Corporate Responsibility

The quality of Burberry products is implicit. This does not simply refer to the rigorous nature of the design, sourcing and quality assurance functions. When buying a Burberry product, customers associate themselves with the heritage and craftsmanship of the brand. Ever since Thomas Burberry started making outdoor garments for explorers and military officers, Burberry has strived to exceed the expectations of its customers. It is therefore important that the Group’s relationships with suppliers and other stakeholders are fair, responsible, and of high integrity.

The Group’s Corporate Responsibility Committee (the ‘Committee’) is responsible for ensuring that the overall management of social, ethical and environmental matters are given due consideration. The Committee is chaired by the General Counsel and Secretary who takes overall accountability for Corporate Responsibility matters on behalf of the Board. The Committee held four formal meetings in the financial year to 31 March 2008. In addition, the Environmental Committee, comprising of operational staff from our UK, Spanish and US divisions, met four times. The Risk Committee, which also considers Corporate Responsibility matters, met three times, and a Worldwide Health and Safety Committee was established during the year.

Burberry is included in the FTSE4Good Indices and is a signatory of the UN Global Compact. Burberry embraces, supports and enacts the ten UN Global Compact principles of human rights, labour standards, the environment, and anti-corruption. The human rights and labour standards principles are embedded in the management of the Group’s supply chain, the environment principles in the environmental management systems and anti-corruption in the code of business ethics.

Supply chain

Our approach

Pursuing operational excellence is one of the Group’s key strategic themes and Burberry’s goal is to be recognised as much for operational expertise as for luxury products. This strategy is applied to the Group’s relationships with suppliers and to the expectations placed upon them. Regardless of where the Group’s factories are based they are governed by its ethical trading policy, which includes managing labour standards and environmental conditions in the factories that produce Burberry’s luxury goods. This policy is based on internationally accepted codes and published in full on our website at www.burberryplc.com under the ‘Corporate Responsibility’ section.

As a global luxury goods group, Burberry manufactures the majority of its products in Europe, primarily in Italy and the UK. The Group supports its standards with a programme of factory assessments conducted either by its own specialist teams or by third-party experts, during which assessments of the working environment and worker interviews take place.

Burberry engages in many industry initiatives and has recently joined Business for Social Responsibility (BSR). Since 2006, Burberry has been an active participant in the apparel industry Corporate Responsibility Brand Collaboration Network. Through this network the Group works with other brands to conduct factory audits more effectively and to ensure a clear message is given on what improvements are needed. Brand collaboration allows factories to spend more time on making improvements and less on dealing with auditors from different brands.

Highlights of the year:

  • Conducted over 300 factory visits to assess compliance with the Burberry Ethical Trading Policy.
  • Further increased the Group’s internal specialist team of compliance officers, responding to some concerns from stakeholders regarding third-party monitoring.
  • Increased the number of audits with non-governmental organisations’ auditing bodies.
  • 17 suppliers have invested in long-term Corporate Responsibility training programmes, which focus on solutions to labour and environmental issues.
  • Burberry held seminars for many of its suppliers updating them on the global Corporate Responsibility programme and providing training on the Burberry Ethical Trading Policy. These seminars were held in the suppliers local language.
  • Burberry launched a confidential worker hotline in a number of factories. The hotline has the dual benefit of being both a whistle-blowing line as well as providing counselling to workers.


Operational responsibility for ethical supply chain management resides with Burberry’s Corporate Responsibility Manager who is supported by an internal team and external experts. Performance is reported to the Risk Committee (comprising the Chief Executive Officer, the Chief Financial Officer and the General Counsel and Secretary) as well as to the Corporate Responsibility Committee.

In 2007/08 the Group’s objectives were to:

  • Continue to assess suppliers’ adherence to the Group’s ethical standards.
  • Increase the number of random spot check visits by Burberry Corporate Responsibility personnel to ensure high standards.
  • Increase the levels of ‘on the ground’ resource to better enable suppliers to achieve high standards.
  • Increase levels of stakeholder engagement so that, where applicable, the Group can align its activities with the expectations of its stakeholders.
  • Continue and increase involvement in leading industry Corporate Responsibility initiatives, cooperating in innovation and best practice to raise industry standards.
  • Commence the roll-out of confidential worker hotlines, both to act as a counselling line for workers and to provide a tool for whistle-blowing on poor practice.


The Group has met all of the above objectives.

