As ALDI companies, we are aware of our responsibility to respect human rights. We believe that long-term business success is only possible if human rights are acknowledged and safeguarded. The UN Guiding Principles for Business and Human Rights, which are an integral part of the National Action Plans of the countries concerned, form the basis of our strategy targeted at human rights due diligence. Our commitment aims to identify and eliminate negative impacts on human rights which we account for. We commit to report regularly and transparently about the success, progress and challenges in implementing these guiding principles.
Our actions can have a direct or indirect negative impact on workers in our supply chains. We have an important role to play in raising awareness of human rights and collaborating with suppliers and other external partners, such as governments or trade unions, to prevent or mitigate negative impacts of business activities. We acknowledge that human rights violations are a global, systemic problem affecting all economic sectors. In this respect, certain groups such as minorities and women should be particularly focused on, as they are potentially more vulnerable to violations of their fundamental human rights. We further recognise, that the worst abuses, including forced and child labour, often occur when governments fail to protect workers’ rights and when trade unions are absent or weak due to restrictions on their activities.
Our approach is based on the understanding of the complexity of issues and aims at a continuous improvement of the processes we deploy to prevent or mitigate human rights violations. ALDI respects all internationally recognized human rights. At the same time, we are aware that specific human rights aspects are of particular relevance to us as a food retailer, as they might be stronger affected by our business activities. These include the prohibition of discrimination, the right to health and safety, freedom of association, the right to fair remuneration, compliance with working hours and the prohibition of child and forced labour.
In order to meet our human rights due diligence as a company, a clear alignment and the integration of the management are required. ALDI has therefore published an International Policy Statement for Human Rights (PDF, 110 KB) emphasizing its position.
„We very much appreciate that ALDI Nord committed to safeguarding human rights in a specific policy statement. The continuous implementation of due diligence processes relating to human rights, both within own business activities and along business relationships in the value chain, forms one of the core objectives of the 10 Principles of the UN Global Compact and the Global Sustainability Goals of the United Nations.”
Marcel Engel, Executive Director, Global Compact Network Germany
Our CR policy and the "Additional Agreement on Social Standards" have been forming binding guidelines for our business partners and us to implement sustainable supply chains for several years already. They define our expectations of appropriate living and working conditions as well as the respect for human rights within the production processes of our products.
Within our Supply Chain & Resources Strategy we developed five goals alongside with tangible measures related to human rights. We strive to achieve these goals and implement the measures by 2027 to meet our human rights obligations even better. We want to improve our due diligence process in line with the UNGPs, e.g. through the development of a forced labour policy, a policy to prevent and avoid child labor, a commitment to promote gender equality and the implementation of Human Rights Impact Assessments (HRIA). Especially in areas where we have the highest leverage, together with partners we want to implement projects, for example to realize living wages. We will increase our efforts in the field of measuring our effectiveness and expand our approaches continuously. Furthermore, we want to implement effective grievance mechanisms in our high-risk supply chains by 2025 and advocate publicly for human rights, e.g. through active participation in MSI and political dialogue as well as through expert dialogues with international trade unions. In addition, we have also included targets for greater transparency in our supply chains in our strategy.
The production of goods along complex supply chains can have adverse impacts on human rights. We understand that the greatest risks mostly relate to the stage of primary production, whereas our greatest direct influence comes to effect at the final assembly stage.
In the range of our non-food and food products, we regularly gain insights into working conditions in production facilities located in risk countries (PDF, 272 KB). This is achieved by comprehensive social audits and certifications carried out by third parties. We consider these third-party social audits an important first step to obtain information on compliance with required standards. At the same time, we are aware that these standardized processes are not always sufficient to reveal all problems. Specialized, local ALDI employees therefore also conduct production facility assessments in collaboration with our suppliers - the so-called ALDI Social Assessments (ASAs). During these on-site visits, we communicate with relevant stakeholders and potentially affected groups in order to better identify and prevent human rights violations at an early stage. We involve our suppliers in these processes to jointly identify and reduce possible risks more effectively as well as to achieve better working conditions.
