Case b: Kesko, K Group, Finland
UPSTREAM: Greening suppliers
Who: Kesko, K Group
Objective: To promote social responsibility of suppliers, to ensure that the products offered to consumers have been manufactured in conditions that are socially and ethically acceptable.
Description of initiative: Kesko, has worked for 10 years on monitoring the social quality of the purchasing chain using the SA8000 and BSCI standards. At the end of January 2010, Kesko had 30 suppliers in six countries that had been granted the SA8000 certification. The number of Kesko's suppliers with SA8000 certification has nearly doubled in two years.
Kesko focuses on promoting BSCI audits of its suppliers. Kesko’s objective for 2009 was to have 59 initial audits and 24 re-audits. In February 2010, Kesko had 119 audited suppliers (35 in February 2009) in the BSCI database. The total number of initial audits carried out at suppliers' premises during the year was 55, while the number of re-audits was 53. The number of employees involved was more than 52,000. Kesko also had 33 suppliers that are members of BSCI and thus promote audits in their own supply chains.
In October 2008, Kesko started monitoring activities in China. The purpose of the initiative is to support Kesko’s responsible purchasing with all of Kesko’s division parent companies importing from China participating in the project. A team of two experts operating from Shanghai guides, trains and oversees Kesko’s Chinese suppliers in issues related to the terms of employment and working conditions, and the observance of environmental and chemical regulations. The monitoring principles of Kesko are in compliance with the terms of the BSCI auditing. The ultimate aim is to get the factory to apply for either the BSCI audit or the SA8000 certification made by a third party. In 2009, the team made 161 factory visits to the premises of 50 suppliers.
Kesko has also launched a supplier monitoring database called SUMO, which is gradually adopted in 2009- 2010 by Kesko's division parent companies and those subsidiaries that import from high-risk countries. SUMO allows online and real-time control of the supply chain's performance and risks. SUMO collects supplier-related documentation in one location accessible to all users and saves information on any changes, which makes the source of the change easily traceable. In the database, Kesko can group all its suppliers in high-risk countries into risk categories and the information can be shared without delay between different Kesko companies. Because the database is web-based, Kesko's buyers and monitoring officers in China can use it both in and out of the office. Information on the factories monitored is transferred quickly and safely to buyers in Finland.
Effect of initiative: Rapid progress was made in 2009. With more than 500 purchasers as BSCI members, the group is starting to be a considerable market force, which contributes to the manufacturing industry's interest in fulfilling the BSCI requirements. Many countries have taken BSCI requirements into account when improving their labour protection control in order to safeguard exports. In 2009, Kesko participated in enhancing working conditions and employee rights in over 250 supplier companies, which is twice as many as in 2008.
Time period: 2000-ongoing
Future work: Kesko continues implementing and expanding its supplier monitoring system, which involves work for many years ahead.
Contact: Marjut Lovio, Kesko ( )