Responsibility in the core business
Retail in food and consumer goods is the core business of the ALDI North Group. We have always had clear ideas about quality, price and responsibility for our own brands. We are well aware that the manufacture of products is associated with social and environmental impacts. This is why we take responsibility in our supply chain. We have established this as a key element of our conceptual interpretation of sustainability within our Corporate Responsibility (CR) Policy.
Around 93 percent of our product range is made up of own-brand products that we carefully select and design for our customers. This enables us to implement sustainability directly in the product. We define clear-cut requirements and therefore exert an impact on the ingredients, product design and production conditions of our products. Some of the product labels, specified limits for compliance and inspections go significantly beyond the defined statutory requirements. We join forces with our suppliers to develop fair and safe working conditions, as well as environmentally friendly production and cultivation methods. This is because our objective is to enable millions of customers in Europe to shop in our stores with a good conscience.
Joint commitment for sustainability and quality
Our suppliers are our most important partners in designing our product range. We work closely together with them in a trusting relationship over the long term. For this reason, we ensure that we share our ideas of quality, responsibility and reliability. We join together and develop our social and environmental standards continuously, and convert our product range, if reasonable and possible, to more sustainable resources. The purchasing policies specifically for resources are one of the tools we use to carry out this conversion. Our Social Compliance Programme (SC Programme) defines clear guidelines for suppliers governing the working conditions at the production facilities they place orders with. The programme also defines the rules for verification of compliance. We participate in sector and multistakeholder initiatives in order to address overarching challenges. We have defined concrete targets for our engagement: for example drawing up an International Coffee Purchasing Policy.
Defining clear requirements and checking compliance
Before we adopt new sustainability requirements, we check that implementation is feasible with selected suppliers – for example drawing up the Animal Welfare Purchasing Policy. The requirements developed in this way become a fixed element in our purchasing processes and contracts. We define dependable objectives and provide our suppliers with as much time as possible to implement any changes. Suppliers have to document implementation of all objectives and evidence of this needs to be provided in random sample checks. Unannounced on-site visits are also carried out by accredited, independent inspectors, but also by our own experts.
The CR managers of the ALDI North Group are available as contacts for suppliers and buyers throughout the Group. Conceptual initiatives are developed by the CR department at ALDI Buying. They coordinate the development and implementation of purchasing policies specific to resources and the SC Programme, and they are in continuous communication with the CR managers in the individual countries.
Our purchasing policies are a commitment to sustainability
By the end of the reporting period, we had published purchasing policies for specific resources relating to our own brands for fish, cocoa and palm oil. An Animal Welfare Purchasing Policy followed at the beginning of 2016. Other corresponding policy documents for coffee, wood, board, paper and cotton are being planned. We use the purchasing policies to define clear requirements, targets and scopes, as well as responsibilities and monitoring measures. They are also binding for our buyers in tender and purchasing processes.
The suppliers of the corresponding products are committed to implementing the requirements of the relevant purchasing policies when they conclude a contract. We only work with business partners who act in accordance with our purchasing policies. These are applicable throughout the ALDI North Group – the International Animal Welfare Purchasing Policy is also supplemented by national policies. The companies in the ALDI North Group can also formulate their own more stringent targets in individual countries – in accordance with the targets of the ALDI North Group.
The content of the purchasing policies is reviewed each year and revised as necessary. Content requirements, facts and figures are always up to date. The latest research findings are also taken into account, alongside government policy initiatives, new legislation and internal CR requirements.
We deploy our own resources where the impact is greatest. To this end, we analyse our product offering from sustainability and risk perspectives. Which resources are subject to risks on account of their manufacturing and cultivation methods and are therefore a topic of debate in the public domain? What is frequently used in our product range or is in great demand? The result is that we achieve environmental, social and economic improvement in production for a maximally large number of own-brand products and the resources they are made of.
Fish and seafood: protecting stocks and the environment, labelling products transparently
Many natural fish stocks are under threat as a result of overfishing, illegal methods of catching fish and environmental impacts. In order to protect stocks and to be in a position to cover the demand for fish as a source of food over the long term, both catching fish in the wild and fish farming need to undergo change. We want to ensure a more sustainable approach to fish and seafood along the entire supply and production chain for our own-brand products. At the end of 2015, the proportion of certified resources in conformity with the Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC), GLOBALG.A.P. or EU organic logo was nearly 33 percent throughout the entire ALDI North Group.
Proportion of insourced own-brand products which are MSC, ASC, GLOBALG.A.P. or EU organic certified out of the total number of insourced fish products, broken down by type of certification (in percent)1
We measure our target attainment on the basis of the proportion of certified products.
|Total||of which MSC||of which ASC||of which GLOBALG.A.P.||of which EU organic logo||Total||of which MSC||of which ASC||of which GLOBALG.A.P.||of which EU organic logo|
|ALDI North Group||27.3||79.4||7.3||11.3||2.0||32.9||71.7||11.5||17.3||2.6|
1 Products that have been certified with several seals of approval are listed in the breakdown under all the relevant categories, but the product is only counted once in the total number of products. The sum of all the breakdowns can therefore exceed 100 percent.
