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The boohoo group plc
Report to the Board: September 2021 The Rt. Hon. Sir Brian Leveson
1. This is my fourth report to the Board of boohoo group plc (‘boohoo’ or ‘the Group’) and
marks the approach to the anniversary of the publication of the Levitt Review (‘the
Review’). I continue to applaud the enthusiasm that all at boohoo have demonstrated for
the Agenda for Change Programme (‘A4C’) and chart the very real progress that has been
made in relation both to the recommendations set out in the Review and also the wider
ethical programme upon which the Group has embarked. It marks the movement of A4C
into business as usual which is not, of course, the beginning of the end of the process, but
merely the end of the beginning.
2. My oversight has continued to be greatly assisted by the role of KPMG who have been
involved in advising, but predominantly overseeing, the governance of A4C and assisting
boohoo. I have also valued input from Tim Godwin (the former Deputy Commissioner of
the Metropolitan Police) who has gone beyond the open source and analytic investigation
of the supply chain to consider the underlying challenges faced particularly in Leicester
both as a result of cultural background and the dynamics of the relationships of those who
work in the garment industry.
3. To such extent as boohoo can seek to address and resolve these issues (aimed at
assisting the workforce of their suppliers), they are making very real effort to do as much
as possible. In some cases, it is clear that this work is beyond what could be considered
as reasonably to have been expected of them: a number of proposals and actions go
beyond that which were recommended in the Review. In the ultimate, however, the
challenge in relation to the development and enforcement of ethical trading is not one that
boohoo faces or can face alone and changes to the way in which the regulatory regime is
enforced will be essential. I do not seek to minimise the responsibility of the Group or the
impact that boohoo can have but it is abundantly clear that the issues are far wider than
any one retailer. So as not to divert attention from the work that boohoo has done and is
doing and in the same way that I addressed the legal and regulatory regime as it operates
in England and Wales in an Annex to my March report, this wider issue is addressed in a
further Annex titled ‘Beyond boohoo’.
4. The main focus of the Review was an investigation of the way in which those employed by
or working for businesses in the Leicester supply chain (whether contracted directly to
boohoo or subcontracted to suppliers) were treated in relation to remuneration and working
conditions along with the responsibility of boohoo to those workers. The response to the
Review was clear: while other business entities decided that they would no longer source
garments from Leicester, boohoo made the decision to stay and seek to demonstrate a
real desire to assist the workforce by ensuring that appropriate working practices were put
into place and enforced. Controlling their suppliers meant that sub-contractors were
excluded from the supply chain and the present list of suppliers continues to be adjusted
by removing suppliers when irremediable breaches of the code of conduct are exposed
(although suppliers who are able and willing to correct less serious failings will be assisted
to do so). At the same time, new suppliers have been on-boarded and boohoo has
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committed to manufacturing in Leicester; to that end, it is building a factory at Thurmaston
Lane which the Group intends will be open later this year.
5. The Review made recommendations which extended beyond the enforcement of
employment rights into many other aspects of ethical governance and supply and boohoo
developed its change programme with all parts of its business in mind. These include:
a. Governance;
b. The development of a robust Code of Conduct and contractual obligations for
businesses wishing to supply boohoo1;
c. Onboarding of existing and future suppliers both in the UK and the rest of the world;
d. The provision of support and assistance to suppliers in relation to compliance with
legal, regulatory and code of conduct requirements;
e. Ethical and sustainable product compliance;
f. Training of those involved in buying and merchandising;
g. Internal and external audit: coping with compliance failures;
h. The development of manufacturing at Thurmaston Lane, Leicester;
i. Outreach including the launch of the Garment and Textile Workers’ Trust.
6. The recommendations of the Review were accepted by the Board of boohoo in their
entirety. A number have been subject to adaptation so as to fit with the way in which
boohoo does business although these modifications have not affected the thrust of the
recommendation; they alter only the mechanism of achieving the aim. Each one has been
considered and approved both by KPMG and the Board.
7. By way of summary, there were 17 recommendations set out in the Executive Summary
at Chapter 2 of the Review, along with 7 subsidiary recommendations (or suggestions) not
included in the Executive Summary. The Group sub-divided these recommendations into
34 actions (the performance of which have subsequently been mapped back to the
articulation in the Review). A number were ‘one-off’ but others require continuous review
to ensure that they are enduring and become ‘business as usual’. After providing evidence
to KPMG for confirmation, and subject to the monitoring of continued performance of those
requiring it, boohoo assesses that 26 have been completed and that those remaining are
in progress: it is anticipated that after the Board meeting on 17 September, five more will
be closed leaving only four as outstanding. KPMG will need to verify the completion of
seven of these actions (for example, the publication of the list of suppliers for the rest of
the world at the end of this month which I understand to be on track) and, subject to their
review in October 2021, agree with the conclusion that only four will remain. I am also
satisfied that this is a fair reflection of the state of the A4C programme but entirely endorse
the view that monitoring for a number will be necessary to ensure that the programme has
become embedded as business as usual; that is equally so in relation to the assurance
map and the internal audit regime which must also be part of business as usual. All the
interaction that I have had with boohoo suggests that this is, indeed, the determined
approach of the senior management (and, indeed, those involved in delivering the
business).
