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Responsible purchasing and sustainable selections

 

We purchase and sell responsibly and support our customers in making sustainable choices
  • We develop our product selections while listening to customers.
  • We ensure responsibility in the supply chain.
  • We are accountable for the safety and quality of products.
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Topic Objective Progress of objectives 2014 Progress of objectives 2015 Progress of objectives 2016

Supply chain

The social responsibility of the production of own direct imports from high-risk countries has been assured.

Kesko's suppliers in high-risk countries had 284 factories or farms within the scope of the BSCI process. 88 BSCI full audits and 74 BSCI re-audits were conducted in the factories and farms of suppliers in high-risk countries. We started an assessment of human rights impacts.

Kesko's suppliers in high-risk countries had 200 factories or farms within the scope of the BSCI process. 107 BSCI full audits and 80 BSCI re-audits were conducted in the factories and farms of suppliers in high-risk countries. The social responsibility of the production of Kesko's grocery trade's own direct imports from high-risk countries was 100% assured.

We continued our work related to the human rights impact assessment. We published the manufacturing plants of private label and own import clothes, accessories, shoes and bags operating in high-risk countries on our website.

210 BSCI full audits and 60 BSCI re-audits were conducted in the factories and farms of Kesko’s suppliers in high-risk countries. At the beginning of 2017, Kesko’s suppliers in high-risk countries had a total of 386 valid social responsibility audits.

The social responsibility of the production of Kesko’s grocery trade's own direct imports from high-risk countries was 100% assured. Kesko Onninen Purchasing Office (KOPO) started operations in Shanghai, China. Kesko’s grocery trade and ICA Global Sourcing launched a sourcing cooperation in the home and speciality trade.

As part of the human rights assessment, we conducted a human rights survey at factories in high-risk countries in cooperation with the Trade Union Solidarity Centre of Finland (SASK). The country-specific reports by SASK provided valuable information for the development of our operations. We forwarded the information received to BSCI in order to develop the audit procedure

We assure the responsibility of the ingredients (Tier 2) of private label Pirkka and K-Menu food products.

We listened to our stakeholders when developing a new risk assessment tool for assuring the responsibility of the ingredients of own-brand grocery products.

Using the risk assessment tool, we started the process of assuring the responsibility of the ingredients of Pirkka and K-Menu products. We established the origin of the ingredients of 1,923 own-brand grocery products. Among these, 233 contained ingredients which require further investigation concerning the responsibility of the ingredient manufacturer based on the risk assessment.

We continued work in order to assure the responsibility of ingredients in the own-brand grocery products. We conducted ingredient risk assessments on 160 new Pirkka or K-Menu food products. Among these, 29 products contained ingredients which require further investigation in terms of responsibility.

We will reduce the water risk caused by our operations.

We identified the need to determine the water risks caused by our operations. Due to the large consumption of imported processed goods and the virtual water footprint associated with them, almost half (47 %) of the water footprint of Finnish consumption falls outside of Finland. Kesko’s most significant impacts on water consumption are thus caused by imported products for sale, which originate from areas suffering from water scarcity.

We initiated a water risk assessment for our own brand products in order to identify the water basins most affected by water scarcity and contamination issues in our supply chain.  The target is to conclude the water risk assessment in 2016.

The water risk assessment is in progress and the aim is to use the results to plan actions.

Policies

Fish and shellfish: The selections of Kesko’s grocery trade and K-food stores do not include species on the red list of the WWF’s fish guide. Kesko’s grocery trade and K-food stores promote green list species in their selections. When making decisions concerning selections, we favour sustainable stocks of fish and MSC- and ASC- certified suppliers. The K Group's fish and shellfish policy has been in effect since 2008.

The Pirkka range included 29 MSC-certified fish products.

The Pirkka range included 41 MSC-certified fish products.

The retail selection of Kesko’s grocery trade included 178 MSC-certified fish products, of which 37 were Pirkka products. Kespro was granted MSC and ASC traceability certificates. All stages of Kespro’s fish and shellfish supply chain have been audited, and Kespro and its certified customer restaurants can use the MSC and ASC ecolabelling in their marketing. Kespro’s HoReCa selections included nearly 300 MSC- and ASC-certified products, and the number continues to grow. Kespro's Menu range had more than 25 MSC-certified products and 2 ASC-certified ones.

Palm oil: By 2020, all palm oil in our own brand groceries will be responsibly produced (CSPO).

Approximately 13% of the palm oil in the Pirkka food products was certified sustainable palm oil (CSPO).

Approximately 20% of the palm oil in the Pirkka food products was certified sustainable palm oil (CSPO).

