Ensuring our products are sourced ethically
During the year there were five key initiatives aimed at enhancing Kmart’s ethical sourcing program:
- Kmart and Target commenced work on establishing a combined Department Stores (Kmart/Target) Ethical Sourcing Program. The combined program will ensure consistency in ethical sourcing policies and procedures between Kmart and Target, and achieve efficiencies in program implementation, monitoring and reporting.
- Kmart joined the ILO/IFC Better Work program as a Buyer Partner. The Better Work program aims to make sustainable improvements in working conditions within the garment industry and make the sector more competitive overall.
- Kmart continued its participation in the Action, Collaboration, Transformation (ACT) living wage collaboration. In the past year, ACT was established as a foundation in the Netherlands, an Executive Director was hired and secretariat established in Berlin, and ACT was formally recognised at the G20 Labour Ministers meeting in Hamburg.
- Kmart trialled a wage monitoring system for suppliers in Bangladesh to improve transparency and enable tracking of wage movements over time.
- Kmart along with other brands signed an agreement with IndustriALL Global Union and UNI Global Union to extend the Bangladesh Accord on Building and Fire Safety to 2021.
During the year, Kmart also conducted 619 ethical sourcing audits of our suppliers' factories. Although the majority of factories were approved or conditionally approved, our audit program and ongoing monitoring efforts identified five critical breaches of Kmart’s Code in the past year – all breaches related to attempted bribery. All of these factories have now been deregistered, meaning no further orders can be placed.