Social matters
Supplier development
In order to offer our customers an assortment that meets their requirements, the availability, condition, quality and sustainability of our products play an important role. We have influence on this through direct contact with our suppliers as producers and manufacturers. By training small and medium-sized suppliers on aspects of food safety, hygiene, processing and implementation of fair working conditions, we enable them to meet relevant standards and thus help them merchandise their goods. This increases their revenue and simultaneously secures our product range.2
- Our approach to promoting our suppliers in terms of compliance with social standards is described in the section global labour and social standards in the supply chain.
- With regard to the description of risks associated with non-compliance of standards by our suppliers, we refer to the section supplier and product risks – quality risks in the risk and opportunity report. We did not identify any material risks.
Respect for human rights
Respect for human rights is one of the fundamental values of the METRO group, as formalised in our ‘Policy for Human Rights’. We pledge to respect all human rights, as set out in the United Nations’ Universal Declaration of Human Rights and the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO). This obligation applies to our own employees (see chapter ‘human rights and employer-employee relationships’) and to our business partners within our value chain.3
Since we expect our business partners to adopt and honour similar values, the METRO Code of Conduct for Business Partners is an integral part of every business relationship. This Code of Conduct includes compliance with human rights according to UN and ILO standards, occupational and social issues based on the principles of the International Labour Organization’s 4 core labour standards, environmental protection and corporate ethics, in particular anti-corruption and anti-bribery, antitrust and competition laws as well as data protection. Furthermore, all of our own-brand contracts contain a social standards clause that gives us legal means to enforce our requirements.
In case of violations of our basic human rights principles, our employees can contact their supervisors or the company’s compliance officers. Using a tool that is publicly accessible via the METRO compliance page, external people can report situations that do not comply with the values and guidelines of METRO or with statutory provisions. The reported incidents will be promptly investigated and processed by our experts to take appropriate action, if necessary.
Global labour and social standards in the supply chain
We aim to contribute to ensuring socially acceptable working conditions within our sourcing channels. Therefore, in addition to a contractual manifestation of our requirements, the application of social standards systems is an integral part of the process as well as an important tool. Social standards systems enable us to take effective action against any potential violations. Irresponsible practices within the supply chain can damage the confidence in our conduct and, consequently, also our business. We will therefore require our producers to be audited in accordance with the supply chain management standard set out by the Amfori Business Social Compliance Initiative (Amfori BSCI) or an equivalent standard. This applies to all producers in certain high-risk countries (based on the Amfori BSCI rating) that manufacture imported goods for METRO SOURCING. It also applies to the producers of non-food items for our own-brand products and our own import products. As of 30 September 2018, 1,274 producers have been audited. Of that group, 92% (1,173 producers) passed the audit. Producers who fail the audit are allowed a period of 12 months to provide proof of improvement by way of a follow-up audit. METRO Wholesale and Real have introduced more stringent supplier requirements on 1 January 2017: New suppliers are only accepted if the producers with whom they collaborate4 can prove that they have achieved an at least acceptable audit result, in example A, B or C, for the Amfori BSCI or an audit that is acknowledged as equivalent. Existing suppliers have been granted a transitional period of 2 years. In addition, we have set stricter requirements than in the past for all suppliers: all suppliers producing for us5 must prove at least acceptable audit results by 1 January 2019.
The verification of compliance with our requirements is performed via an internal IT-based process management database, which is synchronised with the audit results in the Amfori BSCI database. By working with our database, the responsible employees of our METRO national subsidiaries carry out the portfolio management of the affected suppliers and the associated producers and integrate the procedures for compliance with social standards and human rights into their daily work routines. On the other hand, the process management is automated, for example, to warn our suppliers of expiring audits and to initiate the individual review of Amfori BSCI D or E audits or equivalent audits by METRO and to effect improvements. The database is also used as a contract compliance mechanism during initial negotiations or suspension of ongoing business, since the required documents are uploaded and reviewed before conclusion of the contract or suspension of the supplier is triggered in case of misconduct by deal-breakers specified by METRO. This includes findings in the areas of child labour, forced labour, occupational safety hazards with regard to fire safety and ethical behaviour. If there is a misconduct discovered at suppliers and their producers concerning one of these areas, they are required by METRO to develop short-term and long-term solutions. New orders or follow-up orders are suspended until the findings in the deal-breaker process have been resolved.
In order to not only ensure the social requirements of our suppliers, but also to contribute to improving them and thereby further increasing the proportion of valid audits, METRO SOURCING works with our local producers and supports them through training courses designed to understand and comply with social standards. Especially on the subject of forced labour, METRO Turkey and METRO Pakistan piloted a one-day training for employees in key functions. The intention is to reintroduce the importance of the topic into our organisation and to empower our employees to identify, process and prevent potential and/or actual forced labour incidents. The development and execution of the training is carried out in collaboration with the Amfori BSCI. By 30 September 2020, all METRO national subsidiaries are expected to have completed this training.
Social audits relating to own imports by METRO sourcing and non-food own-brand products of the METRO sales lines
as of the closing date of 30/9
2 Due to the business alignment, supplier development is not a significant aspect for the holding company METRO AG.
3 For the holding company METRO AG, the aspect of human rights in the supply chain is not essential owing to its business alignment but rather only in relation to its own employees.
4 This includes merchandise producers (non-food own-brand products and own non-food imports) in high-risk countries that carry out the final significant value-creating production step, for example produce the final item of clothing.
5 This includes merchandise producers (non-food own-brand products and own non-food imports) in high-risk countries that carry out the final significant value-creating production step, for example produce the final item of clothing.