CORPORATE RESPONSIBILITY
Corporate Responsibility
Highlights of the year
- Reduced CO2 emissions from the Group's buildings by 13% per £1,000 of turnover
- Conducted 487 factory visits during the past year
- Launched the Burberry Foundation
- Established an intern programme
- Reduced air travel for UK employees by 17% per £1,000 of turnover
- Moved to new headquarters at Horseferry House, reducing environmental footprint
- Founding member of Luxury Brands Sustainability Group
One of Burberry's five key strategies is pursuing operational excellence. Operational excellence has five important areas of focus:
- Healthy business partnerships: based on shared values and high ethical standards
- Environmental excellence: operating efficiently with minimum waste and maximum control
- Excellence in people management: attracting and retaining talented employees
- Excellent products and service: quality, craftsmanship, heritage and service standards
- Contributing to society: investing and engaging in the communities Burberry serves
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.
Clear management
Michael Mahony, Senior Vice President Commercial Affairs & General Counsel is accountable for CR matters on behalf of Burberry and the Board. He chairs the CR Committee which formally reports to the Group Risk Committee. The CR Committee held three meetings during the year. Two supplementary committees, the Environment and Supply Chain Risk sub-committees, are responsible for these two more detailed topics. Both sub-committees make formal reports to the CR Committee.
The Group employs a CR team of nine people. The team is active in the areas of supply chain, environmental and community management and draws on external independent advice. Key policies, such as those on Environment, Ethical Trading, Employee Volunteering and Exotic Materials - are reviewed and approved by executive management.
Healthy business partnerships: supply chain
Burberry's goal is to be as recognised for the excellence of its supply chain as it is for its luxury products.
Burberry believes that its products should only be made in factories that comply with local labour and environmental laws and by workers who are paid a living wage, work fair but not excessive hours and are provided with a safe and hygienic work environment. All active Burberry suppliers are governed by its ethical trading policy. This policy is based upon internationally accepted codes and published in full on our website at www.burberryplc.com under the 'Corporate Responsibility' section.
The majority of Burberry's products are manufactured in Europe through third-party suppliers. Burberry's internal team and third-party experts monitor and audit suppliers to assure compliance with its standards. Increasingly suppliers are taking part in capacity building programmes to improve their businesses and in turn compliance with Burberry's policy. Burberry engages in many industry initiatives and is a member of Business for Social Responsibility (BSR). This Group works collectively to address industry issues and improve standards.
2008/09 Results
- Factory visits: 487 factory visits to assure compliance with the Burberry ethical trading policy.
- Stakeholder engagement: Active member of three BSR working groups: Mills and Sundry Suppliers; Luxury Brands; and Beyond Monitoring.
- Capacity building: 25 key suppliers took part in long term capacity building programmes focused on training for productivity, human resource management systems and smarter communication.
- Worker hotline: Roll out of the Burberry confidential worker hotline in its suppliers' factories, which act both as a whistleblowing mechanism and counselling line.
- Pre-approval process: New suppliers are approved by the CR team prior to working with Burberry.
Ethical trading policy
Number of CR visits/audits
Environment
Burberry's largest environmental impact areas include carbon emissions (linked to energy use, travel and distribution network), solid waste and the use of bulk materials such as packaging.
The Environment Committee reviews all key impacts quarterly, tracking reductions and initiating new projects.
2008/09 Results
- Packaging: Burberry launched a packaging project to reduce the amount of transit packaging used. The re-use of boxes, a switch from plastic to paper tape to seal boxes and reduced thickness of plastic on security bags by 25% saved costs and environmental impacts.
- Corporate headquarters: During 2008, Burberry relocated to new Corporate headquarters at Horseferry House, London. The building was designed with many energy-saving features, such as ambient light sensors, efficient cooling, light timers and video conferencing facilities. The chemicals used for cleaning have been reduced, the recycled content of stationery improved and 'binless' offices have improved recycling. Horseferry House and its operational efficiencies are the standard for all Burberry offices globally.
- Energy: Energy audits were comissioned at UK manufacturing and warehousing sites and followed up with an energy-saving programme which included the installation of energy-saving compressors.
- Waste reduction: Renewed focus on increasing recycling globally. In the UK, recycled waste has increased its share of total waste to 42%. This was achieved against a back drop of increased waste overall due to a number of site re-organisations and centralising the London office.
- Transport emissions: Burberry launched a sea vs air shipping initiative which resulted in significant savings and reduced environmental impacts. New video conferencing facilities at Horseferry House and key regional offices in New York, Hong Kong and Barcelona have enabled the reduction of business travel. As a result monthly growth in air travel has reversed reducing CO2 emissions.
Global building energy CO2
Air travel CO2
The data in these graphs comes from a combination of automated and manual internal processes. The majority is based on actual data, supplemented where necessary by some approximations.
Organisational development: attracting and retaining talented employees and customers
The corporate resources team supports the organisational strategies to deliver the business results for the organisation. A key focus is on attracting, retaining and developing talent.
2008/09 Results
Recruitment:
- An e-recruitment website was launched to more efficiently and effectively source global talent.
- A corporate intern programme was launched for recent graduates and undergraduate students.
- Talent review – a global assessment of capability at senior levels and high potential individuals was conducted throughout the organisation.
- Development programme – management development skills workshops were designed, developed and delivered.
- Evolving the organisation – the organisation continued to develop in line with Burberry's key strategic themes, which included evolving the supply chain and adding a new global planning function.
The 'Burberry Experience': During the year, Burberry piloted a global education and training programme designed for and delivered to all retail staff to ensure that the customer experience is in line with Burberry's brand standards and Burberry's luxury positioning. The pilot has been highly motivational for staff and results have been promising. The plan is to continue to roll-out the programme not only to all retail stores, but to wholesale customers and all franchisees.
