UN Global Compact Communication on Progress (COP) 2020 - Labour rights

Principle 3: Safeguarding freedom of association

Principle 4: Abolition of all forms of forced labour

Principle 5: Abolition of child labour

Principle 6: Avoidance of discrimination

For us, responsibility does not begin in our stores, nor does it end there. We are working to improve the sustainability of our supply chains. We aim to create better working conditions and enable fair cooperation between retailers, suppliers and upstream industries. As a retailer, we can influence certain aspects more strongly through our business activities, making them particularly relevant. Such aspects include health and safety, freedom of association, pay and working hours, as well as working against discrimination, child labour and forced labour.

That is why we make clear demands with regard to working conditions. We require our suppliers to comply with the ‘amfori BSCI’ (Business Social Compliance Initiative). We monitor and evaluate compliance through on-site inspections and audits by independent inspectors. In 2020, ALDI CR-Support Asia Ltd. in Hong Kong reviewed approximately 7,000 audit reports from external auditors. We expect all suppliers to rectify any deficits as quickly as possible in accordance with agreed corrective action plans. We have introduced our own audits, the ALDI Producer Assessments (APAs), for our food supply chains (see the section entitled ‘Human rights’). In the coming years, we plan to extend these assessments to all high-risk supply chains and to continuously increase the number of these audits. We also regularly assess the working conditions at our suppliers’ production facilities in high-risk countries in the non-food segment by carrying out our own inspections of production sites (ALDI Social Assessments – ASAs) and implementing comprehensive social audits and certifications with the support of external service providers.

In addition, we require suppliers to continuously improve the working and social conditions at their production sites or those of producers they commission. All production sites contracted by our suppliers that are located in high-risk countries according to the amfori classification must provide evidence of their social standards in the form of a valid amfori BSCI audit, SA8000 certification or a comparable valid social audit such as the ‘Sedex Members Ethical Trade Audit’ (SMETA). Since 2020, we have also accepted social audits from the ‘Fair Wear Foundation’ (FWF).

Alongside external audits, we also carry out ALDI Social Assessments (ASAs) in the textile industry and other measures as part of the ALDI Factory Advancement Project (AFA – see the section entitled ‘Human rights’). We also address the multifaceted challenges in the industry by working closely with other businesses, governments, NGOs and trade unions, and by actively engaging in industry and multi-stakeholder initiatives. An overview of all memberships and commitments can be found under ‘Stakeholders & networks’ in the Sustainability Report 2019.

In the future, we plan to develop concepts for pilot projects that improve access to grievance mechanisms in relevant supply chains, taking into account the ‘United Nations Guiding Principles on Business and Human Rights’ (UNGP). Garment factories in Bangladesh where goods are produced for ALDI Nord are also included in the complaints mechanism of the ‘Accord on Fire and Building Safety in Bangladesh’. We believe that the accord is and will remain a critical tool for continuously improving the safety of workers in the textile industry in Bangladesh, also in its future form as the ‘Ready-Made Garments (RMG) Sustainability Council (RSC)’.

Furthermore, we are involved in the ‘Living Wage’ initiative within the Partnership for Sustainable Textiles. As part of this, we reviewed our purchasing practices in 2019 and 2020 using the ‘Purchasing Practices Self Assessment’ (PPSA). All ALDI countries and ALDI CR Support Asia Ltd. in Hong Kong took part in this analysis. An action plan was drawn up and implemented on the basis of these findings. In 2021, we will continue this analysis, expanding the focus on our suppliers and production sites through purchasing practices assessments (PPAs).

To assess the social standards of our suppliers, we review their ability to select suitable production sites and continuously improve their labour and social standards as part of our Corporate Responsibility Supplier Evaluation (CRSE).