2 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
3 For 2014, no complete data is available for the purchased GLOBALG.A.P.-certified fish products in France.
Our Fish Purchasing Policy lays the foundation for sustainable conversion of our product range. Suppliers are committed to comply with the core standards of the International Labour Organization (ILO) and the Code of Conduct of the Business Social Compliance Initiative (BSCI), as well as the specifications of the regional fishery management organisations. Particularly critical products are consistently delisted: for example species of fish which are categorised as endangered on international species protection lists, or were classified as protected, or protected for parts of the year, and are not being sustainably fished. Since 2011, we have been continuously developing the Fish Purchasing Policy. An updated version was published in May 2015. A comprehensive revision is planned for 2016.
We support consumers with our fish label so that they can make an informed purchasing decision. The label provides information about the precise species of fish, wild stock or aquaculture, as well as the method, area and time of fishing. In the case of aquaculture, there is also information about the country where the fish was farmed and usually about the method of aquaculture. If possible, the customer is also provided with details about the fishing vessel and the port of landing. This label means that the ALDI North Group goes beyond the statutory requirements in most countries where the Group is operating. All fishery products and seafood, and all products containing fish – in Germany for instance tuna pizza, paella or salads bear this label. We are planning expansion of the ALDI Transparency Code (ATC) to these product groups in the near future so that the supply chain is digitally traceable.
We are continually developing our purchasing policy and we also communicate with experts from non-governmental organisations (NGOs), researchers and representatives of the German fishery and fish wholesalers. In cooperation with the Buying department, the CR department continually analyses the entire fish product range on the basis of defined criteria, such as the fishing methods. The results are used to find more sustainable alternative products over the short to medium term or to initiate delisting. DNA analyses on a random sample basis at ALDI Buying are used to determine the fish species. This process has been carried out at ALDI France for all fish and seafood products since 2013.
Campaign “Think Fish Week” in the Netherlands and Belgium
In September 2015, ALDI Netherlands participated in a joint initiative of the MSC, the ASC and the World Wide Fund for Nature (WWF). Under the slogan “Think Fish Week”, consumers were informed about how they could identify products from verifiably more sustainable fishing (MSC) or more responsible fish farming (ASC). The campaign was promoted with an online brochure, through the customer magazine ALDI aktuell and in the stores. ALDI Belgium also informed its customers about the campaign.
Animal welfare: Purchasing policy defines standards
Species appropriate husbandry of livestock is the focus of a debate within the community which is unfolding in different ways across the countries where the ALDI North Group is operating. A lot of own-brand products from the ALDI North Group contain resources of animal origin. We are therefore responsible for working together with suppliers to establish and develop animal welfare standards. Over recent years, we have already implemented various measures throughout the ALDI North Group in order to achieve this objective, which go beyond the statutory requirements. In January 2014, for example, we excluded angora wool from our stores. In March 2015, we made a public declaration about ceasing to trade in goods containing real fur in compliance with the international “Fur Free Retailer” Programme.
Since the beginning of 2016, the International Animal Welfare Purchasing Policy has provided a binding framework. This policy applies to all products of the ALDI North Group food and non-food own brands containing resources of animal origin. We formulate our requirements in the purchasing policy to define selection of products in our range, transparency, traceability, checks and inspections. The policy specifies that we continuously expand our animal welfare activities and engage proactively in a sector-wide dialogue such as we are fostering in the scope of our engagement with the “Initiative Tierwohl” (Animal Welfare Initiative) in Germany.
The International Animal Welfare Purchasing Policy applies in all the countries where the ALDI North Group is operating. The companies have the opportunity to establish requirements and aspirations on an individual basis and therefore align the purchasing policy with the national market conditions. We are therefore in a position to meet the varying expectations of consumers or NGOs, and the statutory regulations in the countries concerned. In Germany, the Netherlands and Denmark, we have already adopted National Animal Welfare Purchasing Policies. We will be publishing similar policies in Belgium in 2016.
Over recent years, the debate about animal welfare has been particularly intense in Germany, the Netherlands and Denmark. Our stakeholders confront us with specific demands in this area which are higher than the expectations in other countries. During the reporting period, we have implemented additional measures in these countries and formulated challenging targets.