As a retailer, we particularly focus on the identification of human rights related risks in supply chains. In addition to measures such as human rights risk analysis, human rights impact assessments or supplier evaluations, we have increased and keep on increasing the number of social audits in our food supply chains. Our so-called Producer Assessments are conducted with an external service provider on farm level (field and packhouse) and all non-compliances are reviewed and jointly discussed with each producer, including potential and mandatory measures for improvement. The Progress on improvements is monitored and supported continuously. As part of this process, we aim to understand where producers face challenges to implement our supply chain requirements respectively. Through sharing of best practices with producers and suppliers where applicable, we aim to support improvements and to foster joint learnings in the sector. Moreover, we want to obtain a profound insight into the production conditions of high-risk supply chains to derive targeted improvements.
"Beyond audit approach"
We consider third party social audits to be an important first step in gathering information about the human rights situation in our production sites and initiating improvement. We are aware, however, that they may not always provide a true picture of working conditions and may fail to identify hidden issues such as forced labour, discrimination or harassment. We therefore commit to adopt an approach to ethical trade that goes beyond compliance and does not rely solely on social audits, complementing our audit approach with additional activity such as our own on-site visits, business partner and producer communication and training, participation in multi-stakeholder initiatives and projects on the ground. Sustainable improvements of working conditions require this co-operative approach for the ethical trade between the ALDI companies and our suppliers. With the ALDI Factory Advancement (AFA) project, ALDI has implemented an effective tool to improve the working conditions in Bengali garment factories producing the goods for our ranges. Launched in 2013, the AFA project focusses on the factories´ workers and managers developing sustainable solutions for better working conditions. In this respect, promoting the dialogue and collaboration between workers and managers is in the focus. Only this commitment and the corporate responsibility of both parties will result in lasting positive changes.
Human Rights Risk Assessments (HRRAs)
In 2018, ALDI has comprehensively examined, together with an independent service provider specialized in sustainability, the human rights risks within food and agriculture supply chains. The aim of this risk assessment was to identify group-wide human rights risks throughout our supply chains on a global level and, at the same time, to see where we can leverage our influence most effectively. This analysis covered the entire supply chain, particularly focusing on the primary production as well as the production stage.
The assessments were based on data such as purchasing volumes, the locations of production and manufacturing facilities as well as on global trade data of the industry. In addition, numerous recognized indices and evaluations such as the Global Slavery Index, the Environmental Performance Index or the corruption perception index of Transparency International were included.
The human rights risk assessments identified both social and environmental human rights risks along the supply chains. For each country of production and origin of our products, respectively, an overall risk assessment was carried out. Environmental risks such as climate vulnerability, water scarcity and industrial pollution were also part of the analysis, as these factors can have an indirect impact on human rights.
In addition to the assessment conducted by a service provider, we identified Spanish and Italian produce at raw material level as further high priorities. Our internal data evaluation shows that a significant part of our tropical fruits derives from those countries. Furthermore, the classification of high-risk supply chain is based on our internal human rights expertise and dialogues with expert stakeholders.
We will regularly update our publicly available risk analysis to show the evolving prioritization of our human rights due diligence processes.
The following eight indicators were considered:
Social risks
Workers' rights: negative impacts on workers' rights, including; exceeding the permissible working hours, low wages, health and safety risks, workplace bullying, harassment and abuse, discrimination or restricted freedom of association.
Gender-based discrimination: assessment of unequal treatment between men and women and the risk of possible gender-specific discrimination, for example, through gender-based abuse or discrimination with regard to wages and working conditions.
Child labour: the risk that children perform work that has an adverse impact on their health and development or the employment of school age children.
Forced/bonded labour: refers to modern forms of slavery and human trafficking, for example, by exerting pressure, withholding wages, or other forms of coercion.
Environmental risks
Water scarcity: the risk that a country's demand for water exceeds its availability. This is accompanied by limited access to water supply - for personal consumption and/or as a source of income.
Climate vulnerability: assessment of the current and future risk that a certain country is exposed to extreme weather events. In addition, the willingness of the private and public sectors to invest in the necessary modifications (e.g. in case of draught, flood or hurricanes) was also assessed.
