TRANSPARENCY IN THE SUPPLY CHAIN AND MODERN SLAVERY STATEMENTS
MODERN SLAVERY ACT 2015 AND TRANSPARENCY IN SUPPLY CHAINS ACT 2010 | 2022/23 BURBERRY GROUP PLC STATEMENT
This statement is made pursuant to Section 54 of the Modern Slavery Act 2015 and California Transparency in Supply Chains Act of 2010 (SB 657). It sets out the steps we have taken during the financial year 2022/23 (the “Year”) to prevent slavery and human trafficking from taking place in our supply chains or in any part of our business. Burberry’s definition of slavery and human trafficking is aligned to section 54 (12) of the Modern Slavery Act 2015.
This statement is also made on behalf of the following subsidiaries of Burberry Group plc (company number 3458224): Burberry Limited (company number 162636), Burberry (UK) Limited (company number 4288292), Burberry International Holdings Limited (company number 4251867), Burberry (España) Holdings Limited (company number 5265289), Thomas Burberry Holdings Limited (company number 3509143), Burberry Haymarket Limited (company number 4868493), Burberry Holdings Limited (company number 4251948) and Burberry London Limited (company number 4251951) and the actions and operations set out below are effective across the Burberry group.
We are committed to doing well by doing right, from how we design, source and craft our products to how we support our communities.
Our latest Responsibility strategy, Burberry Beyond, consists of four pillars – Product, Planet, People and Communities, and brings together everything we do across our Company, our supply chain and our communities to create a better world for the next generation. We have set 12 targets across these priorities to embed responsible business practices, supported by our ongoing policy commitments. We recognise transparency is important, so we have in place metrics to measure and report on progress.
To positively impact people within and beyond our value chain, we collaborate across our business to protect and nurture luxury craftmanship skills, and drive progress towards our diversity, equity and inclusion targets. Core to this agenda are; Respecting and upholding human rights, combatting the risk of modern slavery and increasing transparency throughout our supply chain.
This is our eighth Modern Slavery Statement and provides an overview of the progress we’ve made over the past year in strengthening our systems to prevent modern slavery in our supply chain and operations and how we have addressed identified risks.
During this time, we have remained committed to supporting the people in our supply chain and our local communities through the cost-of-living crisis, increasing climate related issues as well as the evolving geopolitical landscape. These are some of the biggest challenges the world faces today, and we want to ensure that we are playing our part in addressing these, and mitigating associated Human Rights implications.
In FY 2022/23, we continued to adapt our due diligence programme to focus on the key risk areas of our supply chain. In line with our commitment to ensure all key materials are 100% traceable, we have set certification targets for the following key raw materials: cotton, nylon, polyester, viscose, wool, leather and feather and down. We have delved further into our raw materials supply chains to identify new potential modern slavery risks and we have started to develop a sourcing Country of Origin risk mapping tool that can be utilised by our product teams to support them when making sourcing decisions.
We expanded and strengthened our training programme for both internal teams and supply chain partners to build more effective prevention and mitigation actions, specifically working with external experts such as the International Organisation for Migration (IOM) to support our supply chain partners in responsible recruitment of migrant workers.
We have continued to collaborate with cross-industry groups, such as the Business Against Slavery Forum and the BSR Human Rights Working Group, to help target modern slavery. We continue to monitor and assess our response to new emerging risk areas, including those caused by the current global challenges.
As a responsible business, Burberry is closely monitoring the increasing trends towards mandatory human rights and ethical trading due diligence legislation. We continue to raise awareness and support our supply chain partners’ compliance with such standards.
OUR BUSINESS AND SUPPLY CHAIN
Burberry is a global luxury brand, headquartered in London, UK. We design, source, make and sell luxury products under the Burberry brand and we put sustainability and the wellbeing of our people and communities at the heart of our business decisions. Our identity is intrinsically linked to our British heritage and the 167-year-old legacy of our founder. Thomas Burberry established our brand as an outerwear pioneer driven by creativity. We build on this today.
• Over 9,000 employees
• 140 nationalities
• Across 34 countries
• 413 stores
• Over 40 Responsibility specialists
• FY2022/23 revenues: £3.1 billion
We make our products at Burberry-owned sites in the UK and Italy, as well as in collaboration with a network of global suppliers. All our activities are underpinned by a commitment to responsible craftsmanship.
