- Company Approach
- Supply Chain
- Social Commitment
- Press Releases and Statements
Dignity, freedom, equality. Right to work and to education. Protection of vulnerable groups such as women, children, indigenous peoples, refugees and migrants, and LGTBQI+ people. Benetton Group has always believed in a society based on respect for human rights, without any exception.
The Company states this firmly in its social campaigns and does it every day at the workplace – from the initiatives implemented in its offices around the world to supplier selection – for the purpose of ensuring equal treatment and respect for diversity: from skin color to gender, from sexual orientation to political and religious opinions.
Responsible purchasing practices
Benetton Group is committed to implementing responsible purchasing practices and to be a fair business partner: our aspiration is to drive an efficient and ethical buying process, taking into consideration the challenging environment in which our suppliers operate. Responsible purchasing practices are fundamental in the safeguard of a fair treatment of workers and of healthy and safe working conditions in the garments world. We are aware that our purchasing practices and capacity planning are key for suppliers in order to plan their production cycles efficiently and therefore avoid excessive working hours and ensure on-time and accurate payment to workers. In this perspective, Benetton Group is committed to minimize the changes to purchase orders after their official emission (adjustments involve less than 5% of orders).
We also undertake to honor the terms of payments and the other contractual terms agreed: our suppliers are usually paid after 90 or 120 days by credit letter or wire transfer.
See our Purchase Order Standard Format
For its industrialized channel (which represents 40% of total production) Benetton Group has full visibility of the costs of its supply chain and takes them into account in the contract, adopting an "open-costing" negotiation approach. Specifically, for the geographies of Tunisia, Serbia and Croatia, an inflation index is constructed annually which considers three components:
- Labor costs - LCC (adjustments to the minimum wage, social security and insurance contributions, changes in the national contracts of reference); given the attention to the issue, Benetton Group periodically meets with the social partners, trade unions, workers' representatives and national authorities. The cost of labor (direct and indirect) is related to the total production minutes for the various processing phases to identify the labor minute value – LMV.
- Cost of energy; in the face of the recent energy crisis, Benetton Group actively supports its suppliers in identifying the most protective providers and contractual solutions.
- Cost of raw materials.
In defining costs, each component is isolated and analysed separately; at the same time, Benetton Group and its suppliers confront each other on the opportunities for efficiency (e.g. optimal use of raw materials).
The development of each new collection is preceded by a discussion between the Merchandising, Finance and Operations teams to consider the index thus constructed in defining prices and to guarantee fair and correct negotiation with suppliers.
Over the last 12 months, the average percentage increase in the FOB for the two main collections (FW and SS) is respectively 15.6% and 18.2%, due to the strong inflationary push that has characterized the entire macroeconomic scenario.
The adoption of responsible purchasing practices, as well as the achievement of the other social and environmental objectives of the Group, are periodically reported to the Sustainability Committee and to the Control, Risk and Sustainability Committee. During the year, intermediate targets, and activities functional to the management of social and environmental impacts are defined: the departments involved are assessed on these objectives and incentivised to achieve them.
In 2023 Benetton Group has established a partnership with Better Buying to evaluate its purchasing practices and improve its strategic approach based on feedback received from suppliers.
Thanks to the data collected through social compliance monitoring activities, we find that approximately 99,95% of workers in our supply chain are paid with a salary equal to or higher than the minimum established by local law or by the collective agreement and in accordance with the related salary classification grid. Furthermore, approximately 83% of workers in our supply chain receive remuneration in digital form while the remaining 17% are paid mainly in cash (only 0,26% are paid by cheque).
Suppliers’ evaluation and incentives
In 2023 Benetton Group has formalized the supply chain integrated scorecard, adopting a holistic perspective; the criteria considered are: the punctuality in deliveries, the cost efficiency, the quality of the product offered, and the social and environmental performance. The Group adopts an approach oriented towards continuous improvement and evaluates the development of the commercial relationship with the supplier based on the score obtained in the scorecard, incentivising suppliers who contribute to the achievement of the corporate social and environmental objectives; specifically, Benetton Group's goal is to guarantee the continuity of orders and the positive impact on business conditions to the most virtuous suppliers.
Benetton Group and the Covid-19 emergency
Benetton Group has launched a series of initiatives to help its community and adapt its business to the new, unpredictable international context due to the Covid-19 emergency, both in the acute phases and in the moments of recovery.
Supply chain support measures
In full phase of emergency, Benetton has decided to partially rethink FW 2020 collection. Consequently, we have cancelled 7% of our future orders, first ensuring that the garments had not yet been produced. This reduction is equivalent to 8%, in value, of total production in the Far East, Egypt and some EMEA countries (Europe, Middle East, and Africa). All orders – even only partially completed ones – have been paid for and we have not asked our suppliers for discounts, although we have in some cases negotiated postponing payment. In particular, after receiving the suppliers’ consensus, in the FW 2020 collection the payments for 26% of total orders were postponed for 30 days, 18% for 60 days; in the SS 2021 collection we negotiated some deferments of payment in minor percentage: 2% of total orders for 30 days, 9% for 60 days, 2% for 90 days.
To our knowledge, none of the factories in our supply chain have closed due to Covid-19. Despite the criticalities of the year, the overall Free On Board (FOB) prices have remained stable, with no significant increase or decrease, due to the influence of multiple factors. The relationship between our suppliers and their employees is governed by the Benetton Group Code of Conduct.
This document is attached to the commercial contract that is approved and signed by suppliers, and is based on the respect for human rights and environmental protection.
Attention to worker safety
We have implemented safety measures in favour of workers in the workplace, both abroad and in Italy, in accordance with national and local laws. On the company intranet we immediately created a dedicated page offering suggestions and useful information to our employees for dealing with Covid-19.
Benetton Group benefits from public aid made available to companies in Italy and in the countries where it operates. To mitigate the reduction in wages, managers donated part of their holiday allowance days to workers. As already decided in past years, no dividends will be paid to shareholders.
Collaboration with the Sustainable Apparel Coalition
We are in contact with the other members of Sustainable Apparel Coalition, the alliance between the leading brands of the clothing, footwear and textile industries, to share and compare responses to the crisis.
Donation to the Veneto Region
Benetton Group has donated 100,000 disposable medical gowns to the Veneto Region for the protection of health workers employed in the fight against Covid-19. The gowns are made of a material that protects against infectious pathogens.
The gown materials were produced in Italy, while the gowns themselves were made in Veneto.