Deforestation/land conversion: the likelihood that products are cultivated on land which was recently a forest area with high conservation value, which may mean that forests worth of preserving were destroyed.
Industrial pollution: pollution caused by the manufacturing of products, which then leads to air and water contamination, (chemical) waste and noise pollution.
The graphs show the raw materials and product groups identified for ALDI which represent a high risk of human rights violations and are thus considered to be highly relevant:
Raw material level:
Production facility level:
Human Rights Impact Assessments (HRIAs)
In November 2020, we started to conduct three Human Rights Impact Assessments (HRIAs) for different high priority food supply chains to tackle human rights issues. The aim is to understand and to identify the direct and indirect adverse impact of our business activities on workers and other affected rights-holders. In this respect, a main focus is on the particular human rights risks for women and smallholder farmers. The assessments are carried out together with local experts, taking into account the relevant stakeholders such as workers, producer organizations, civil society organizations and trade unions. In the scope of HRIA, we will start to aggregate gender-specific data to detect pay gaps between women and men in our supply chains. We also want to understand how the people along our supply chains contribute to the value of our products through their work. We are aiming to improve our data by tracking the effectiveness of our measures related to gender equality and to human rights in general continuously. Our approach is to develop specific measures from the HRIA results in order to fulfil our human rights due diligence even better. We aim to conduct and publish up to 12 HRIA by the end of 2025, at least one in every high-risk supply chain. We will analyze our high-risk supply chains on a regular basis.
During our first assessments some delays occurred due to the covid-19 crisis. Especially rightsholders engagement became challenging, mainly caused by travel restrictions. Accordingly, the finalization of the reports delayed as well, but were published in late 2022. The reports of our conducted HRIAs including the corresponding human rights action plans can be downloaded below:
Human rights in global supply chains is a very complex topic that requires an intensive examination and a holistic approach in order to achieve long-term improvements. Our risk analysis is an important step identifying significant potential human rights risks along supply chains and setting appropriate priorities.
We will therefore particularly focus on the high-priority raw materials identified in the analysis, i.e. coffee, cocoa, nuts and tropical fruits in the relevant countries of origin.
In addition to this, we are already implementing a variety of measures to reduce human rights risks in our food and non-food supply chains:
Commitment to smallholder farmers
We work with many different types of business partners, from small, family-run businesses to larger global companies. We understand that there are numerous specific challenges faced by smallholder farmers. Due to many factors beyond farmers’ control such as climate change, unpredictable weather conditions, international energy prices affecting farm inputs, and lack of access to the market, it can be a challenge to produce a stable quantity of crops. Farmers often are not able to earn a living income and we recognise that we have an important role to play in facilitating this. We are therefore committed to support small-scale farmers to organize collectively.
We are currently involved in a number of projects and initiatives e.g. our coffee project in Columbia (promoted by the Hanns R. Neumann foundation), the PRO-PLANTEURS project for sustainable cocoa or our memberships in the World Banana Forum and the Juice CSR Platform. We plan to continue our support and extend our commitment by adding further measures. Additionally, we aim to offer and promote food products to our customers which are from supply chains where farmers have a decent standard of living. We are committed to continuously advance in this regard.
Commitment to gender equality
ALDI believes that all workers should be treated fairly. We do not tolerate any form of discrimination and commit to achieve gender equality across our own business and supply chains. We recognise that many of the workers in our supply chains are women and that they are among those most affected by human rights violations. Some of the problems faced by women workers include unequal treatment, risk of gender-specific discrimination regarding wages and working conditions, limited access to land and education as well as the double burden of paid work and their unpaid care and domestic responsibilities. To underline our efforts and to promote women’s empowerment, we signed the UN Women’s Empowerment Principles and developed our International Policy on Gender Equality in ALDI’s Supply Chains.
To strive to implement the Policy’s principles, we also developed our Gender Equality Action Plan. It contains time bounded measures and targets, which are aligned with our Human Rights Due Diligence process.
