Transparency in the Supply Chain and Modern Slavery Statements
BURBERRY GROUP PLC STATEMENT
This statement is made pursuant to Section 54 of the Modern Slavery Act 2015 and California Transparency in Supply Chains Act of 2010 (SB 657). It sets out the steps we have taken during the financial year 2018/19 (the “Year”) to prevent slavery and human trafficking from taking place in our supply chains or in any part of our business.
This statement is also made on behalf of the following subsidiaries of Burberry Group plc (company number 3458224); Burberry Limited (company number 162636), Burberrys Limited (company number 230931), Burberry (UK) Limited (company number 4288292), Burberry International Holdings Limited (company number 4251867), Burberry Europe Holdings Limited (company number 4458720), Thomas Burberry Holdings Limited (company number 3509143), Burberry Haymarket Limited (company number 4868493), Burberry Holdings Limited (company number 4251948) and Burberry London Limited (company number 4251951) and the actions and operations set out below are effective across the Burberry group.
As a global luxury retailer and manufacturer, with more than 10,000 employees, 431 retail stores and a supply chain touching the lives of thousands of people worldwide, we believe in being socially and environmentally responsible.
Burberry has had social and environmental programmes in place for more than a decade. These programmes, which cover our operations, our supply chain and extend to the communities around us, are designed to drive positive change and build a more sustainable future through innovation and collaboration. Combatting slavery and human trafficking are core to this agenda.
As part of our five-year responsibility strategy, we set ambitious goals for 2022, focused on addressing our most material social and environmental impacts, while supporting the Burberry Foundation in fuelling innovation and transforming the lives of people in our communities. This agenda supports the aims of the Paris Climate Agreement as well as a number of the United Nations Sustainable Development Goals.
We published our third Modern Slavery Statement in June 2018 and over the past year have continued to increase the depth and breadth of our ethical trading programme, reviewing our policies, developing our due diligence efforts upstream in our supply chain, delving deeper into our modern slavery risks and continuing to collaborate with cross-industry groups, such as the Ethical Trading Initiative’s Modern Slavery Working Group and Business Against Slavery Forum, to target modern slavery.
OUR BUSINESS AND SUPPLY CHAIN
We design, develop, make and sell luxury products under the Burberry brand and our business model is focused on creating long term sustainable value for all our stakeholders.
Our design process begins at our headquarters in London, where our creative teams work across womenswear, menswear, childrenswear and accessories. We also collaborate with licensing partners to create our beauty and eyewear offering. With customer desires and responsibility front of mind, we constantly innovate to bring our designs to life with new materials, techniques and combinations to remain at the forefront of fashion while driving positive environmental and social impacts.
We carefully source materials based on their quality and sustainability, working closely with our network of suppliers to ensure we receive the highest-quality materials and goods while supporting our partners to drive positive social impact in their communities.
DISTRIBUTION & COMMUNICATION
We have a large global network of directly operated and franchise stores, and our own e-commerce capability serves 44 countries. We also work with select wholesale and licensing partners, including third-party digital providers, to complement our distribution networks and provide a luxury experience for all customers.
OUR SUPPLY CHAIN
Our supply chain network supports the production of our apparel and accessories products, and our day-to-day business operations.
APPAREL & ACCESSORIES
Finished products are manufactured at both company-owned facilities in the UK and Italy, and by an external supplier network. A large proportion of our finished goods production takes place in Europe, where Burberry has many long-standing relationships, including some for more than 15 years. We believe that these strong supplier relationships are key to ensuring continuous improvement in supply chain working conditions and we work towards minimising supplier turnover, where possible.
We have visibility of all finished goods manufacturing suppliers, their subcontractors and supporting facilities, as well as mills, tanneries and trims suppliers.
We believe that the sustainability of suppliers within our raw material supply chain Is key to ensuring overall responsible sourcing of our products.
The key raw materials we use are cotton, leather and cashmere and we have a strategy and targets to source these more sustainably. Further detail on our raw material sourcing targets is available here: Burberry Product Strategy.
This year, we continued to expand our responsibility programme to also include the assessment of mills, tanneries and trim suppliers and their sub-contractors, covering 70% of our raw material suppliers.
