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.

ALDI Producer Assessments (APAs) are audits on food farms and plantations in countries of origin. The audits are conducted by external service providers and enable us to carry out spot checks to verify the human rights situation and working conditions 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 300 ASAs.

APAs: Food

ALDI has been conducting APAs since 2019. All non-compliance is 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 are 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 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. In acknowledgment of our responsibility, we are working to ensure that ALDI standards and requirements are implemented beyond our first-tier suppliers and also at production level.

We have 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 focus on our business partners’ social and environmental compliance management systems as well as their farms’ or production facilities’ CR performance and are derived from our international CR Requirements, which form part of every contract.

CRSE Process

Rating

The fulfilment of our CR Requirements is a key criteria during price negotiations. Business partners are rated from A-D regarding key CR topics, such as their CR set-up and compliance processes, support for and relationship with production facilities or growers and their human rights and environmental due diligence. On the topic of labour rights, we focus among other on how production sites are being selected and on-boarded, whether our business partners conduct internal audits at production sites, how the implementation of corrective actions is ensured and how our business partners support producers with capacity building measures on the topic of human rights.

Business partners with a D rating have to improve their CR performance. They receive ongoing support, but will be delisted if they do not demonstrate improvements over two consecutive years. With the CR Supplier Evaluation, ALDI also aims to understand the challenges that business partners face and develop potential solutions. In line with the target of our roadmap to Vision 2030, we are committed to sourcing 80% of our buying volume in high-risk supply chains from A and B rated business partners.

A Self-Assessment Questionnaire forms the first part of our supplier evaluation. We ask our business partners to share proof, e.g. documents, to underpin their responses. To further validate the responses and assess the situation at production-level, the results of our on-site ALDI Producer Assessments/ALDI Social Assessments feed into the score that then translates into the final grade from A-D. Our business partners are a key part of this production-level assessment, and we evaluate how they are implementing the ALDI CR requirements and managing potential risks in supply chains.

Evaluation

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 develop plans and strategies 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 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, as the majority of our buying volume in our high-priority supply chains will be allocated to such suppliers. Continuous improvement is at the very centre of our CRSE. Our A rated suppliers are expected to continue their efforts year-on-year and focus on improvement measures to maintain their score. As part of our International CR Strategy, we want to use our buying power to respect and support human rights by making our buying practices more sustainable.

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 fifth year. We have integrated shoe business partners into the programme in 2020 and gradually will extend the CR supplier evaluation programme to include additional non-food business partners in the future.

CRSE: Food

In collaboration with internal and external supply chain experts, we developed an approach to evaluate the corporate responsibility capacities and efforts of our food suppliers. The aim is to integrate sustainability-related metrics into our buying decisions which reflect the sustainability performance of suppliers beyond certification. As a first step in 2019, we successfully developed our first evaluation tool and piloted this approach with our current and potential banana suppliers. We have expanded the evaluation in 2020 to include pineapple suppliers and are planning to roll-out in other high-risk food supply chains. In 2021, we successfully integrated our ALDI Producer Assessments (APA) into the CRSE, which allows us to consider production-level compliance with our corporate responsibility requirements and expectations as part of the CRSE. As part of our APAs conducted at farm level, all non-compliances are reviewed with each producer by an external partner.

As part of this process, we aim to understand where the challenges for producers are at farm level when implementing our supply chain requirements. By sharing of best practices with producers, we aim to support improvements in the sector by identifying and addressing human rights issues on farm level.

To incentivise our business partners to continuously improve their performance regarding human rights, gender equality and other key areas, we have publicly committed to sourcing 80% of our buying volume in high-risk supply chains from A and B rated suppliers. Examples of what may constitute an A rated supplier include:

Assessing production sites based on environmental or human rights criteria and selecting sites based on a good assessment to provide incentives for improvements
Demonstrating access to effective and transparent grievance mechanisms is ensured for all workers
Going beyond a certification-based approach and implementing robust internal monitoring at own and third-party production sites
Demonstrating dialogue and continuous support for production sites for the remediation of identified human rights issues
Promoting continuous CR improvements, including on gender equality via capacity building programmes and within all relevant processes.

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 of the origins of the products we sell and the raw materials we use in 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.

Transparency in supply chains: Textiles & Shoes

Transparency: Food

In 2021, we published the names and addresses of our direct business partners (tier 1 suppliers) for bananas & pineapples, coffee and fish & seafood. We will subsequently publish these details for all of our food high-priority supply chains by the end of 2022.

National traceability platforms

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

Transparency in supply chains: Food

Our CR Performance (2020)

The ALDI SOUTH Group have developed and implemented a Social Monitoring Programme (SMP) so that we are able to monitor compliance with our social standards. On-site audits performed by independent experts are a key component of the programme.

Our Goals:

All high-risk non-food supply chains are integrated into the Social Monitoring Programme.
All high-priority food supply chains are integrated into 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.

Our Achievements:

Since 2018, all high-risk non-food supply chains, including garment and household textiles, are integrated into our Social Monitoring Programme.
Since 2020, additionally all high-priority food supply chains of the ALDI South Group, including fish and seafood, oils and condiments and processed produce, are covered by the ALDI Social Monitoring Programme.

