In November 2020 Ethical Consumer received a completed questionnaire from L'Occitane but the question relating to how the company managed workers' rights issues in its supply chain was left blank. Ethical Consumer viewed the company's ESG Report 2020 for further information.
Supply chain policy (poor)
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 ESG Report referred to the company's Corporate Responsibility Policy. This was found and viewed. It contained adequate standards for forced labour, freedom of association and discrimination. The stanrds for child labour, working hours and wages were not considered adequate as the company did not specify the age of a child, the number of acceptable working hours or that a wage should be a living wage. The document also did not mention suppliers and it was not clear whether these standards were required if all suppliers or if it covered direct employees only. The company was considered to have poor 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.
The company did not appear to be a member of a multistakeholder initiative nor have systematic engagement of NGOs or Trade Unions in its supply chain audits. The ESG Report mentioned that the company protected whistleblower's anonymity but did not provide any details of a complaint system for workers in the supply chain. It was considered to have a poor approach to 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 ESG report stated " We currently work with 44 sustainable supply chains, monitored directly on production sites through regular field visits (about 200 per year) and 4 audited supply chains3 according to a Sustainable sourcing charter" but did not provide a clear explanation of an auditing process for its suppliers and did not demonstrate that it met any of Ethical Consumer's criteria for a good approach to auditing and reporting. This statement also appeared to be focused on environmental considerations as opposed to the protection of workers' rights. Its approach was, therefore, considered poor.
Difficult issues (poor)
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. No discussion of these issues could be found and the company was considered to have a poor approach.
Overall, L'Occitane received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark under this category.
ESG Report 2020 (2020)