At Flying Tiger Copenhagen, we want to inspire people to make the things they care about happen. We love to put a smile on peoples’ faces while giving them the things they need, the things they dream of and the things they didn’t even know existed. All at affordable prices. In order to do so, we recognize that we depend on the environment we operate in. We want our customers to know that when they buy a product from Flying Tiger Copenhagen, we strive to ensure that it has been produced in respect of ethical, environmental and social standards and is safe to use. We believe this is critical for the success of our company, to protect our brand and to advance better social and environmental conditions in global supply chains. Consequently, our commitment to conduct our business ethically and responsibly cuts across the full value chain from sourcing to shipping and sales in stores.
Our responsibility framework ‘It’s about caring’ unites our five priority areas:
1. People 2. Products 3. Planet 4. Partnerships 5. Policies
Flying Tiger Copenhagen is held accountable for creating a work environment that respects our employees’ human and labour rights and allows them to thrive as professionals. Our Human Rights Policy outlines our standard to comply with all applicable UN and ILO conventions and applies them to our employees working across all levels. In 2018, we investigated how far our partners have incorporated due diligence processes for handling employee complaints. It became apparent that most of our partners have appropriate processes for mediating employee complaints in place. In addition to that, we will investigate potential developments in collaboration with our partners.At Flying Tiger Copenhagen, we rely on our ability to attract, motivate and retain highly qualified employees at all levels of the organisation, from store staff and managers to creative and administrative people at head office. As we aim to offer an engaging workplace with equal opportunities for all, we employ people with a wide range of nationalities and educational backgrounds. Now that we are a truly global company, it is a particularly crucial task for us to keep working on the issue of diversity to live up to our values of being a welcoming and inclusive organisation. At corporate level we employ 58% female and 42% male employees, while three of our nine Senior Managers are female. In Flying Tiger Copenhagen it is our ambition to have more diversity in our Board of Directors. In 2018 we had a replacement, where Morten Hummelmose was replaced by Mads Ditlevsen, who is partner at EQT and head of EQT’s office in Denmark. As the owners of Flying Tiger Copenhagen need to be represented in the Board of Directors, it was not possible to find a female replacement of Morten Hummelmose. Flying Tiger Copenhagen will continue to work with diversity in our Board of Directors, and it is still the ambition to have female members of the Board of Directors by 2023.
As we believe that it is particularly important to recruit the right profiles for our company, we use several personality assessments to assess our candidates against our organisational culture and values. In September 2018, we set up a Talent Acquisition function with the specific aim of providing more internal expertise in the way we find the appropriate candidates and ensuring they have a positive recruitment experience with us.
In 2018, we also introduced HR Business Partner roles to ensure that HR acts as a strategic partner for the business. In 2019, we will keep strengthening this vital role and further focus on supporting our employees at all levels to ensure they have a great working experience at Flying Tiger Copenhagen. In addition to that, we will go through a digitalisation of our processes and tools to ensure an agile support function.
In the UK, the Gender Pay Gap legislation, under the Equality Act 2010, requires an employer with 250 employees or more to publish their gender pay gap for their employees.
Read our UK Gender Pay Gap report 2017 here
Read our UK Gender Pay Gap report 2018 here
Our products are the very core of our business. We want to offer our customers useful, fun and inspiring products at affordable prices. We want our products to be safe and therefore take significant measures to ensure that all items have been produced under humane and responsible conditions in respect of international social, environmental and ethical standards.
We do not produce the products ourselves and in 2018, we purchased products from around 350 suppliers worldwide. Approximately 60 percent of these are based in China; 30 percent are based in the EU and the remaining 10 percent are spread across the world, in countries like Turkey, Vietnam, India, etc. Most of our direct suppliers are trading companies who source from a range of different factories, enabling us to offer a broad array of novel products across a variety of categories.