Approximately 34% of the palm oil in our own brand groceries (Pirkka, K-Menu and Kespro’s Menu) was certified sustainable palm oil (CSPO).

Soy: By 2020, all the soy used in the production chain of our private label products will be responsibly produced, and be either RTRS or ProTerra certified.

This applies to:

- the ingredients of soy origin of the private label foods

- soy fodder used in the production of private label products of animal origin

- soy in the animal feed products sold by the agricultural trade.

The objective was added in 2016.

The objective was added in 2016.

We were a founding member in the Finnish soy commitment group, which started operations in February 2016. The members of the Finnish soy commitment group pledge to ensure that by 2020 all the soy used in the production chain of their private label products will be responsibly produced, and be either RTRS or ProTerra certified. The commitment covers both the Finnish production chain and sourcing from other countries. We joined the Round Table on Responsible Soy (RTRS) and thereby committed to promote responsibility in the production chain of soy on a long-term and target-oriented basis. 

Timber:  We will ensure the origin and traceability of the timber and wood products sold by the building and home improvement trade. The products made of wood of tropical origin must be either FSC or PEFC certified.

 

Rautakesko has been granted the PEFC certificate, which covers spruce and pine timber and processed timber, MDF boards' wholesale in Finland (percentage-based method).The certificate is issued on 11 November 2013 and  is valid until 11 November 2018. 

The PEFC certification percentage is announced monthly at Kesko's web pages.

The average PEFC certification percentage was 91.2% for pine and 84.6% for spruce. We are investigating the opportunities to expand the timber policy to cover the entire Group.

Plastic: We promote the recycling and reuse of plastic. We create operating models which prevent plastic from ending up in bodies of water and elsewhere in the natural environment. We seek alternatives to plastic as a packaging material. By means of consumer communications, we will increase the sales share of alternative shopping bags (cotton bags, reusable bags and jute bags) and cardboard boxes to 10% by 2025. We will look for solutions to replace PVC as a material.

The Pirkka reusable bag with the Boulevard design by Vallila was included in K-food stores’ selection.

More reusable bag alternatives were added to the grocery store selections: a new Vallila design, a Summer Day bag, and a Red Nose Day bag.

We published our plastics policy in October 2016 and pledged to implement measures aiming at reducing the use of plastic bags. Plastic bags have been subject to a charge in the K Group's grocery stores as well as building and home improvement stores, and, at the beginning of 207, they became subject to a charge in the agricultural and machinery stores as well as in furniture stores. By the end of 2017, thin small plastic bags will no longer be available at the checkout. Our selections offer alternatives to plastic bags; reusable bags, cotton bags, jute bags as well as paper bags and bags made of recycled plastic. The share of paper bags in the sales of all different shopping bags was approximately 1.5% and that of reusable bags was approximately 1.5%. In spring 2017, we included the Pirkka ESSI circular economy bags made by Amerplast Oy in our selections. They are manufactured from plastic packaging waste recycled by households through the Rinki eco-points. We will discontinue the use of microplastics in our private label cosmetics brand products in 2017. The packaging of our private label cosmetics does not contain PVC. We will discontinue using PVC as the material for Kesko’s gift cards in 2017. We will work to eliminate PVC from the material of the K-Plussa card in 2017.

Own brands with responsibility labelling

We offer an extensive selection of own-brand products with responsibility labelling

The Pirkka range included 44 Pirkka Fairtrade products, 116 Pirkka Organic products, 29 Pirkka MSC-certified fish products, and 16 Pirkka UTZ-certified products.

The Pirkka range included 40 Pirkka Fairtrade products, 134 Pirkka Organic products, 41 Pirkka MSC-certified fish products, and 17 Pirkka UTZ-certified products.

The Pirkka range included 36 Pirkka Fairtrade products, 118 Pirkka Organic products, 37 Pirkka MSC-certified fish products, 32 Pirkka UTZ-certified products and 65 Nordic Swan label products. All Pirkka and K-Menu coffees are Fairtrade or UTZ-certified. The Pirkka range includes 15 Fairtrade or UTZ-certified chocolate and baking chocolate products. In 2017, all Pirkka range chocolates will be Fairtrade or UTZ-certified.

Kespro’s Menu range included 7 Fairtrade products, 5 organic products, 25 MSC-certified products, 2 ASC-certified products, 13 products with the Nordic Swan ecolabel, and 5 UTZ-certified products.

All interior and exterior paints in the K-Rauta's Cello range carry the Nordic Swan ecolabel. 62 Cello products carried the M1 label and 105 Cello products had the Allergy Label. 15 products in the PROF range carried the M1 label.

