Supply Chain

Over the years, Benetton Group has implemented a series of procedures and initiatives designed to ensure that all individuals and entities involved in our supply chain are treated fairly and correctly. Respect for human rights is not only an ethical imperative, but also a pressing demand from consumers as well as a necessary prerequisite for doing business.
In confirming its commitment to respecting human rights, Benetton Group published a statement in 2019 based on Section 54 of the Modern Slavery Act of 2015 concerning the measures adopted to prevent and mitigate the risk of all forms of slavery along the supply chain and to actively promote respect for human rights.

 

Supplier selection

We select our suppliers not only based on product quality, competitive prices and transparency, but also on their compliance with social, ethical and environmental principles. A list of our active suppliers located all over the world is available on our web site for consultation.

 
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Our tools

Code of Conduct
Any individual or company that establishes a business relationship with us undertakes to comply with the Benetton Group’s Code of Conduct, founded on compliance with human rights and protection of the environment. The Group’s Code of Conduct implements the most relevant international regulations with particular reference to the UN Business and Human Rights of June 2011 and the Communication from the European Commission on the Renewed Strategy on Corporate Social Responsibility of October 2011. Benetton Group’s Code of Conduct is annexed to the commercial contract, and, as such, our suppliers have to sign it.
 
For the benefit of active business partners worldwide, the Code of Conduct is available on our website in several languages. We ask to our suppliers to expose its version in local language in a space of their production building accessible to workers.









 

Guidelines For Benetton Group Code Of Conduct For Manufacturers

In order to support suppliers in the operational implementation of Code of Conduct’s requirements, Benetton has produced the document Guidelines for Benetton Group Code of Conduct for Manufacturers, which details the organization’s expectations for fair, healthy, safe workplace conditions and environmentally sound factory operations. The aim of the document is make the CoC standards understandable and practical, provide additional guidance for our suppliers, and help us work together to find effective solutions to workplace problems. This is why we believe that the collaboration with our supply chain plays a key role in doing business.
 


 

CSR Audit

Benetton has implemented an audit program to monitor adherence with the Code of Conduct, which applies to all finished garment producers, with particular attention to those located in regions where respect for human rights and workers is considered more at risk.
 
Suppliers to be audited are identified jointly by the CSR Management and the Operations & Sourcing functions, while the operating organization for the performance of the audits is entrusted to the CSR Management function. Before placing an order, the Operations & Sourcing function operates a qualitative examination of the factory, while the CSR function verifies its compliance with the social and environmental standards defined in the Code of Conduct. Audits are carried out by globally recognized independent auditing firms. The checklist, inspired by the content of SA8000 Standards, is designed to verify working conditions, environmental protection, transparency and compliance with the applicable local and international regulations. It includes the following sections:
 

Child Labour Forced Labour
Non-discrimination Coercion and Harassment
Association Workers’ Contracts
Working Hours Remuneration
Migrant Workers’ Rights Health and Safety
Risk Assessment Reference to National Law
Conventions and Agreements Environmental Protection
Chemical and Hazardous Materials Waste and Water Management
Transparency and Cooperation Monitoring and Compliance

 
The audit visit includes documents’ review, facility tour, and interviews with sampled employees. All these activities are conducted following the SA8000 operational criteria.
 

Audit Number of Workers to be interviewed according to SA8000

N. of employees N. of individual interviews N. of Group interviews Total employees interviewed
1-10 Decided by auditor Decided by auditor Decided by auditor
11-25 2 1 group of 3 5
26-100 3 2 groups of 2 + 1 group of 3 10
101-250 6 3 groups of 3 15
251-500 10 2 groups of 3 + 1 group of 4 20
501-800 15 2 groups of 3 + 1 group of 4 25
801-1200 15 1 group of 3 + 3 groups of 4 30
1201-2000 20 2 groups of 3 + 1 group of 4 + 1 group of 5 35
2001-3000 20 2 groups of 3 + 1 group of 4 + 2 groups of 5 40
3001-6000 25 2 groups of 3 + 1 group of 4 +2 groups of 5 45

 

Major and critical non-conformities

Benetton Group has a zero tolerance policy towards some critical topics: the non-compliances listed below cause an immediate intervention from Benetton and the supplier is asked to promptly perform the most suitable corrective action.