Animal welfare commitment in Germany: providing transparent information and addressing critical issues
In 2004, The ALDI North Group was the first company in German food retailing to stop selling eggs from caged birds or small-group housing systems. We have also defined a negative list which excludes the sale of specific goods. These include:
- Meat, down or feathers obtained using forced feeding and live plucking
- Wool obtained using the mulesing procedure
- Rabbit meat
- Quails and quail eggs
- Lobster, eels, shark and fish species which are classified on international species protection lists as “endangered and protected” or “protected at certain times”
We expect the seamless traceability of the origin of our products, as partially stipulated by law. Our business partners must go beyond the statutory regulations, present these records to the ALDI North Group immediately upon request, and they must have put in place appropriate procedures for this purpose. The ATC enables us to help customers in Germany to check the origin of products already in the store. In addition, we work together with the “Verein für kontrollierte alternative Tierhaltungsformen” (KAT – Association for Controlled Alternative Animal Husbandry) which monitors the origin of organic, free-range and barn eggs. The KAT requirements extend beyond the statutory criteria and include aspects of animal protection. Any customer can go to www.was-steht-auf-dem-ei.de (“What is on the egg?”) and find out detailed information about the producer’s business.
Key figure: Proportion of KAT-certified shell eggs
Proportion of KAT-certified shell eggs out of the total number of insourced shell eggs (in percent)1
The proportion of KAT-certified shell eggs amounts to around 99 percent. The increased proportion of KAT-certified shell eggs is due to introduction of the requirement in Belgium at the beginning of 2015.
|ALDI North Group||97.8||99.1|
1 KAT certification is not used in all countries. Only the countries where this system is used are therefore listed here.
2 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
The ALDI North Group in Germany is planning to further intensify its cooperation with suppliers on additional critical aspects to drive forward improvements in animal welfare. These aspects include slaughter of pregnant cows, dehorning of cattle and tail docking in piglets. In Germany, the sale of shell eggs from laying hens that suffered beak shortening will also be banned in 2017.
Animal Welfare Initiative
The ALDI North Group is a founding member of the “Initiative Tierwohl” (Animal Welfare Initiative). Since January 2015, the collaboration between retail, academia, animal welfare campaigners, and pig and poultry producers in Germany has been working to improve conditions in the husbandry of pigs and poultry.
The initiative develops quantifiable animal welfare criteria which extend beyond the statutory regulations. A certification process was also introduced. Farmers who voluntarily implement specified measures receive an animal welfare allowance independently of market price. The additional cost for the livestock producers is financed by all the participating food retailers. The ALDI North Group pays a fixed amount of four cents per kilo of pork or poultry meat sold to the animal welfare fund set up by the initiative.
One year after the launch of the initiative, twelve million pigs as well as 255 million chickens and turkeys in around 2,900 businesses are already benefiting from the advances.
Netherlands: Quality label for meat products and animal welfare campaigns
At the beginning of 2016, ALDI Netherlands also published a National Animal Welfare Purchasing Policy. In the Netherlands, we use the “Beter Leven” quality seal (“Better Living”) from the Dutch animal protection association. This seal labels products containing resources from animals or processed animal resources, which meet specific animal welfare criteria. Our objective over the long term is for all the relevant products at ALDI Netherlands to at least meet the criteria of the One Star “Beter Leven” quality seal. Starting in 2016, the first products with the quality seal will be on sale. By the end of the year, we will have replaced our entire product range of fresh chicken meat in the Netherlands with meat from a slower growing breed – or by meat which meets the criteria of the One Star “Beter Leven” quality seal. The target by then is for fresh pork in our standard range to meet the One Star criteria.
ALDI Netherlands works together with suppliers and NGOs through national sustainability campaigns to achieve improvements in animal welfare. The National Animal Welfare Purchasing Policy was agreed with the Dutch animal protection association and they are going to work together to evaluate the policy every year.
Denmark: Ban on specific animal products
The National Animal Welfare Purchasing Policy of ALDI Denmark was published in spring 2016. We also ban the sale of specific goods there by a negative list. These include rabbit meat, quails and their eggs, as well as wool obtained in conjunction with the mulesing procedure. The sale of lobster will also be banned in the near future.
Genetic modification: ban in products and feedstocks
In the European Union (EU), there has been a requirement to label genetically modified organisms (GMO) for some years now. In France, products containing GMOs are prohibited by law. Hence, the labelling requirement is not applicable there. The suppliers of the ALDI North Group are obliged to guarantee that their goods do not contain, nor consist of GMO ingredients, and that they are not produced with genetically modified food ingredients, additives or other substances according to EU legislation. This applies to all food products sold by the ALDI North Group and includes all upstream stages in the production process. The suppliers must also keep all the appropriate declarations and laboratory analyses and disclose them for audits. However, labelling in conformity with EU legislation does not require disclosure of any information in the end product relating to the feedstocks used. The ALDI North Group in Germany therefore uses the seal “Ohne GenTechnik” (Ohne Gentechnik = no genetic engineering) from the “Verband Lebensmittel ohne Gentechnik” (VLOG – Industry Association Food without Genetic Engineering), which provides information on this issue. During the reporting year, twelve products were labelled with the VLOG seal.