We have granted two product category licences under the Burberry brand to third parties, namely to Coty to produce beauty products and to Luxottica to produce eyewear.
Our responsibility team works with Coty and Luxottica to ensure they apply consistent standards which are aligned with those applied across the rest of Burberry’s supply chain.
As a large global organisation, we have many other supply chain operations across EMEIA, Americas and Asia Pacific related to general business operations, including but not limited to retail stores, our website, offices, marketing and transport. We continue to communicate our commitments and policies designed to prevent forced, bonded and trafficked labour through our Responsible Business Principles (the “Principles”). Further details are set out below.
From 2018/19, we are including our packaging, visual merchandising, repurposing and recycling supply chains within our ethical trading programme, assessing risk, completing audits when required and working with suppliers to implement continuous improvement plans.
We believe that respect for human rights is integral to being a responsible company. The prevention of forced, bonded and trafficked labour is a key element of Burberry’s Human Rights Policy and Ethical Trading Code of Conduct: Burberry Policies
To promote human rights across our direct and indirect business operations, we require our network of business associates and extended supply chain to comply with our Principles.
The Principles have been developed over a number of years. They have been informed by our longstanding membership of the United Nations Global Compact and the Ethical Trading Initiative (ETI), and are underpinned by the International Bill of Human Rights and the Fundamental Conventions of the International Labour Organization. The Principles apply to all our business associates, which include, but are not limited to: finished goods suppliers, raw material suppliers, non-stock suppliers, construction contractors, licensees and franchisees.
Since 2016, the Principles have expressly addressed modern slavery risks. Incorporation of the Principles into our contracts with business associates ensures the provisions targeting modern slavery are also included. The Principles are overseen by Burberry’s Ethics Committee, chaired by our general counsel. The policies are monitored by our responsibility and supply chain teams and enforced pursuant to the Burberry Non-Compliance Policy, detailed below.
The Principles include Burberry’s Code of Ethical Business Principles, Anti-Bribery and Anti-Corruption Policy and Global Environmental Policy, and the following policies:
ETHICAL TRADING CODE OF CONDUCT
This outlines requirements which all our business associates must uphold in relation to their own employees and throughout their own supply chain. The code includes, amongst other standards, the following requirements: that employment is freely chosen, child labour is not used, freedom of association is respected and no harsh or inhumane treatment occurs.
The full Code of Conduct is available here: Burberry Ethical Trading Code of Conduct
BURBERRY MIGRANT WORKER POLICY
This is specifically intended to protect workers who may be vulnerable to exploitation in the course of international migration. The Policy contains requirements including, but not limited to, the prohibition of withholding passports and similar documents and the levying of recruitment fees.
We are in the process of updating and recommunicating this policy to suppliers to provide more guidance on implementation of the Dhaka Principles for Migration with Dignity.
The full Migrant Worker Policy is available here: Burberry Migrant Worker Policy
BURBERRY HUMAN RIGHTS POLICY
Burberry’s Human Rights Policy sets out our four key stakeholder groups – our people, workers in our supply chain, our customers and our communities - and the procedures we have put in place to protect and uphold human rights, including mechanisms in place to address any instances of potential infringement. The policy was developed with reference to the United Nations Guiding Principles on Business and Human Rights. We assess human rights impacts and monitor labour conditions in both our own operations and our supply chain on a regular basis to ensure the policy is upheld.
This year we reviewed and updated the Human Rights Policy to include references to the International Labour Organization (ILO) core conventions throughout and our expectations of suppliers.
Further details of Burberry’s Human Rights Policy are available here: Burberry Human Rights Policy
RESPONSIBLE SOURCING POLICY
This outlines Burberry’s commitment to responsible and sustainable business principles throughout the supply chain, including at the sourcing stage of raw materials. The policy outlines specific prohibited sourcing regions, where the risk of modern slavery and other labour rights issues is recognised. For example, the policy prohibits any sourcing of cotton from Uzbekistan, Turkmenistan and Syria.
Further details of the Responsible Sourcing Policy are available here: Burberry Responsible Sourcing Policy
PARTNER NON-COMPLIANCE POLICY
Where breaches of our standards and policies are identified, Burberry collaborates with local partners to find solutions to address the non-compliance. Where improvements are not made within a given time or there is an unwillingness to address the issue, we may consider terminating a particular business relationship.
