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2019 Statement - Combating Modern Slavery

“Slavery is illegal at all times and in all places. It is officially banned from our economic system. Yet while states have formally abolished slavery, informally economic systems continue to tolerate and generate practices that generate similar results. Although slavery is illegal, there are currently an estimated 40.3 million people in modern slavery or victims of human trafficking. That is around 1 in every 185 people alive.”

- A Blueprint for Mobilizing Finance Against Slavery and Trafficking,

September 2019

1 in 4 victims are children.

- A Blueprint for Mobilizing Finance Against Slavery and Trafficking

September 2019

 

An estimated 40.3 MILLION people are victims of modern slavery or human trafficking.

 

‘Modern Slavery’ is the phrase used to describe the crimes of human trafficking, slavery and slavery-like practices such as servitude, forced labour, forced or servile marriage, the sale and exploitation of children, and debt bondage. A common thread runs through all of these offences: they involve one person depriving another person of their liberty, in order to exploit them for personal or commercial gain.

This, our fourth Modern Slavery Statement has been published in accordance with the UK Modern Slavery Act (2015). Section 54
of the MSA requires every organisation with a global annual turnover of £36 million or more, which carries out business (or part of a business) in the UK, to produce a slavery and human trafficking statement for each financial year. The statement should set out

the steps a business has taken that year to identify and eradicate modern slavery from its business and its supply chain. Lush’s financial year runs from July to the end of June.

In addition to the UK Modern Slavery Act, similar legislation has been introduced in other parts of the world (the California Transparency in Supply Chains Act (2010), French Duty of Vigilance Law (2017) and Australian Modern Slavery Bill (2018)) which is an important step in widening the reach and discussions around this important topic.

Publishing a Modern Slavery Statement is a step towards transparency with customers and a businesses wider stakeholder community and can encourage change.

This statement details what Lush is doing to combat the risks of modern slavery and human trafficking in our own business and in our supply chains provides an update on the activities and commitments detailed in our previous (third) Modern Slavery Statement and the steps taken during the period covered by the last statement (our financial year July 2018 - June 2019). The statement also outlines
our commitments towards mitigating the risk of modern slavery in our supply chain going forward.

 

Our Business - Organisational Structure

 

 

Lush is a UK cosmetics brand, with its head office in Poole and an additional office in London. Lush was started in 1995 by a close-knit team who have continued to work together for over 40 years (2020 marks Lush’s 25th anniversary).

The first Lush shop opened at 29 High St, Poole in April 1995, with products being made in
a small space above the shop. Lush places emphasis on the benefits of using the finest quality fresh, natural ingredients in our products for their nutritious effects on the body and mind. We strive to ensure our products reach our customers in the freshest condition, when they are most potent and effective – it’s at the heart

of our philosophy. We use ingredients such as fruits and vegetables, herbs, flowers, butters and essential oils - organic wherever possible - and with minimal synthetic preservatives.

All products are vegetarian, and the majority are vegan too.

Lush’s global expansion whilst rapid has been carefully controlled. 24 years on Lush has over 100 stores in the UK, 900+ shops worldwide

and is present in 50 countries, with manufacturing operations in 6 countries, employing over 18,000 people. We have also opened Lush Spas in
select locations across the UK, France, Korea, Japan and Hong Kong and have more planned. We invent, manufacture and retail our own range of unique products so that we can be confident that our beliefs and ethics are carried through at all stages.

We are very proud to offer a range of fresh, handmade, cosmetic products which are all manufactured in house at our six manufacturing sites based in the UK, Germany, Croatia, Japan, Australia and North America and sold through our retail shops and digital channels.

At the time of writing this statement, a total of 1220 product lines are made (including gift sizes) at our manufacturing sites.

The Lush business is run in accordance with
a set of founding ethical principles written by
our founders at the very beginning of Lush’s life, commonly known as our We Believe Statement. These principles underpin all that we do and run through every vein of our business.

 

Our Business - Our Supply Chains

 

Lush products are for sale in our shops and our website invented in-house and manufactured by our own factories. The Creative Buying Team manages the supply chains and together with the Ethical Compliance Team, who are part of this team, ensure product and raw material suppliers are selected based on ethical and sustainable as well as commercial criteria.