Organisational effectiveness:
- In January 2009, Burberry announced a global £50m cost efficiency programme across all regions and corporate, aiming to deliver streamlined operations in line with overall demand, the most efficient organisation through tighter and more focused and flexible teams, and removing duplication of effort and inefficient processes. A significant proportion of this included restructuring of Spanish operations and consolidation of UK manufacturing.
- Due to the number of employees impacted it was necessary to enter into collective consultations in a number of regions. Business, employee and HR representatives worked closely to agree roles and terms and conditions beyond legal requirement. Employees were fully and proactively supported throughout with outplacement support, individual consultation, and redeployment opportunities where possible.
Health and safety
In addition to attracting and retaining talented employees Burberry also ensures a healthy and safe environment for all employees. Burberry has a formal health and safety audit process and programme that ensures all UK manufacturing sites and distribution centres are audited at least annually with major offices and retail locations audited at least once every three years. Overall UK audit scores continued to improve as a result of the thorough implementation of audit recommendations (prioritised on the basis of risk) and improved overall processes.
The auditing programme has been extended to include some major European retail stores and reviews were undertaken by a third-party consultant in the United States and key Asian markets. In addition, Burberry continues to enhance accident reporting and assurance framework for major operations.
Product and supply chain standards
Since 1856 Burberry has strived to achieve the highest quality standards in all components and stages of its supply chain process.
2008/09 Results
- Raw materials: During the past year, Burberry has been more efficient with the use of raw materials, reducing sampling and production wastage. Excess and out of season raw materials were recycled into carpet underlay or insulation.
- Fur: There has been and will continue to be occasions where consumer tastes demand Burberry's 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. Natural hides are carefully sourced, 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 and have been visited this year by Burberry's team.
- Restricted substances: To ensure no harmful chemicals are used or contained within Burberry products, the Group issues all licensees, vendors and manufacturers with a restricted substance list that prohibits the use of certain substances. The list has been amended to include the first list of chemicals proposed for action under the REACH Legislation. Burberry supports this action with a programme of vendor self-certification backed up with our own compliance testing.
Contributing to society
In 2008 Burberry continued its practice of corporate sponsorship worldwide by making targeted contributions to local charities in the communities where Burberry employees live and work. Charitable causes supported by Burberry corporate sponsorship fall across a range of needs, with special attention to the arts, education and women's and children's health and well-being. Burberry's more than 200 instances of corporate giving include cash donations and, where appropriate, product donation to assist charity development through raising awareness.
To complement this wide base of giving, in 2008 Burberry took steps to leverage its community impact by increasing and focusing charitable activity through the new Burberry Foundation. A registered charity in England and Wales, the Burberry Foundation works to help young people realise their dreams and potential through the power of their creativity. The Foundation seeks to advance three key goals for young people—to enable them to build confidence, make connections in their communities, and grasp opportunities to succeed—by empowering them to use their own intellectual creativity to imagine and achieve their life goals.
The Burberry Foundation benefits from the alignment between the Burberry brand and its philanthropic strategy: innovative, creative, and seeking programmes with broad appeal, democratic values and vibrant futures. The Burberry Foundation uses donations received from Burberry and other benefactors to make strategic grants and targeted donations of in-kind gifts and goods. Burberry supports the work of the Foundation through a comprehensive employee engagement programme that enables and underwrites employee volunteering.
2008/09 Results
- Grantmaking: The Burberry Foundation focused this year on three cities: London, New York City and Hong Kong. The funding strategy for each city identifies unique local challenges to successful youth development and supports charities with proven programmes to address them. Wherever possible, the Foundation partners with charities and social support organisations to leverage grantmaking. Examples of this include: support in London for Tower Hamlets Summer University, Envision and IntoUniversity; in New York for the Robin Hood Foundation and New Yorkers for Children; and in Hong Kong for the KELY Support Group, Junior Achievement Hong Kong and the Changing Young Lives Foundation.
- Employee engagement: In partnership with Foundation supported charities, Burberry's employees serve as mentors to young people and volunteer for a range of programmes. In addition to time served, employee volunteers draw upon corporate resources to help young people expand their horizons or gain opportunity. For example, Burberry is the corporate partner for job training courses that bring students to Horseferry House for tours of the corporate environment, mock interviews and shadow job placements. Burberry designers host young people for art and design courses in their studios and on the showroom floor. Burberry stores serve as excellent places to give young people exposure to retail environments in preparation for entry-level jobs in the sector. At holiday and school breaks, the Burberry offices welcome young people from various charity programmes and courses for celebration and congratulations. In 2008/09, the Employee Volunteering Programme's first year, Burberry staff have volunteered a total of 350 hours to Foundation supported charities.
- In-kind donations: The Burberry Foundation seeks to channel products donated by Burberry to Foundation supported charities. Donations are designed to be both generous and strategic and range from smaller, utilitarian products (such as materials for an art or design course, or a luxury piece for a charity fundraising auction) to large-scale programmes of donation (such as tailored clothing donations to outfit job training students so they can interview smartly and arrive prepared for their first weeks of work). The 2008 Christmas Coat Donation saw more than 500 coats distributed in London, New York City, Hong Kong, and Seoul across 12 different charities, ensuring that the coats went to job training students in time to help them begin their job search with confidence.
- Office equipment donations: Redundant office furniture and equipment from Burberry's old offices were made available to the Foundation supported charities for their offices and programmes.
- Corporate donations: An ongoing part of doing business is to selectively support customer-related events and charitable causes. Each regional office has a discretionary budget which is approved and tracked quarterly.
For a list of charities supported by the Burberry Foundation, or for further information, please see www.burberryfoundation.com.
Community donations