We sell Burberry products through our directly operated and franchised stores, as well as via wholesale partners and online. We use the product and distribution expertise of licensing partners for certain product categories, such as eyewear and beauty.
Operating across the world, we contribute to local economies and support the communities around us. We add value to societies both directly and indirectly through our business operations and by partnering with NGOs on community programmes.
OUR PRODUCT SUPPLY CHAIN
As a modern luxury brand, we are passionate about driving positive change. We have clearly defined Principles aligned to our Responsibility agenda for all external partners to comply with, in order to ensure the wellbeing of people involved in the manufacturing of all Burberry’s production processes; protect the brand from human rights breaches; safeguard against modern slavery and prioritise the wellbeing of all involved.
We have two Burberry-owned manufacturing sites in the UK and two in Italy.
We also have a global network of supply chain partners that support the production of our products. We have visibility of all finished goods vendors (including manufacturing sites, their subcontractors and supporting facilities) and key raw material suppliers (including raw material mills, tanneries and trim suppliers). There are also many more indirect suppliers in our extended supply chain and for this reason, we’ve introduced new targets to ensure all key raw materials are 100% traceable by FY 2029/30 (back to country level as a minimum) and for 100% of key raw materials in our products to be certified. See our Annual Report FY 2022/23 for further details on our raw material targets.
Supply chain partner production sites FY 2022/23:
- Finished goods suppliers: 640 production sites, 72% in Italy, 20% in rest of Europe and 8% in Asia
We have longstanding partnerships with many of our suppliers, particularly in Europe, where some of our supplier relationships extend beyond 15 years. We believe that strong relationships are key to ensuring continuous improvement in supply chain working conditions.
Supplier production sites – workforce profile FY 2022/23:
• Total workforce: 56,073 workers
• Average number of workers per facility is 88
• Gender split: 32% male, 68% female
• Collective bargaining: Over 70% of the finished goods production sites we source from are covered by national and/or industrial collective bargaining agreements
We license production of our beauty and eyewear products to Coty and Luxottica respectively. We work with both licensees to ensure they apply consistent standards which align with those adhered to across the rest of Burberry’s supply chain.
• Coty published a new Human Rights Policy in 2022 and has taken steps to mitigate risks in its supply chain. Coty is a founding member of The Responsible Mica Initiative (RMI), a multi-stakeholder action group aiming to establish a 100% responsible Indian mica supply chain by the end of 2030. Since 2017, Coty has been a member of the Roundtable for Sustainable Palm Oil (RSPO) and is working towards the ambition for all their palm oil to be RSPO mass balance-certified. For further details, see Coty’s Modern Slavery Statement.
• Luxottica has several policies to address human rights and modern slavery risks, including its Responsible Sourcing & Manufacturing Principles (LRSM), Code of Ethics and Conflicting Minerals Policy. For further details, see Luxottica’s Modern Slavery Statement.
SERVICES AND GOODS NOT FOR RESALE
We also work with suppliers that support our broader business operations. These include logistics and waste contractors, and suppliers of goods not for resale such as packaging and visual merchandising. We require all our supply chain partners to comply with our Responsible Business Principles, including our Ethical Trading Code of Conduct. These are incorporated into our contractual agreements with vendors and suppliers (see policies section). We also carry out ethical trade audits to monitor compliance with our Ethical Trading Code of Conduct (see due diligence section – page 12).
We continue to implement and promote the management of modern slavery risks within Burberry and externally.
We have a Responsibility team consisting of over 40 specialists in key locations globally, with targets relating to our supply chain owned and monitored by dedicated teams. Burberry employees who are responsible for supply chain partner relationships and sourcing have personal KPIs related to labour conditions, recognising the potential impact of fair purchasing practices on labour conditions throughout our supply chain.
Our Ethical Trading Programme is supported and monitored internally by several management committees. The programme aims to ensure that the potential risks to labour and human rights are considered at all appropriate levels and areas of the business. Policies relating to human rights are reviewed and approved by the company’s Ethics Committee which is chaired by the General Counsel. If any labour or human rights risks are identified, the Vice President of Corporate Responsibility will report on such issues to the Ethics Committee as well as the Group’s Risk Committee. The Risk Committee, which meets at least three times a year, is chaired by the Chief Financial Officer, who sits on the Burberry Group plc Board. The Risk and Ethics committees report into the Group’s Audit Committee which is chaired by an independent non-executive director.