The policy is designed to allow partners a reasonable amount of time to rectify any non-compliance with the Principles, to minimise any potential detrimental impact on workers’ livelihoods, while always reserving the right to terminate contracts and take any other legal action possible, depending on the nature of the breach.
Further details of the Partner Non-Compliance Policy are available here: Burberry Partner Non-Compliance Policy
In addition to the Principles, Burberry’s Ways of Working provide a set of guidelines which all employees must abide by, relating to a wide range of matters including personal conduct and whistleblowing. Burberry employees, contractors and agency workers across our operations, also have access to a confidential whistleblowing hotline which ensures that there is always a way to report issues if usual routes of escalation are unavailable or restricted.
We continue to implement additional risk management of our non-stock procurement supply chain to gain more visibility of areas of greater risk, such as labour suppliers globally and construction contractors. Suppliers are required to take responsibility for the prevention of forced, bonded and trafficked labour in their supply chain and certify that neither they nor any of their affiliates, contractors or sub-contractors engage or have engaged in any form of modern slavery. This year, we have increased the due diligence conducted within our visual merchandising supply chain.
Compliance with the Principles is a requirement of doing business with Burberry. Adherence to the Principles is included in contracts with suppliers. Finished goods suppliers sign a letter of undertaking confirming, amongst other matters, their commitment to the Principles and to cascade the Principles to their suppliers. We work with our business associates to support their compliance, and may act against those that do not demonstrate sufficient commitment to the Principles or are in breach of them. In the event of a business associate being found to be involved in modern slavery, we would first act to help safeguard the affected workers’ wellbeing and then to support the business associate with its remediation process including any actions to identify and address root cause issues.
We continue to promote the management of modern slavery risks within Burberry and externally. In October 2017, Burberry became a founding member of the Business Against Slavery Forum alongside some of the UK’s largest companies. As part of this, Burberry’s CEO, Marco Gobbetti shares intelligence and best practice to help businesses identify, tackle and prevent slavery in their supply chains.
We have a global responsibility team consisting of around 35 specialists in key locations globally. Although ethical trading activities are coordinated by our responsibility team, targets relating to working conditions in the supply chain are owned by our supply chain and relevant sourcing teams. Burberry employees, who are responsible for supply chain partner relationships and sourcing, also have personal KPIs related to labour conditions, recognising the potential impact of fair purchasing practices on labour conditions throughout our supply chain.
Our ethical trading programme is supported and monitored internally by a number of management committees. The Programme aims to ensure that the potential risks to labour and human rights are considered at all appropriate levels and areas of the business.
In the event that any labour or human rights risks are identified, the Chief Supply Chain Officer will report on such issues to the Group’s Risk Committee, which meets at least three times a year. The Risk Committee is chaired by the Chief Operating and Financial Officer, who sits on the Burberry Group plc board. The Risk Committee reports into the Group’s Audit Committee. The Audit Committee is chaired by an independent non-executive member of the Board.
Additionally, our ethical trading targets and sustainability strategy are reviewed by the Burberry Responsibility Advisory Committee (BRAC), which includes representation from international Non-Governmental Organisations (NGOs) Forum for the Future and Oxfam. The BRAC provides a third-party perspective on our programmes to help determine whether we are focusing our actions and resources on the most salient labour rights’ risks throughout our operations.
DUE DILIGENCE & ASSESSMENT OF OUR SUPPLY CHAIN
Over the last 15 years, we have had a programme aimed at monitoring the labour conditions in our product supply chains and safeguarding the workers engaged in that supply chain.
Monitoring and verification activities are carried out throughout our finished goods and key raw material supply chains to support compliance with the Principles. To ensure our supply chain mapping stays up to date, we operate a strict approval process and conduct a transparency analysis with our vendors and commercial teams each season. Following this analysis, we conduct an assessment to identify any new or emerging areas of risk.
