Procurement, production and processing

In terms of procurement, production and processing, it is important for us to know which resources and raw materials are used to produce our products and under which social and environmental conditions our products are made. In managing these issues, we draw on our group-wide and cross-product purchasing policy “Sustainability”. In this policy, we have formulated the fundamental requirements for sustainable supply chain and procurement management. At the same time, our purchasing policy forms the framework for guidelines that address specific issues related to individual product and raw material categories. By developing and implementing guidelines for sustainable purchasing, we are strengthening our procurement channels and helping to improve the sustainability of our products.

Social audits of own imports through MGB Hong Kong
as of closing date

Social audits of own imports through MGB Hong Kong (bar chart and pie chart)

Active suppliers are those who generated actual sales as of the closing
date. Suppliers who have passed the audit can demonstrate their
successful compliance with the BSCI standard by presenting a certificate
awarded by an independent third party.

To ensure socially compatible working conditions within our procurement channels, we are committed to the implementation of social standard systems in our suppliers’ business operations.

All of our producers in defined risk countries (based on the assessment of the Business Social Compliance Initiative, BSCI) who supply us with clothing, shoes, toys and hardware through our import company MGB METRO Group Buying Hong Kong undergo audits conducted in accordance with BSCI or equivalent standards. As of 30 September 2014, 835 producers had been audited. Of this group, 58 per cent received a grade of “good”. Producers who fail to pass the audit have 18 months following the audit date to improve conditions at the site. Should these improvements not be made, the production site will receive no more orders until it can demonstrate that it has sustainably improved its organisational processes. In financial year 2013/14, 12 per cent of suppliers who had not passed the audit demonstrated improvement. Overall, though, the share of suppliers who passed audits declined. This is primarily the result of stricter BSCI requirements for audits.

Topic

Goals

Status goal

Measures

Status measures

1

This covers the producers of merchandise (own brands and own imports) who carry out the final significant and value-creating production step

INTERNATIONAL LABOUR STANDARDS/SOCIAL STANDARDS

METRO GROUP expands its commitment to fair working conditions at its suppliers.


Work in progress

Inclusion of all non-food own-brand suppliers1 in a BSCI or equivalent social standard system by the end of 2014 if the final product is produced in a risk country (risk country based on BSCI definition).


Measure ongoing