How Cotton On became an ethical sourcing leader

Cotton-On-DubaiBy the end of next year more than 3,000 large businesses across the country could be on the hook for producing annual reports detailing slavery risks in their supply chains.

The requirement will come in the form of a Modern Slavery Act, unveiled by the Turnbull government later this month.

But while many Australian supply chain managers are unprepared for the onset of a mandatory reporting requirement, some in the retail sector remain confident.

As customer facing businesses, retailers like Cotton On have been investing heavily in supply chain transparency in recent years as customer interest in ethical sourcing has increased.

Cotton On’s group sustainability and ethical sourcing manager Sonya Rand said the prospective legislation would elevate the importance of modern slavery in the community.

“[It] reinforces what we consider to be a core part of our operations and our ethical approach to business,” she said.

“We’re incredibly proud of what we’ve achieved to date but know this is a journey of continuous improvement and one that we are committed to for the long haul.”

Cotton On has emerged as a leader in ethical sourcing, scoring an A on Baptist World Aid’s 2018 ethical fashion report.

The business has spent eight years building a program to improve its practices, working closely with suppliers, industry leaders, governments and NGOs.

We welcome the implementation of legislation as an opportunity to review our due diligence processes, policies, and initiatives,” Rand said.

Cotton On said it doesn’t anticipate needing to make any adjustments to its approach to comply with modern slavery legislation, but the same is not true for all businesses that would be impacted.

A Chartered Institute of Procurement & Supply (CIPS) survey released earlier this month found that more than a quarter of procurement managers don’t know if their business could produce a modern slavery report.

Cotton On already publicly discloses the details of its supplier base and is currently working towards full disclosure.

Rand said the business had learned the importance of two-way dialogue in its efforts to date, particularly with production partners.

“We hold an annual supplier conference and hold face-to-face training and education sessions,” Rand said.

“These forums allow us to talk openly with suppliers on matters relating to ethical sourcing, while providing them with an opportunity to update us on the challenges they face and the steps they are making to bring about positive change.”

Cotton On also audits its suppliers and holds training sessions with workers, educating them on best practice while maintaining a confidential whistle blower hotline to enable it to be alerted to any issues in its supply chain.

Under the government’s proposal large businesses would be required to prepare reports on their structure, operations and supply chains; potential modern slavery risks; actions taken to address those risks; and the way effectiveness is measured.

Reports will be required to address slavery, trafficking in persons, servitude, forced labour and forced marriage.

There is still disagreement over the specifics of the bill, but the government hopes to have it passed by the end of the year, with a grace period that would likely see businesses required to prepare reports in FY19/20.

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