 

Product safety

The product safety of the K Group’s selections has been verified. The Product Research Unit's laboratory monitors the product safety and quality of the private labels and own imports in the grocery trade. All of our food product operations have a self-control plan in place.

The Product Research laboratory analysed 8,864 product samples and conducted 20,386 analyses. Forty audits were performed.

The Product Research laboratory analysed 8,037 product samples and conducted 20,396 analyses. Seven audits were performed.

The Product Research laboratory analysed 7,770 product samples and conducted 17,176 analyses. The product safety of 539 suppliers was verified by means of a certified auditing procedure. The number of own audits was 13.

          

Management approach

Material aspects

  • Compliance of products and services
  • Customer health and safety
  • Assessment of suppliers’ working conditions
  • Human rights
  • Marketing communications

Policies, principles and commitments

Responsible purchasing is guided by Kesko's purchasing principles.

The principles are based on national labour protection legislation and corresponding conventions of the International Labour Organization (ILO), which are applied when national legislation does not correspond to the same level. In its operations, Kesko pays special attention to human rights issues and working conditions in its supply chain and, in monitoring these, primarily focuses on suppliers in high-risk countries. In accordance with the BSCI (Business Social Compliance Initiative), high-risk countries are countries and areas where there is a risk of human rights and workers' rights violations. The classification is based on the World Bank's Worldwide Governance Indicators.

Kesko and K Group stores are responsible to the products' end-users for ensuring that the products comply with all the requirements of Finnish and EU legislation, are safe for users and meet quality and other promises. Kesko's product labelling and marketing communications comply with legislative requirements and the recommendations of authorities.

Kesko and K Group stores want to support customers in making sustainable choices and offer a wide selection of products with responsibility criteria.

Kesko's policy on chemicals applies to home textiles, clothing, leather goods, shoes and upholstered furniture. Based on EU and Finnish legislation, it lists the chemicals which are prohibited or the quantity of which is restricted in the products supplied to Kesko. In addition, for substances of very high concern, Kesko sets restrictions that are stricter than those set in legislation.

Kesko’s plastics policy promotes recycling and the reuse of plastics. The objective of the operating model is to prevent plastic from ending up in bodies of water and elsewhere in the natural environment.

Various product group-specific responsibility policies and statements, such as the palm oil policy, the fish and shellfish statement, the timber policy, and the stand on the sandblasting of jeans, have been prepared to support purchasing operations.

Monitoring and control systems

Certification and audit systems related to production in high-risk countries approved by Kesko.

Supplier agreements require that suppliers and service provides comply with the principles of the K Code of Conduct and the BSCI Code of Conduct links. Kesko's grocery trade requires that the manufacturers and producers of its own-brand products have an international food safety certification. Kesko’s grocery trade approves the following audit procedures: BRC, IFS, ISO/FSSC 22000, SQF1000/2000 and GlobalGAP, IP basic certification for vegetables, or IP-Sigill.

The Product Research Unit's laboratory monitors the quality of products sold by K-food stores and K-Citymarket hypermarkets. It is a testing laboratory T251 which has been accredited by the FINAS accreditation services and approved to comply with the SFS-EN ISO/IEC 17025 standard.

The assessment of a store's responsible operations comprises the store's annual self-assessment, the criteria defined in the store's quality system and a responsibility audit performed by an external party on a specified sample. The auditor reports the results to the store and to Kesko.

Programmes, projects and initiatives

Responsible choices are communicated to customers in stores according to the K-responsibility concept within-store communications, such as shelf labelling and product labelling. The selection and marketing policies of organic, eco-labelled and Fairtrade certified products are included in K-food stores' chain concepts. The K responsibility concept was first adopted in K-food stores in 2013. The concept was taken into use in K-Rauta stores. In 2015, it was adopted by Rautia stores and in the K-maatalous chain.

In 2016, Kesko joined the new BSCI Sustainable Wine Programme pilot programme of the Foreign Trade Association (FTA). The programme focuses on improving the social responsibility and environmental responsibility of wine production and its goal is to increase transparency and traceability in wine production.

In 2016, Kesko became a member of the Centre for Child Rights and Corporate Social Responsibility (CCR CSR) based in China. The objective of CCR CSR is to prevent and reduce child labour, improve the status of young workers at factories, and make the daily life of migrant worker parents easier. Kesko participates in the Virtual Working Group of the organisation.

Grievance mechanisms

  • SpeakUp reporting channel
  • K Consumer Service
  • Customer feedback systems of the chains

Boundaries

Compliance Kesko
Product safety Kesko - private labels and own imports
Social responsibility of procurement (1st tier) Kesko