Sustainable standards in the non-food supply chain

[GRI 204/103-1, 308/103-1, 414/103-1] Our objective is to enable millions of customers in Europe to shop in our stores with a good conscience. To make this possible, we take responsibility for safe and fair working conditions and compliance with environmental standards wherever we can make a difference. Our non-food range includes, among other things, textiles, cosmetic and toiletry products, and weekly special-buy products – from electronics and household goods to furniture. The supply chains behind these products are diverse and complex. During production, non-food products often pass through several production sites in various different countries. Hence, the challenges are complex as well: Issues such as building safety, living wages or reducing the use of chemicals in textile production require cross-sector cooperation among companies, governments and non-governmental organisations (NGOs). That is why we have joined forces with other players to work on these challenges in global initiatives such as amfori BSCI*¹ (Business Social Compliance Initiative).

[GRI 308/103-1, 414/103-1] We focus on long-term, fair and reliable business relationships with suppliers who share our understanding of quality and responsibility. They have the goods that we have commissioned manufactured at production facilities in countries such as China, Bangladesh or Turkey. Together, we work on enforcing high environmental and social standards.

Our measures focus on countries of origin in which the risk of violations of social and environmental standards is increased. We are guided in this process by the list of countries that amfori (formerly the Foreign Trade Association – FTA) has classified as risk countries.

With regard to working conditions, we subject our suppliers and the production facilities they place orders with to clearly defined requirements.

[GRI 308/103-1, 414/103-1, 407/103-1/2/3, 407-1]

[GRI 308/103-2, 414/103-2]

[GRI 414-1, 308-2, 407-1] Together with our suppliers, we visit the production facilities that work on our behalf as part of the ALDI Social Assessments (ASA). This allows us to see for ourselves how our requirements are being implemented in the supply chain. An ASA covers talks with the management, an accounting audit and an inspection of the production facility to audit working and social standards, as well as talks with employees. In the event of deficiencies, we work with suppliers and production facilities to draw up action plans aimed at achieving lasting improvements as quickly as possible and review their implementation. In the year under review, we performed 199 ASAs in eight countries, many of them in China (70 per cent). There were deficiencies at roughly 13 per cent of the production facilities in 2017 in fields such as occupational health and safety. Such deficiencies are often the result of structural challenges in the production countries. We also work to address findings of this nature through overarching initiatives such as the Bangladesh Accord on Fire and Building Safety*².

[GRI 414-1, 414-2] We continued to advance the ALDI Factory Advancement (AFA) Project in the year under review (2017). The project pursues a dialogue-based, cooperative approach that fosters communication between workers and managers and encourages them to work together to identify and efficiently solve problems. The central focus is dealing with issues such as health protection and safety in the workplace, fire protection, pay, working hours and discrimination. The subsequent alumni project also covers productivity- and quality-related issues. Today, 38 production facilities have joined the programme, thereby covering some 54 per cent of the purchasing volume (2015: 35 per cent) from Bangladesh. More than 85,000 workers benefit from this programme. As part of a further project – AFA Project PLUS – the Group worked with an NGO from Bangladesh to achieve improvements at in-house crèches at nine factories by the middle of 2017. Seven further production facilities will complete the AFA Project PLUS in 2018.

[GRI 308-2] Coordinated action by all players in the industry is absolutely essential to achieving positive change in the supply chain. We must work with the right partners to implement the requirements laid out in the ALDI Detox Commitment. It was for this reason that we joined the amfori BEPI initiative (Business Environmental Performance Initiative) in early 2017. amfori BEPI aims to promote environmental protection in supply chains during chemical-intensive production processes, among other things. amfori BEPI is the central platform for collaboration between the ALDI North Group and our business partners. Since July 2017, all production facilities for clothing, home textiles and footwear that work for our suppliers have been required to complete an amfori BEPI Self-Assessment. This disclosure provides starting points for environmental management improvement measures. Training measures for production facilities give participants essential information about the practical implementation of these measures.

In the field of chemical management, amfori BEPI works with the Zero Discharge of Hazardous Chemicals (ZDHC) group, for example, whose standards are widely accepted in the industry. The partnership gives participating production facilities access to the ZDHC’s training programmes. We also use our amfori BEPI membership to share findings that we gained in 2016 during pilot projects in the field of chemical management audits (CMAs), allowing other companies to benefit from this information.

In 2017, we also joined forces with the service provider NimkarTek to develop a chemical management training programme that includes compulsory modules on APEOs (alkylphenol ethoxylates), a chemical group that is used in textile production primarily as a surfactant in detergents and is one of the focal points of our activities due to its environmentally damaging effects, as well as additional training modules on topics such as chemicals, wastewater and silt management.

We also launched a pilot project with four selected production facilities of our suppliers in 2017, which are participating in the BVE3 programme offered by the certification provider Bureau Veritas. The programme calculates the production facility’s expected wastewater load based on benchmarks related to production processes and data on the chemicals used for processes such as dyeing and washing, allowing us to ensure greater transparency and calculate the expected chemical load in wastewater. This programme is specifically tailored to industrial processes that use water. Training sessions are also offered. The BVE³ programme is initially slated to last twelve months. Production facilities will be supported by ALDI CR Support Asia Ltd. The programme will be subsequently evaluated with a view to use in other production facilities.