  • Presence of child labour
  • Evidence of forced/prison/bonded labour
  • Evidence of discrimination in employment, training, promotion, compensation, welfare, dismissal and retirement, etc.
  • Evidence of physical or verbal abuse
  • Prohibition of association
  • Absence of workers’ contracts
  • Irregularities and abuse towards migrant workers
  • Structurally unsafe buildings
  • Evidence of not communicated use of sub-contractors
  • Lack of cooperation during the audit
  •  
    Moreover, under the verified elements, some of the non-compliances have been recognized as “major non-conformities” because of their reference to aspects towards which the Group is particularly sensitive; they result in severer penalization in the final score. They are:

  • The engagement of young workers in hazardous work.
  • The requirement of lodging deposits (such as illegal withholding of salary, training fee, employment broker fee) or original identity documents.
  • The requirement of virginity or pregnancy tests as part of the recruitment procedures.
  • The excess of overtime hours.
  • The presence of discrepancy between working hours records with payroll records or other relevant records.
  • The non-payment of the legal minimum wage for all standard working hours.
  • The absence of a safe and healthy environment in respect of temperature, noise, lighting, ventilation, cleanliness and tidiness.
  • The absence of the “intended use” certificate or of similar documents required by local authorities.
  • The absence of an effective fire extinguishing system and the lack of a correct and constant maintenance.
  • The absence of an adequate number of appropriate fire extinguisher and an incorrect collocation of them.
  • The absence of adequate escape routes and the failure to keep them accessible and unblocked.
  • The absence of a valid fire inspection certificated issued by local authority.
  •  

    Audit results and following steps

    The CSR audit is considered passed reaching a final score of 80/100. If the audit fails, Benetton undertakes to collaborate with the supplier helping, supporting and exercising pressure, for the producer to better his environment and procedures. These suppliers, in order to maintain the business relationship with the Group, are asked to undergo a follow-up audit within six months. If also the follow up results failed, the supplier is excluded from Benetton Group’s supply chain for at least one year. Similarly, the Group terminates the business relationship with those suppliers that refuse to commit to solve the detected non-compliances.
     
    After the audit a Corrective Action Plan Agreement Report is written, reporting a corrective action for each non-compliance found. By signing it, the supplier commits to solve the situation within an agreed timeline. In 2018, we introduced a periodic monitoring procedure, which provides for the forwarding of updated corrective plans and evidence of the resolution of non-conformities on a periodic basis, in order to supervise the remediation process with a view to continuous improvement. Moreover, the Guidelines For Benetton Group Code Of Conduct For Manufacturers are available for producers, presenting advices and best practices.
     
    The CSR audit function carries out audits on all producers of finished products regularly, with controls that are repeated every six months as a maximum and every two years as a minimum, according to the results achieved and the need to correct procedures identified as critical in previous audits.
     
    Our performance in 2019
    In 2019, more than 300 suppliers were assessed for their social impact. Of these, about 70% undertook a process of correcting non-conformities, while 18 business relationships were interrupted.
     
    In order to increase the audits’ effectiveness, Benetton mostly carries out unannounced audits.
     

    Percentage of 2019 audits according to their type

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    Regarding apparel, Benetton core business that counts for 95% of the total production, 88% of the audited suppliers scored enough to be rated as “top” or “very good”.
     
    Below we report the results divided by country or region. EMEA region comprehends suppliers located in West and East Europe and North Africa; we analysed Tunisia separately because for us is a strategic country, where 30% of our EMEA suppliers are located. Far East region comprehends mainly Chinese suppliers, but we have collaborations also in other countries of this area, such as Myanmar and Cambodia. To have a complete look at our suppliers, view our suppliers map.

     

    Percentage of suppliers in “Top” and “Very Good” ranking, divided by region

    Bangladesh India Far East EMEA Tunisy TOTAL
    Top 80% 80% 40% 36% 57% 54%
    Very good 20% 20% 38% 25% 32% 34%
    TOTAL 100% 100% 78% 61% 89% 88%

     
    The remaining percentage are suppliers were the found non-compliances require a stricter monitoring and an important commitment from the factories. If a supplier is not willing to perform the required corrective actions the commercial relationship with Benetton is interrupted.
     
    Note that the EMEA region’s results are less positive with respect to the other analysed groups. This is mostly linked to the fact that many new collaborations started this year in this region, and, accordingly, the improvement path of many suppliers is still at the beginning.
     

    Percentage of volumes sourced from Top and Very Good suppliers (per region)

    Bangladesh 100%
    India 100%
    Far East 87%
    EMEA 93%
    Tunisy 86%

     
    Besides these internal tools, Benetton cooperates with other entities in order to help its suppliers in the improvements of their social and environmental performance. Discover the collaboration with Accord and with the Sustainable Apparel Coalition. 

     

    Non-discrimination and freedom of association

    Benetton Group believes that every company must commit to rejecting any form of discrimination, ensuring fair and respectful treatment of its people in all circumstances.
    In particular, in 2019, no employee reports of discrimination were received through the Whistleblower service.
    In addition, 96% of our suppliers meet the requirements of our Code of Conduct in the matter. The non-conformities identified refer to procedural aspects, all of which were corrected during the year.
    In 2019, three events were recorded in which there was no worker representation and eight cases in which worker representation was insufficient, failing to meet local legal requirements.

     
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