In November 2020, Ethical Consumer searched the Lidl UK website for information on how it managed workers rights issues in its supply chain.
The following documents were consulted: Sustainability Report 2017/18, Supplier Code of Conduct (COC), Lidl Great Britain Human Rights and Environmental Due Diligence Policy, Supplier Social Compliance Guidance, Modern Slavery Statement 2018/2019
Supply Chain Policy - reasonable
The COC contained adequate clauses on child and forced labour, discrimination and freedom of association, and for regular working hours it stated that they "must not exceed 48 hours per week. Overtime shall not exceed 12 hours per week". In terms of living wages it stated, "The aim is to pay wages and provide other benefits in order to cover the cost of living, should the legal minimum wage alone be insufficient." However, as it was unclear what Lidl meant by 'benefits in order to cover the cost of living' and whether this 'aim' was binding, this was not considered to be an adequate clause on living wage. It also stated, "Every contracted Business Partner of Lidl agrees to implement these social standards in their own company organisation, to impose them also on their respective business partners". Overall its supply chain policy was considered reasonable.
Stakeholder engagement - rudimentary
Lidl was a member of Stronger Together, considered by Ethical Consumer at the time of writing to be an acceptable multi-stakeholder initiative.
No mention was found of engagement with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits.
Lidl UK had a “confidential online reporting system” as well as an “external Whistleblowing Hotline”, which were said to be anonymous and open to “Members of the public, employees and business partners”. However, it was not stated whether or not this was available in multiple languages and free of charge.
Stakeholder engagement overall was considered to be rudimentary.
Auditing and Reporting - poor
Lidl’s website stated, “As part of our due diligence approach, we have established a risk-based social auditing programme, conducting third-party independent audits to measure performance against our Supplier Code of Conduct. These provide us with an important snapshot of our supply chain performance on human rights and working conditions. Following audits commissioned at our sites, suppliers develop corrective actions to address any issues raised, which we monitor on an ongoing basis.”
Ethical Consumer expected that: Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to its 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.
Lidl had a policy for non-compliance but did not appear to meet the other standards above.
Some limited reporting of audit results was included in the company’s Modern Slavery Statement such as the number of non-compliances identified and the breakdown of categories, but this did not give the level of detail expected
Overall, Lidl UK’s auditing and reporting was considered to be poor.
Difficult issues - reasonable
Lidl GB’s Sustainability Report stated a preference for long-term contracts with suppliers: “our longer-term contracts, combined with fair and simple buying practices, have been fundamental to the sustainable growth of Lidl GB”
Lidl also stated that it was working towards implementing living wages in its supply chain: “Lidl is committed to taking an action-orientated approach to working towards achieving living incomes and living wages within our global supply chains, thereby closing existing income and wage gaps. We are committed to publishing wage gaps in order to measure our progress and show our accountability.
We have implemented programs in four high-risk supply chains aimed at working towards living wages and living incomes for workers”
Lidl UK’s approach to difficult issues was considered reasonable.
Overall, Lidl UK received Ethical Consumer’s middle rating for Supply Chain Management and lost half a mark in this category.