11 The Code of Conduct (dated 19 May 2020) can be accessed on the website of boohoo plc at https://www.boohooplc.com/sites/boohoo-corp/files/all-documents/boohoo-code-of-conduct-1.pdf
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8. An illustration of the extent to which boohoo has taken on the responsibilities set out in the
Review can be obtained from an examination of the number of senior managers who have
responsibility for aspects of the A4C programme (a number of whom have been
transferred from other duties or appointed to the Group specifically for that purpose).
Under the Group Director of Responsible Sourcing and Product Operations, they include:
a. A Group Head of Sourcing and a global sourcing team (including staff in Italy, Paris,
China and Turkey;
b. A Group Head of Sustainability (including staff concerned with performance
management, carbon, supply chain and waste, product sustainability, packaging
and labelling);
c. A Group Head of Product Operations;
d. A Group Head of Product Compliance (with a team dealing with quality control and
including the ability to conduct laboratory analysis);
e. A Group Head of Quality Assurance supported by a substantial technical team
dealing with each of the business entities;
f. An Ethical Compliance team (headed by the Group Director) and including audit
capability;
g. A General Manager for the factory at Thurmaston Lane (now in the process of
recruiting staff with a view to opening the factory later in the year).
In addition, corporate governance and communications (involving public affairs and
internal communication) have been given enhanced attention; furthermore, internal audit
operates as a check on the business generally.
9. My role has not been limited to that of silent observer (and reporter) of the extent to which
the recommendations of the Review have been implemented. I have attended (albeit
virtually) many meetings covering different aspects of the business and I have continued
to provide challenge not only to the substance of the proposals aimed at maximising the
prospects of successfully implementing the A4C but also to ensuring that the steps which
are taken to ensure legal and ethical compliance can be evidenced and that processes
are in place to deal with any issue that might arise. The critical importance of both process
and evidence can be exemplified in this way. If (as has happened) there is an allegation
that a company in boohoo’s supply chain is not complying with the requirements of the law
or boohoo’s code of conduct, three things need to be capable of being demonstrated.
First, boohoo must be able to show that it undertook a robust process before including the
supplier within its supply chain in the first place. Secondly, boohoo must be able to
demonstrate that it has done all that could reasonably be expected of it to support the
supplier and ensure that it is capable of and complying with the ethical requirements placed
upon it: this includes, for example, being able to demonstrate that the contract for supply
of garments could be completed in an ethical manner and that the checks in place are
sufficient. Finally, boohoo must have a fit-for-purpose process to investigate any allegation
(whether by a whistle-blower using a hot-line or otherwise) so that appropriate steps can
be taken fairly either to remove the supplier from the supply chain or, (for breaches that
do not offend its zero tolerance policies, are not repeated or are otherwise irremediable),
the supplier is provided with appropriate support to correct its failings.
10. Following my earlier reports, rather than analyse the recommendations item by item
(although this is entirely possible), this report deals with the present position in the UK
supply chain, the publication of the supplier list for the rest of the world and many of the
other developments that have taken place over recent months. It will also highlight the
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building of the new factory at Thurmaston Lane; the training opportunities for workers that
are being encouraged within the supply chain; and the grant of charitable status for the
Garment and Textile Workers’ Trust along with illustrations of how the trust is seeking to
assist the ethical development of the industry in Leicester.
Executive Summary
11. There remains no doubt about the determination of all at boohoo (from the Chief Executive
and throughout the management chain and those involved in delivering the business) to
deliver the Agenda for Change. The enthusiasm for the programme has been evident both
at meetings and through their willingness to provide detail and explanation in any area that
I have probed.
12. Following the Review published a year ago, boohoo sub-divided the 17 recommendations
and 7 subsidiary recommendation into 34 actions which it committed to delivering through
its A4C programme. The programme covers the entirety of boohoo’s business (including
areas not covered by the Review) and is intended to address the issues of labour abuse
in the supply chain, sustainability and the other identified challenges including the
weaknesses in corporate governance. After the Board meeting this week and subject to
verification of seven by KPMG next month, boohoo anticipates that only four (all in
progress) will remain outstanding.