Additionally, our sustainability strategies are reviewed by the Sustainability Committee which is chaired by the CEO.
WORKING WITH OTHERS
We aim to collaborate and work in partnership with others to identify and manage human rights and modern slavery risks. We participate in several cross-industry groups and partnerships including:
• The Business Against Slavery Forum, which is convened by the UK Home Office, and brings together some of the UK’s largest companies. Members share intelligence and best practice to help identify, tackle and prevent slavery in their supply chains.
• BSR Human Rights Working Group. We became members of Business for Social Responsibility (BSR) in 2022 and joined their Human Rights Working Group, which was established to help companies implement the UN Guiding Principles on Business and Human Rights (UNGPs). It supports companies to share best practices, challenges, and experiences implementing the UNGPs and to learn about both foundational human rights approaches and emerging issues.
• We are a long-standing member of the UN Global Compact
• We are committed to supporting the UN Sustainable Development Goals (SDGs) and report on how we contribute to the SDGs in our Responsibility Data Appendix FY 2022/23.
We believe that respect for human rights is fundamental to modern business. The prevention of forced, bonded and trafficked labour is a core element of Burberry’s Human Rights Policy and Ethical Trading Code of Conduct.
The Responsible Business Principles (the “Principles”) have been developed in line with our commitments and experience over many years. They have been informed by our longstanding membership of the United Nations’ Global Compact, and are underpinned by the ETI Base Code, International Bill of Human Rights and the Fundamental Conventions of the International Labour Organisation. We review and update the Principles on an annual basis to ensure that they align to the latest best practice guidelines and any emerging regulatory requirements. The Principles apply to all our business associates, which include, but are not limited to: raw material suppliers, finished goods vendors, subcontractors, supporting facilities, non-stock suppliers, construction contractors, licensees and franchisees.
The Principles are overseen by Burberry’s Ethics Committee, chaired by our General Counsel, and are monitored by our Responsibility and Supply Chain teams.
The Principles include Burberry Code of Ethical Business Principles, Anti-Bribery and Anti-Corruption Policy and Global Environmental Policy, and the following seven policies:
HUMAN RIGHTS POLICY
Burberry’s Human Rights Policy sets out the procedures we have put in place to protect and uphold human rights, including mechanisms in place to address any instances of potential infringement, across four key stakeholder groups – our people, workers in our supply chain, our customers and our communities. The policy was developed with reference to the United Nations’ Guiding Principles on Business and Human Rights. We assess human rights impacts and monitor labour conditions in both our own operations and our supply chain on a regular basis to ensure the policy is upheld.
Further details of Burberry’s Human Rights Policy are available here: Burberry Human Rights Policy.
ETHICAL TRADING CODE OF CONDUCT
This outlines requirements which all our business associates must uphold in relation to their own employees, contracted labour and throughout their own supply chain. The code includes, amongst other standards, the following requirements: that employment is freely chosen, child labour is not used, freedom of association is respected and no harsh or inhumane treatment occurs.
The full Ethical Trading Code of Conduct is available here: Burberry Ethical Trading Code of Conduct.
MIGRANT WORKER POLICY
This is specifically intended to protect workers who may be vulnerable to exploitation during international and national migration. The policy contains requirements including, but not limited to, the prohibition of withholding passports and similar documents and the levying of recruitment fees. During FY 2020/21, we updated this policy based on learnings from partnering with Issara Institute, an NGO specialised on recruitment journeys for migrant workers in supply chains. We then recommunicated this policy to business associates to provide more detailed guidance on implementation of the policy and meeting the standards within it.
The full Migrant Worker Policy is available here: Burberry Migrant Worker Policy.
CHILD LABOUR AND YOUNG WORKER POLICY
We prohibit all forms of child labour in our own operations and throughout our supply chain. In our Ethical Trading Code of Conduct, we state that we will never use child labour and outline provisions for young workers.
Our Child Labour and Young Worker Policy expands on the Ethical Trading Code of Conduct and includes standards relating to implementation, monitoring and remediation procedures which must be followed by all business associates.
Further details of the Child Labour and Young Worker Policy are available here: Burberry Child Labour and Young Worker Policy.