We enable our customers to trace the origin of our textiles and footwear. In a first step, we published information on all relevant production facilities for selected product groups for the first time on the German and Portuguese ALDI websites in 2017. We are constantly reviewing the additional information on the production facilities that we can release. The first textiles with the ALDI Transparency Code (ATC) will go on sale in Germany in 2018. The ATC can be gradually expanded within the ALDI North Group to all items featuring certified cotton following a successful test phase. In Germany, Fairtrade textiles have already received the Fairtrade code, making it possible to trace the origins of the cotton.

[GRI 204/103-2/3] In Germany, we published a National Cotton Purchasing Policy in 2017, which already covers the majority of all items sold in the ALDI North Group countries due to international buying practices. The purchasing policy sets a target of raising the proportion of certified sustainable cotton to 30 per cent by 2018. That figure stood at just under 23 per cent, or 20 per cent throughout the entire ALDI North Group, in 2017^[1]. We currently rely on the Global Organic Textile Standard*³ (GOTS), the Organic Content Standard*⁴ (OCS), Fairtrade, organic cotton and recycled cotton. To support producers in implementing our requirements, we plan to sponsor a cotton project in a country of origin. In 2017, we made a public pledge to the NGO Textile Exchange that we would increase the proportion of recycled fibres (polyester) by 25 per cent (reference year: 2016) by 2020. We were already able to achieve this goal in 2017. We were also ranked among the top ten retailers of recycled cotton in Textile Exchange’s 2017 Textile Fiber Market Report.

[1] Excluding ALDI Netherlands due to a lack of data for 2017.

In 2017, we published our International Flowers and Plants Purchasing Policy, in which we pledge to promote the sustainable cultivation of flowers and plants and improve workers’ working and living conditions in the long term. We are therefore working to change over our entire range of flowers and plants to certified sustainable goods throughout the ALDI North Group within the scope of this Purchasing Policy by the end of 2019. For this purpose, we will only accept the GLOBALG.A.P. standard*⁵ in combination with the additional module GRASP*⁶ (GLOBALG.A.P Risk Assessment on Social Practice) or any certification that is approved by ALDI North or GLOBALG.A.P. Wherever possible, we will use the GLOBALG.A.P. label to show consumers that they are purchasing certified flowers and plants.

[GRI 204/103-2/3] Forests are important ecosystems and provide a habitat for humans, animals and plants. They also act as a vital reservoir of drinking water and have a moderating effect on the climate. Sustainable forestry and the sustainable processing and recovery of wood and wood-based products and packaging are necessary to protect forests and preserve them in the long term. Furthermore, it is essential to prevent illegal logging and protect endangered forests.

Wood or wood-based resources are often used in the products we sell, such as furniture, toilet tissue or packaging. In December 2017, we published our International Timber Purchasing Policy for the ALDI North Group, in which we defined clear requirements for products and packaging with constituent elements made of wood, cellulose fibres, bamboo and cellulose-based viscose and non-woven fabric. We have also pledged to change over our wood and wood-based products to certified sustainable materials by the end of 2020. The standards we will accept are FSC®, PEFCTM and EU Ecolabel. For more details about our requirements, please see "Packaging & cycle".

[GRI 204/103-2/3, 308/103-2/3, 414/103-2/3] As part of our voluntary commitment and purchasing policies, we have set ourselves a number of ambitious targets. We report transparently on our progress in our Detox Commitment Progress Report or as part of our Textile Partnership road map.

*¹ amfori BSCI
The amfori BSCI initiative was established in 2003 by amfori (formerly the Foreign Trade Association – FTA). amfori BSCI is an initiative by industrial and trading companies which is dedicated to the function of guaranteeing secure and socially ethical conditions within the supply chain. 

*² Bangladesh Accord on Fire and Building Safety
This accord for the improvement of fire and building safety in Bangladesh was drafted following the Rana Plaza disaster in April 2013. The ALDI North Group signed the accord in May 2013. From our perspective, the accord is an important and fundamental step in improving the safety of workers in the textile sector in Bangladesh. The accord includes an agreement on independent safety inspections.

*³ Global Organic Textile Standard
The Global Organic Textile Standard (GOTS) defines demanding, globally consistent criteria for the processing of textiles from certified, organically produced natural fibres throughout the entire textile supply chain. These criteria include the certified organic cultivation of fibres, environmentally friendly and socially responsible manufacturing practices and consistent product labelling. Only textile products made from at least 70 per cent certified organic natural fibres can receive GOTS certification from independent testing labs.

*⁴ Organic Content Standard
Der Organic Content Standard (OCS) der Organisation Textile Exchange garantiert einen festgelegten Anteil an biologisch angebauter Baumwolle im Produkt. OCS kann nicht nur Bio-Baumwolle in der Produktionskette nachverfolgen, sondern jegliche Bio-Faser (also auch Schafwolle, Leinen etc.).

*⁵ GLOBALG.A.P.
GLOBALG.A.P. is a private organisation which has developed voluntary standards for the certification of agricultural products (including fruit and vegetables, feedstock, animal husbandry, plants and seeds, and aquaculture). The inspections focus on food safety, animal welfare, waste and environmental management, and occupational health and safety. Producers certified in accordance with the GLOBALG.A.P. standard can prove that all steps in their production process are fully traceable and are subject to comprehensive monitoring.

*⁶ GRASP
GRASP stands for GLOBALG.A.P. Risk Assessment on Social Practice and is a voluntary add-on module developed to assess social practices on farms. It addresses specific aspects of workers’ health, safety and welfare, which are monitored during audits. A GRASP assessment helps producers to establish a good social management system on their farms. Since 2016, we have required fruit and vegetable farms to undergo a GRASP social assessment to help us better evaluate producers’ social management systems.