Over the last two years, there has been significant change in the global supply chain, due to the impacts of Covid-19 and the war in Ukraine. This has resulted in global shortages of commodities and ingredients that are important for our business. We have needed to react fast to these changes to keep our operations running, and so our sourcing and procurement practices have been far more reactionary in nature. This has made making planned and strategic progress in ethical sourcing and preferential procurement more difficult, see enhanced livelihoods.

Approach

Ethical sourcing is a key tenet of our commercial processes and is subject to continuous improvement as we refine our supply chains. We learn and drive improvements in our approach by participating in dialogues and building relationships with potential partners. We engage with government on key issues and legislative developments, and participate in facilitated discussions through forums created by organisations such as the National Business Initiative (NBI), Consumer Goods Council of South Africa (CGCSA), World Wide Fund for Nature (WWF), and UNICEF.

Our ethical sourcing policy, approved by the board in 2018, is an uncompromising commitment to working with our suppliers to build a sustainable future anchored in sound governance. The policy encompasses the responsibilities of our staff and our suppliers to mitigate supply chain risk and build consumer and stakeholder trust. The policy directly aligns with our code and all other ethics policies, and explicitly integrates and articulates the key ethical principles to be adhered to, including but not limited to: human rights and labour practices see ethical behaviour), preferential procurement see enhanced livelihoods, and environmental protection see energy and climate change. Our ethical sourcing policy is available at www.tigerbrands.com

Management

We currently work with our suppliers to protect human rights, uphold fair labour practices, tackle plastic packaging waste, promote animal welfare and source sustainable palm-oil and cocoa. We aim to engage our suppliers more consistently and work together more closely to graduate our standards, and advance and assure our ethical supply chain practices in respect to environmental, social and governance related concerns.

We select new suppliers and routinely assess existing suppliers against supplier risk specifications relating to financial management, criminal activity, human rights (including child and forced labour), labour relations, wage, safety, quality, social, environmental, and compliance practices (including accreditations). All our suppliers are requested to sign an annual commitment of compliance to our ethical sourcing policy, including a signed human rights declaration in line with our human rights policy see ethical behaviour. We have zero tolerance for non-conformance with our requirements. In the case that we become aware of any significant issues or misconduct by a supplier, we engage the supplier with the intent to resolve the issue, may initiate a supplier audit, and possibly, where appropriate, cancel contracts and find alternative suppliers. Our process for obtaining and tracking the ethical sourcing declaration with our suppliers is currently very manual, and we plan to digitise the process in the next few years.

In recent years, we have focused on strengthening the integration of food safety and quality see food safety and quality, and fraud risk see ethical behaviour due-diligence processes into our risk and internal auditing processes, for our own operations and suppliers. Going forward, we plan to strengthen these processes in relation to human rights and environment-related aspects.

Our current engagement on agricultural practice in our supply chain, for example, is primarily governed by the imperative to produce products that are safe, meet all regulatory requirements, and fulfil our high standards for quality.

Palm-oil and cocoa (liquor and butter) are important ingredients in our chocolate business. We are concerned about deforestation, loss of biodiversity, and the use of peat lands in the production of these forest commodities. To address this, we set caveats on our sourcing of these raw materials that foreground traceability and sustainable certification. This safeguard provides some assurance that our supply chains for palm-oil and cocoa are anchored by the principles and standards of sustainable production. Our preferred suppliers Cargill, Guan Chong, Barry Callebaut and Olam have programmes in place to lift farmers out of poverty, eradicate child labour, become carbon and forest positive, and source sustainable ingredients. All our suppliers are members of the International Cocoa Organization (ICCO), Fairtrade and the Supplier Ethical Data Exchange (Sedex) and are audited on a regular basis by these bodies to ensure compliance.

Performance

In 2022, we unfortunately did not complete our ethical sourcing declaration process, due to a lack of capacity in our procurement department as we struggled to fill vacancies this year. We will resume our ethical declaration process in 2023.