The CRSE assessment process was implemented for the footwear product group at the beginning of 2020, followed by DIY and household goods from mid-2021. In 2020, we also started a pilot project for the fish and seafood supply chain, particularly tuna. Furthermore, we critically reviewed our international clothing textile supplier pool for ALDI Nord in 2020 with the aim of consolidating the pool of suppliers and terminating business relationships with suppliers who have repeatedly received negative ratings. In the coming years, we will continue our comprehensive CR assessment of suppliers and production sites in combination with strategic meetings. CRSEs for all high-risk supply chains are expected to be implemented by 2027.

In the long term, we plan to reinforce these measures by developing company-wide strategies for ethically responsible purchasing (ethical sourcing). The aim is to integrate other Corporate Responsibility (CR) criteria in addition to certifications into our purchasing decisions. For example, consideration should be paid to how suppliers monitor working conditions on site and whether they promote special programmes that provide additional support to local workers and their families.

From producers of fruit and vegetables, as well as flowers and plants, we require a valid ‘GLOBALG.A.P.’ certification according to the Integrated Farm Assurance Standard (IFA) in combination with a social assessment such as ‘GRASP’ (GLOBALG.A.P Risk Assessment on Social Practice) or an equal or higher social standard. At the end of 2020, the share of producer companies with corresponding evidence was almost 100 per cent for all ALDI companies. In 2017, we began purchasing (organic) ‘Fairtrade’ and ‘Rainforest Alliance’ certified bananas in line with our international CR requirements.* Bananas with organic and Rainforest Alliance certification (without Fairtrade) are only traded at ALDI Poland. Since 2019, similar rules have applied to the purchase of pineapples throughout the group, requiring at least Fairtrade or ‘SCS Sustainably Grown’ certification. As part of our International Purchasing Policy for Flowers and Plants, only certified sustainable flowers and plants have been sold by ALDI companies since 2020.

As a member of the German Initiative on Sustainable Cocoa, we have been supporting the ‘PRO-PLANTEURS’ project, which improves the working and living conditions of cocoa farmers in Côte d’Ivoire, since 2015. We will continue to support PRO-PLANTEURS in the second project phase from 2020 to 2025. In 2020, we became the first discount retailer to join the Tony’s Chocolonely ‘Open Chain’ initiative, which works to protect human rights in chocolate production. Together, we are pursuing the mission to change the prevailing standards in the cocoa industry by improving working conditions along supply chains and making the sourcing of cocoa beans more transparent. Since spring 2021, the chocolate has been available at all stores in Germany in three flavours under the Choceur brand. The product will also appear internationally in ALDI countries in 2021, partly as a special-buy product and in the standard product ranges.

In the case of herbal teas and fruit infusions, around 51 per cent of the own-brand products across all ALDI companies were sustainably certified at the end of 2020 (UEBT/UTZ, EU organic logo, Fairtrade or UTZ/Rainforest Alliance Certified seal). As a result, we have exceeded our target of increasing the share of certified sustainable resources in our own-brand herbal tea and fruit infusion products to 40 per cent by the end of 2020.

_{* In the Sustainability Report 2019, we stated that sustainably certified bananas had already been sourced for all ALDI Nord countries since 2017. However, in 2017 this only applied to the ALDI companies in Belgium, Germany and the Netherlands.}

The over 79,000 ALDI employees have always been one of the pillars of success for the ALDI companies. The HR principles and the employer brand build on this foundation with a holistic approach encompassing all areas of HR (see Sustainability Report 2019). Due to the challenges surrounding the COVID-19 pandemic, the focus of HR work was primarily on digitalisation in 2020, with an emphasis on digital collaboration, processes, training, staff dialogue and the introduction of digital media. Further developing the way leadership is viewed in times of digital collaboration was also on the agenda.

Responsibility for HR is organised locally, enabling a location-specific approach to provide the best possible support for regional issues. The mission statement, the HR standards and the ‘real traders’ leadership principles form the common core of our HR work. Since 2019, we have been investing in expanding and strengthening the HR teams at the ALDI companies. For example, the position of HR Business Partner was created at a large number of the regional companies to act as ‘change agents’ for implementing the common HR principles. The Business Partners focus on employees and ensure that high HR standards are maintained. We continued this development in 2020.

