Supply Chain

Our Approach

The ALDI SOUTH Group, in collaboration with its business partners, assumes responsibility throughout the supply chain. This relationship is based on mutual respect and trust and forms the foundation for our supply chain activities.

We expect our business partners to comply with all our social and environmental standards and we pay particular attention to production conditions in countries where adherence to these standards cannot yet be taken for granted. In these countries, we want to contribute to the improvement of working conditions and the protection of the environment.

As many of our products are not sourced directly from producers, we value our business partners as key allies in improving working conditions in production facilities used for ALDI. Therefore, we maintain an ongoing dialogue with our business partners, work together on projects as well as monitoring their activities to ensure that our requirements are implemented and adhered to in all production facilities used for ALDI production.

Our Actions

The ALDI Social Standards in Production are our definitive standard for cooperation with business partners for our food and non-food products. They were first published in 2010 and were further revised in 2014. These standards are based on the following:

The ALDI Social Standards in Production are contractually binding for all business partners and we expect them to communicate and implement these requirements, in addition to all legal requirements, at the production facilities and then monitor compliance against them. We strive to ensure that our business partners are able to fulfil our requirements and we collaborate with them in order to achieve continuous improvements.

ALDI Social Standards in Production

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In order to be able to monitor compliance with these social standards at production facility level and to continue to foster these together with our business partners, we have developed and implemented our Social Monitoring Programme. Business partners are integrated into this programme according to an assessment and prioritisation of their respective supply chain risks (based on commodity groups and sourcing countries).

All main production facilities in high risk areas used for the manufacturing of ALDI products have to have a valid third party audit. On-site audits performed by independent experts are a key component of the programme. ALDI recognises audits and certificates according to the standards including:

Following every audit, a Corrective Action Plan (CAP) is developed which sets out an individualised timeline for eliminating any issues that may have been found. Our business partners are obliged to implement the measures together with the production facility’s management. Our CR departments closely monitor the process to ensure successful remediation.

SMP: Non-food

In 2013, the SMP Handbook for non-food commodity groups was developed for all ALDI SOUTH Group countries. The handbook contains CR requirements for business partners and since 2018, all relevant non-food commodity groups of all ALDI SOUTH countries have been integrated into the Social Monitoring Programme.

SMP: Food

In 2017, the SMP was introduced for selected food commodity groups in the ALDI SOUTH Group. In 2020, the ALDI SOUTH Group will integrate 100% of products in the high-priority commodity groups of fish and seafood, processed produce, oils and condiments into the SMP.

We consider third party social audits to be an important first step in gathering social compliance information about our production facilities and initiating improvements. However, we are aware that they may not always provide a true picture of working conditions. From our experience, we know that on-site presence can lead to greater transparency and fosters strong partnership with business partners and production facilities. Since 2011, we have been supplementing third-party audits with our own on-site visits for certain high-risk commodity groups.

These ALDI Social Assessments (ASAs) are assessments of main production facilities that are carried out by ALDI employees together with external auditors and business partner representatives. These ASAs mainly take place in amfori BSCI risk countries.

We have started to conduct ALDI Producer Assessments (APAs) on food plantations in relevant countries of origin. This enables us to carry out spot checks to verify how the producers work in our supply chain and how our requirements, in particular the ‘ALDI Social Standards in Production’, are being implemented and met.

Following every assessment, if necessary, a Corrective Action Plan is agreed which lays out an individualised timeline for eliminating potential issues. Our business partners are obliged to implement the measures together with the production facility’s management. Our CR departments closely monitor the progress and successful remediation.

ASAs: Non-food

ASAs have been conducted in non-food production facilities since 2011. We have focused on garment textiles and shoes production facilities. We also visit other non-food production facilities, such as toys or household textiles production. Each year, we conduct around 400 ASAs.

APAs: Food

Producer Assessments are conducted on farm level across different fruit and vegetable supply chains. All non-compliance are reviewed with each producer by an external partner and jointly discussed, progress is monitored and supported. Where relevant, a plan outlining corrective actions is prepared by our external partner and steps for improvements discussed with our producers.

As part of this process, we aim to understand what the challenges are for producers at farm level and what support they need to implement our supply chain requirements. Through sharing of best practices with producers, we aim to support improvements and to foster joint learnings in the sector in identifying and addressing human rights issues on farm level.

Corporate Responsibility Supplier Evaluation (CRSE)

As the majority of our products are sourced from business partners who commission the manufacture of the products, establishing strategic long-term relationships with business partners with a good CR performance is an essential factor in achieving our sustainability goals in the supply chain.

We have therefore adopted an annual Corporate Responsibility Supplier Evaluation (CRSE), an approach that goes beyond conducting audits. The CRSE is a comparable and transparent evaluation based on quantitative and qualitative indicators. The indicators focussing on our business partners’ social and environmental compliance management systems as well as their production facilities’ CR performance are derived from our CR Requirements, which form part of every contract.