13. Although the work undertaken by boohoo to date has been considerable, neither that effort
nor the ultimate completion of A4C will mark the end of the journey. Rather, it will represent
the end of the beginning. As the Group readily recognises and is prepared for, it will be
critical to continue to maintain effective and efficient systems to ensure ethical compliance
across its business practices; these systems must be baked into the way of working and
become business as usual. In relation to the supply chain, this will involve monitoring not
only through audit (which is not the complete answer, simply providing a snap-shot of
compliance at the time) but by regular visits, ensuring access to whistle-blowing hotlines
and engagement with the supplier. The wider picture is analysed in the Annex ‘Beyond
boohoo’.
14. Since the publication of the UK supply chain, boohoo has continued to monitor its suppliers
and has responded to information as it has come to light, removing suppliers from the
supply chain if evidence of egregious breaches of its code of conduct becomes available.
At the same time, it is taking a number of steps to ensure that workers employed by its
approved suppliers are aware of and can exercise their rights. These include working with
community outreach and supporting a training programme pilot aimed at providing workers
with externally accredited training.
15. This month also sees the publication of boohoo’s supply chain outside the UK. The
preparation of this list has involved mapping and auditing a substantial number of factories
in 29 countries outside the UK: 125 auditors from Bureau Veritas have been involved in
the audit programme. The result is that every factory declared within the boohoo supply
chain is now mapped to a supplier.
16. Other recent developments include planning permission for the factory at Thurmaston
Lane with progress on construction sufficiently advanced that the first recruitment fair for
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staff has taken place: it is intended to start work in November. In addition, the Garment
and Textile Workers Trust is now formally constituted by the Charities Commission. It will
be a grant awarding body complementing existing charity, community and NGO initiatives
but, in addition, the Trustees are working with specialist academics from Nottingham
Universities Rights Lab to undertake research better to understand the socio-economic
issues in the city to inform both its purpose and scope.
17. In my report of 23 March, I referred to the need for boohoo to visualise where it saw itself
in two or five years and, by 9 June, I spoke of the development by the Group (approved
by the Board) of the ‘End State Design’ with Key Performance Indicators to spell out the
individual steps to achieve those goals. When fully developed, these will bring together
all aspects of business change. In the meantime, boohoo has also accelerated the
development of its purchasing practices and published a new set of Responsible
Purchasing Practices. These have been created in collaboration with product teams from
across the business and over the coming months there is a comprehensive plan to deliver
the training to every individual across the group who part to play in the design,
development and sourcing of products. Second, after the planned opening of Thurmaston
Lane, every garment quoted for boohoo brands will be broken down into cost components,
thereby giving buyers a better understanding in this area. Third, boohoo has also
developed a sustainability plan with elements concerned with fabric, packaging and overall
carbon emissions.
18. The Group has articulated its aspirations. Its commitment is clear and boohoo is
progressing at a commendable pace on the road to delivery. The challenge will be to
complete the journey and then to sustain and enlarge the transformation to its business.
The Supply Chain
The United Kingdom
19. The effect of the A4C has been to increase the capability and capacity of the ethical supply
team, to undertake unannounced visits (checking time sheets, pay slips, HR onboarding
processes, health and safety and establishing whistle-blowing hotlines). Staff have been
interviewed away from managers and a forensic intelligence gathering exercise has been
undertaken on directors and those with significant control in the supply chain (who, in
addition, have been interviewed). Essentially, the ethical compliance and quality control
teams have aimed at doing all that is possible both to ensure compliance and to provide
support and assistance in relation to quality levels and good works of working (including
the management of sharps in accordance with the Group’s metal policy). Engagement
with the team demonstrates that there is a real desire to support the UK workforce where
that is possible and assist businesses to correct the less egregious breaches of policy,
that is to say that do not offend those for which there is ‘zero tolerance’. Where possible,
the aim is and has been to help rather than simply to exclude.
20. It is reported by those concerned with compliance that they have seen many improvements
and that, generally, there is a real sense of unity with improved communication and
commitment. The on-boarding process and the supplier hub will identify and keep track
on the location of premises which, in accordance with the contract, are required to permit
access for the purposes of inspection and also to comply with other conditions of the code
of conduct including the provision of publicity for the whistle-blower hotline. Checking at
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premises which might previously have supplied boohoo but no longer do so (to ensure that
there is no unauthorised sub-contracting) is more difficult because those who run these
businesses no longer provide access to boohoo. Having said that, the order app allows
boohoo to link a factory to a supplier and, by extension, when boohoo disengages with a
supplier, a boohoo buyer can no longer place orders with that supplier or that factory.
21. That is not to suggest that boohoo consider that the issues of ethical supply are all
resolved. Without somebody prepared to complain, audit is not necessarily able to identify
transgressions but there have been whistle-blowers. Each report is fully investigated and
then referred to the Supply Chain Compliance Committee or, first, its sub-committee, the
Supplier Due Diligence Financial Review Forum. The upshot is that businesses which
were originally approved in the supply chain have now been removed although, as time
passes, other businesses which have demonstrated willingness and ability to comply with
the code of conduct (and have passed the checks which I have previously outlined) have
been approved.