PARTNER NON-COMPLIANCE POLICY
Where breaches of our standards and policies are identified, Burberry collaborates with local partners to find solutions to address non-compliance. Where improvements are not made within a given time or there is an unwillingness to address the issue, we may consider terminating a particular business relationship. The policy is designed to allow partners a reasonable amount of time to rectify non-compliances with the Principles, to minimise any potential detrimental impact on workers’ livelihoods, while always reserving the right to terminate contracts and take any other legal action possible, depending on the nature of the breach.
Further details of the Partner Non-Compliance Policy are available here: Burberry Partner Non-Compliance Policy.
INFECTION MANAGEMENT CONTROL POLICY
Most of our supply chain has now returned to operating as they were prior to the COVID-19 pandemic. To support our business associates in continuing to ensure a safe and healthy environment for employees, customers, partners and visitors, this policy sets out the minimum standards which Burberry requires its business associates to comply with.
The policy covers infection controls such as social distancing, Personal Protection Equipment (PPE) requirements and cleaning programmes that must be observed on site. In addition, Burberry recognises, within its supply chain, that there are many different countries each with their own laws and therefore all business associates must ensure that, in addition to compliance with this policy, it continues to comply with local regulations, laws and industry best practices.
Looking ahead, we will also support our partners and their employees that are facing any longer term effects of the pandemic, by providing psychological guidance through our NGO sponsored worker hotline, and additional assistance through our health and wellbeing programmes.
Training and Resources
Our Responsibility team includes specialists in labour and human rights and modern slavery. Burberry employees are introduced to Burberry’s responsibility policies and programmes during their induction training to ensure a general understanding of Burberry’s responsibilities in this area.
BURBERRY INTERNAL TEAMS TRAINING
In FY 2016/17, we developed our first bespoke modern slavery and labour rights training programme for our internal teams and supply chain partners, informed by Burberry’s Human Rights Impact Assessment and in collaboration with the ethical trade, human rights and labour standards consultancy Impactt. In FY 2021/22, over 120 members of our internal supply chain, sourcing, internal manufacturing and product teams received either introductory or refresher training. The targeted training helps those who have close contact with our extended supply chain to be familiar with the risk areas, likely indications of human rights abuses (including instances of modern slavery) and possible actions to take if an incident of modern slavery is identified. In previous years, we also trained members of our human resources, health and safety, construction and fulfilment teams on modern slavery, how to identify it and appropriate actions to take. A refresher training will be organised again next year. This training has helped embed respect for human rights and a policy of zero tolerance for modern slavery throughout the business.
We regularly review training needs across our business operations to ensure all relevant employees are included. In FY2022/23 we will create new online resources and continue to conduct trainings to reach a wider audience of employees and further embed awareness and risk mitigation into our culture.
SUPPLY CHAIN TRAINING
Since FY 2016/2017, we have been training our supply chain partners, including vendors and key raw material suppliers, on understanding, identifying and managing modern slavery risks. In FY 2018/19, our UK Responsibility team completed an “Investigative Interviewing Skills” course developed and delivered by the Gangmasters Labour Abuse Authority and Stronger Together. The skills learned have been used to improve our Ethical Trading Audit methodology and have helped to provide insight when working with our regional teams. In addition, since the end of 2019 the Burberry EMEIA Responsibility team has collaborated with partners with cultural integration expertise to further strengthen our due diligence activities in multi- cultural environments.
In line with the commitment we made in FY 2020/21, this year’s training has reached our key global product supply vendors and raw material suppliers covering 80% of our production. They have attended a three hour training session on modern slavery identification and management within their own operations and extended supply chain. All training participants have been tasked with the development of action plans to embed modern slavery awareness and prevention within their companies.
As part of our broader supply chain training programme, we also delivered a “Train the Trainer” course to 17 key finished goods vendors in Italy, one of our primary sourcing countries, to support them in cascading the modern slavery training within their company and to their own supply chain partners.
As part of the training objectives, we stressed that any instance of modern slavery is not tolerated and will be addressed in line with our partner non-compliance policy. If a suspected case of modern slavery emerges, supply chain partners have been trained to act in the first instance to ensure the safety of the persons at risk and Burberry will support them in identifying the most appropriate course of action.
During FY 2022/23 we will continue to monitor the implementation of our suppliers action plans. Moreover, we will continue to deliver annual modern slavery training to our key finished goods vendors and raw material suppliers to ensure that our main suppliers are well equipped to understand and address this topic and their attention remains high.