Freedom of association is comprehensively safeguarded at the locations of ALDI Nord. In the ALDI Nord countries, dialogue with employees takes place either via works councils or directly with the respective trade unions (see Sustainability Report 2015).

People from all over the world work in the nine European countries in which the ALDI companies operate. This diversity is a part of ALDI Nord. It enriches our working relationships and reflects the diversity of our customers. All ALDI employees should have the same opportunities, regardless of gender, age, religious affiliation or world view, sexual identity, origin or physical impairment. The ALDI companies reject all forms of discrimination. Our values are also set out in the ALDI Nord CR Policy. In 2020, women accounted for around 67 per cent of the total workforce (2019: 65 per cent). The proportion of female employees in management positions was 34 per cent in the reporting year (2019: 32 per cent), and women manage about half of our stores. We see this as confirmation of our philosophy of placing a clear focus on individual performance when filling management positions. By signing the United Nations’ ‘Women’s Empowerment Principles’ in March 2021, we publicly reaffirmed our commitment to greater gender equality in our group of companies and along our international supply chains.

ALDI Nord aims to provide long-term employment relationships with fair pay and fair employment conditions. Most employment contracts offered by the ALDI companies are permanent (almost 79 per cent in 2020). In comparison to the rest of the retail sector, ALDI Nord has always benefited from above-average employee loyalty. Regardless of their gender, all ALDI employees are remunerated with fair pay in accordance with their performance.

Taking responsibility for the well-being of employees is part of the ethos of the ALDI companies. We focus on occupational health and safety measures, preventive health measures, fair pay and employment contract conditions, and equal opportunities for all employees. These measures have the added benefit of functioning as engagement and motivational tools for employees.

In 2020, we too were particularly challenged by the COVID-19 pandemic. The ALDI Nord group of companies reacted early to the requirements arising from the global pandemic, taking responsibility for the health of our employees and customers. As early as spring 2020, we provided technical support for home working where possible, particularly in administration and service. We also set up extensive protective measures for employees and customers in areas where direct customer contact is necessary. These measures guaranteed working operations and food supplies at all times across all ALDI Nord countries. ALDI Nord was thus able to fulfil its responsibility as a responsible employer and food supplier even during the pandemic.

ALDI Nord hired additional workers in 2020 to ensure the supply of goods to the population during the pandemic. We continue to aim to support staff growth and provide candidates with a quick and easy access point to ALDI Nord. Onboarding programmes, such as the week-long ALDI POWER DAYS for new ALDI Einkauf employees, were held fully online in the context of the COVID-19 pandemic.

Systematic training and development are key elements to ensure the continued success of ALDI Nord. The ALDI Academy was founded in 2019 to establish a range of continuing education programmes in Germany. Among other things, we continue to provide leadership coaching and training on feedback culture, as well as programmes to promote situational leadership and active employee participation. These training courses help managers – and through them, the employees – to better adapt to customers’ needs. Despite the challenges of the COVID-19 pandemic, the training programmes were extended to more staff groups in 2020, as they were transferred to digital learning formats. The online programmes range from digital language courses to extensive project management training. The plan to establish the ALDI Academy in other countries could not be implemented in 2020 due to the pandemic. However, further training programmes are already and will continue to be available in the other countries.

By introducing grievance systems, we are living up to our commitment as an employer to offer equal opportunities for all and to prevent discrimination. At ALDI Netherlands, employees can confidentially report discrimination, bullying, intimidation or other undesirable behaviour to an advisor. In Spain, a new grievance system (whistleblowing line) has been active since July 2019, in addition to other methods for reporting discrimination issues. Via this system, employees can access a protocol on prevention and management of abuse in the workplace. In 2020, ALDI Poland, ALDI Spain, ALDI Netherlands, ALDI Portugal and ALDI Denmark followed ALDI Nord Germany and ALDI France in introducing grievance systems for reporting discrimination cases.