22. The difficulties should not be underestimated and there is a real challenge obtaining the
information (or the thread to pull to obtain the information) in the first place. There are
many reasons which may, at least in part, be cultural for this reluctance even on the part
of those who have every right to work in the UK. One example suffices. There has been
recent credible evidence (which was identified in a news report but also came to boohoo
through another reporting mechanism that is open to a whistle-blower) that, at a subsidiary
factory which was part of a business contracted directly with boohoo, although the
paperwork in those factory premises supported payment to workers of at least the
minimum wage, part of those wages then had to be refunded to the on-site manager. The
owner of the business was appalled at the allegation having prided himself on the full
compliance of his business and had clearly over-relied on the manager. When confronted,
the manager called for help from a friend (nothing to do with the business) who quickly
attended. The manager was sacked and the owner made it clear that he would reimburse
wages that were paid over to the manager. Thereafter, the other workers asserted that
they had not been required to repay wages and the entire workforce left in support of the
manager. That stance remained the following day when the workforce declined to return
without the manager.
23. Steps were taken by the supplier to remediate the position of any worker who established
the requirement to hand cash back. In fact, with the assistance of a community worker, the
requirement to repay was subsequently evidenced and that worker (now employed by the
same supplier at different premises) was reimbursed for the payments made to the
manager over a period of some months. All the remaining workers, however, resigned and
have since commenced work at premises not approved by boohoo and thus not within its
remit for further investigation. The supplier has taken what has happened very much to
heart and the owner has embarked on his own change programme (evidenced through
material supplied to boohoo) so as to ensure that issues such as this can be and are
captured; he is sponsoring public training on modern day slavery.
24. The Group is engaging with a nominated charity and community centre to engage workers
in relation to their rights and remediation generally is being pursued through an involved
NGO. In appropriate circumstances, where it is appropriate, remediation is a worthwhile
approach allowing workers to retain employment which is both ethically based and safe.
What this example has done, however, is that it has led to further analysis of suppliers with
multiple sites where business owners may have over-relied on a manager to deal ethically
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and fairly with the workforce. Cultural and community links are clearly of the highest
importance and have to be engaged to ensure that issues such as this can be resolved.
25. It is clear that challenges remain for the internal compliance team and for the ethical
auditors Fast Forward (referred to in my last report). In relation to individual suppliers,
however, boohoo is going beyond audit, the enforcement of the code of conduct and the
provision of whistle-blowing hotlines but is seeking to address the skills of the workers.
Although it will be necessary to wait to see how these develop, a number of new
programmes have either commenced or are being planned.
26. First, boohoo has become involved with external accredited training provision. It has
engaged with KTL training which specialises in training of garment workers with
accreditation provided by NVQ. This has started with a pilot involving five suppliers who
each have up to 6 workers on the programme with trainers visiting the supplier’s premises
each week, working with each trainee for an hour leaving them with homework. An NVQ
Manufacturing Textile Products Level 2 qualification is available after 6 weeks. The
response has been enthusiastic and, after this pilot, will be extended to new workers and
new suppliers. The programme is free of charge to the suppliers.
27. Second, albeit in the future, with the provision of a new manufacturing site at Thurmaston
Lane (intended to be a centre of excellence in garment manufacture), it is intended to
encourage suppliers to visit and attend benchmarking days to learn ways of setting up,
managing and improving the efficiency of their operation, with weekly training sessions
and sharing of best practice. It is also hoped to make use of the apprenticeship levy to
which boohoo is required to contribute by supporting apprenticeships in the workforce of
suppliers.
28. Similarly in the future, boohoo are learning from de Montfort University (‘DMU’) and
Leicester Education Business Co Ltd (‘LEBC’) how the new factory at Thurmaston Lane
can support their aims not only by improving the reputation of garment manufacturing in
the UK but also by providing first hand experience of working in a garment manufacturing
business. It is intended that DMU students can visit and also receive talks on the operation
of a commercial fashion business including buying, designing, merchandising and product
specialism. At the same time, with training providers such as LEBC, it is hoped to extend
this reach into colleges and secondary schools.
29. I appreciate that a number of these proposals (going beyond the specific
recommendations in the Review) have, as yet, to move from the discussion and planning
phase into effective operations but it is important to identify what is visualised not least so
that, as time passes, the extent to which plans move into enduring business as usual can
be tested. The transparency which the Group has shown both in the publication of the
Review and in the publication of these reports carries with it a responsibility to continue
the work that has been proposed. In this regard, as in many others, the proof of the
pudding will be in the eating.