The fulfilment of our CR Requirements is a key criteria during price negotiations. Business partners will be rated from A-D regarding key factors such as their CR set-up, their support for and relationship with production facilities or growers as well as their due diligence. We are committed to source the majority of our buying share from best-rated A and B business partners. Business partners with a D rating have to improve their CR performance and will be delisted if they do not demonstrate credible improvements for two consecutive years.

To ensure transparency, we share the evaluation results including a comprehensive status quo analysis with business partners. This analysis is then used by our business partners to improve their social and environmental management systems throughout the year. To support our business partners to better understand and implement our CR requirements, they are invited to participate in capacity building activities.

The results of this evaluation increasingly influence our buying decisions. The CRSE supports long-term relationships with those business partners who demonstrate a strong CR record and provides incentives for continuous improvement.

Corporate Responsibility Supplier Evaluation cycle

CRSE: Non-food

In 2017, we began focusing more on strategic business partners within our garment textile supply chain and intensifying discussions with strategic business partners about CR-related topics. The evaluation of garment textile business partners is now in its fourth year. We started to integrate shoe business partners into the programme and gradually will extend the CR supplier evaluation programme to include additional non-food business partners in the future.

CRSE: Food

In collaboration with FLOCERT, the Fairtrade standard’s certification body, we developed an approach to evaluate the corporate responsibility capacities and efforts of our food suppliers. The aim is to increasingly integrate sustainability-related metrics into our buying decisions. These will reflect the sustainability performance of suppliers beyond certification. We successfully piloted this approach with our current and potential banana suppliers in 2019. For 2020, we have expanded the evaluation to include pineapple suppliers and are planning a further roll-out to other high risk supply chains. We are committed to sourcing 80% of our buying volume from high-risk supply chains from A and B rated suppliers as part of a stepwise approach over the coming years.

Transparency of supply chains

We attach great importance to sustainable production conditions in the manufacturing of food and non-food products. Supply chain transparency is the foundation for all our sustainability measures. Without the knowledge where our products come from, we cannot ensure compliance with our requirements, analyse risks, monitor or implement projects. We work with our business partners to increase the transparency of our supply chains so that we have a better understanding concerning the origin of every product we sell and the raw materials we use for our products.

Transparency: Non-food

In order to offer greater transparency to our customers, we are publishing the addresses and number of employees of all our main production facilities used for the manufacturing of garment textiles and shoes bought by the International Buying department. Production facilities are classified by product groups or country and the information will be updated bi-annually.

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Transparency: Food

We commit to publish information on all relevant tiers for six of our high priority supply chains. We will start with one supply chain and will scale our transparency to six of our high priority supply chains over the coming years.

In order to offer their customers a higher transparency for products, ALDI SOUTH Germany and HOFER have established traceability platforms. With the help of a QR code or a tracking code on the packaging, the respective product can be traced back to its origin.

ALDI SOUTH Germany: Traceability platform for fish, meat, or eggs
HOFER: Check your product platform for fish, meat, soy, organic or fruit

Our Goals & Performance (2019)

Our Goals:

All high-risk non-food commodities are integrated within the Social Monitoring Programme.
All main production facilities used for non-food items, which have been integrated within the Social Monitoring Programme, are to possess a valid social audit report or certificate accepted by the ALDI SOUTH Group.

100%

of non-food production facilities with a valid social audit report

Our Goals:

Assess the situation in the production facilities to complement third party audits.
Assess and collect information on the business partners responsible for the production facility.

343

number of ASAs conducted

Corporate Responsibility Supplier Evaluation (CRSE)

Our Goals:

It is planned that all business partners in high-priority commodity groups will undergo a yearly review to evaluate their compliance with the ALDI CR requirements in the future. Currently this evaluation is conducted for suppliers of garment textiles and shoes.
The aim is to improve our business partners’ CR and monitoring skills and empower them to improve their compliance with our CR requirements along the supply chain.
Additionally, we want to establish long-term relationships with strategic business partners who perform well in regards to CR and increasingly source more from those business partners.

100%

of our textile business partners are integrated into the CR Supplier Evaluation Programme

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Our Projects & Memberships

Anke Ehlers cutting cake on the opening of the Bangladesh CR office

International organisation

ALDI CR offices in Asia

Each of the ALDI SOUTH Group’s national organisations sources products from Asia. To minimise the risks relating to working conditions and ensure compliance with our high standards, the ALDI SOUTH Group, together with ALDI Nord, has been operating its own CR office in Hong Kong since 2012 and established a second CR office in Bangladesh in 2017.

The focus of these CR offices is to monitor our business partner’ production facilities and the performance of our business partners with regard to social compliance. For this purpose, the CR offices conduct ALDI Social Assessments in the production facilities on behalf of the ALDI SOUTH Group and provide support to business partners on how to implement them.

