SUSTAINABILITY REPORT2017

A respon­sible value chain

Management approach: GRI 203; 301; 308; 407; 408; 409; 412; 413; 414 

GRI 102-9; 308-2; 409-1; 412-3; 414-2

In weekly-changing theme worlds, we offer our customers consumer goods that are distin­guished by their quality and variety. We take care to ensure that social and environ­mental standards are complied with in the sourcing of raw materials and in production, and include sustain­ability aspects in our product design. We are working to further increase trans­parency in our value chains so as to bring about improve­ments at upstream supply chain levels as well. Global challenges in the supply chain that we cannot solve on our own are tackled through cooper­ation projects, ideally in industry-wide initia­tives. 

Since 2006, sustain­ability has been an integral part of Tchibo's corporate strategy. On our way to becoming a 100 % sustainable business, we contin­ually expand our assortment of sustainable consumer goods, implement social and environ­mental standards in the supply chain. We team up in initia­tives with other stake­holders to develop possible solutions to the challenges of global­i­sation. We take our respon­si­bility as a value-oriented family-owned business seriously, and believe that business success must not be at the expense of people and the environment. With a view to future gener­a­tions, we also see it as the task of companies to do their part for a humane devel­opment of society and for the preser­vation of our natural environment. 

The oppor­tu­nities and challenges of global supply chains 

The liber­al­i­sation of the flow of goods and finances has resulted in a global division of labour in which countries focus on their specific compet­itive advan­tages. Tchibo sources a large proportion of its textiles and other consumer goods from Asia and Eastern Europe, where they can usually be produced at cheaper prices than in Western and Southern Europe, quite aside from the fact that many product categories can only be sourced from there. At the same time, Tchibo – like other companies – is confronted with risk factors. These include a disregard for labour and social rights, as well as environ­mental standards. We are convinced that the inter­na­tional division of labour can open up oppor­tu­nities for everyone if people and the environment are given consid­er­ation and treated consid­er­ately in our [collective] actions. That is why we work for a sustainable design of our consumer goods value chains.

The culti­vation and processing of raw materials such as cotton and wood have reper­cus­sions for people and the environment. For example, cotton farming requires large amounts of water, and chemical pesti­cides and fertilisers are applied to the cotton planta­tions and forested areas. The further processing of these raw materials also often takes place without adequate attention to environ­mental and social standards. Tchibo is aware of this problem – which is why, as a respon­sible company, we are contin­u­ously reducing the negative impact of our business activ­ities on people, the environment and society. This includes our imple­menting social standards in the supply chain, such as occupa­tional health and safety measures, as well as environ­mental standards, such as resource conser­vation and chemicals management. Making sure our value chains are sustainable also means expanding our sustainable product ranges and promoting sustainable consumption. For example, by building demand for sustainably grown cotton, we are also promoting sustainable agriculture. By making sustainable consumption possible for our customers, we are also making a contri­bution to increasing sustainable growth. 

Focuses of our measures on our way to a 100 % sustainable business 

We contin­ually develop the focuses of our sustain­ability management work. As long ago as 2012, we evaluated and mapped them for our Consumer Goods value chain as part of a materi­ality survey conducted with our stake­holders. We defined ‘environ­mental and social standards in the supply chain’, ‘resource-conserving product design’ and ‘supplier quali­fi­cation’ as our focus topics.

These prior­ities guide us in devel­oping concrete goals and actions on the way towards becoming a 100 % sustainable business. In 2017, too, we conducted extensive and targeted stake­holder dialogues and stake­holder surveys that will be incor­po­rated into the further devel­opment of our focus topics. In the field of social standards, for instance, we are redou­bling our focus on trans­parency in the supply chains and on human rights, bearing in mind especially the United Nations Guiding Principles on Business and Human Rights (UNGs), their imple­men­tation in the framework of the National Action Plan for Business and Human Rights (NAP), and their Sustainable Devel­opment Goals (SDGs), which we also regard as global frame­works for our own sustain­ability agenda.

We pay particular attention to the sustainable design of our value chains. Our company size enables us to achieve signif­icant effects in this connection. On the way towards becoming a sustainable business, we work step by step to design all products and processes in an environ­men­tally and socially acceptable way. We concen­trate on those areas where we have the greatest impact on people and the environment, and where we can have the most influence:  

  • respon­sible business practices
  • gradually obtain raw materials and ingre­dients exclu­sively from sustainable sources
  • perma­nently improve working and environ­mental condi­tions at the production sites
  • tackle struc­tural challenges through cross-industry coali­tions and alliances

Guide­lines and Principles for our Respon­sible Business Practices 

In striving to contin­ually improve our sustain­ability management, we are guided by inter­na­tional guide­lines, in particular the Sustainable Devel­opment Goals (SDGs) as an overar­ching global framework, the United Nations Guiding Principles on Business and Human Rights for socially respon­sible conduct in the supply chains, the National Actions Plan on Business and Human Rights (NAP), the conven­tions of the Inter­na­tional Labour Organ­i­sation (ILO), and the principles of sustainable devel­opment based on the Rio Decla­ration of 1992. EU regula­tions (e.g. the REACH regula­tions for chemical management) as well as German legis­lation (for example, the Waste and Packaging Act and Food and Consumer Goods Act) provide the legal framework for the sustainable design of our products and processes.