ALDI Social Assessments (ASA) 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 and in the scope of our CR Supplier Evaluation Programme (CRSE).

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.

304

Number of ASAs conducted in garment textiles, shoes, toys and household textiles production facilities

ALDI Producer Assessments (APAs)

ALDI Producer Assessments (APA) are audits on food plantations in countries of origin. The audits are conducted by external service providers and enable us to carry out spot checks to verify the human rights situation and working conditions in our supply chains and how our requirements, in particular the ALDI “Social Standards in Production”, are being implemented.

Our Goals:

Verify social and environmental compliance with ALDI requirements at the farm and packing facility level.
Assess our business partners’ relationship with farms and evaluate their processes to support farms in fulfilling our CR requirements and in remediating social and environmental issues.

20

Number of APAs conducted on fruit and vegetable farms and plantations

Corporate Responsibility Supplier Evaluation (CRSE)

The CR Supplier Evaluation (CRSE) is a comparable and transparent evaluation, which focuses on our business partners’ social and environmental compliance management systems and their farm or production facilities’ CR performance, which are derived from our international ALDI CR Requirements, which form part of every contract.

Our Goals:

All business partners in our food and non-food high-priority supply chains will undergo a yearly review to evaluate their compliance with the ALDI CR requirements in the future.
Improve our business partners’ CR knowledge and monitoring skills and empower them to comply with our CR requirements along the supply chain.
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 garment textiles and shoes business partners are integrated into the CRSE

100%

of our bananas and pineapples business partners for our European & US stores integrated into the CRSE

More: CR Performance

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 related to working conditions and to 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 our own ALDI Social Assessments in the production facilities used for ALDI production and provide support to business partners on how to implement our CR requirements.

More: Company Profile

Male and female people sitting around in circle

Project in Bangladesh

ALDI Factory Advancement (AFA) Project (2013-2020)

ALDI is committed to promoting human rights in the garment industry. With the ALDI Factory Advancement (AFA) Project, the ALDI SOUTH Group, together with ALDI Nord, has introduced a programme which delivers change in factories that produce our garments in Bangladesh.

Running from 2013 to 2020, the AFA Project placed factory workers and managers at the centre of its activities to find sustainable solutions for improved workplaces. Its core principle was the promotion of dialogue and cooperation between workers and managers. To date, approximately 85,000 workers and their managers of 40 participating factories have benefitted from the project and experienced positive changes in their day-to-day working environment.

More: AFA Project

Picture drawn from a child showing the scene from a child care service

Project in Bangladesh

AFA Project Plus for child care services (2016-2019)

From 2016 until 2019, the AFA Project PLUS addressed the critical need for quality childcare for the children of working parents in factories that produce our textile goods in Bangladesh. ALDI supported selected factories participating in the AFA Project in improving their internal day-care services.

Many workers are reliant on these services due to financial constraints and a lack of alternative care options. Together with local non-governmental organisations, we trained caregivers, childcare centre supervisors, nurses and parents working at the factory.

More: AFA Project

Special focus

Bangladesh

ALDI SOUTH was one of the first signatories of the Accord on Fire and Building Safety in Bangladesh in 2013 and 2017. By signing this independent, legally binding agreement we have committed to improve the safety of the Ready-Made Garments (RMG) factories in our Bangladesh supply chain.

At the beginning of September 2021, the ALDI SOUTH Group were one of the first brands to sign the new legally-binding International Accord for Health and Safety in the Garment and Textile Industry that will continue to make garment factories in Bangladesh safer for workers. The new “International Accord for Health and Safety in the Garment and Textile Industry” is the result of long and intensive negotiations between trade unions and brands. We fully support the new agreement and we believe that it will help us to continue our engagement for fair and safe working conditions in Bangladesh.

As Bangladesh is one of our most important sourcing countries, we have intensified our regular ALDI Social Assessment (ASA) activities in this country to step up cooperation with business partners sourcing from there.

With the ALDI Factory Advancement (AFA) Project, the ALDI SOUTH Group, together with ALDI Nord, has introduced a programme, which delivers change in factories that produce our garments in Bangladesh.

More on 'AFA Project'

COVID-19 emergency relief in Bangladesh & Myanmar

ALDI & CARE support female garment workers

The impact of the COVID-19 pandemic on garment workers has been devastating. Women make up the majority of the garment sector workforce and they have been affected the most. In 2020, CARE International and the ALDI SOUTH Group teamed up to protect the rights and needs of women in the garment sector in Bangladesh and Myanmar during the pandemic.

These efforts resulted in nearly 5,000 female workers receiving hygiene kits while 1,600 workers received household handwashing facilities in Bangladesh. In Myanmar, we were able to reach more than 76,000 factory workers with sanitising and disinfecting materials and provided face masks for more than 28,000 workers.

More: CARE

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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 2020

Consumer Goods Forum (CGF)

In 2020, the ALDI SOUTH Group joined the Consumer Goods Forum (“CGF”), a global industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category, and format.

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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.

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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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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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