Palm oil: conversion of the standard product range to certified sources
Palm oil is very versatile and is therefore used in numerous products – from detergents, through cosmetics, to cake icing and glazes. However, in many areas of cultivation in South-east Asia the production of palm oil results in negative environmental and social impacts. Rain forests are destroyed to make way for palm oil plantations, animal species lose their habitats and indigenous people lose their way of life and means of existence. However, replacing palm oil is anything but easy – the oil palm is the most productive oil fruit worldwide. The ALDI North Group has therefore been committed to more sustainable and environmentally friendly cultivation methods through its International Palm Oil Purchasing Policy introduced in 2015. In future, we will have certified all our own-brand food products in the standard product range containing palm oil that are sold in our stores. The platform is provided by physical certification in conformity with the Roundtable on Sustainable Palm Oil (RSPO). Over the long term, we are planning to source the highest possible proportion through the two segregated supply chain systems which require strict separation of sustainable from non-certified palm oil.
Since 2015, we have been a member of RSPO and we use this forum to make a contribution to environmentally friendly agricultural use in the cultivation of oil palms. Principles and criteria for the production of palm oil using environmentally friendly and ethical methods are worked out in the dialogue with NGOs, palm oil producers and trading companies. We require our suppliers to join the RSPO as well. Furthermore, they are obliged to verify certification of the supply chain, which also applies to the final production facility prior to delivery. Since 2014, we have been carrying out annual supplier surveys so that we are in a position to check the status of implementation.
Since the end of 2015, the ALDI North Group has only been sourcing physically RSPO-certified palm oil for own-brand food products in Germany. Our commitment has been acknowledged by external stakeholders. The ALDI North Group is listed in the upper mid-range on the Palm Oil Scorecard 2015 by WWF Germany. At the beginning of 2016, ALDI Netherlands was able to verify a proportion of 90 percent of physically RSPO-certified palm oil for own-brand food products. Discussions are currently being held there with suppliers in order to convert the final ten percent.
Proportion of the total volume of palm oil used to manufacture our food and non-food products which was certified in conformity with a physical RSPO supply chain system (in percent)1
In 2015, the proportion of physically certified palm oil (including palm kernel oil and derivatives) went up to nearly 77 percent compared with the previous year. The amount of palm oil used over the same period came down from more than 44,000 metric tons to around 39,600 metric tons in 2015. One of the reasons for the fall was the International Palm Oil Purchasing Policy introduced in 2015. Since all the data for 2014 are not yet available, the proportions are not directly comparable with each other.
|ALDI North Group||71.7||76.8|
1 Some of the data are based on extrapolations.
2 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
3 Data are only available from 2015 (n/a = not available).
Cocoa: improving the framework conditions for small farmers and ecosystems
The ALDI North Group sells numerous products containing cocoa. Most cocoa is cultivated by small farmers and their families in West Africa, and sold to cooperatives. However, in many places the small farmers lack the knowledge and the opportunities to work successfully in accordance with environmental, ethical and business standards. We would like to make a contribution to preserving ecosystems and improving the living conditions of the people involved in cultivating cocoa. At the same time, we are also in a position to safeguard cocoa stocks in the future and preserve them as a basis for our products. Our International Cocoa Purchasing Policy is applicable throughout the ALDI North Group and we have therefore defined our target in this policy as converting our own-brand products containing cocoa to sustainably certified resources by the end of 2017. This applies to confectionery (sweet bakery products, pralines, chocolate, seasonal articles), cereals and ice cream, and other own-brand products with significant cocoa content (for example spreads, chocolate coatings). We require suppliers of our own-brand products to comply with the Fairtrade, Rainforest Alliance or UTZ Certification Standard.
Proportion of insourced own-brand products containing cocoa with certified sustainable cocoa out of the total number of insourced products containing cocoa, broken down by type of certification (in percent)
At the end of 2015, we had converted around 49 percent of own-brand products containing cocoa completely to certified resources throughout the ALDI North Group. At the end of 2015, ALDI Netherlands had already converted around 78 percent of its total product range (including special-buy products) to certified resources.
|Total||of which Fairtrade||of which UTZ||of which Rainforest Alliance||Total||of which Fairtrade||of which UTZ||of which Rainforest Alliance|
|ALDI North Group||32.3||0.5||99.5||–||48.9||1.9||97.9||0.2|
1 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
We deployed various measures internally and externally to highlight the publication of the International Cocoa Purchasing Policy in 2015. These activities will be expanded continuously, for example we are promoting certified products in our customer magazine ALDI aktuell. We have been a member of the initiative “Forum Nachhaltiger Kakao” (FNK – German Initiative on Sustainable Cocoa) since March 2015 and we are making use of the association as a communication platform. The FNK is striving to improve the living conditions of cocoa farmers and their families, protect and preserve natural resources and biodiversity in the growing countries, and promote the cultivation and marketing of sustainably produced cocoa. As a member of the FNK, the ALDI North Group is committed to reporting about activities promoting sustainability in the cocoa sector. Furthermore, advances are regularly reviewed internally. This helps us to identify potential for further development of our International Cocoa Purchasing Policy.