Product supply chains are complex, involving
a number of different processes - Lush’s supply chains are no exception, although we try wherever possible to buy as direct as we can most supply chains are made up of several tiers stretching over numerous countries.
We source materials from 93 countries globally.

 

 

We have many supply chains that contribute
to the operation of our business and as the
Lush business continues to grow in size, so do our supply chains. For example, our raw material supply chains are made up of a network of approximately 340 suppliers all over the world. This number continues to evolve as we discover new materials, meet new suppliers and source materials to meet the growing business needs.

We are committed to sourcing and developing top quality, ethical materials for our products through a resilient global network.

We also grow materials ourselves via agricultural projects and direct partnerships around the world. From the early days of buying, we learned the hard way, from the adulteration of our essential oils, that it is vital to gain an understanding of each material, the local impacts of its production and who is involved in its supply chain in order to ensure top quality ingredients with no exploitation at any of its stages. As a business, we realised that we could have both a positive and negative impact through our business operations. Since then, we have aspired to maximise the benefit of our actions, relying on positive and open relationships with our suppliers and producers to find a path to a truly ethical and sustainable business that will last into the future.

Our vision is that each and every ingredient we purchase is helping contribute to a positive future. We are already building a web of like-minded pioneers who wish to become part of the answer to the problems we all see every day. Through the ingredients we buy and through the people we meet and partner with, we are finding that some of these answers come through reciprocal trade. That means finding ways in which we can grow, produce, manufacture and ship our goods that are truly sustainable.

In fact, we have ceased to aim for just sustainable but wish to reach beyond that to regenerative - making sure that our purchases put back more into the soil, to the community and the natural world than they take out and at the same time provide profit and a viable business for all of us.

The risk of modern slavery lies in all tiers of a company's supply chain. For Lush one of these high-risk supply chains was mica which is why we have moved away from sourcing natural
mica and why we made the decision to go completely natural mica-free as of the 1st January 2018.

Another high-risk industry is mining. We are currently in the process of putting together an internal policy on purchasing practices around mined materials. Our focus on the palm industry began many years ago as we realised the destructive practices involved but we also now regard it as a high slavery risk. So Lush is currently in the process of identifying and eradicating the last remnants of palm from our supply chain.

“Non-governmental organisations (NGOs) and unions report that even plantations that have been certified a ‘sustainable’ often show signs of child labour and forced labour”

- Greenpeace, Final Countdown Report, 2018

 

Our policies and practices in relation to slavery and human trafficking - Minimum requirements

We have several policies in place that help us to enforce the standards set to prevent the risk of Modern Slavery in our supply chains and also encourage disclosure of any such practices within our business and throughout our supply chains. These policies are reviewed, sent out and acknowledged by new and existing suppliers annually.

As a minimum requirement all our suppliers need to comply and acknowledge the following policies / documents (in addition to our strict Non-Animal Testing Policy and declaration)

Our Anti-Slavery & Human Trafficking Policy

This policy clearly defines Lush’s position on Modern Slavery and sets the minimum standards that we expect all of our suppliers to comply with to ensure the fair treatment and well-being of all workers in our supply chains. Any employee who breaches this policy will face disciplinary action, which could result in dismissal

for misconduct or gross misconduct. We may terminate our relationship with other individuals and organisations working on our behalf if they breach this policy.

Our People Care, Earth Care and Fair Share Buying Policy

These buying policies consist of legal requirements, non-negotiable standards and progressive standards. The policies help us to ensure that our supply chain matches our core values which include the Anti-Slavery & Human Trafficking policy.

Our Buying Policy Supplier Survey

The purpose of this online survey is to open a dialogue and to gather the information that will help Lush identify positive practices in our supply chains or focus on what support might be needed to bring about improvements. This is sent out annually for all direct suppliers to complete.

Our Whistleblowing Policy

Encourages our employees and anyone in our supply chains to report concerns of illegal or unethical malpractice within our business or supply chains. The anonymity
of whistle-blowers and anyone raising concerns or bringing to our attention
practices that do not comply with our policies is protected. Our central whistleblowing email address ‘[email protected] is monitored by our Lush UK People Experience Team and whistleblowing cases will be investigated and resolved in the shortest time possible.

