A responsible value chain
Management approach: GRI 203; 301; 308; 407; 408; 409; 412; 413; 414
GRI 102-9; 308-2; 409-1; 412-3; 414-2
In weekly-changing theme worlds, we offer our customers consumer goods that are distinguished by their quality and variety. We take care to ensure that social and environmental standards are complied with in the sourcing of raw materials and in production, and include sustainability aspects in our product design. We are working to further increase transparency in our value chains so as to bring about improvements at upstream supply chain levels as well. Global challenges in the supply chain that we cannot solve on our own are tackled through cooperation projects, ideally in industry-wide initiatives.
Since 2006, sustainability has been an integral part of Tchibo's corporate strategy. On our way to becoming a 100 % sustainable business, we continually expand our assortment of sustainable consumer goods, implement social and environmental standards in the supply chain. We team up in initiatives with other stakeholders to develop possible solutions to the challenges of globalisation. We take our responsibility as a value-oriented family-owned business seriously, and believe that business success must not be at the expense of people and the environment. With a view to future generations, we also see it as the task of companies to do their part for a humane development of society and for the preservation of our natural environment.
The opportunities and challenges of global supply chains
The liberalisation of the flow of goods and finances has resulted in a global division of labour in which countries focus on their specific competitive advantages. Tchibo sources a large proportion of its textiles and other consumer goods from Asia and Eastern Europe, where they can usually be produced at cheaper prices than in Western and Southern Europe, quite aside from the fact that many product categories can only be sourced from there. At the same time, Tchibo – like other companies – is confronted with risk factors. These include a disregard for labour and social rights, as well as environmental standards. We are convinced that the international division of labour can open up opportunities for everyone if people and the environment are given consideration and treated considerately in our [collective] actions. That is why we work for a sustainable design of our consumer goods value chains.
The cultivation and processing of raw materials such as cotton and wood have repercussions for people and the environment. For example, cotton farming requires large amounts of water, and chemical pesticides and fertilisers are applied to the cotton plantations and forested areas. The further processing of these raw materials also often takes place without adequate attention to environmental and social standards. Tchibo is aware of this problem – which is why, as a responsible company, we are continuously reducing the negative impact of our business activities on people, the environment and society. This includes our implementing social standards in the supply chain, such as occupational health and safety measures, as well as environmental standards, such as resource conservation and chemicals management. Making sure our value chains are sustainable also means expanding our sustainable product ranges and promoting sustainable consumption. For example, by building demand for sustainably grown cotton, we are also promoting sustainable agriculture. By making sustainable consumption possible for our customers, we are also making a contribution to increasing sustainable growth.
Focuses of our measures on our way to a 100 % sustainable business
We continually develop the focuses of our sustainability management work. As long ago as 2012, we evaluated and mapped them for our Consumer Goods value chain as part of a materiality survey conducted with our stakeholders. We defined ‘environmental and social standards in the supply chain’, ‘resource-conserving product design’ and ‘supplier qualification’ as our focus topics.
These priorities guide us in developing concrete goals and actions on the way towards becoming a 100 % sustainable business. In 2017, too, we conducted extensive and targeted stakeholder dialogues and stakeholder surveys that will be incorporated into the further development of our focus topics. In the field of social standards, for instance, we are redoubling our focus on transparency in the supply chains and on human rights, bearing in mind especially the United Nations Guiding Principles on Business and Human Rights (UNGs), their implementation in the framework of the National Action Plan for Business and Human Rights (NAP), and their Sustainable Development Goals (SDGs), which we also regard as global frameworks for our own sustainability agenda.
We pay particular attention to the sustainable design of our value chains. Our company size enables us to achieve significant effects in this connection. On the way towards becoming a sustainable business, we work step by step to design all products and processes in an environmentally and socially acceptable way. We concentrate on those areas where we have the greatest impact on people and the environment, and where we can have the most influence:
- responsible business practices
- gradually obtain raw materials and ingredients exclusively from sustainable sources
- permanently improve working and environmental conditions at the production sites
- tackle structural challenges through cross-industry coalitions and alliances
Guidelines and Principles for our Responsible Business Practices
In striving to continually improve our sustainability management, we are guided by international guidelines, in particular the Sustainable Development Goals (SDGs) as an overarching global framework, the United Nations Guiding Principles on Business and Human Rights for socially responsible conduct in the supply chains, the National Actions Plan on Business and Human Rights (NAP), the conventions of the International Labour Organisation (ILO), and the principles of sustainable development based on the Rio Declaration of 1992. EU regulations (e.g. the REACH regulations for chemical management) as well as German legislation (for example, the Waste and Packaging Act and Food and Consumer Goods Act) provide the legal framework for the sustainable design of our products and processes.