The Rest of the World 30. The task of auditing factories that supply boohoo from outside the United Kingdom has
complexities which did not have to be addressed for those in the UK. First, importers who
provide to the Group may well not manufacture but will obtain product from third party
suppliers whom they will not necessarily have been willing to identify for fear of cut out of
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the chain with the Group going directly to the manufacturer. Second, working conditions
in other countries are undeniably different to those required in the UK and ethical auditors
cannot adopt a ‘one size fits all’ to the work they undertake: financial due diligence and
analytics possible in this country have not been possible in other parts of the world not
least because of the different approach to corporate liability and reporting. In that regard,
although there are in-country staff in some countries and support by way of open source
investigation and analysis has been provided from the UK (where possible), the on-site
audit work has been undertaken by Bureau Veritas who are well placed to undertake the
work, involved in 140 countries through a network of over 1,500 offices and laboratories
and a workforce in excess of 78,000. As the approved list will attest, this has involved
factories in 29 countries outside the UK with 125 auditors from Bureau Veritas involved in
the audit programme or validating other reputable ethical audits.
31. It is important to appreciate that a number of suppliers source garments from declared
factories. Those suppliers who are based in the UK have been through the same financial
due diligence process as was used to assess the UK suppliers. In relation to factories
outside the UK, each has been visited by Bureau Veritas for audit or has provided third
party evidence of an ethical audit from a recognised auditor which, in either case, can be
matched to the boohoo code of conduct and audit requirements. The result is that the list
to be published at the end of September will be of factories but, as with the UK, these
factories (and the suppliers which contract with them) will remain under review. Those
factories that reveal the egregious ‘non-negotiable’ breaches of boohoo’s code of conduct
or standards set by the International Labour Organisation or the Ethical Trading Initiative
will not be approved but it has been made clear that, although suppliers will be supported,
other breaches will be the subject of further audit with the ultimate conclusion that lack of
sustained and appropriate improvement will mean that suppliers will no longer be able to
remain on the approved list. The Supply Chain Compliance Committee and (in relation to
possible financial irregularities), the Supplier Due Diligence Financial Review Forum has
reviewed global audits by grading and has reached decisions based on the evidence.
32. Given the number involved, it has not been possible for KPMG to be present at these
meetings and to consider the issue of robust and fair process at the time. The firm has,
however, been regularly appraised of the process being followed and, throughout, has had
the opportunity to challenge its application and status. After publication of the list, for the
purpose of being able to report this recommendation as closed, KPMG will be able to
review in retrospect how it has operated. There is nothing to suggest that this will not be
achieved.
33. As suppliers are approved and ‘mapped’ their factories are added to the order app to
increase the visibility of the commitment of each factory. As with the UK, this will allow
boohoo to check up on capacity at those factories which are in the supply chain and will
permit buyers to ensure that capacity at any factory is not exceeded. Also in line with the
UK, this is merely the start of the process and there will be a continued focus on audit and
consolidation; once more, the challenge will be to ensure the approach to suppliers in the
rest of the world is also enduring.
Onboarding New Suppliers or new Factories for existing Suppliers 34. As for the future, one of the ways of ensuring that all who supply textiles can comply with
the code of conduct is to onboard only those businesses which demonstrate that they can
do so. The process is for the details of potential factories to be submitted to boohoo’s
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Sourcing and Compliance team (soon to be through the supplier hub) and to upload
certified audit documentation which can be reviewed both by the team and by Bureau
Veritas. If an approved certified audit from one of a number of nominated auditors is
available, it will be converted into a boohoo report and be graded based on the boohoo
code of conduct and the International Labour Organisation/Ethical Trading Initiative base
code. If not, the factory will be requested to book an appropriate audit to be completed so
that it provides a graded report. It has to be recognised that few audits will be completely
clear of critical, high or medium rated issues of non-compliance with the high standards
required (green requiring re-audit after 12 months) so, assuming that the factory is
considered capable of remediation (if not, access for the factory will simply be denied), an
improvement plan will be devised and agreed with a further audit after 60, 90 or 180 days
determined by the number and nature of the requirements needing to be addressed.
35. The supplier hub is due to ‘go-live’ in the near future for all new suppliers and new factories
for established suppliers. To that end, on-boarding processes and training have been
completed with all buying teams across all brands. Requirements include social and
ethical compliance criteria created for buyers. Supplier score cards have been created
and rolled out. The scorecards identify production capacity, history of acceptance quality
limits, quality assurance inspection, delivery compliance, speed, return rate, replacement
and refund; no order can be raised to a supplier or factory that is not on the system.
36. The critical requirement will be to maintain effective and efficient monitoring not only
through audit (which is by no means infallible) but by regular visits, ensuring access to
whistle-blowing hotlines and engagement with the supplier so that the critical value of
compliance is not only understood but also baked into the way of working.