In 2008/09 the Group intends to:

  • Continue to assess suppliers’ adherence to the Group’s ethical standards, further increasing the number of random spot check visits by Burberry Corporate Responsibility personnel and adding further ‘on the ground’ resource for auditing and training.
  • Participate in a number of Business for Social Responsibility (BSR) working groups such as the ‘Mills’ working group and ‘Beyond Monitoring’ working group.
  • Launch the confidential hotline in two more countries.


Burberry ethical trading policy (38.3 KB)

Fur

As an international luxury brand producing apparel and accessories with a strong outerwear heritage, there has been and will continue to be occasions where consumer tastes demand the use of natural hides. The Group believes that any materials derived from animals should be produced without inflicting cruelty or threatening the environment and will not use natural hides if there is any concern that they have been produced by the unacceptable treatment of the animals. For this reason the Group does not source such materials from China.

The Group sources natural hides very carefully, safeguarding the correct ethical standards and traceability. Fur is principally sourced from SAGA furs in Finland who are known for upholding high standards of ethical treatment of animals and share the Group’s concerns about animal welfare. The farms which supply fur are open to third-party inspections at any time.

People

Employment

The Group employs over 5,500 people worldwide and is organised into three regions – Europe, Asia and the Americas with the Global Head Office based in London. The workforce has increased and strengthened considerably over the past 12 months to drive delivery of the five strategic themes and support and sustain continued growth.

The Group is committed to attracting, retaining and developing world class talent. As the business grows and the demand for expertise and capability across the organisation increases, Burberry is ensuring that it develops a robust 'pipeline' of talent throughout the Group. Succession planning is a critical activity whereby we evaluate who we have within the business that can develop over time to move into more senior/critical roles throughout the Group.

As the business continues to grow and we evolve our organisational design, the requirements for new roles and skills are identified. Where appropriate, our preference is to promote internally. To support our succession planning we are committed to supporting all employees with their personal development. This takes a variety of formats such as specific projects, attending bespoke workshops or relevant work experience. Those identified with high potential will receive more robust development support, tailored to address individual needs. If it becomes necessary to recruit externally we follow a fair and thorough selection process. In all cases, people are selected on the basis of skills and experience and without regard to sex, race, ethnic origin, nationality, marital status, age, religion, disability or sexual orientation.

People management

The integrated global Human Resources (HR) function is structured to support the three regions and the Global Head Office. The team consists of a) generalists who demonstrate a broad skill set and b) experts in the dedicated centres of excellence: resourcing, learning and development, and compensation and benefits.

Employee communications

A dedicated communications function is responsible for ensuring that effective mechanisms are in place to provide all employees with sufficient information and updates about the Group’s progress. The Chief Executive Officer and senior management host a quarterly webcast which has a global reach and discusses the Group’s financial performance, progress against the strategic themes and current developments/initiatives taking place within the Group. In addition, the Chief Executive Officer regularly hosts ‘round table’ meetings with each function. These meetings provide the opportunity for employees to share progress in their functions and the challenges they face across the business.

The Group is proud to announce the success of the first series of award ceremonies which are taking place across the three regions and Head Office. Employees across the globe have the opportunity to nominate their colleagues for a Burberry Icon Award, which is awarded to employees who have made an exceptional contribution to the business, measured against the five strategic themes. This has become a highly coveted accolade.

Health and safety

In 2003, the Group began a partnership with a third-party health and safety auditor in the UK to review its existing standards. Since then, the Group has continued with the audit programme and ensures that all UK manufacturing sites and distribution centres are audited at least annually with our major offices and retail locations being audited at least once every three years. We are pleased to report that our overall UK audit scores continue to steadily improve as a result of the thorough implementation of audit recommendations (prioritised on the basis of risk) and improved overall housekeeping.

As with many global businesses, the challenge the Group faces is to find a consistent approach to the management and reporting of health and safety worldwide that is easy to administer yet meets regional legislative expectations. The Group has already extended the auditing programme to include some of the major European retail stores and have also had audits undertaken in the US operation. In addition, the Group is in the process of reviewing its accident reporting and assurance framework for its major operations. Further information regarding the Group’s health and safety policy is provided in the Directors’ Report.

Burberry and the community

Community involvement

The Group’s community involvement is focused on working in the spheres of fashion and textiles education, humanitarian issues and the arts. By working in close partnership with a number of organisations we aim to raise awareness and promote understanding of issues we believe are important in our industry and in the communities in which we operate.