PRO-PLANTEURS supports cocoa farmers
The ALDI North Group is involved in the PRO-PLANTEURS project. This project was launched by members of the initiative “Forum Nachhaltiger Kakao” (FNK – German Initiative on Sustainable Cocoa) and the Ivory Coast government in 2015. The objective of the project is to professionalise cocoa-producing family businesses and farmers’ organisations, and to increase their income. The aim is to bring about an improvement in the nutritional and living situation. The project has a lifetime of five years and within this period the aim is to professionalise 20,000 family businesses and farmers’ organisations in the eastern and south-eastern regions of the Ivory Coast (Côte d’Ivoire) by providing training sessions and advice. The project is particularly focusing on young farmers and women. While the objective is to make cocoa production more attractive for young farmers, the project is also helping women to improve their income situation and to create a better nutritional foundation for their families. The project is being implemented with close integration of FNK members and the government of the Ivory Coast.
Coffee : International Purchasing Policy for Sustainable Coffee being prepared
The cultivation of coffee provides the means of earning a living for around 25 million small famers from Africa, Asia and Latin America. Numerous work processes on the route to the final product present social, environmental and economic challenges. Our objective is to provide support for coffee farmers by stimulating demand for responsibly produced products. To this end, we work together with recognised and established standards organisations like the Common Code for the Coffee Community (4C) Association, TransFair (Fairtrade) and Rainforest Alliance. They empower coffee farmers through certification systems and qualification programmes to place their businesses in a better position from social, environmental and economic aspects. Alongside the 4C membership logo, the EU organic logo, the Fairtrade mark as well as the Rainforest Alliance CertifiedTM seal are represented. In future, we are planning to strengthen our commitment to sustainability within our range of coffee products. In 2016, we will be working out an International Coffee Purchasing Policy as a first stage. This will steer and expand the conversion of our product range to sustainable coffee.
Proportion of insourced certified or verified sustainable coffee out of the total weight of insourced coffee for own-brand products (in percent)
In 2015, a total of around 13 percent of the insourced coffee was certified with the standards specified above. The biggest proportion here was attributable to 4C verification (around 49 percent), followed by the Rainforest Alliance certification (around 21 percent) and the EU organic logo (around 18 percent).
|ALDI North Group||10.8||12.8|
1 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
Since 2009, the ALDI North Group has been a member of the 4C Association and has been working on improvements in the coffee sector together with coffee farmers, cooperatives, exporters, raw coffee dealers, roasters, wholesale and retail organisations, NGOs, standard initiatives, public institutions and research institutes. In future, 4C will undergo a strategic realignment which encompasses further development of the organisation into the Global Coffee Platform. This platform as a sustainability forum for different stakeholder groups will bring together all the important players in the coffee sector. The members will work together on improving the economic, social and environmental conditions for coffee production and processing so that the sustainable cultivation of coffee in countries of origin also presents an attractive proposition for future generations. One element is the promotion of different sustainability standards and initiatives in order to increase the supply and demand for verified and certified coffee. The objective of the 4C Association is to have 100-percent compliance with sustainability criteria for the basic standard in the entire coffee production (verified involvement of 4C verification or other accredited mechanisms). The ALDI North Group supports this initiative for implementing their obligation on sustainability and therefore sources coffee which has been produced in conformity with the basic standard – the Baseline Common Code.
Tea: also active in sustainable purchase of tea
Key figure: Proportion of insource certified sustainable tea
Proportion of insourced certified sustainable tea out of the total weight of insourced tea products (in percent)1
Fairtrade, the EU organic logo, Rainforest Alliance and UTZ were assessed as certification types. Overall in 2015, around 17 percent of the insourced tea was certified with one of these standards. The biggest proportion was attributable to the EU organic logo (around 55 percent), followed by the Rainforest Alliance certification (around 38 percent).
|ALDI North Group||15.9||17.1|
1 The survey included own-brand products containing tea (products which contain substances from the tea plant) and tea-based own-brand products (for example fruit tea).
Fairtrade: promoting social and environmental standards in the sourcing of resources
Fairtrade represents better working and living conditions for small farmers and employees in Africa, Asia and Latin America. The cooperation with Fairtrade offers us an additional opportunity to promote social and environmental standards in global trading.
The ALDI North Group is planning to gradually expand the offering of Fairtrade products in the standard and special-buy product range. In 2015, we developed and launched our own brand FAIR in order to market Fairtrade certified products. Up to now, products under this brand are sold in Denmark, Germany and the Netherlands.