Gender relevant risk data is included into our ongoing Sustainability Risk Analysis to get insights and disclosure of food and non-food supply chains where gender-discrimination risks are of high relevance. In addition to that we will further analyze best practice measures to address gender issues in the supply chain, taking country specific norms and circumstances into consideration. From this, further supply chain specific measures will be derived.
We have developed both, the Policy and the Action Plan in consultation with supply chain stakeholders and we are continuously in contact with external stakeholders to make sure that we meet the expectations towards ALDI as one of the leading international retail companies and we will further strengthen our dialogue with women’s rights organizations and trade unions in order to better address the needs of women workers. We will furthermore promote women’s representation and rights in those dialogues, whenever possible.
Part of our existing work on understanding and tackling low wages focusing chocolate, orange and banana supply chains. We will report about our progress in improving wages of all workers in these supply chains.
Many of the root causes of gender inequality are difficult to address as a single company, but we will do our part to contribute to gender equality and we further aim to advocate and raise awareness on gender equality, internally and externally, within multi-stakeholder initiatives and individually. As an example, we are providing guidance to support our business partners in strengthening gender equality in the supply chains and as part of this, we encourage our suppliers to sign the UN Women´s Empowerment Principles.
Commitment to end Child Labour and Forced Labour
Globally, many people are still affected by child- and forced labour, most of them in the private sector. As cases of forced labour and child labour are detected both in the industry and agricultural sector, these serious issues are fundamental to tackle for us. We therefore regularly carry out social assessments in our production facilities in order to identify negative human rights impacts and to provide remedy where necessary. We also rely on certifications whose requirements include the prevention of child- and forced labour.
In order to emphasize the relevance of these issues and to ensure that these risks are further minimized, we we published our International Policy on Child Labour and our International Policy on Forced Labour in early 2021. These policies apply to our non-food and textile supply chains as well as to our food supply chains. Our forced labour policy is a proactive approach to prevent forced labour and we will, for example, take steps to ensure migrant workers do not have to pay recruitment fees (Employer Pays Principle).
Support for European framework conditions and joint commitment
We want to go one step further to successfully address systemic challenges throughout complex supply chains. Our longstanding commitment and cooperation with various interest groups have shown that the best way to improve working conditions within supply chains is through joint initiatives and partnerships. We continuously stand up for human rights in our initiatives, associations and in our business relationships. We therefore support sustainable solutions that require all relevant political, economic and social stakeholders to work together. In our position paper we call for an, at least, European legal framework for the implementation of a clearly defined, practical and long-term effective mandatory human rights due diligence. This creates a level playing field and makes human rights along supply chains non-negotiable. Beyond that, we signed alongside 25 other companies the joint statement by the Business & Human Rights Resource Centre, which welcomes the announcement of the EU Commission to launch a legislative initiative on mandatory human rights and environmental due diligence.
We are already involved in product-specific multi-stakeholder initiatives and we commit to join and actively participate in another MSI focusing on labour issues in high-risk supply chains by 2021.
Examples of continuous engagement:
Commitment on living wages and living income
Living wages and living incomes are an integral part of human rights and are essential if we want to address inequality and eradicate poverty. We acknowledge, that income and wages achieved by workers along the global supply chains are often not sufficient to allow a decent standard of living. We recognize that there might be a gap between the legal minimum wages or actually paid wages, respectively, and a living wage or income which could have an adverse impact on human rights. Therefore, we will strive to create lasting change in our global supply chains by strengthening our responsible purchasing practices, which can have an impact on working conditions, wages and incomes, and by increasing our supply chain transparency and traceability. Pilot projects, such as the payment of premiums or income diversification projects will help to ensure a decent standard of living for workers and for farmers and their families.
We also understand that collective bargaining plays a valuable role in allowing sufficient wages to be determined and wage gaps to be closed and support the adoption of measures by governments to promote collective bargaining between workers and employers.
To emphasize our commitment and demonstrate ALDI’s stance, we developed our International Position Statement on Living Wages and Living Incomes, which has company-wide acceptance and relevance.
