from relationship, cost, innovation, technical ability, quality, ethical and environmental considerations, and alignment with our core values. A cross-departmental team will gather to score suppliers on competencies, then we ask supplier to complete a self-assessment. We then meet with the suppliers to share results, seeking ways the relationship can be mutually improved with an agreed continuous improvement plan in place". As Neal's Yard had only demonstrated that it favoured a remedial approach to instances of non-compliance it was rated as having a poor approach to 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.
The company stated: "Angela Weston, Procurement Manager, is CIPS (Chartered Institute of Procurement & Supply) qualified up to and including professional level, and further training is taking place within the department to ensure ethical best practice. We have rolled out CIPS ethical sourcing & supply training - an annual training platform - to 24 key staff both within the Procurement team and wider business to ensure best practice across the company. Training covers anti-bribery and corruption measures, the Modern Slavery Act and human rights."
It also stated that it: "We work with a select number of suppliers and have done so for many years, forging strong and trusting relationships."
As Neal's Yard was a medium sized company with an annual turnover under £50 million and was considered to be demonstrating effective if not explicit good practice it was not marked down in the same way for not exactly meeting Ethical Consumer's Supply Chain Management rating criteria.
Overall the company received Ethical Consumer's best rating for Supply Chain Management and was not marked down in this category.
Do Good Guiding Principles (July 2019)