Small farmers and employees benefit through Fairtrade by receiving fixed minimum prices, which cover the costs of sustainable production, and also from the Fairtrade premium for joint projects. These might include the construction of a school, a health unit or investment in the local infrastructure. Fairtrade bans forced labour and illegal child labour, and offers support, training sessions and advice for producers in the growing countries. Around 1.6 million small farmers and employees in 74 countries are already benefiting from this. The independent certification company FLO-CERT carries out local on-site checks to ascertain whether producers and traders are complying with Fairtrade standards.
Fruit and vegetables: creating a broadly based awareness for social standards
Fruit and vegetables constitute an important product group of the ALDI North Group. At the beginning of 2016, we introduced the evaluation tool GRASP (GLOBALG.A.P. Risk Assessment on Social Practice) with the aim of assessing social practices at the producers. The GRASP module is a complement to GLOBALG.A.P. certification. It relates to occupational safety, health protection and social requirements of employees in agricultural businesses. GRASP is not a certification or social audit system but a complementary evaluation tool which is used in conjunction with a GLOBALG.A.P. audit. Already since 2008, most of the suppliers of the fruit and vegetables product group to the ALDI North Group have been contracted to have producer businesses certified in conformity with GLOBALG.A.P. The GRASP module empowers us to create awareness for social standards in the producer businesses. The GLOBALG.A.P. database enables us to audit the results of the GRASP evaluation and to identify the risks in the supply chain. We are able to counter these risks with selective measures. By 2018, all suppliers will have to submit GRASP or a comparable social evaluation. At the end of 2015, the proportion of producer businesses evaluated in conformity with GRASP or businesses with a comparable social evaluation measured by the total number of producer business of fruit and vegetable suppliers which supply the ALDI North Group in Germany was nearly 27 percent.
GLOBALG.A.P. is an international standard for agricultural governance – G.A.P. stands for Good Agricultural Practices. GLOBALG.A.P. currently reaches more than 160,000 producers in more than 120 countries. The producers must meet defined criteria for their entire business and for the individual product area (plants, agricultural livestock or aquacultures) and product group (for example fruit and vegetables).
Risks to food safety are reduced to a minimum through GLOBALG.A.P. certification of our suppliers for fruit and vegetables. The products meet the requirements for food safety and hygiene. Our suppliers can verify that all production stages are traceable without any interruption and are monitored comprehensively.
Wood, board and paper: transparent procurement sources thanks to acknowledged certificates
The ALDI North Group is increasingly using certified wood-based products in order to promote sustainable forestry. In 2017, we will publish an International Wood, Board, Paper Purchasing Policy that is binding throughout the group of companies. This will define clear requirements and targets in order to convert wood-based own-brand products in the standard and special-buy product range, as well as office material for our own use to certified resource. For this purpose, we take the Forest Stewardship Council (FSC®) standard or equivalent certifications as a basis, which guarantee traceability from the forest to the finished product.
Throughout the entire ALDI North Group, the customer magazine ALDI aktuell and – if available – the travel magazine ALDI Reisen have been converted to FSC®-certified paper. The Blue Angel label is also used in Germany.
Alongside promotional flyers and customer magazines, in Germany we also converted most drinks cartons, office paper and stationery, cosmetic products, toilet tissue, and garden furniture and occasional small items of furniture to FSC® and PEFC-certified resources. Over the long term, we are striving to achieve complete conversion of these and other wood-based own-brand products in the standard and special-buy product range to sustainable resources.
Key figure: Proportion of insourced products with FSC® or PEFC-certified resources
Proportion of insourced own-brand products which are FSC® or PEFC-certified resources out of the total number of insourced own-brand products with constituent elements made of wood, board and paper, broken down by type of certification (in percent)
In order to identify potential for improvement, we calculate the proportion of wood, board and paper products and build a product database. In 2015, the proportion in Germany amounted to around 84 percent, in the ALDI North Group more than 41 percent.
|Total||of which FSC® pure||of which FSC® mix||of which PEFC||Total||of which FSC® pure||of which FSC® mix||of which PEFC|
|ALDI North Group||39.1||34.1||37.9||28.0||41.3||30.9||36.7||32.4|
1 ALDI Belgium and ALDI Luxembourg are legally independent companies (see “About this Report“).
2 Data for 2014 are partly based on extrapolations.
Cotton: steps towards sustainable improvement
We are one of the leading textile retailers in Germany. We also rank among the major textile providers in other countries where the ALDI North Group is operating. We take responsibility for the resources which are processed in our textiles. The cultivation of cotton is associated with social, economic and in particular environmental challenges, such as a high level of water consumption or the use of pesticides. We want to gradually promote textile products in the special-buy product range to sustainable cotton, if reasonable and possible. That is why we are committed in our CR Programme to developing a purchasing policy for sustainable cotton by 2017. Our special-buy product range already includes textiles containing certified sustainable cotton – including Fairtrade, the Global Organic Textile Standard (GOTS) and the Organic Content Standard (OCS). From 2016, we will also be gradually converting workwear to GOTS-certified cotton.
