Sainsbury's

Our Code of Conduct for Ethical Trade covers the employment practices we expect from our suppliers, both in the UK and abroad.

Ethical trading

Our customers want to be confident that the people who make and sell our products are not being exploited, or exposed to unsafe working conditions. Our Code of Conduct for Ethical Trade covers the employment practices we expect from our suppliers, both in the UK and abroad. As founder members of the Ethical Trading Initiative, our Code of Conduct is consistent with the ETI Base Code and national and international laws.

We pride ourselves on having good supplier relationships and work with them to support our ethical trade goals in the following areas:

Policies and procedures

We were the first supermarket to implement a voluntary code of conduct that went beyond the obligations contained in the previous Supermarkets Code of Practice. We have consistently supported the strengthened and widened Grocery Supply Code of Practice (GSCOP) which came into force in February 2010 following the Competition Commission report into the grocery market. We have made significant investments to implement GSCOP throughout our business.

Our Supplier Handbook, which is issued to all suppliers, is our legally binding code of commercial practice. It incorporates GSCOP and our Code of Conduct for Ethical Trade. Where there have been disagreements with suppliers about a particular trading practice or decision we have a proven record of effective internal escalation and resolution. We support effective GSCOP enforcement, but we remain of the view that an additional enforcement body is unnecessary, as the strengthened provisions in the GSCOP and the  existing enforcement regime are already self sufficient and fully address the areas of concern identified by the Competition Commission.

All our new suppliers are risk assessed prior to us establishing a relationship and are required to sign up to our terms and conditions which incorporate the Code of Conduct for Ethical Trade. Our assessment tools determine the level of ethical trading risk of each supplier and require suppliers to undertake a third-party, independent ethical audit where necessary. This in depth analysis allows us to determine whether a supplier is eligible to work with us. Suppliers are required to ensure that our Code of Conduct is applied to their suppliers and sub-contractors.

Auditing and tracking

We work with lower risk suppliers to assess their risks and performance against our Code of Conduct whilst higher-risk suppliers are required to have independent, third party ethical audits. Over 1,700 audits and site visits were conducted at Sainsbury's suppliers last year.

Suppliers' ongoing ethical trade performance is then regularly tracked through the Supplier Ethical Data Exchange (SEDEX), our own internal databases and our supplier scorecard. Corrective actions which are identified through audits are resolved in a timely manner by suppliers with support from our ethical and technical teams. We report back to internal colleagues on supplier compliance and best practice on a regular basis and share our performance externally through meetings and workshops. Our Product Technologists and Ethical Trade teams visit suppliers throughout the year to ensure that our ethical requirements are being met and provide support on ethical issues where required.

Close monitoring of suppliers means that we are able to identify trends of common issues. It also enables us to give additional support to those suppliers who may find it challenging to achieve our standards.

Training and capacity building

We recognise that relevant colleagues need an awareness of ethical trade and their potential influence on the supply chain. These colleagues are required to undertake training on the importance of ethical trade and ethical purchasing practices. Their performance is measured on this target and also on how they track suppliers' compliance against our ethical trading requirements.

We regard building long and stable relationships with our suppliers as a key priority for delivering consistently high quality products for our customers as well as ensuring we are trading fairly and ethically. To achieve this goal, we ensure that our suppliers have the skills and capacity required to ensure both they and their suppliers comply with our ethical trading requirements and promote best practice in people management. We achieve this through continuous dialogue and knowledge sharing as well as newsletters, supplier conferences and working groups. In total, we provided 8,600 hours of training for our food suppliers along our supply chains in 2010 and 2,700 hours for our non-food suppliers.

Our primary method for providing formal training to Sainsbury's suppliers is through our Technical Management Academy (TMA), established in 2006 in partnership with Campden BRI, a leader in food and drink research and training. Our technologists work with suppliers to identify where teams or individuals would benefit from ethical trade training and the Academy provides a modular approach to tailor this to their needs. In the past year, over 90 food suppliers and 150 non-food suppliers have received ethical trade training through the TMA. In addition, in 2009/10 we launched the TMA in China, where we trained over 100 suppliers based in Asia and developed a Fairtrade and ethical trade component to TMAs held in South and East Africa.

In early 2010 our first ethical non-food workshop brought together our top 60 clothing suppliers in London to discuss issues within the supply chain and how through a coordinated approach we can resolve them. We also held supplier workshops for our footwear, menswear and accessories suppliers.

Our offices in Hong Kong, China and Bangladesh enable us to support our suppliers and reinforce our ethical trading standards. The teams complement our dedicated team in the UK and allow us to manage projects and remediation clearly.

Collaborations and project monitoring

In addition to our supplier monitoring we have a programme of 'Beyond Auditing' projects where we look at industry wide issues and work in collaboration with a range of partners to influence the supply chains that we source from. Our projects currently focus on issues including living wage in Bangladesh and working hours in China.

In our food supply chains, we have actively participated in the Equality and Human Rights Commission Meat and Poultry Processing Task Force in collaboration with other retailers, key suppliers, trade unions and industry bodies. We have shared the lessons learnt from this group on managing agency workers, and supporting workforce cohesion with our technical teams and suppliers. We continue to work closely with the Gangmasters Licensing Authority to ensure the welfare of agency workers in our supply chains.

We continue to run our living wage project in Bangladesh, focusing on increased productivity and efficiencies. As Bangladesh is an important sourcing country for us, with many economic and social challenges, we have widened the scope of our project work with a collaborative initiative with five other high street retailers and Department for International Development which covers 110 factories across India and Bangladesh.

Our ongoing engagement with the ETI enables us to remain up to date with new developments in the area of ethical trade, to take part in collaborations which have a positive impact on the welfare of workers and to take learning from ETI programmes to share with our own supply chains.