Besides the ALDI Position Statement on Living Wages and Living Incomes, we are part of the GIZ working group of German retailers on this topic, because we strongly believe that an effective and lasting solution needs collaboration and level playing fields.
In this context we signed a voluntary commitment in 2020, to promote living incomes and living wages. The steps agreed in the commitment also include the calculation of income and wage gaps and the implementation of sustainable purchasing practices together with buyers and suppliers.
In 2021, the working group was intensively focusing on the commitment´s goals and could agree on concrete steps concerning piloting and a roll-out of bananas encompassing living wage criteria.
The sourcing targets for Living Wage- bananas in the scope of cavendish bananas sold on the German market (excl. branded bananas) from 2023 onwards are as follows:
All three targets have been agreed by all members as well as approved by the German Federal Cartel Office and therefore pave the way for the payment of living wages in the banana sector and supporting a level playing field.
For 2022, all members´ target is to analyze and validate wage gaps for farms in Ecuador and other origins by collaborating with the IDH and an external service provider. For more information, please click here.
Improving sustainable sourcing of ALDI’s bananas
We are aware that all supply chain stakeholders (including retailers), have a vital role to play in creating a banana sector that is socially, economically, and environmentally sustainable. Both ALDI’s and our partners’ current and future actions will support human rights and the environment. We are further integrating CR into our buying to help deliver our long-term goals, but we can’t do this alone, it is a shared endeavour. Everyone involved contributes to a sustainable and fair banana supply chain.
Responsible purchasing practices of ALDI’s bananas
We are strengthening the sustainability of ALDI’s banana supply chain via an approach developed with our strategic suppliers. We are implementing responsible purchasing practices and further increase the transparency of production costs. This improvement to our buying process means that critical cost changes and cost fluctuations that impact all supply chain stakeholders can be addressed much better together.
In addition to our engagement in our food supply chains, since 2019 ALDI is actively engaging in the Partnership Initiative on living wages of the German Partnership for Sustainable Textiles. Within this initiative, we are working on the sustainable improvement of our purchasing practices to provide production sites with the space for substantial and continuous wage growth.
We will publish regular updates regarding our measures to achieve our commitments, for example about our Tony’s open chain chocolate.
“Access to remedy” is one important pillar of the due diligence framework provided by the UNGP. Therein, effective operational-level grievance mechanisms made available by business enterprises are envisaged to provide a channel via which grievances of rightsholders can be “addressed early and remediated directly” (UNGP 29).
While functioning as an instrument for rightsholders to seek redress for any legitimate concerns they may have in connection to a business enterprise’s operations, they also serve as one tool of a company’s risk management since they can provide early warnings for systemic problems.
As part of our responsibility to respect human rights, ALDI Nord recognizes the importance of making appropriate grievance channels available for anyone possibly negatively affected by our operations, directly or indirectly. With regards to the area of compliance, ALDI Nord has therefore established a whistleblower system. However, our position as one of the last links in complex supply chains signifies that there are several important factors to bear in mind:
1. In order to be effective, grievance mechanisms need to be tailored specifically to each group and location they are established for. Since ALDI Nord sources products from many different countries, with supply chains spanning continents, the variety of mechanisms that are needed to cover and manage these exceed the capacities of any one company.
2. Moreover, if all companies were to establish their own grievance mechanisms throughout each supply chain, production sites would be overwhelmed by individual procedures.
3. Additionally, those affected may be reluctant to voice any grievances through a mechanism hosted by ALDI Nord since retailers are far removed from workers, farmers, and communities.
4. Lastly, remedy of any grievance should always be provided on the level closest to the complainant. Accordingly, a mechanism of a retailer at the end of a supply chain mainly functions as a recourse option if other channels are inadequate.
We are addressing these challenges
While these steps are all ongoing and constitute processes that we will continue to implement, refine, and adjust, at this point in time we can already share the following learnings:
1. Collaboration is key – The cooperation with other stakeholders that are well positioned in the supply chain to provide a specific grievance mechanism, for instance other retailers, business associations or NGOs, constitutes a decisive advantage in comparison to grievance mechanisms operated by one retailer alone. It allows for a more effective allocation of resources, avoids the overlap and duplication of engagement measures, fosters collective learning, and can decrease confusion throughout the supply chains with regards to communication and responsibilities. Importantly, it also offers the opportunity to increase leverage on behalf of rightsholders to achieve remediation.