Detox: environmental production standards for textile and footwear production
We have made a voluntary commitment to support the objectives of the Detox campaign. Detox was set up by the environmental protection organisation Greenpeace in order to reduce the negative impact exerted on humans and the environment by production processes involving chemicals in the textile and footwear industry.
A comprehensive list of criteria was worked out in cooperation with Greenpeace in which challenging environmental requirements were defined for the production of textiles and footwear. On the basis of this voluntary commitment, we have defined the target for banning specific chemicals in textile and footwear production by 2020 (see download ALDI Detox Commitment). A roadmap lists the necessary operational stages.
We are aware that there will be a protracted process until the understanding and acceptance for the Detox requirements has been internalised for all the stakeholders involved. This learning process depends on the cooperation and support of all the participants throughout the entire supply chain. The platform for successful implementation is provided by ongoing open and constructive discussions with Greenpeace.
Implementation of reasonable social standards is associated with challenges in many production countries. We expect our suppliers to guarantee fair and safe working conditions in production. Since 2008, we have participated in the Business Social Compliance Initiative (BSCI). We commit all our suppliers to compliance with the BSCI Code of Conduct. When implementing our requirements, we support them with the Non-Food Social Compliance Programme developed in 2014 for the entire ALDI North Group. The BSCI is of vital importance for our Social Compliance Programme.
The role of the BSCI for the Non-Food Social Compliance Programme
The BSCI was established in 2003 by the Foreign Trade Association (FTA). As a FTA member, the ALDI North Group participates in the BSCI. The 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. This joint understanding is defined in a Code of Conduct.
The BSCI Code of Conduct is based on numerous international agreements including the core conventions of the International Labour Organization (ILO) or the Universal Declaration of Human Rights by the United Nations (UN). This enshrines all eleven central employee rights, including the right to freedom of association and the right to participate in collective bargaining negotiations. It also excludes discrimination, child labour and forced labour.
Positive cascade effect in the supply chain
All BSCI participants are themselves committed to compliance with the BSCI Code of Conduct and they in turn also demand compliance from their business partners. At the ALDI North Group, this requirement is defined contractually for all suppliers. The ALDI North Group suppliers in turn pass on the commitment to implement the Code to their suppliers. This creates a positive cascade effect along the entire supply chain.
Auditing production facilities
Compliance with the BSCI Code of Conduct is monitored and evaluated by on-site inspections known as audits. These are performed at defined intervals by SAAS accredited audit companies recognised by the BSCI. The auditors carry out tours of inspection of the production facilities, check the relevant documentation and interview selected employees. After the audit has taken place, the auditor then draws up a report on the defects identified and records the necessary improvements. If significant objections emerge as a result of the audit, the production facilities are required to develop remedial measures within a period of 60 working days. In this case, a follow-up audit is carried out within a period of one year. The ALDI North Group expects its suppliers to eliminate any defects as quickly as possible and provide regular status reports on the implementation status. Apart from the audits, the BSCI also offers a series of additional services, such as training sessions, and organises the exchange of information. It also promotes communication with local stakeholders on the ground and worldwide.
Harmonised requirements as a platform for improvements
From the perspective of the ALDI North Group, the BSCI offers an effective initiative for improving the working and social conditions in the production facilities. Our participation in the BSCI generates a cascade effect which exerts a positive impact beyond suppliers to the ALDI North Group. The harmonised requirements and the joint approach adopted by all BSCI participants also reduces the expenditure for the players involved – for example by avoiding multiple audits.
Non-Food Social Compliance Programme
The Non-Food Social Compliance Programme (SC Programme) defines requirements for our suppliers and for the production facilities in the BSCI risk countries which are commissioned by our suppliers for manufacture and finishing – in other words the processing to create the finished product at the last production stage. The suppliers must be members of the FTA and participate in the BSCI. The production facilities used by them must have a valid BSCI audit or SA8000 certification covering the entire period of the contractual period. The quality of the audit result is of crucial importance for us. We expect our suppliers to commission production facilities that have achieved good to very good audit results or to provide proof that they are working together with the production facilities to implement the necessary corrective measures.
When we developed the SC Programme we started with textiles. Products from more than 16 product groups have now been integrated in the SC Programme, including footwear, electronics and toys. The remaining product groups will be integrated in the SC Programme in January 2017. We have defined this in our CR Programme.