 

 

Breaches to these policies are not taken lightly. Where there is opportunity to influence change we will work hard with our suppliers to do so, but we will not hesitate to cease trade with any organisation where breaches of our policies are severe. The additional information from our Buying Policy Supplier Survey enables us to benchmark suppliers and practices to keep tracking progress against each of the areas covered by our buying policy.

Taking responsibility - Governance

The Lush board of directors have overall responsibility for ensuring Lush’s compliance with the Modern Slavery Act and that all those under our control comply with it. Management at all levels is responsible for ensuring those reporting to them understand the issue of modern slavery and comply with this policy.

Our training is rolled out to key management within property, recruitment, buying, travel, imports, digital, IT, and design.

 

 

Training and Raising Awareness

Over 18.000 people work for Lush globally - even more around peak times like Christmas when we recruit seasonal staff. We want all employees to have an active and engaged understanding of the risks of modern slavery to our business.
In November 2018, we have started to roll out training to the management of key teams within the business to educate them on these risks
and indicators of modern slavery. These teams included Property, Recruitment (Head Office & Manufacturing), Buying (Raw Mats & Packaging), Travel, Imports, Digital, IT and Design and we
aim to roll out this training to new areas of the business over the next year. With this experience, our staff are more likely to identify possible warning signs and raise issues if a supplier
looks like they might be slipping below our expected standards.

Our Anti-slavery and Human Trafficking policy and Modern Slavery statements are published on our website where staff, suppliers, customers and anyone with an interest can read about the risks to our business and the steps we are taking to combat modern slavery.

During our reporting period 2019/20 we will roll out updated training for our buying team and online training for all managers of all key departments. Relevant members of the Ethical Compliance team will attend the latest Stronger Together Modern Slavery training sessions & work on an improved training session that can be given to internal Lush teams and rolled out accross the business. We’ll also be exploring options for supplier training.

Key performance indicators to measure the effectiveness of steps taken in 2018/19 & what
Lush wants to achieve during 2019/20. Due diligence processes / Risk assessment and management

 

We use key performance indicators to measure how effective we’ve been in combating slavery and human trafficking in our business and supply chains.

 

These are the KPI’s Lush set for this year (reporting period 2018/19) to measure our success in combating modern slavery:

 

• Number of suppliers visited and audited by our Buying Team • Number of suppliers audited by a third party
• Number of slavery reports received
• Level and depth of Internal and External training
• Number of suppliers that completed our buying questionnaire
• Number of development targets met by suppliers to help improve working conditions
• Identifying high risk countries and industries for Modern Slavery

This year (2018/19), we have been focusing on strengthening our internal processes in order to be able to monitor and address modern slavery risk as best as we can. Early 2018 saw the introduction of the Lush People Care, Earth Care and Fair Share policy, with the People Care section being based on the Ethical Trading Initiative Base Code and International Labour Organisation’s Fundamental Conventions. It defines the minimum standards we require from our suppliers. The policy includes a prohibition of forced, bonded or involuntary labour and also covers these areas:

• Employment freely chosen
• Freedom of association and the right to collective bargaining
• Safe & hygienic working conditions
• Child labour
• Legal minimum wages and legally mandated benefits
• Working hours
• Discrimination
• Regular employment
• Harsh or inhumane treatment
• Homeworking & subcontracting
• Use of Genetically Modified Organisms
• Environment and biodiversity
• Chemical management practices
• Animal Welfare in Agriculture
• Soil Health
• Highly Hazardous Pesticides
• Forestry Management
• Fair Share
• Legal Obligations

We embarked on a trial with this brand new policy document in 2018 to gather feedback from suppliers and also sent out an online supplier survey.
The buying policy was circulated to all Lush raw material and packaging suppliers in May 2018.

The online buying survey was circulated to all raw material and packaging suppliers in August 2018. Of the top 50 suppliers, by spend, 97% completed the policy declaration and online survey.

We have since refined the Buying Policy and it has now been adopted as an official Lush policy (in October 2019) and we are going to roll this out to our global markets in 2019/20.

The online supplier survey covered all areas of the Lush People Care, Earth Care and Fair Share policy. From this we have created a dashboard that can easily be used by buying team to establish how suppliers are doing in each policy section. This has been very useful as it made a significant amount of data usable and enabled the buying team to have better conversations with suppliers around these topics. We have however realised that this dashboard is not enough. We identified the need to have more live data and risk data identified by country and industry.

