As part of the PRI-coordinated engagement, Dutch investment manager Robeco and French asset owner ERAFP led a dialogue with the French retailer Carrefour. During several conference calls and company visits to Paris, the investors learned about Carrefour’s model to improve labour practices in its supply chain.

Using workers to identify and prevent labour-related issues

Carrefour feels that every supplier should remain responsible for managing their factories and that Carrefour must therefore not interfere in day-to-day operations. The company operates unannounced audits, where a minimum of ten employees are interviewed. Labour standards risk management is a bottom-up process, managed between the quality manager and the human rights manager for every supplier relationship.

Building strong relationships with unions

A key pillar of Carrefour’s approach is to work closely with unions. Carrefour collaborates with UNI – the global association of trade unions – who they meet quarterly to discuss human rights and labour-related issues. In Carrefour’s experience, working through the tripartite combination of the employer, the worker and the trade union is the most effective way to improve working conditions and create a constructive environment for collective bargaining at supplier level. The experience with this approach has been positive and has led to better access to information. For example if a supplier bans unions, Carrefour is likely to find out directly from the unions. Carrefour continues to evaluate the success of its approach compared to more traditional, prescriptive approaches adopted by some other retailers.

Collaborating with partners and peers to address root causes

Carrefour is aware that many systemic improvements are still needed. The company recognises that there are cases such as forced labour issues at its supplier CP Foods, where it did not have all the necessary information.

Carrefour is convinced that this is a challenge for which it should identify solutions at local rather than at headquarter level. Ultimately, the company aims to go beyond audits, which are snapshots of labour standards in time, and is committed to working collectively with NGOs, unions, and sector peers to improve practices.

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From poor working conditions to forced labour - what's hidden in your portfolio?