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Tesco 60/100

(LSE:TSCO) 4 of 38 (2018)

Tesco plc (Tesco), a food retailer which is largest supermarket chain in the United Kingdom and also operated throughout Europe and in Asia, ranks fourth out of 38 companies, disclosing more information on its forced labor policies and practices than its peers across all themes. Notably, the company has achieved the second highest score on the theme of worker voice. The company has a number of leading practices in place, which include risk assessment, supplier training, and auditing of lower-tier suppliers. KnowTheChain identified one allegation of forced labor in the company's supply chain. Tesco's response, issued by the British Retail Consortium on behalf of retailers including Tesco, outlines steps the company has undertaken to improve supplier practices but does not disclose concrete remedy outcomes for workers. Additional steps the company could take to address forced labor risks in its supply chains include strengthening its disclosure and practices on the themes of traceability, recruitment, remedy.

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60 /100

2018 Ranking: 4 of 38

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60

The average score for the sector was 30/100, matching the average score in the 2016 benchmark. Compared to 2016, the number of companies assessed in 2018 increased from 20 to 38. Since 2016 the methodology has been strengthened, making it harder for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 30/100 to 33/100, which is positive given the changes to the methodology.

METHODOLOGY

2018

60

The average score for the sector was 30/100, matching the average score in the 2016 benchmark. Compared to 2016, the number of companies assessed in 2018 increased from 20 to 38. Since 2016 the methodology has been strengthened, making it harder for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 30/100 to 33/100, which is positive given the changes to the methodology.

METHODOLOGY

THEME AND INDICATOR SCORE

The benchmark methodology has seven themes, selected to capture the key areas where companies need to take action to eradicate forced labor from their supply chains. There are a total of 23 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

This theme evaluates a company's commitment to addressing forced labor, whether it discloses supply chain standards, and to what extent it has management processes and board oversight, training programs, and engagement with stakeholders on forced labor in place.

OVERALL 91
INDICATORS
Commitment
100
Supply Chain Standards
80
Management and Accountability
75
Training
100
Stakeholder Engagement
100

Traceability and Risk Assessment

This theme measures the extent to which a company demonstrates an understanding of its suppliers and their workforce by disclosing relevant information (such as supplier names or sourcing countries) and assesses and discloses forced labor risks across its supply chains.

OVERALL 63
Traceability
25
Risk Assessment
100

Purchasing Practices

This theme assesses to what extent a company adopts responsible purchasing practices (such as providing price premiums and procurement incentives) and integrates supply chain standards into supplier selection and supplier contracts, and whether it cascades them down the supply chain.

OVERALL 53
Purchasing Practices
60
Supplier Selection
50
Integration into Supplier Contracts
50
Cascading Standards through the Supply Chain
50

Recruitment

This theme measures a company's approach to reducing the risk of exploitation of supply chain workers by recruitment agencies, eliminating workers' payment of fees during recruitment processes throughout its supply chains, and protecting the rights of migrant workers.

OVERALL 48
Recruitment Approach
15
Recruitment Fees
50
Monitoring and Ethical Recruitment
100
Migrant Worker Rights
25

Worker Voice

This theme measures the extent to which a company engages with workers in its supply chains, enables freedom of association, and ensures access to effective and trusted grievance mechanisms.

OVERALL 64
INDICATORS
Communication of Policies
75
Worker Voice
25
Freedom of Association
75
Grievance Mechanism
80

Monitoring

This theme evaluates a company's process for auditing suppliers (including whether audits include non-scheduled visits, review relevant documents such as wage slips or contracts, interview workers, and audit lower-tier suppliers) and providing disclosure on the outcomes of supplier audits.

OVERALL 60
Auditing Process
90
Audit Disclosure
30

Remedy

This theme measures the extent to which a company has corrective action plan processes for non-compliant suppliers and ensures remedy is provided to workers in its supply chains who are victims of forced labor. Publicly available allegations of forced labor in a company's supply chains that occurred in the past three years, and how a company has responded to and addressed those allegations, are also assessed as part of this theme.

OVERALL 44
Corrective Action Plans
62.5
Remedy Programs and Response to Allegations
25

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