Meet the Makers
37. This, again, is a proposal that springs out of the commitment of boohoo to be open and
transparent and falls beyond the recommendations in the Review. In August, boohoo
launched an event for 15 September encouraging members of the public and others to
visit the premises of a number of boohoo suppliers and ‘meet the makers’. This is intended
to promote the transparency of the way in which boohoo is requiring suppliers to conduct
their business and to present a more up-to-date picture of the Leicester supply base than
was described in the Review. It will involve talks from those involved in the management
of the business and in the Agenda for Change and presages what is a critical openness in
the way garments are manufactured which it is hoped will start to allay concern. Similar
openness is to be demonstrated in relation to the new factory premises at Thurmaston
Lane when it opens later this year.
Business and Cultural Change
38. Parallel to the work in relation to the supply chain, part of the A4C programme has been
to invigorate change across the Group in many aspects of its business. This includes
those areas identified in but extends beyond the Review.
Corporate Governance
39. A number of the Review recommendations concerned corporate governance and, in
particular, non-executive membership of the Board, the further development of a
committee structure and the appropriate minuting of meetings. The Board (of which there
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are two new non-executive members) has a standing item dealing with risk management
and has been dealing with the progress of A4C at each of its meetings. Members of the
Board have shown a very real interest not only in the progress of the A4C programme but
also the oversight that has been provided by KPMG and, separately, by me. To that end
I have attended meetings and had a number of one-to-one meetings with the Deputy
Chairman and another Non-Executive Director. Terms of reference for all committees
have been agreed and a new Risk Committee has been established into which the Supply
Chain Compliance Committee reports. Meetings are minuted and internal audit is
involved in providing assurance. Both KPMG and I are separately satisfied that the
weaknesses identified in the Review in relation to this aspect of the business have been
and continue to be addressed.
Responsible Purchasing Practices
40. As I set out in my March report, the Group has developed a series of Responsible
Purchasing Practices and each of the businesses within the Group have developed or are
in the process of finalising merchandising handbooks which identify both principles and
goals across buying and merchandising functions. They identify what is required from each
employee from the most junior to the most senior and are intended to support everyone to
‘do the right thing’ both developing and maintaining ethical operations. At a high level,
they may not appear to be specific, but each breaks down, first, into a series of goals and
then into tangible practices directed to achieving the goals. It is sufficient if I identify the
practices and the goals without drilling further into the specific mechanisms for achieving
the goals (other than to say that they are sufficiently granular so that nobody could have
any doubt as to what is required of them).
41. The practices and the goals are as follows:
a. We are fair
i. We understand what a fair price is for garments and commit to paying this.
ii. Cancellation terms and penalties applied are reasonable and proportionate.
iii. Our teams understand what is possible to expect from a supplier.
b. We are committed to working with an ethically compliant supplier base
i. All suppliers and buyers know our standards and requirements.
ii. We measurer our suppliers against our standards and take action when
required.
c. We communicate with clarity and frequency
i. All our teams know what we are aiming for and what their part of that
journey is.
ii. We know what good communication looks like and our teams communicate
effectively.
d. We are transparent with our supplier base
i. We are committed to driving closer strategic partnerships with our
suppliers, where required, to drive out better efficiencies for both parties.
ii. Sourcing and buying teams review individual supplier performance.
e. We are committed to offering more sustainable products
i. Sourcing more sustainable materials is central to our product strategy.
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ii. We will minimise the packaging and labelling we use and make it consistent
and more sustainable.
iii. We are committed to more sustainable design.
f. We have the right tools and knowledge to do our jobs
i. Our teams have the right tools and knowledge to do their jobs.
ii. We support our suppliers with knowledge and training.
42. It has been recognised that at the heart of these purchasing practices is the provision of
learning and training opportunities to equip the teams with the skill and knowledge they
each need, not only to understand what is expected of them but also to provide the tools
for these practices to be achieved. This training is being delivered by subject matter
experts and has started to be rolled out through the summer and its full delivery is planned
through the autumn and into the early part of next year. Courses are in Responsible
Purchasing Practices, Supplier Onboarding, Costing, Product Compliance, Ethical
Compliance, Product Sustainability, Modern Slavery, Anti-Bribery and Garment
Production. These will be supplemented by online Health and Safety and HR Compliance
and leadership training.
43. A good example has been the provision of an update in relation to Modern Slavery in the
process of being delivered to all relevant members of staff. The trainers’ knowledge has
been described as ‘excellent’ and 95% of those who participated considered the training
extremely relevant and expressed themselves very satisfied both with it and with their
confidence in identifying and reporting signs of modern slavery.
