Ethical Performance
inside intelligence for responsible business


Boots picks up with Bitc after leaving the ETI fold

October 2009

Alliance Boots has turned to Business in the Community for advice on ethical supply chain management after its recent decision to leave the Ethical Trading Initiative.

The UK-based high street retailer has become the first company to sign up to an in-depth package of measures offered under Bitc’s responsible supply chain programme.

Richard Ellis, group head of CSR at Alliance Boots, said the company had switched from the ETI ‘because we wanted to assess how our suppliers perform on a broad range of sustainability issues, not just on labour standards’.

Boots says that before it left the initiative, it spoke to ETI directors to see if the group would expand its services to cover sustainability issues – but was told it would not.

Ellis said: ‘We have no argument with the ETI and support their work on labour standards; it’s simply that we feel they have too narrow a focus. We’ll use the money we were spending with ETI to instead commission work with Business in the Community to assess how we audit both the social and environmental performance of our suppliers.’

Ellis added that the decision to withdraw from the ETI would not be likely to save the company money and had nothing to do with its ownership by private equity firm KKR.

‘The sum Boots paid to ETI is the same amount that it will spend with Bitc to assess the sustainability of the products and processes as well as working conditions in factories,’ he said. ‘There’s always more to be done [on labour issues]. It’s still our number one priority when we look at a new supplier, but we want to expand the things that we’re audited upon. We’re genuinely interested in the whole supply chain, not just labour standards.’

While other companies have paid to use some elements of Bitc’s responsible supply chain programme, such as its training courses for procurement and purchasing teams, Boots is the first to take advantage of the entire programme, which Ellis says will ‘audit the whole of the supplier verification process from labour standards right through to the materials being used’.

Boots, which had been an ETI member since 2003, said it wants to ‘progress the agenda’ on supply chain sustainability, and that any lessons learned in its work with Bitc will be shared with other companies.

Although membership of the ten-year-old ETI has risen steadily over the past few years, it has lost some high profile companies, notably Littlewoods, Somerfield, and Levi Strauss.

It is also possible that current member Primark may be invited to leave, following revelations that is has had serious labour standards problems in its supply chain (EP10, issue 9, p7).

The ETI launched an inquiry into Primark eight months ago to establish whether the clothes retailer had been failing to live up to the initiative’s base code of conduct, but there has been no announcement on the issue. A spokesperson told EP: ‘We will be reporting the outcome of the investigation within the next few weeks.’

Alliance Boots | UK & NI Ireland | Supply Chain Management

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