Examples of the Group’s involvement during 2007/08 include:

  • Burberry contributed a specially designed coat to Earth Pledge’s FutureFashion Show at New York Fashion Week, an eco-friendly runway show aimed at raising awareness about the need to use sustainable materials in the fashion industry.
  • Christopher Bailey, Creative Director, designed a T-shirt for the Fashion for Relief initiative. The T-shirts were sold at Burberry’s UK stores and through the ecommerce website, with 100% of the proceeds going to the Rotary Flood Appeal. In addition, the Group donated merchandise for the Fashion for Relief catwalk show at London Fashion Week; the merchandise was later sold as part of a special auction with all proceeds also benefiting the Rotary Flood Appeal.
  • Christopher Bailey acted as mentor to the finalists in the Fashion Fringe competition, which supports young up and coming designers. The winner of the competition received a £10,000 bursary donated by Burberry.
  • Burberry, accompanied by Razorlight, participated in Fashion Rocks 2007, an event which celebrated the relationship between music and fashion. Proceeds from the event went to the Prince’s Trust.
  • Employees at Burberry’s offices in Korea established a charitable programme of events in support of the Zion Home Orphanage in Seoul, which included the donation of personal computers, a television and books.


Following a review of its supply chain in 2006, the Group closed its factory in Treorchy. Prior to the closure on 30 March 2007, the Group made every possible effort to mitigate the consequences for those employees who were affected, by offering a programme of retraining and outplacements. To help address the wider longer-term issues the Group committed to donating £150,000 a year over the next ten years to projects to benefit the community. During the financial year ended 31 March 2008, the Group made its first donation of £150,000 to the Rhondda Trust, an independent trust, which will determine how to use Burberry’s donations for the benefit of the local community. During the financial year, the Group committed £1.0m for the benefit of charitable causes of which £0.4m was donated during the year.

The Burberry Foundation

The Burberry Foundation (the ‘Foundation’) was established as a charitable trust during 2007/08. The mission of the Foundation is to help young people realise their dreams and potential through the power of their creativity. The Foundation is committed to dedicating its global resources to help young people build confidence, make connections in their communities, and grasp opportunities to succeed. The Foundation is in the process of establishing partnerships with a view to making long-term commitment to multi-year investments with selected charitable organisations in the UK, US and in Hong Kong, representing one location in each of the regions in which Burberry operates.

A global employee committee, made up of regional and corporate employee representatives, has been established to consider the Foundation’s potential partnerships and make recommendations to its board of trustees. The global employee committee will also seek to promote and harness employee involvement with the Foundation’s partners.

Burberry and the environment

The Group has a wide-ranging dependence and impact on the planet’s resources. These range from the growing and processing of raw materials to produce yarns and fabrics, to the shipping of goods to Burberry stores and customers, to the running of retail operations, offices and factories and finally to the plastic and paper packaging the consumer throws away.

Burberry is committed to reducing these dependencies and impacts as far as possible throughout its business, meeting all environmental legislation and reducing all major sources of pollution. The Environmental Committee met four times in the last year to track performance against targets and included input from our European, US and Asian retail and wholesale operations. This committee then reports into the Corporate Responsibility committee.

Highlights of the year:

  • Burberry’s Spanish wholesale operation achieved ISO14001 accreditation in June 2007.
  • Conducted an environmental review and training programme of our operations in Taiwan and Hong Kong. These are now included in the Group’s Environmental
  • Management System.
  • Worked with the Carbon Trust in the UK to assess the energy saving opportunities in our internal UK manufacturing sites.
  • Continued to install 20 watt metal halide bulbs in our European stores replacing the 50 watt versions.
  • Installed ‘smart meters’ to track electricity use in our UK retail stores that do not already have continuous monitoring in place.
  • Burberry Spain ran two internal environment campaigns, one on water use and one on waste.
  • Continued to share environmental best practice between our operating sites. We hope to extend this during the next year.
  • Re-engineered some of our packaging in order to be more environmentally efficient and reduce the amount of empty space we store and ship around. For example, we reduced the thickness of our polo shirt bags by 31%, saving an estimated 40 tonnes of plastic.


In 2007/08 the Group’s objectives were:

  • To have over 90% of our directly owned business operations covered by the Environmental Management System. This haTo develop an off-the-shelf environmental training pack for managers, based on Group best practice, carried forward to 2008 following a review of our policy and strategy.
  • To examine the opportunities for extending ISO 14001 certification, following its application at our major Spanish wholesale site. A management briefing has been circulated to assess feasibility and implementation.


In 2008/09 the Group intends to:

  • Introduce a new web-based system for tracking environmental KPIs.
  • Hold our first global staff environment day.
  • Establish a network of environmental champions around the business.
  • Develop an off-the-shelf environment training pack for managers based on Group best practice.


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