During 2018, we continued to gradually reduce the tail of small suppliers to strengthen partnerships with our largest trading companies. The objective has been to ensure more effective supplier management and compliance with our requirements. In 2019, we will revise our sourcing strategy in order to further simplify our supply chain. We will also introduce more requirements to our existing and new partners, to assure compliance and transparency in our supply chain.
Product safety process
All products go through our product compliance process to ensure they are safe and compliant. This means that all materials must be approved prior to purchase through our approval process. The process is complemented by our test programme, through which we ensure that our products are tested for hazardous materials. With very few exceptions, all our products are tested in the pre-production phase. For those products considered to be high risk, the testing is repeated during mass production. When we define our requirements, our policy is to comply with the EU requirements or the applicable national legislation, whichever sets the highest standards. In a number of areas, we go beyond the legal requirements. This means, for instance, that we prohibit chemicals like triclosan, formaldehyde, phthalates (all types of phthalates), formamide and coating materials that are based on halogens (bromine, chlorine, fluorine etc.). We work continuously on improving and developing our FTC product compliance requirements, leading to safer products. This is done through closer cooperation with our suppliers, helping them to understand and implement our restrictions. In 2018, we had one product recall of light clay with one non-compliant batch. We mitigated the risk by immediately recalling all batches.
Zebra Quality Programme
With a strategy of improving the quality of our products, Zebra developed a Quality programme focusing on physical inspections during production. A team of quality inspectors, a quality manager and supporting personnel was established in Shanghai. Selection of the products subject to quality checks and description of the quality check points are performed at the headquarters in Denmark, but the inspections and handling are done by the local team and in the local language.
We develop the Quality Programme continuously by including more aspects leading to a higher quality in general, e.g. pre-evaluation, mold prevention and hygienic standards. The stronger quality focus also creates a higher awareness among our suppliers, leading to a continuously higher quality level for all products.
With respect to our supply chain setup, focus on responsible sourcing ensures that we account for human rights and labour rights and adverse impacts on workers and communities in the production areas. Through our social compliance process, we work to ensure that factories selected for production on our behalf can meet our requirements, and that the people producing our products are treated with respect and provided with fair and safe working conditions. We have an ongoing focus on continuously improving our social compliance process and our performance. In 2018, we strengthened our cooperation with buying and product quality teams, measured progress on individual suppliers, allowing for an even more systematic and transparent process and cooperation.
The process follows three steps.
Social compliance process:
Our Social Compliance Process:
1. Commitment to the Zebra Supplier Code of Conduct
All product suppliers must sign the Zebra Supplier Code of Conduct. The Code is based on international standards as defined by the United Nations (UN) and the International Labour Organisation (ILO). It defines our requirements in the areas of workplace health and safety, terms of employment, working hours, wages, environmental protection and business ethics. Among other things, it prohibits child labour, forced labour, dangerous or severely unhealthy working conditions and abusive disciplinary practices. No purchases can take place without a valid Code in place. Commitment to the Code must be renewed every 2nd year in writing.
2. Risk assessment and factory audits
Factories are selected for audit in a two-step process:I. Factory information for all items is gathered from the Bill of material (BOM) tool and items are automatically assigned a risk rating based on:
i) country of production; ii) purchase volume; iii) product category.
II. The automatic risk rating is combined with a manual process looking at: i) brand exposure of product; ii) audit history and performance of factory, including sub-contracting practices.
Items rated high-risk are selected for audit. On-site factory audits are carried out either by our China-based audit team or by Elevate, an organisation specialised in social compliance factory audits. All audits follow the Zebra Audit protocol that consists of 115 questions and assess practices in the areas of ethics, sub-supplier management, human rights, labour practices, and the environment. Audits include a combination of site assessment, documentation review, management interviews and anonymous workers' interviews. Audits can be announced, semi-announced and unannounced audits depending on progression of audits and types of findings in previous audits. All factories are evaluated from A (compliant) to E (Zero-tolerance).
