Together for Change!
Each week, Tchibo surprises its customers with a new and diverse assortment of high-quality goods, at fair prices. We work towards compliance with social and environmental standards in production processes and are committed to ensuring continuous improvement. As a value oriented family business, we take our responsibility seriously and believe that business success must not come at the expense of people and the environment.
Our assortment of goods is diverse: in 2014 it comprised approximately 3,000 products. With our new line, "Tchibo Lieblingsstücke" (Tchibo Favourites), we offer our customers a permanent collection of the 300 most popular products on our online shop. These goods are manufactured globally, especially in Asia and Europe.
In a Global Economy: Creating Opportunities for Participation and Preservation of the Environment
In the wake of globalisation, labour-intensive industries have shifted to emerging and developing countries. Germany no longer produces large quantities of consumer goods; instead, these now come from China and other Asian countries. The low production costs there far outweigh the higher cost of transport to Europe. Factories have also developed the expertise needed to meet our stringent quality requirements, including product safety and durability. Especially the younger generations in emerging and developing markets work in factories, opening up new professional and personal perspectives. However, industrialisation also brings with it social, environmental and political challenges; for example, factory workers are often vulnerable to the risk of accidents, their wages are often insufficient to meet their own and their families' basic needs, and the production processes pollute the environment. A lack of transparency and the limited ability to politically enforce higher social and environmental standards complicate the situation. We are convinced that the international division of labour can open up opportunities for all, as long as they do not come at the expense of people and the environment. As a responsible buyer, we are committed to the sustainable management of our supply chain.
Integrated Supplier Management: The Basis for Transparency and Participation
As one of the largest international retail companies in Germany, Tchibo takes responsibility for its entire supply chain. Since 2006, sustainability has been an integral part of our business strategy. On the way towards becoming a sustainable business, we are reworking products and processes, such as purchasing and sourcing, to make them environmentally and socially friendly.
Setting Priorities on the Way to Sustainable Business
In the process of transforming our business operations in the supply chain, we focus on the areas where we can have the most impact on people and the environment, and where we can exercise the most influence for change. These priority areas include:
- Implement responsible business practices together with stakeholders,
- Gradually source resources and materials from responsible sources,
- Improve working and environmental conditions at factories
Tackle structural challenges through cross-industry coalitions.
At the same time, we are pushing for more transparency and accountability in the question of where and under what conditions our goods are manufactured.
Principles of our responsible actions
The UN Guiding Principles on Business and Human Rights (also known as the Ruggie Principles, for the former UN Special Representative, Professor John Ruggie) and the conventions of the International Labour Organization (ILO) provide a framework for our responsible business practices. Close cooperation with local stakeholders to further the interests of factory workers and the protection of the environment is another tenet of our work. Based on international standards, and taking stakeholder expectations into account, we have formulated the following clear and binding principles for our work:
- Dialogue and participation: When working with our suppliers, we involve both the management (top-down) as well as the workers (bottom-up). Only by involving all interest groups, can joint solutions that are acceptable for all parties be found.
- Setting Targets: We set ambitious but realistic goals, check the impact of our efforts and continually seek to make improvements.
- Responsibility in our daily business: We encourage and empower our operational departments, such as purchasing, quality management or marketing, to proactively and independently implement improvement measures.
- Openness and willingness to learn: We do not want to instruct. Rather, we listen and are open to the views of local stakeholders, openly discuss challenges, are self-critical and learn from our mistakes.
With this approach, we improve working and production conditions, ensure long-term sourcing capacity, and produce goods that make it easier for our customers to make sustainable purchasing decisions. In sum, our sustainability strategy contributes to our long-term business success.
Implementing Responsible Business Practices Together with Stakeholders
Since 2006, sustainability is firmly anchored in the Tchibo business strategy, in the Tchibo DNA and in the Code of Conduct for our employees; it is a core component of all business processes. Our sustainability goals also shape our relations with suppliers and business partners, through the Tchibo Social and Environmental Code of Conduct (SCoC), which was also created in 2006. It is the basis for all buying contracts, and obligates our suppliers to comply with social and environmental standards. It includes requirements, such as fair wages, safe working conditions and the existence of environmental management systems in our production facilities. Moreover, it is important to us that factory workers can help shape their working conditions. With the WE (Worldwide Enhancement of Social Quality) Programme, we offer managers and workers the opportunity to engage in a structured dialogue process, with support from experienced trainers, to develop improvements in the workplace and implement these together. Finally, we are involved in efforts to enforce the Rights to Freedom of Association and Collective Bargaining.
Our efforts and programmes can only achieve limited progress in countries like China or Bangladesh. The 2013 collapse of the Rana Plaza factory in Bangladesh, with more than 1,100 dead, exemplified the extent of the problem. Improvements can only be made and disasters of this kind avoided if all relevant actors in the value chain work together. Coalitions like the "Accord on Fire and Building Safety in Bangladesh" are an ideal platform for doing so. In this coalition, we are working with other companies and stakeholders on structural solutions to improve the conditions of the entire textile industry in Bangladesh (Responsible business practices).