44. Rather more difficult is the training of buyers as to the true cost of manufacture. It is
complex because costs ethically incurred in different countries will be different and the cost
of making each garment will be different and will require an understanding and
appreciation of the cost of the fabric and any trim, the time required to make each garment
(which reflects into labour costs, electricity usage, rent or return on investment and rates
or other overhead), logistics and, of course, profit. Cost is the critical element in order to
demonstrate that what boohoo has ordered from a supplier can be delivered in an ethically
compliant manner and is not simply dependent on ethical audits, spot checks and whistle-
blowers. Furthermore, the value of this cost information is that it provides an independent
check on ethical compliance and, also, can generate evidence which can be used to assist
manufacturers to improve efficiency. Thus, if it is taking longer in one factory as contrasted
with another to produce the same garment, boohoo will be able to advise and assist the
less well performing factory in an effort to improve the efficiency of the process by adopting
best industry practices.
45. One of the functions of the factory at Thurmaston Lane will be to provide a fully accurate
and transparent costing breakdown on every garment quoted to be made there. This
information will then be used for all buyers to undertake factory-based training which will
start early next year following the opening of the factory. In addition, pilots have been
conducted in relation to a number of specific manufacturers to gather supplier open
costings to enable price and production volume checks to ensure that factories are running
at an operational range that enables them to comply with ethical requirements.
46. To ensure that the approach to responsible purchasing practices is embedded (and not
merely seen as incidental to the way the Group works), it is and will be clear that all will
understand that they will be measured against the RPPs through the appraisal process.
12
Recruitment and new starter processes are being reviewed to ensure that there is
consistency in the approach to be adopted from the very start; consistent training will also
be relevant to career development plans.
Up.Front: the Sustainability Plan
47. The Group is a partner signatory to WRAP’s textile 2030 which is a collaboration of
members from across the UK textile industry working to combat climate change and
improve circularity of product. It is a member of the Sustainable Apparel Coalition and
seeks to use their platforms and insight to guide strategy and monitor both its own
performance but also that of its suppliers. The team dealing with sustainability has been
built to work with all 13 brands and examines sustainability, climate change (and, in
particular, carbon emissions), packaging and labelling.
48. In relation to sustainability, goals have been set to ensure that, by 2023, all garment
packaging will be reusable, recyclable or compostable with plastic containing over 50%
recycled content; it is intended to launch resale and recycling offers across the brands. By
2025, all polyester and cotton will be recycled or more sustainably resourced and
innovation in design will result in reduced waste, increased durability and improved
recyclability. Through Cotton Connect and the Indus Development Programme, over 2,500
farmers in 85 villages in Pakistan, covering over 12,000 acres, have sown sustainable
cotton which is now growing and will be picked later this year and then processed so that
manufacture and delivery of will be possible from the first quarter of 2022: it is anticipated
that this will provide over 2,000 metric tonnes. The Group has joined the Better Cotton
Initiative designed to improve global cotton production for the people who produce it,
improving the environment in which it is grown and train farmers to use water efficiently,
care for the health of the soil and natural habitats, reduce the use of harmful chemicals
and respect the rights and well being of the workforce.
49. The Group is also working on its carbon footprint. In relation to the emissions that are
directly under its control or consist of indirect operations acquired for its use, the target of
4% absolute reduction each year has been set. For indirect emissions in the Group’s value
chain (product production, logistics, services by third parties and product end of life
disposal), the target is 7% reduction relative to growth or 52% by 2030. The Group has
also committed to industry initiatives including the British Retail Consortium’s Climate
Action Roadmap (seeking to drive changer towards achieving net zero carbon emissions)
and Textiles 2030 (developed by the Waste and Resources Action Programme known as
WRAP) which aims to engage the majority of UK fashion and textiles organisations in
collaborative climate action.
50. To this end, renewable energy contracts have been agreed across the business, energy
efficient technology (including solar panels for which planning permission has been
granted) is being installed in Burnley and Manchester. More sustainable materials are
being sourced and a trial has commenced in Leicester to collect fabric offcuts diverting
them from landfill. Suppliers are being asked to complete the Facilities Environment
Module as part of boohoo’s membership of the Sustainable Apparel Coalition. Trials are
also being undertaken in relation to the removal of swing tickets from garments (which
tend to be cut off and discarded) and the Group is seeking to ensure that polythene bags
are made with 100% recycled material. Sustainability training is being rolled out and the
first Sustainability Report has been published.
13
Key Performance Indicators
51. All these aspects of business change are in the process of being collected together in the
development of a series of Key Performance Indicators based upon the four pillars
identified by the World Economic Forum. The four identified pillars are as follows:
a. Principles of Governance
i. This is described as requiring governance to evolve as organisations are
increasingly expected to define and embed their purpose at the centre of
their business, underlining that the principles of agency, accountability and
stewardship continue to be vital for truly good governance.
ii. Themes include the governing purpose; the quality of the governing body;
stakeholder engagement; ethical behaviour; risk and opportunity.
b. Planet
i. The ambition to protect the planet from degradation, including through
sustainable consumption and production, sustainable management of
natural resources and taking urgent action on climate change so as to
support the needs of the present and future generations.
ii. Themes include climate change; nature loss; fresh water availability.
c. People
i. This pillar covers an ambition to end poverty and hunger in all forms and
dimensions along with seeking to ensure that all human beings can fulfil
their potential in dignity, equality and a healthy environment.
ii. Themes are dignity and equality; health and well-being; skills for the future.
d. Prosperity
i. Described as an ambition to ensure that all human beings can enjoy
prosperous and fulfilling lives and that economic social and technological
progress occurs in harmony with nature.
ii. The themes are wealth creation and employment, innovation in better
products and services and community and social vitality.