3. Improvement and remediation
All factories, apart from A-rated factories, must implement a corrective action plan (CAP) within a defined timeline. The CAP is reviewed regularly until closure by Zebra, and the factory must go through a re-audit to verify improvements. Re-audits are semi-announced or unannounced. Factories that present severe zero-tolerance issues are rejected (e.g. use of child labour, forced labour, severe safety and human rights issues, attempted bribery of auditor). In some cases, where good faith and procedural errors can be verified, the factory is put through a requalification process which includes training, a strictly monitored improvement plan and a re-audit. In case a supplier and/or factory is unwilling to improve, we will stop the collaboration permanently.
In 2018 we conducted more than 300 audits at factories in Asia. The most common issues in 2018 that required improvement were ensuring a safe and healthy working environment, tackling pollution and reducing overtime. Our target for 2019 is to maintain the number of audits and pursue greater transparency by introducing a pre-screening through the entire range of assortment, and further build the capacity of our suppliers.
Supplier engagement and capability building
We consider our social compliance processes a critical tool to ensure compliance in our supply chain. But we have also learned that to drive genuine improvements, we must combine these processes with proactive capacity building and training of our suppliers and their factories. We believe in a fair partnership based on transparency and trust, completed with the ability to check and drive improvement.
In 2018, we continued to establish a closer engagement with our suppliers. Our local office in Shanghai is growing, and now hosts the quality, social compliance and merchandising teams. That allows us to keep closer dialogue with our suppliers and develop the long-term partnerships.
In 2018, for the third year we repeated a week of intensive product compliance, quality and social compliance training in Shanghai with 38 of our key suppliers, responsible for about 70% of our annual procurement. The training included practical instructions on our requirements within product compliance, quality and social compliance as well as guidance on how to build management systems to monitor and promote performance among their core suppliers. We believe this cascading of capacity building and management systems is a precondition for sustainable change, and as such a strong supplement to verification via Zebra audits and controls.
The annual training is complemented by individual dialogue meetings with our top 10 suppliers responsible for more than 60% of annual procurement throughout the year. Furthermore, bespoke training of these suppliers’ core manufacturers is an integral part of our preventive and corrective action activities. During 2018 we conducted training sessions and assigned e-learning sessions to more than 90 factories. In 2019, we will continue the supplier engagement work with further strategic training, developing more concrete written guidelines that can be shared with a larger number of factories, as well as reviewing our policies and strengthening our internal commitment.
As a globally operating retailer, we have a responsibility for the impact we pose on the environment, such as emitting greenhouse gases and plastic pollution. Our Environmental policy expresses our commitment to protect the environment and the climate by minimising our negative impact. A significant part of our impact derives from production in our supply chain. Consequently, our Supplier Code of Conduct further specifies our requirements for the environmental awareness and conduct of our suppliers.
Apart from seeking to minimise impact in the supply chain, we focus our resources where Zebra, as a retailer, has the highest impact. This includes reducing energy consumption in stores and offices, sourcing sustainable forestry products, minimising packaging, looking into sustainable alternatives, and minimising food- and other product waste via donations, as described below.
To minimise plastic waste and support a more sustainable plastic lifecycle, we have initiated a transfer to carrier bags based on 80% recycled materials. In 2018, all our plastic carrier bags were already of this kind. In 2019 we will continue exploring new materials that can ensure greater reusability of the bags by our customers and contribute to making a positive impact.
In 2018, we made the decision that we will stop purchasing single-use plastic. Items that fall into this category will be phased out by 2020. At the same time, in 2018 we began discussions, research and assessment on sustainable materials. It is a challenging exercise that requires constant decision-making from us and alignment on what sustainability means to Zebra and how can we translate that to our products.
To minimise the environmental footprint of our stores, we began replacing traditional bulbs with LED bulbs back in 2013. Today we require that all new and refurbished stores install LED lighting, meaning that in 2018, all our stores are equipped with LED bulbs.
We have ambitious goals and a big tradition for philanthropy. We also recognize that we can only achieve big successes in cooperation with others. Therefore, we partner with many different institutions and NGOs in order to support the communities where we are present.