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Logo of amfori BEPI

Since 2017

amfori Business Environmental Performance Initiative (BEPI)

For over 40 years, amfori has been the leading global business association for open and sustainable trade. Its mission is to support each of its members to enhance human rights, use natural resources responsibly, and drive open trade globally. It brings together over 2,000 retailers, importers, brands and associations. The ALDI SOUTH Group became a member of the Business Environmental Performance Initiative (BEPI) in 2017.

Working together

amfori is run by Board of Directors representing the member’s interests from different countries and businesses. In June 2019, Anke Ehlers, Managing Director for Corporate Responsibility International of the ALDI SOUTH Group, was elected to the Board of Directors of amfori to represent ALDI SOUTH and ALDI Nord internationally. This shows the continuing dedication of ALDI to enhance sustainable development in our global supply chains.

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Logo of amfori BSCI

Since 2008

amfori Business Social Compliance Initiative (BSCI)

For over 40 years, amfori has been the leading global business association for open and sustainable trade. Its mission is to support each of its members to enhance human rights, use natural resources responsibly, and drive open trade globally. It brings together over 2,000 retailers, importers, brands and associations. The ALDI SOUTH Group became a member of the Business Social Compliance Initiative (BSCI) in 2008.

Working together

amfori is run by Board of Directors representing the member’s interests from different countries and businesses. In June 2019, Anke Ehlers, Managing Director for Corporate Responsibility International of the ALDI SOUTH Group, was elected to the Board of Directors of amfori to represent ALDI SOUTH and ALDI Nord internationally. This shows the continuing dedication of ALDI to enhance sustainable development in our global supply chains.

The ALDI SOUTH Group is also an active member of the amfori Project Group ‘Social Issues in Food’, which unites retailer and producer members of amfori to tackle shared social and environmental issues in the food sector. A representative from ALDI SOUTH chairs the group.

The ALDI SOUTH Group and ALDI Nord Group of companies have joined UN Women, amfori and other leading companies from across Europe to increase their positive impact on gender diversity and inclusion. This is through the Women’s Empowerment Principles (WEPs) Activator programme. The programme will contribute to closing the gender gap in the private sector while building business value. Its aim is to secure business leadership buy-in for gender equality as a foundation for companies and their global supply chains.

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Since 2019

Ethical Trade Initiative (ETI)

In line with our responsible sourcing strategy to mitigate adverse human rights impacts of our business activities, the ALDI SOUTH Group was accepted as a Foundation stage member of the ETI in 2019. ETI is a global alliance of companies, trade unions, and NGOs that promotes respect for workers' rights. Our Social Standards in Production are aligned with the ETI Base Code.

Working together

Since joining ETI, the ALDI SOUTH Group has become a member in several working groups:

Italian Agriculture Working Group to establish an Italian Ethical Trade Forum in order to address social and environmental challenges facing Italian agriculture particularly related to the cultivation of produce.
Peruvian Horticulture Working Group to engage with key stakeholders both local and international - and including workers - to identify and implement collaborative action plans, which address poor working conditions and improve the lives of vulnerable workers.

Over the next five years, the ALDI SOUTH Group intends to address issues within its high priority supply chains via a number of measures.

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Logo of IDH

Since 2019

IDH - The Sustainable Trade Initiative

IDH, The Sustainable Trade Initiative, brings governments, companies, CSOs and financiers together in action driven coalitions. The IDH orchestrates the powers of law, of entrepreneurship and investments to work together to create solutions for global sustainability issues at scale.

Working together

In 2019, IDH created the ‘Roadmap on Living Wages’ to develop aligned solutions for measuring and closing living wage gaps in global supply chains. The ALDI SOUTH Group is part of IDH’s 'Living Wage Steering Committee' to address overall strategic issues related to the Roadmap on Living Wages and oversee its development. Furthermore, the participating companies in the committee will monitor the implementation of the IDH Roadmap, including the development of tools to measure the living wage gap and approaches to close it.

Anke Ehlers, Managing Director Corporate Responsibility International (CRI) for the ALDI SOUTH Group: “A living income and wage are an important part of a successful and fair sustainable supply chain, it is a key way in which the ALDI SOUTH Group can protect human rights and reduce poverty. We are proud to engage with the IDH and work alongside our industry partners to improve the livelihoods of farmers and workers in global supply chains. We believe that the best way to create the greatest impact is through fostering alignment and through the continuation of long-term joint initiatives and partnerships.”

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Logo of Sedex

Since 2017

Sedex - Members Ethical Trade Audit

Sedex is one of the world’s leading ethical trade service providers, striving to improve working conditions in global supply chains. Sedex provides practical tools, services and a community network to help companies improve their responsible and sustainable business practices, and source sustainably. ALDI became a member in 2017. ALDI UK is also part of the Sedex Board.

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Logo of UNGC

Since 2017

UN Global Compact (UNGC)

In August 2017, the ALDI SOUTH Group was the first discount food retailer to join the United Nations Global Compact (UNGC). By joining this initiative, we have committed to implementing the UN Global Compact's ten principles in the areas of human rights, labour, environment, and anti-corruption as part of our corporate strategy and within the scope of our daily business operations.

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