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As we do not manufacture the majority of the products that we sell, we engage regularly with our suppliers to ensure they know their responsibilities as a Dunelm supplier and take ownership for compliance and progress towards our targets. All suppliers sign up to our Ethical Code of Conduct (which aligns to international labour standards and includes an enhanced section on Modern Day Slavery and a commitment to improve their environmental performance) and to our standard terms and conditions. Recently, we have evolved our audit programme to include environmental risks alongside ethical and social risks, which we have monitored for many years.

ETHICAL ASSESSMENTS AND AUDITING

We expect our supplier partners to demonstrate full compliance with the social, ethical and environmental standards set out in our policies in a transparent manner.

Who needs an audit?

Tier 4

Fibre processing

Tier 3

Fabric and cotton suppliers

Tier 2

Tier 1 sub-contractor

Tier 1

Final product factory

Tier 0

Office, retail, distribution centres

All sites that manufacture a finished product for Dunelm (Tier 1 suppliers) must provide a low-to medium-risk graded ethical audit (not more than two years old) and a valid building and fire safety certificate. Our ethical audit programme has been extended to cover all warehouses that hold stock of Dunelm branded product and selected Tier 2 sites. In response to our findings, we review and raise our audit standards annually – making it harder to reach our internal targets but ‘doing the right thing’ for the long term, see Modern slavery. In FY21, our ability to audit sites and close off corrective actions was hampered temporarily by Covid-19 restrictions. At FY21 we had in-date audits for 89% of Tier 1 factories. In FY22 we intend to map all Tier 2 textiles suppliers and extend our ethical programme to them.

We use an independent third-party expert Verisio to assess, grade and monitor the social and ethical performance of the supply chain for both product and third-party service providers. Corrective actions and timescales are logged on digitised supplier scorecards on our web portal, giving a ‘live’ overview of individual supplier performance. We work closely with our suppliers – especially key partners – to help them rectify any issues within agreed timescales. However, where participants refuse to engage in continuous improvement or to supply minimum documentation, we will not compromise our supply chain integrity. If action is not taken within an acceptable period, Dunelm will stop buying products from that supplier and supply chain. This year we implemented unannounced, full spot check audits in UK sites on a risk basis and during FY21 we audited over 40% of applicable sites. This was a major initiative which focused on areas such as ‘right to work’, minimum wage payments and Covid safety. We plan to increase the frequency of spot checks in FY22.

ENVIRONMENTAL ASSESSMENT AND AUDITING

In FY21, we continued to roll out processes to assess the environmental practices of sites that manufacture our own brand products, including water, chemicals, emissions and energy use. We moved from a trial stage to working with independent supply chain verification specialists for our major/high-profile supply chain materials and introduced an assessment programme to support the verification of recycled materials. We also joined the Textiles 2030 industry group and committed to their targets to reduce the environmental impacts of textile sourcing, see Cotton.