52. These high level ambitions have been reduced into a series of key performance indicators
or core metrics against which the success of the Group can be judged. It is unnecessary
(and perhaps inappropriate for commercial reasons) to set out the KPIs in this document
but it is sufficient to identify that there are 8 in relation to the Principles of Governance, 14
in relation to Planet, 1 in relation to People and 2 in relation to Prosperity. Each is of value
to the business and each is both tangible and measurable. They represent a first rate start
at looking for mechanisms which can be used as appropriate and reachable targets. Many
(but not all) KPIs have been launched and they will doubtless develop with time and
experience but their value is that as performance indicators they develop in all employees
the mindset to have regard to what the A4C is seeking to achieve in its transformation to
business as usual.
14
The Garment and Textile Workers’ Trust
53. The Trust has now been formally constituted with appropriate approval and registration by
the Charity Commission. I identified five Trustees in my last report; they also include Kevin
McKeever, the Managing Director of the Lowick Group who, at the first meeting of the
Trustees as now constituted, was elected as its Chair. It is intended to address some of
the immediate and future needs of workers within the local garment industry and seeks to
create positive and lasting change for the benefit of the wider industry. Initially, it is
intended to be a grant awarding body complementing existing charity, community and
NGO initiatives but thereafter looking to expand the remit to deliver a more comprehensive
package of services for garment workers in the city.
54. For the Trustees (identified in my last report) to gain insight into the social and economic
issues that exist in Leicester, it has engaged the services of the research team at
Nottingham University Rights Lab. This is not to replicate what is already in the public
domain but to review, in a non-political way, the circumstances in which people end up
working in the industry; the most effective way of improving understanding of workplace
rights; the response from factory owners; what retailers, government agencies and others
can do to encourage the provision of the best possible working environment and life
improvements for garment workers; in the light of the pressure for union involvement for
garment workers, how they would like to be represented and by whom. These aims are
summarised but reflect the thrust of the work. After this research has been completed
(visualised by December), the Trustees will be able to enunciate a grant making policy.
Thurmaston Lane
55. Planning permission has now been granted in relation to the factory at Thurmaston Lane
and construction is in process and on track for a handover (and opening) later this year.
It is intended that it should be a centre of excellence for garment manufacturing in Leicester
and will also be a central hub for practical training not only for machinists but also for all
other aspects of the business that need to understand the complexities and costs of
garment manufacture. This will include those in the buying and merchandising teams as
well as a place for boohoo’s suppliers to improve their own practical and business skills.
In addition, the factory will provide learning opportunities for local communities and there
has been engagement with local universities for regular weekly visiting slots starting next
year. In particular, students at de Montfort University will be supported with guest lectures,
informal talks and projects.
56. A General Manager and Head of HR have been appointed and, so far, there was been
one recruitment fare attended by over 200 people. Since the event, others have
approached looking for work and it is visualised that there will be no difficulty recruiting
sufficient experienced workers. Those ultimately engaged will be employed directly by
boohoo with equivalent employment rights to other members of the Group and extending
training and development opportunities. An on-boarding, induction and training plan is
underway with the intention that the factory (powered with renewable energy) will produce
garments across two shifts for all brands in the Group involving garment printing and
drying, cutting, sewing, pressing and packing. I observe that the proof of these aspirations
will be visible very quickly.
15
Concluding Remarks
57. The overall landscape in Leicester remains a challenge but I am confident that the Group
has embarked at speed upon a truly transformational agenda for change intended to
address the issues of labour abuse in the supply chain, sustainability and the other which
have been identified. Many of the recommendations in the Review have been fully
addressed and it is likely that more will be completed within weeks not least with the
publication of the ‘rest of the world’ supplier list.
58. In addition, boohoo has created systems so that the Board can reassure itself and be
reassured that progress not only continues to be made but (which is more difficult and will
require constant vigilance) that the changes now put in place will endure in the form of
business as usual. It is sufficient to say ‘so far, so good’.
59. At this stage it only remains to add that throughout the months of my involvement in
boohoo, I have encountered no resistance either from boohoo, its Chief Executive, or any
of those (however senior or junior) involved in the A4C programme and there has not been
the slightest difficulty arranging meetings in whatever area that I have wished to probe or
ask about. The enthusiasm for the changes that I have sought to summarise from all is
obvious.
14 September 2021
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