New raw material suppliers are required to confirm they will adhere to the Principles and comply with applicable local laws. They agree that we may visit and assess their own compliance and that of their suppliers. Before any new supplier is approved to participate in the Burberry supply chain, they are risk assessed for social compliance and any indication of forced, bonded or trafficked labour. If during this risk assessment a vulnerable workforce or geographical location risk is identified, a full audit will be completed and the results and the remediation plans (if any) will be evaluated before a decision on whether or not to approve is taken.
In addition, before a factory is approved to produce Burberry finished goods, we assess its compliance with the Principles and applicable local laws and commitment to uphold them. The responsibility team must be satisfied that the factory will uphold these standards before giving approval for production to begin. Audits, announced or unannounced, consist of worker interviews, document reviews and site tours, and are repeated periodically to confirm ongoing compliance and continuous improvement. The frequency of audits depends on the level of performance in previous audits – better performing factories are audited less frequently. Worker interviews are always conducted confidentially and workers are selected at random with fair representation of the workforce, including, for example, union and worker representatives, first aiders and migrant workers. Our audit methodology prescribes that we interview at least 10% of the workers in a factory. Between audits, our Responsibility Team works closely with facilities to implement systems to prevent modern slavery and improve the management of human rights and safety risks, amongst others. During the period 2018/19, we conducted 481 audits and 221 engagement visits.
ASSESSING OUR HUMAN RIGHTS IMPACT
Every two years, we conduct a Human Rights Impact Assessment of our operations and activities and those of our extended supply chain to identify and address potential risks. This year, we are engaging representatives of affected stakeholder groups to develop informed mitigation action plans.
We have implemented a number of action plans in both our direct operations and supply chain, including a focus on migrant workers and women throughout the different levels of our supply chain as we identified that these groups are more vulnerable to modern slavery risk. Action plans include context specific interventions such as mapping recruitment journeys in identified hotspots, building worker voice mechanisms in these areas and working with experts to integrate gender sensitive processes and metrics into our programmes.
After the 2016 assessment, we expanded our ethical trading assessments to cover select construction projects and all distribution and fulfilment centres globally. From 2018/2019 we have been assessing the repurposing and recycling facilities we work with as recycling facilities in particular can rely on a large contingent labour workforce.
Other areas identified in the 2018/19 assessment include recruitment practices in all owned and third-party distribution centres globally, promotion of access to remedy in our key supply chain locations, and upholding of labour rights in our raw material supply chains. Where we have identified a salient forced labour risk in our raw material supplier facilities, ethical trading assessments are conducted by our internal teams or by a local NGO, where local expertise is needed, to identify any labour rights issues and remediation required.
Further details on our Human Rights Impact Assessment are available here: Burberry Human Rights Impact Assessment.
Monitoring alone does not drive improvements in labour conditions and therefore we have several programmes in place to support our supply chain partners to improve labour conditions:
WORKER GRIEVANCE MECHANISM
Labour rights issues can include inadequate access to remedy. Where this occurs, we work with local NGOs to establish a hotline to share information with workers on their labour rights, create a mechanism to report grievances and provide psychological support.
The effectiveness of the hotline is frequently reviewed and, during 2018/19, 572 calls (20 complaints, 504 consulting requests and 48 psychological support requests) were received. Resolutions were monitored closely by our local responsibility teams.
We continue to review access to remedy and we will extend the hotline where required, prioritising suppliers with migrant workers.
We continue to work on programmes to capture comments and grievances from workers in our supply chain globally and address issues raised.
We have used the tool we developed with Oxfam to measure worker wellbeing in our supply chain and capture comments and feedback from workers with approximately 1,400 workers across eight facilities globally.
The results have been used to develop specific action plans for each factory. To date, these action plans have focused on the development of HR management systems, worker and supervisor training programmes and policy implementation.
CHAMPIONING DIVERSITY AND ENSURING INCLUSIVITY
Following this year’s Human Rights Impact Assessment, we have created a theory of change and programme plan for migrant workers within our supply chain, focused on ensuring fair treatment, no discrimination and ensuring workers can flourish both at work and in their environment.
We have mapped particular risk areas and are working closely with local expert organisations and our suppliers to develop roadmaps to mitigate risk to domestic and international migrant workers in key supply chain locations.