2. Name recognition matters – Implementing grievance mechanisms through initiatives or organizations that are known to rightsholders and other actors in a supply chain via, for instance, certification schemes, allows these mechanisms to build on the awareness and trust the respective organization already holds. This can facilitate the acceptance by actors affected by the mechanism, simplify roll-out and ease accessibility. Moreover, by establishing a mechanism within a pre-existing organizational framework, it may not be perceived as a foreign intrusion, but as a reasonable addition to a toolbox.
3. Vulnerable groups remain vulnerable – One of the main goals of grievance mechanisms is to allow the most marginalized and vulnerable rightsholders affected by business operations to seek remedy. However, evaluating if this goal has been achieved is also one of the most difficult. Groups that may hardly have a voice in a supply chain setting or that may be difficult to reach, such as women workers or homeworkers, are also unlikely to readily share their needs for a grievance mechanism or criticize its shortcomings. To learn about such factors requires time, trust and the empowerment programs mentioned below.
4. Establishing a grievance channel is one aspect of “Access to remedy” – As the UNGP clearly outline, providing an avenue to allow rightsholders to voice grievances constitutes just one of several components required to provide “access to remedy”. While setting up this channel comes with significant challenges, several components beyond the mechanism itself pose further demands:
a. Empowerment is a prerequisite – in order for a mechanism to function effectively, the intended users need to be aware of their rights to voice complaints and how to go about raising them. They also need to be in a position to do so without having to fear reprisal or victimization. Achieving this requires additional well-designed, targeted programs.
b. Remedies must be available – Once rightsholders are in a position to voice their concerns and a mechanism has an established process to handle these, solutions to issues raised need to be provided and the effectiveness of their implementation has to be monitored. This requires additional resources, the willingness of those involved in a case to address it and a system via which follow-up is feasible.
5. Interaction of grievance mechanism-levels constitutes a crucial challenge – As pointed out above, the grievance mechanisms a player such as ALDI Nord makes available throughout supply chains are envisaged to serve as a recourse option. This structure comes with two main challenges: firstly, assessing where such a back-up is most urgently needed in order to allocate resources most effectively, would require in-depth analyses of all other channels available in a given supply chain. The second challenge lies in the delicate relationship between a grievance mechanism and each individual complainant. While measures can be put in place to check if all local options have been exhausted first, doing so too vigorously may decrease the overall accessibility of the mechanism. This, in turn, may also hinder the improvement of local processes in the long run.
6. Level of human rights risks closely correlates with challenges of setting up a grievance mechanism – The establishment of grievance mechanisms is overall challenging. Yet these challenges become even more pronounced in a supply chain or in a specific tier where human rights risks are particularly high. This, of course, does not constitute a surprising insight, yet it is important to point out as it signifies that for these supply chains it is also especially difficult to implement any of the other steps derived from the learnings listed above.
While this list is of course not exhaustive, these are the main insights that will inform the next steps ALDI Nord plans to take to provide rightsholders in our supply chains with “access to remedy”.
Fostering transparency throughout our supply chains is an essential component of our human rights due diligence since it is a prerequisite for managing social and environmental risks related to the production of our articles. Therefore, we already use a variety of means to inform about our work in this regard, such as our Sustainability Report or this website.
In a stepwise approach, we aim to further increase the transparency of our high-priority supply chains for our stakeholders. For instance, we already publish our main production sites for apparel, home textiles and shoes.
Now we have embarked on the publication process of first-tier suppliers active in 2021 for identified food high-priority supply chains and will continue to increase the number of supply chains and suppliers that we publish. You can find the data here.
By 2027, we will publish information on all relevant tiers (including names and addresses) for six of our high-priority supply chains.
We are aware that the implementation of human rights diligence is a continuous process of development. Our relevant processes and instruments are therefore subjected to regular review.
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