Based on this, we have formu­lated the following binding principles to guide us in designing sustainable value chains for consumer goods:

  • Dialogue and partic­i­pation: When working with our suppliers, we involve both the management (top-down) as well as their employees (bottom-up). This turns everyone involved into ‘owners’ of the processes and improves the prospects of finding solutions that are acceptable for all parties.
  • Setting targets: We set ambitious but realistic goals regarding our business practices, regularly monitor results, and work on continual improve­ments.
  • Respon­si­bility in the day-to-day business: Our opera­tional depart­ments such as Purchasing, Quality Management and Marketing are respon­sible for the devel­oping and imple­menting change measures. Where necessary, Corporate Respon­si­bility plays an initi­ating, co-creating and accom­pa­nying role.
  • Openness and willingness to learn: We don’t seek to instruct, but listen to our stake­holders, openly address problems, are self-critical, and learn from our mistakes.

Social and environ­mental standards as minimum requirement 

Since 2006, sustain­ability has been integrated in our company’s strategy and is a core component of all business processes. The Tchibo Social and Environ­mental Code of Conduct (SCoC), which we developed in cooper­ation with our stake­holders, is the foundation for this. It defines minimum require­ments for working condi­tions and environ­mental standards in the production of our consumer goods, and is the basis of all purchasing contracts. Developed in 2006 as the Tchibo Social Code of Conduct, in 2011 the Code was expanded to include environ­mental require­ments. By signing the SCoC, our producers commit to social and environ­mental standards at their production sites. This includes occupa­tional safety, the prohi­bition of child labour and discrim­i­nation, the recog­nition of trade union rights, and measures to avoid negative environ­mental impacts.

In 2017, we revised the SCoC again. It now includes further environ­mental require­ments as well as additions that became necessary due to our commit­ments under the Global Framework Agreement with the Indus­triALL Global Union, the Partnership for Sustainable Textiles, and the SDGs.

Engagement in industry-wide initia­tives 

For many struc­tural challenges in the value creation chains, there are no complete solutions available at this time, but some stake­holders already have individual partial solutions. In order to bring combine these and achieve change with concerted strength, all the relevant stake­holders need to join forces in alliances. That is why we work closely with other retailers, producers, govern­ments, trade unions and non-govern­mental organ­i­sa­tions, science and trade unions, and are involved in cross-industry alliances, to implement global solutions step by step. In our collab­o­ration with other stake­holders, we want to more clearly address not only grievances such as discrim­i­nation or low wages, but also the under­lying systemic causes. Examples of this include our strategic alliance with the German Associ­ation for Inter­na­tional Cooper­ation (GIZ) and REWE Group as well as our cooper­ation in the textile alliance.

  • In September 2016, Tchibo became the first German trading company to sign a framework agreement with the Indus­triALL Global Union. The idea is to make it possible for employees and trade unions at the production sites to negotiate – wages and social benefits in particular – with factory owners and management. As a member of the ACT (Action, Collab­o­ration, Trans­for­mation) initiative we also work in partnership with Indus­triALL and other inter­na­tional trading companies on living wages and industry-wide wage bargaining between social partners on an equal footing in the clothing industry.
  • As long ago as 2012, Tchibo became the second company in the world to sign the 'Accord on Fire and Building Safety in Bangladesh' and contributed to its negoti­ation, entry into force, improvement and ongoing imple­men­tation. In 2017, we signed a follow-up accord for another three years. It will continue the accord until such time as the public author­ities in Bangladesh can take over its work.

  • In 2015, we joined the Partnership for Sustainable Textiles initiated by Germany’s Federal Ministry for Economic Cooper­ation and Devel­opment (BMZ). The focus of the alliance of politics, business, standards organ­i­sa­tions, NGOs, trade unions, science and academe and other stake­holders is committed to imple­menting environ­mental and social standards at all stages of the global textile supply chain. As part of our membership, we are on the one hand imple­menting our own published ‘roadmap’, and on the other hand have provided support in two ways since 2016: an alliance initiative to system­i­cally improve the working condi­tions of girls and young women in spinning and textile mills in the southern Indian state of Tamil Nadu. The second initiative is dedicated to chemical and environ­mental management and builds on our strategic alliance with the German Associ­ation for Inter­na­tional Cooper­ation (GIZ) and the REWE Group. As part of this alliance, a training and quali­fi­cation program has been developed that is being carried out in production facil­ities in China and Bangladesh. Following on from this, we want to work with the alliance initiative to support the estab­lishment of national quali­fi­cation struc­tures in other countries as well. As part of the exchange of experience, Tchibo also partic­i­pated in the production of a brochure for small and medium-sized enter­prises on the subject of combating corruption in the supply chain.

  • In 2016, we became a member of the multi-stake­holder initiative 'Organic Cotton Accel­erator', which was launched in 2014. In it, we work with protag­o­nists from the inter­na­tional cotton industry to strengthen the production of organic cotton and estab­lishing a sustainable organic cotton market.