Our Ethical Trading Approach
Our strong belief is that a sustainable business needs a sustainable supply chain, one which is underpinned by fair working conditions for all those involved in the manufacture and supply of our products. As founding members of the Ethical Trading Initiative, we have been active in this area since 1998. We support our suppliers to comply with the ETI Base Code and seek to use our business for good, helping suppliers to improve and adding our weight to collaborative initiatives which improve conditions for workers across industries.
Ethical Trade is fully integrated within Tesco's operations, forming a key part of our broader strategy for corporate responsibility. Our approach is based on four pillars:
- Values - ensuring we work with suppliers who share our values
- Monitoring - getting to the truth about conditions for workers in our supply chains
- Improvement - supporting our suppliers to improve
- Transparency - being open and honest, working with others
The programme extends to everything we source for our own-label, services and goods not for re-sale to customers.
The ETI Base Code
We are a founder member of the Ethical Trading Initiative (ETI) and expect all of our suppliers to apply the standards set out under the ETI Base Code and ensure their workers the rights within it. For more information see www.ethicaltrade.org
Setting, communicating and enforcing strong standards is a cornerstone of our ethical trade programme. We will only work with suppliers who share our values and can demonstrate commitment to the ETI Base Code.
Our Values focus on two main areas; how we ensure we meet the needs and expectations of our customers, and how we work with others. Our core company value of “treating people how we like to be treated” is, of course, central to how we expect workers to be treated.
We promote Tesco’s commitment to ethical trading in a number of ways throughout our business and to our suppliers:
- Tesco commercial personnel involved in sourcing products are trained to understand the Tesco approach and ways of working.
- All our suppliers receive a practical, accessible Tesco ethical trading requirements document so they can be clear on our programme and expectations.
The second pillar of our ethical trading programme is monitoring. Monitoring helps identify issues in the supply chain on which we and our suppliers must focus.
a) Assessing site level risk
All sites which supply directly to Tesco are risk-assessed in relation to ethical standards before supply begins.
b) Audit and report accurately
Ethical audits at sites deemed high risk are conducted in accordance with SMETA (SEDEX Members Ethical Trade Audit) guidelines.
Audits are conducted on a semi-announced basis (within a 4 week window) by independent specialists who are recognised as competent to audit and interview workers in their own languages.
During the closing meeting all non-compliances are discussed and a Corrective Action Plan Report (CAPR) agreed between the Supplier and the auditor. If any Critical non-compliances are found, the Audit Company will notify Tesco directly. Any attempt to pervert the course of the audit through fraud, coercion, deception or interference is treated as a Critical non-compliance and reported to Tesco.
Following the audit suppliers are required to resolve all corrective actions identified in the audit report within a given timeframe, addressing non-compliances with the ETI Base Code and local law.
c) Response to allegations
In addition to reports by independent auditors and visits from our own staff, breaches of the ETI Base Code — or related concerns — can also be reported in confidence to us by suppliers themselves, workers, NGOs and trade unions. We investigate any such reports immediately and provide confidentiality for complainants where requested.
We provide a dedicated, confidential helpline called Protector line for any staff, suppliers, supplier’s workers or other interested groups concerned about ethical trade issues to report concerns and we investigate any reports thoroughly.
The third of the four pillars of our ethical trade programme focuses on Improvement. Our work under this pillar is the most important as the process of monitoring does not by itself drive improvement that is sustainable in the longer term, only serving to flag up issues that require further focus and attention. We look to understand what remedy may need to take place in order to mitigate any adverse impacts on workers or their communities and how this is best achieved, for example through initiatives that provide access to remedy or through supplier or Tesco led initiatives.
The final pillar of our ethical trading programme is transparency. This is essential both to maintain customer and stakeholder confidence in our work, and to enable effective collaboration and convergence with other retailers, suppliers and civil society. We source in over 70 countries today and we want to be the partner of choice in every one. We are investing in the skills and insights to create transparency and respond to changing markets.