In 2018, we entered two very important partnerships and projects that are of great significance to Zebra. We became a Signatory of the United Nations Global Compact initiative and made the commitment to comply with the ten principles, as well as to strive to improve our responsibility targets gradually each year. Zebra has also become a member of the CCR-CSR network. CCR-CSR is a social enterprise that sells its competence, experience and knowledge to help companies improve and implement child rights-related CSR-strategies, programmes and projects. Through this partnership, we ensure that our suppliers are better trained in how to prevent child labour and how to guarantee juvenile workers’ rights. In 2019, we plan to unravel new ways of cooperating and adding more value to our portfolio of projects.
Combating food waste
As fighting food waste is a vital risk factor in achieving the Sustainable Development Goal “Zero Hunger”, we strive to minimize food waste in all our partnerships. In 2015, we partnered with The Danish Food Bank and through this partnership we ensure that surplus food products in our warehouses are offered as donations when the expiry date approaches. Inspired by this success, today our warehouses in the UK and Spain have partnered with the equivalent national members of the Federation of European Food Banks. In 2018 we donated food products with a total retail value of more than DKK 1.9m.
As a global company, we want and can do good for the communities where we operate. This includes creating employment and stores’ engagement in local charitable activities. We have developed guidelines on charitable giving in order to ensure transparency across the entire business.
At corporate level, we have partnered with, among others, the Red Cross in Denmark, the UK and Spain, as well as In Kind Direct in the UK. We donate a wide range of products to the organisations, who then distribute further to people in need. For instance, via our collaboration with In Kind Direct, 452 charities across the UK benefit from our products, the majority focusing on child/youth care and community projects. From our warehouses in the EU, we have donated reading and writing tools as wells as games with a total retail value of approximately DKK 35,000 to Klub Kickstart. The project supports refugee children aged 6 to 16 in learning Danish and mathematics. The children receive colorful boxes filled with products that make learning easy and playful. The project is carried out as a collaboration between The Danish Refugee Council, Als Research, the Egmont Foundation and the publishers Alinea and Carlsen. In the past year we have donated products worth more than DKK 5.9m in local markets.
In the HQ, we have engaged employees in a Christmas donation for UNICEF, where we were able to donate DKK 62,400 to Global Parent, thereby supporting vulnerable children in other countries. These vulnerable children lack access to basic health services or do not have access to school.
Our ambition for 2019 is to maintain the level of engagement with the charities and define our partnership engagement on a strategic level that can support stores in all countries where we operate.
Consistency and transparency are a key pillar in any responsibility work. We use our responsibility policy framework to clarify our positions, guide our decision-making and define expectations for our business partners. The framework comprises of policies on business ethics, human rights, product safety and the environment. Within responsible sourcing, our Supplier Code of Conduct is the leading document. It has been complemented by policies on animal welfare, child labour and young workers, as well as home workers. In 2018, we published our second transparency statement according to the UK Modern Slavery Act and we will continue doing so moving forward.
In 2019, we will also review and publish all our policies and establish new baselines in some areas.
When dealing with a wide range of suppliers and partners, we are expected to manage the risk of unethical behaviour and to promote anti-corruption measures. Our Business Ethics Code of Conduct outlines the ethical expectations to our employees. The Code is signed by all employees at Zebra A/S, all partners and subsidiaries, including their Headquarter staff, district and store managers. All our partners and most employees in leadership positions at Zebra A/S have received face-to-face business ethics training. In addition to that, our Supplier Code of Conduct outlines a zero-tolerance policy on bribery and unethical business behaviour. In 2018, our strategic suppliers received anti-corruption instruction through e-learning, and nominated people in their organizations responsible for implementing and securing the business ethics.
The Code of Conduct and the training sessions are supplemented by our whistleblower scheme, enabling our employees to report unethical and illegal behaviour anonymously. In 2018, no instances of illegal or unethical behaviour were reported.