KEY PERFORMANCE INDICATORS (KPIs)
We monitor the KPIs set out below on an ongoing basis. These KPIs help us ensure the effectiveness of our efforts to address modern slavery risks and are continually reviewed.
BURBERRY INTERNAL TEAMS TRAINING
The Burberry Responsibility team trains key internal teams working with our business and product supply chains. This includes sourcing, supply chain and logistics, product development, HR, legal, construction, procurement and workplace services.
In FY 2021/22, the supply chain, sourcing and product teams received either introductory or refresher training to better understand forced labour indicators and raise awareness of modern slavery risks within our business operations and supply chain.
SUPPLY CHAIN TRAINING
We regularly train finished goods suppliers, their key subcontractors and key raw material suppliers on the identification of modern slavery and building systems to prevent the occurrence of modern slavery.
We continue to implement initiatives to strengthen workers’ access to information and the ability to raise grievances as well as to measure worker wellbeing.
During FY 2021/22, Burberry’s worker hotline received 435 calls, categorised as 15 complaints, 409 consulting requests and 11 psychological support requests.
We also surveyed approximately 3,300 workers across 30 facilities globally to build a better understanding of workers’ wellbeing and identify opportunities for improvement. In FY2020/21 we introduced a communication training programme in two European production facilities and further expanded it in FY 2021/22 to two additional suppliers where a need was identified. The aim of the programme was to build communication skills and improve interaction between workers, supervisors and factory management. As a result, the facilities introduced stronger worker consultation and feedback mechanisms, improving internal dialogue. We continued to evolve our approach to workers’ wellbeing to better capture and measure key wellbeing dimensions and more effectively address worker priorities. Our key vendors were consulted to inform the review of the methodology and ensure their input and suggestions were taken into account.
In FY 2022/23, we’ll further expand the tool reach and monitor the results of our updated wellbeing model as well as continue gathering feedback from our supply chain partners. This will allow us to identify any further opportunity for improvement or any needs for targeted action.
AUDITS AND ASSESSMENTS
In FY 2021/22, we conducted 601 ethical trading audits and 28 engagement activities. The majority of these activities were conducted by our internal Responsibility team who endeavour to build trust in our ongoing partnerships and drive continuous improvement.
Since the start of the global pandemic in March 2020, the Responsibility team has remained in close contact with supply chain partners by developing a blended physical and virtual ethical trade auditing system. Over FY 2021/22, we have maintained this approach to continue protecting the health and safety of our own as well as supply chain partners employees. However, when and where the circumstances have allowed, we have given preference to onsite monitoring activities as these allow to better capture any challenge and provide more effective support.
The audit and assessment programme covers all our finished goods facilities and their subcontractor supply chains as well as raw material suppliers covering over 40% of our finished products.
In early 2020, in an area of our supply chain where we identified a group of migrant workers paying fees during a complex recruitment journey, we started working with a local NGO, Issara Institute, and two suppliers who operate four facilities to build worker voice and remediate any fees paid by existing workers as well as workers that had since left their employment.
With remediation work now completed, in FY 2022/23 we will continue to focus on implementing measures for an ethical recruitment route for migrant workers and continue collaborating with our supply chain partners to support them in abiding by the designed guidelines. Facilities where domestic and international migrant workers are employed remain a key focus area.
We continue to strengthen the breadth and depth of our human rights due diligence and Ethical Trading Programme, as well as implement the action plans resulting from our FY 2022/23 Human Rights Impact Assessment.
A key focus in the coming year will be to continue to enhance our due diligence model to ensure it meets the heightened expectations of our external stakeholders such as consumers, investors and governments and ensure alignment to upcoming human rights legislation. We will also work to strengthen our human rights strategy, which will be supported by the revisions made to our human rights impact assessment methodology and underpinned by our modern slavery mitigation programme. As part of this, we will continue to review our own business operations and procurement procedures to ensure that risks of modern slavery are considered right from the initial stage of sourcing.
Over the next year we will increase our efforts to strengthen our supply chain traceability, in line with our FY 2029/30 commitments. We believe that our focus on transparency and traceability throughout the supply chain will further strengthen our ability to identify modern slavery risks and address any new challenge that might emerge.
Should any instances of modern slavery be identified, we believe that we are well positioned to address these, and to support workers through the mitigation and prevention processes we have put in place.
Approved by the Board on 11th May 2023 and signed on its behalf by:
Chief Executive Officer
Burberry Group plc