Due diligence

Our commitment

Our commitment is aligned with the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. We express our commitments in our human rights, environmental and other policies (available here). 

Governance 

Sustainability oversight, including matters related to human rights, is the responsibility of the Board of Directors (BoD). Our BoD is regularly engaged on sustainability matters and approves our annual Transparency in Supply Chains Statement which outlines our approach to preventing modern slavery in our business and value chain.

The Global Sustainability team drives implementation of the sustainability strategy. Within this team, a dedicated role focuses on human rights due diligence and engages with key functions across the business. Key functions such as procurement, retail, operations and crafting have dedicated personnel on human rights and responsible sourcing to ensure human rights issues are addressed on a day-to-day basis within the business and value chain. For example, in Thailand, we have a human rights manager and four people dedicated to responsible sourcing with our direct procurement suppliers. We also have teams in Copenhagen and China focused on the human rights of our indirect suppliers. 

Further information on our sustainability governance structure can be found here. 

Identifying and preventing risks

Our approach to human rights aims to address the most salient human rights risks across our business, with the objective of promoting positive impact. We focus on priority topics across key business functions, acknowledging that there are varying levels of maturity. Following the UNGPs ensures we apply a consistent approach to identifying and mitigating human rights risks in our own operations and across our value chain. 

Our 2021 corporate-level human rights impact assessment was conducted by an expert third party and provided us with a view of our human rights risks across our business and value chain; from marketing and distribution centres through to our supply chain. The HRIA process included the third party reviewing relevant policies and conducting interviews with our business function leaders. Our salient issues identified from this assessment are listed in our Human Rights Policy.

We have used this assessment to prioritise our human rights work. With a significant portion of our employees and suppliers based in Thailand, we carried out a thorough onsite human rights impact assessment with local experts. They conducted document reviews and interviews with management, employees, and contractors. The process included an employee survey, interviews with 142 workers including security, catering, and cleaning staff, and 29 interviews with community leaders, amongst other stakeholders such as franchisees and suppliers. Human rights risks were assessed from a saliency and severity perspective which includes scale, scope and remediability. Specific areas for improvement include ensuring the consistent implementation of our policies, ensuring our management systems do not have unintended negative impacts, and prioritising employee training on human rights. 

We proactively and regularly engage with our stakeholders, including affected rightsholders and/or their legitimate representatives. Our key stakeholder groups include employees, franchisees, consumers, suppliers and their workers and local communities. For example, we conduct regular focus group discussions with a statistically representative sample of employees in Thailand, focusing on perceptions of working environment, harassment, discrimination, the effectiveness of our grievance mechanisms and opportunities for positive impact. We also engage with suppliers and their workers through our responsible sourcing programme.

Through regular engagement with rightsholders, we are able to understand and act if new risks arise. This also includes additional due diligence if key business changes occur. For example, with the expansion of our crafting facilities in Vietnam, we conducted additional due diligence with an expert third party on potential construction suppliers, due to the heightened risks to workers in this sector, arising from the informal and often multi-layered nature of contracting onsite staff. We also implemented a third-party grievance mechanism for workers to freely raise concerns throughout the construction process.   

Results from our corporate-level human rights impact assessment showed that salient human rights risks in our supply chain include working conditions, forced labour, child labour and freedom of association. When assessing suppliers, we look at inherent country and sector risk for each supplier and overlay that with spend data and reputational risk. The risk assessment tool we use (from Sedex) draws on robust international indices to help identify key labour, human rights, governance, and environmental risks. The scope of our responsible sourcing programme consistently evolves and focuses on sectors such as manufacturing, warehousing, and construction. Within these sectors, we then also look at vulnerable people such as migrant workers and have a key focus on identifying recruitment fees in our supply chain as a potential indicator of forced labour. We do this by engaging directly with workers in our supply chain through onsite audits and capacity building. We seek to be transparent about the results of our assessments through our annual reporting, including detailed results of supplier audits.

Tracking and measuring effectiveness

We track the effectiveness of our human rights programme through consistent engagement with rightsholders such as focus group discussions with employees in Thailand, a worker dialogue app in our Thai distribution centre and specific KPIs on health and safety. Tracking incidents raised through our whistleblower hotline also provides us with a consistent overview of human rights issues raised.

In our supply chain, third-party audits provide useful snapshot information of how suppliers have worked on non-conformances to improve, and our onsite capacity building programme ensures suppliers are supported throughout their continuous improvement journey.

We often assess our own practices to ensure continued effectiveness. For example, in-depth COVID-recovery visits at our supplier factories in 2022 provided us with a deeper understanding of the human rights issues and their root causes in our supply chain beyond the findings identified by our regular audits. We used the findings to train our colleagues, establish more holistic supplier engagement, change our primary audit provider to ensure a more thorough approach and increased our focus on vulnerable workers such as migrants.

Alongside this, we have a programme dedicated to evaluating, tracking, and improving our buying practices to ensure they are more responsible and do not have unintended consequences on our suppliers nor on the human rights of workers in our supply chain.

Remedy

We are committed to working with relevant stakeholders including suppliers to find the best solutions that provide remedy for affected rightsholders. Specific examples are included in our annual reports such as our Transparency in Supply Chains statement.

When remedy is implemented in our own operations or with suppliers, we continuously monitor the situation for rightsholders through tools such as follow-up audits and building the capacity of our colleagues and suppliers to engage directly with workers and affected stakeholders.