TRAINING & RESOURCES
Our responsibility team includes specialists on labour and human rights and modern slavery. All Burberry employees are introduced to Burberry’s corporate responsibility policies and programmes during their induction training to ensure a general understanding of Burberry’s responsibilities in this area.
Informed by Burberry’s Human Rights Impact Assessment, we developed a bespoke modern slavery and labour rights training programme in collaboration with the ethical trade, human rights and labour standards consultancy, Impactt. The training has been delivered to key employee groups who interact with Burberry’s supply chain networks. The targeted training helps those travelling to supply chain facilities to be familiar with the risk areas, likely indications of human rights abuses (including instances of modern slavery) and possible actions to take if an incident of modern slavery is identified. In addition, we have trained members of our human resources, health and safety, construction and fulfilment teams on modern slavery, how to identify it and appropriate actions to take. This training has helped embed respect for human rights and a policy of zero tolerance for modern slavery throughout the business. An ongoing training programme will deliver updated training to relevant employee groups globally.
In 2016/17, we provided tailored training to suppliers on identifying and combatting modern slavery. In-person training sessions were held with finished goods vendors who together manufacture 72% of our products. Initially, this training was provided to key finished goods and raw material suppliers, third-party labour contractors and certain suppliers operating in sectors with a greater risk of modern slavery issues arising. Participants were required to develop and implement plans around the recruitment and ongoing management of workers to reduce the risk of modern slavery in their operations and supply chain. These plans continue to be monitored on an ongoing basis by our responsibility team.
In 2018/19, our UK responsibility team completed an “Investigative Interviewing Skills” course developed and delivered by the Gangmasters Labour Abuse Authority and Stronger Togther. The skills learned will be deployed as part of our ethical trading audit methodology.
KEY PERFORMANCE INDICATORS
We monitor the Key Performance Indicators (KPIs) set out below on an ongoing basis. These KPIs help us ensure the effectiveness of our efforts to address modern slavery risks and are continually reviewed.
We have trained 112 employees from teams working with our business and product supply chains. Teams completing the training include Sourcing, Product Development, HR, Legal, Construction, Procurement and Workplace Service.
In 2019/20, the sourcing and product teams will receive refresher training.
SUPPLY CHAIN TRAINING
We have trained finished goods suppliers, their key subcontractors and key raw material suppliers on the identification of modern slavery and building systems to prevent the occurrence of modern slavery.
We continue to implement initiatives to strengthen workers’ access to information and the ability to raise grievances as well as to measure worker wellbeing.
In 2018/2019, Burberry’s worker hotline received 572 calls, categorised as 20 complaints, 504 consulting requests and 48 psychological support requests.
We also surveyed approximately 1,400 workers across 8 facilities globally to build a better understanding of workers’ wellbeing and identify opportunities for improvement. In the coming year, we will use these results to improve the KPIs we review across facilities.
AUDITS & ASSESSMENTS
In 2018/19, we conducted 481 audits and 221 engagement visits or training sessions. The majority of these activities were conducted by our internal responsibility team who endeavour to build trust in our ongoing partnerships and drive continuous improvement.
The audit and assessment programme covers all our finished goods facilities and their subcontractor supply chains, and 70% of our raw material supplier mills, tanneries and trim or component facilities.
Through this year’s audits of the product and licensee supply chains, we have identified instances at 9 facilities where workers have paid fees for recruitment. We have worked with facility management to ensure workers were refunded. We also identified two facilities where management was holding worker passports. Both instances were resolved within a few days and workers’ identity documentation returned. To prevent future issues, we continue to re-communicate policies, review recruitment journeys of migrant workers and develop fee-free recruitment chains.
We continue to strengthen the breadth and depth of our ethical trading programme and implement the action plans resulting from our 2018 Human Rights Impact Assessment. We believe that our continuing focus on transparency and traceability throughout the supply chain can help identify modern slavery risks which can then be addressed.
We continue to review own business operations and procurement procedures to ensure that risks of modern slavery are considered.
Should any instances of modern slavery be identified, we believe we are well positioned to address these and to support any affected workers in line with our core values.
Approved by the Board on 09 May 2019 and signed on its behalf by:
Chief Executive Officer
Burberry Group Plc