Based on this, we have formulated the following binding principles to guide us in designing sustainable value chains for consumer goods:
- Dialogue and participation: When working with our suppliers, we involve both the management (top-down) as well as their employees (bottom-up). This turns everyone involved into ‘owners’ of the processes and improves the prospects of finding solutions that are acceptable for all parties.
- Setting targets: We set ambitious but realistic goals regarding our business practices, regularly monitor results, and work on continual improvements.
- Responsibility in the day-to-day business: Our operational departments such as Purchasing, Quality Management and Marketing are responsible for the developing and implementing change measures. Where necessary, Corporate Responsibility plays an initiating, co-creating and accompanying role.
- Openness and willingness to learn: We don’t seek to instruct, but listen to our stakeholders, openly address problems, are self-critical, and learn from our mistakes.
Social and environmental standards as minimum requirement
Since 2006, sustainability has been integrated in our company’s strategy and is a core component of all business processes. The Tchibo Social and Environmental Code of Conduct (SCoC), which we developed in cooperation with our stakeholders, is the foundation for this. It defines minimum requirements for working conditions and environmental standards in the production of our consumer goods, and is the basis of all purchasing contracts. Developed in 2006 as the Tchibo Social Code of Conduct, in 2011 the Code was expanded to include environmental requirements. By signing the SCoC, our producers commit to social and environmental standards at their production sites. This includes occupational safety, the prohibition of child labour and discrimination, the recognition of trade union rights, and measures to avoid negative environmental impacts.
In 2017, we revised the SCoC again. It now includes further environmental requirements as well as additions that became necessary due to our commitments under the Global Framework Agreement with the IndustriALL Global Union, the Partnership for Sustainable Textiles, and the SDGs.
Engagement in industry-wide initiatives
For many structural challenges in the value creation chains, there are no complete solutions available at this time, but some stakeholders already have individual partial solutions. In order to bring combine these and achieve change with concerted strength, all the relevant stakeholders need to join forces in alliances. That is why we work closely with other retailers, producers, governments, trade unions and non-governmental organisations, science and trade unions, and are involved in cross-industry alliances, to implement global solutions step by step. In our collaboration with other stakeholders, we want to more clearly address not only grievances such as discrimination or low wages, but also the underlying systemic causes. Examples of this include our strategic alliance with the German Association for International Cooperation (GIZ) and REWE Group as well as our cooperation in the textile alliance.
- In September 2016, Tchibo became the first German trading company to sign a framework agreement with the IndustriALL Global Union. The idea is to make it possible for employees and trade unions at the production sites to negotiate – wages and social benefits in particular – with factory owners and management. As a member of the ACT (Action, Collaboration, Transformation) initiative we also work in partnership with IndustriALL and other international trading companies on living wages and industry-wide wage bargaining between social partners on an equal footing in the clothing industry.
As long ago as 2012, Tchibo became the second company in the world to sign the 'Accord on Fire and Building Safety in Bangladesh' and contributed to its negotiation, entry into force, improvement and ongoing implementation. In 2017, we signed a follow-up accord for another three years. It will continue the accord until such time as the public authorities in Bangladesh can take over its work.
- In 2015, we joined the Partnership for Sustainable Textiles initiated by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). The focus of the alliance of politics, business, standards organisations, NGOs, trade unions, science and academe and other stakeholders is committed to implementing environmental and social standards at all stages of the global textile supply chain. As part of our membership, we are on the one hand implementing our own published ‘roadmap’, and on the other hand have provided support in two ways since 2016: an alliance initiative to systemically improve the working conditions of girls and young women in spinning and textile mills in the southern Indian state of Tamil Nadu. The second initiative is dedicated to chemical and environmental management and builds on our strategic alliance with the German Association for International Cooperation (GIZ) and the REWE Group. As part of this alliance, a training and qualification program has been developed that is being carried out in production facilities in China and Bangladesh. Following on from this, we want to work with the alliance initiative to support the establishment of national qualification structures in other countries as well. As part of the exchange of experience, Tchibo also participated in the production of a brochure for small and medium-sized enterprises on the subject of combating corruption in the supply chain.
- In Myanmar, we also work with the German Society for International Cooperation (GIZ) on the ‘Working and Social Standards in the Textile and Clothing Sector in Asia’ project, to ensure compliance with human rights and labour standards by our core suppliers there.
- In 2016, we became a member of the multi-stakeholder initiative 'Organic Cotton Accelerator', which was launched in 2014. In it, we work with protagonists from the international cotton industry to strengthen the production of organic cotton and establishing a sustainable organic cotton market.