We embarked on a journey of speaking with providers of supply chain risk management and transparency platforms and after benchmarking several providers we made a decision to use SupplyShift. The purchase of this software/platform was signed off by the business in May 2019.

Supplyshift is a technology solution that helps to automate a number of ethical sourcing practices across a global supply chain. It covers supply chain mapping, supplier benchmarking, risk analysis, reporting and can help with gaining more transparency. It’s a tool that will support the Lush buying team to visualise the supply chain any possible risk and information in one place. By consolidating all the information about the supply chain in one place it allows for more responsible and productive decisions to be made. In short SupplyShift helps with supplier management, responsible sourcing and supplier engagement.

The use of SupplyShift will also help us to raise standards and enforcement measures throughout our supply chains, encourage disclosure, enable us to review policies & get acknowledgment of our policies from suppliers annually, benchmarking suppliers & tracking progress over time, help us decide where to utilise the help of third party auditing and set development targets for suppliers who might not meet our buying policy standards yet.

Further to SupplyShift we have also decided to work with Maplecroft, a global research house and data analytics organisation that helps with data modelling, risk analysis & forecasting at country and industry level. This enables Lush to have access to 10+ years of Maplecroft data spanning 200 risk indices across 198 countries.

We are currently (December 2019) in the implementation phase of the Supplyshift and Maplecroft systems and are excited about this new collaboration and to see where this will take us over the next year.

We have also set up a whistleblowing email address ‘[email protected]’ which is published on the Lush website.

Where possible, we work directly with suppliers and producers, but long-distance relationships take work which is why we conduct regular visits to our overseas ( and UK) suppliers to see their operations. Our buyers take the information gathered from our online survey along to these visits as it forms a good basis for an internal audit.

There are many ways that a company can ensure that their internal practices are transparent and honest – and one of the best ways is to allow oversight of these internal practices by outside agencies. There are several areas of our business where external bodies exist that can check and verify our work. Expert eyes from outside the company can give reassurance and confirmation to customers that we are doing the things we say in our written policies and give guidance to us for future developments and improvements.

In 2019/2020 Lush will undergo the Stronger Together Organisational Performance Assessment. The OPA has been developed to support companies to evaluate their progress in tackling modern slavery and to inform their next steps
to improve the scope and effectiveness of their programmes. The OPA analyses gaps, reports on strengths and provides detailed recommendations and action plans to support a business to make further organisational improvement.
The assessment is delivered by a trained and approved business and human rights expert consultants and will provide independent verification of the company’s progress in tackling modern slavery.

At the end of the assessment, Lush will receive an overview report with progress scores across all policies and practices we have in place to tackle modern slavery, as well as detailed expert recommendations to support step by step change and ongoing continuous improvement.

Our UK based creative buying team and ethical compliance team works hard to look after our policies. They make sure the policies are implemented in practice on a daily basis and work closely with our global buying teams based in our five other manufacturing countries.

They look into all new suppliers to ensure everyone in our supply chain, that we source from and give our money to, is in line with our non-animal testing and other buying policies.

We care about the welfare of everyone in our supply chains - we have processes in place for our raw material supply chains and in 2019/20 we are going to work on reviewing and revising processes for other supply chains within the business.

Percentage of donations to human causes related to Modern Slavery

 

At Lush, we like to look after those who look after others, and we are committed to supporting small, grassroots groups and other non-profit Human Rights organisations.

Globally we have made 867 donations to Human Rights groups (including groups supporting anti-slavery practices such as human trafficking) - £4.34M were donated in total to these groups. In the UK alone we have made 284 of these donations totalling £781K. A full list of the charities we have supported can be found on our website.

We encourage Charity Pot applications from all Human Rights organisations through our website. Please see our Charity Pot Guidelines for more information.

This statement is made pursuant to section 54 (1) of the Modern Slavery Act 2015 and constitutes our Group’s slavery and human trafficking statement for the financial year ending 30/06/2019. It has been issued on behalf of the Lush Group, approved by the Lush board of directors on the 31st of December 2019 and covers all UK Lush Entities including Lush Ltd, Lush Retail Ltd, Lush Manufacturing Ltd and Lush Cosmetics Ltd.

Signed by: Hilary Jones, Ethics Director Date: 31st December 2019

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