Clearly defined requirements for our suppliers
The supplier must ensure before each order is commissioned that our requirements are complied with. Our buyers have compliance checked by the CR department. For example, the BSCI provides a database giving the opportunity of gaining a comprehensive insight into all past and present audit reports of the production facilities. The CR department checks all existing information for each submitted production facility and records an overall assessment. If the overall assessment is poor, no order is commissioned in the first instance. In such cases, the supplier must ensure that action plans are worked out for the necessary improvements and any problems in the production facilities are remedied. The ALDI North Group expects its suppliers to correct any defects as quickly as possible and to continuously improve the working and social conditions in the production facilities. Suppliers are not permitted to subcontract other production facilities without prior review and approval.
The approach for breaches of the SC Programme has been defined in writing and the procedures have been communicated internally and to suppliers. The severity and the frequency of any breaches of regulations are taken into account to the same extent as the joint responsibility of the supplier and the readiness of the supplier to cooperate. Potential consequences range from written warnings to – in the worst case scenario – termination of business relationships.
Improving building safety for textile production in Bangladesh
In May 2013, we signed the Accord on Fire and Building Safety in Bangladesh. From the perspective of the ALDI North Group, the accord is an important and fundamental step for improving the safety of workers in the textile sector in Bangladesh. The accord includes an agreement on independent safety inspections. The pooled commitment of the signatories from business and the community offers the opportunity to achieve the appropriate leverage for sustainable improvements in fire protection and in building safety in Bangladesh. All suppliers sourcing textiles for the apparel industry must sign the Accord in order to comply with our SC Programme.
On-site presence: further development of cooperation with suppliers in Asia
In 2015, we established ALDI CR Support Asia in Hong Kong. This provides operational support for the CR department of ALDI Buying in the production countries. The primary function is to carry out visits to production facilities together with our suppliers. This enables us to gain an impression of the conditions and advances of our suppliers at their local facilities. The other functions of ALDI CR Support Asia include qualification of the suppliers and production facilities, as well as stakeholder management in Asia. ALDI CR Support Asia keeps the CR department continuously informed about its activities and findings. This means that the information can be recorded and integrated in purchasing decisions.
Engaging in dialogue for improved framework conditions: ALDI Factory Advancement Project
Our SC Programme is based on the effectiveness of standards, and checks and balances. Audits make a contribution to identifying problems and initiating improvements – however, they can only provide snapshots. In order to achieve sustainable changes, intensive cooperation is required in the production facilities that takes place in a spirit of cooperation. In 2013, we therefore joined forces with the ALDI SOUTH Group to launch the ALDI Factory Advancement (AFA) Project for production facilities in the apparel industry in Bangladesh. This is intended to bring about improvements in working conditions and is also supposed to help establish resilient social relationships in the production facilities. The AFA Project pursues a dialogue-based, cooperative approach. The aim is for workers and managers to build up social skills enabling them to communicate effectively with each other, and to develop the motivation to solve problems together efficiently. The central focus is dealing with conflict issues such as health protection and safety in the workplace, fire protection, pay, working hours and discrimination.
The initial project phase lasted two years and 20 production facilities were selected for this phase. These participants cover approximately 35 percent of our purchasing volume of textiles for apparel in Bangladesh. Approximately 45,000 workers benefit from this programme. We analyse the results of the programme on a regular basis. The training sessions have already led to structural changes in the production facilities in some places. Fire protection installation and sanitary facilities have been modernised, drinking water facilities and cleaning systems have been refurbished, and the safety infrastructure has been improved. Apart from structural and technical changes, the focus of the project is on dialogue about improved workflows. Employees and management report a reduction in the turnover rates and absences, alongside an increase in productivity and development of competence models. There is evidence that the ideas of the employees have been frequently integrated and communication has been improved.
In 2015, we extended the AFA Project beyond the original period. In the course of 2016, 20 additional production facilities shall be included in the programme. An alumni project is intended to contribute to using the experiences of former participants for the future, and to transform the dialogue culture into a fixed element of the everyday routine in the production facilities. Furthermore, implementation of additional social offerings like daycare provision for the children of employees is planned in cooperation with NGOs from Bangladesh such as Phulki and AWAJ.
Textile Partnership: addressing challenges together
We are only able to tackle the multifaceted challenges in the textile industry in cooperation with other business enterprises, governments, NGOs and unions. In June 2015, we therefore joined the “Bündnis für nachhaltige Textilien” (Partnership for Sustainable Textiles) as the ALDI North Group. The alliance originates from an initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ). Meanwhile, it unites more than half of all the companies in the German textile industry. The idea is for important players in the sales markets to come together in order to jointly address the social, environmental and economic challenges in the textile sector in the supply chain – such as guaranteeing living wages or reducing the use of chemicals. We hope that work on common standards and implementation requirements in the supply chain will lead to sustainable improvements and we therefore engage proactively in the working groups of the alliance.