Gradual Transition to Responsibly-Sourced Resources and Materials
The products that we offer have to meet many requirements: They must be well-made, stylish, and durable. Tchibo and its customers understand that quality also means that the valuable resources and materials contained in our products are sourced sustainably. Tchibo therefore increasingly sources from socially and environmentally responsible sources. When it comes to cotton, wood and pulp we collaborate with internationally recognised standards certification organizations and industry experts. For materials such as leather or animal fibres, for which no recognised certifications or accreditations exist, we pursue own approaches to improve the processes. In addition, we continue to increase the number of products made from recycled materials and improve the recyclability of our products.
Trendiness and a sense of responsibility are closely linked: we increased the proportion of cotton textiles made from responsible cotton from 40% in 2012 to 85% in 2015. Nearly 6,000 tonnes of organic cotton were woven into Tchibo lingerie and home textiles in the past year. As the third largest buyer of organic cotton worldwide, we are working to increase the demand and promote organic farming. On the way to our goal to source 100% of the cotton in our products from sustainable sources, we were certified according to the Global Organic Textile Standard (GOTS) in 2014. Since 2013, 100% of wood and pulp originates from responsible sources, of which a large proportion has been certified by the Forest Stewardship Council (FSC®) (Sustainable products and resources).
Lasting Improvement of Working and Environmental Conditions at Factories
In many of the countries from which we source, violations of labour and human rights and environmental offenses are common. As a company which takes responsibility seriously, we want to ensure that our goods are produced with respect for human rights and the environment. That is why our purchasing experts work to ensure that standards are reliably implemented and integrated at the factories. The WE Programme has an important role to play: on the one hand, the trainings empower workers to articulate and defend their interests; on the other hand, we guide the management to constructively respond to these. Experienced local trainers facilitate an open dialogue and ensure that trainings are designed to consider the local context in which they are held. Through hands-on trainings, trainers support managers and workers in meeting social and environmental standards such as occupational health and safety, fair wages, non-discrimination and reasonable working hours. Since the pilot phase in 2011, we have been expanding the WE Programme to our strategic suppliers.
So far, 320 suppliers have completed or are currently enrolled in WE. For the products sold in 2015, around 75% of our buying volume for Non Food goods in high-risk markets were produced at WE factories. The capacity necessary for such close cooperation with our suppliers is created through the consolidation our supplier network: in 2014 we further reduced the total number of producers to 780 (from 808 in 2013). In the medium-term we aim to include all strategic suppliers in risk countries in the WE Programme.
As part of our risk management strategy, potential new suppliers and suppliers in countries where we have not yet established WE are subject to an audit process. In the case of new suppliers, only those who meet the minimum requirements of the SCoC may produce for us. Those factories already in our portfolio are audited regularly, either by us directly or a third party. Factories in the WE Programme receive comprehensive support to apply a dialogue process towards compliance with the requirements of the SCoC (Sustainable supply chains).
Tackling Structural Challenges with Cross-Industry Partnerships
Effective change also requires legal, political and economic parameters to be established, adjusted and adapted. In order to support these processes, we are involved at the political level and work closely with stakeholders from other industries. In countries such as Benin and Zambia, which produce cotton for our textiles and garments, we support education programmes.
Issues such as safety standards, protection of the Right to Freedom of Association and Collective Bargaining and living wages can only be addressed through a cross-sector approach. In 2012, we were the second company worldwide to join the “Accord on Fire and Building Safety in Bangladesh”. In this effort, we work with other companies, factories, trade unions and NGOs to improve fire safety and building safety standards for the garment industry in Bangladesh. In addition, we joined forces with several other proactive global brands, in partnership with the international trade union federation IndustriALL Global Union, to form the ACT on Living Wages Initiative. The initiative pushes for binding, industry-wide collective agreements towards the goal of ensuring that factory workers are paid a living wage. Since June 2015, we are a member of the German Partnership for Sustainable Textiles, which seeks to promote the implementation of environmental and social standards at all stages of the textile supply chain (Social aspects of production).
Through our WE Programme and the Carbon Performance Improvement Initiative (CPI₂), we offer strategic suppliers practical tools to reduce their energy consumption and CO₂ emissions. Since early 2015, modules for water and chemical management have been integrated into the CPI₂ programme. The pre-production processes of our direct suppliers are also incorporated. In 2014, we signed the Detox Commitment with the aim to exclude hazardous chemicals from our textile supply chain by 2020. The initiative was launched by the environmental non-governmental organisation Greenpeace to draw attention to the use of such chemicals (Environmental aspects of production).
Since 2008 we support the countries from where our cotton is grown through the Cotton Made in Africa (CmiA) initiative of the Aid by Trade Foundation. It focuses on the principle of "helping people help themselves" to improve the lives of cotton farmers and their families in sub-Saharan Africa. In trainings, farmers learn how they can improve the quality of their cotton, increase their yield and learn about environmentally friendly cultivation methods. In addition, we are involved with educational and vocational projects for the children of cotton farmers in Benin and Zambia, and support the development of school infrastructure (Educational projects in the source countries).