John Lewis Partnership Annual Report and Accounts 2015

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John Lewis performance (continued) John Lewis Partnership plc Annual Report and Accounts 2015

SOURCING REVIEW

We are a much more complex business today than when John Lewis started one hundred and fifty years ago. In a rapidly changing economic, social and environmental context, the way our Constitution guides how we do business becomes particularly relevant.

We have 350,000 product lines in our John Lewis shops and 280,000 online. These are sourced from thousands of suppliers from across the globe. Through our sourcing, we can have a huge direct and indirect impact on the environment and communities in which we operate. It is up to us to ensure we manage our footprint responsibly, creating positive change where we can.

In 2014/15, we analysed numerous issues which could have an impact on our performance. We prioritised these to ensure we’re addressing the most material ones. We have thousands of suppliers, more than a third of which supply our own brand products, so issues related to our sourcing are particularly relevant for us.

Understanding where products come from

Tracing the original source of all the raw materials used in products, and ensuring they come from a sustainable source, is a challenge for a lot of retailers. We use a number of raw materials across our John Lewis own brand ranges. It is important for us to be able to trace their sources, particularly for materials we use a lot, such as timber.

Improving the traceability of raw materials and a responsible approach to sourcing them will help us minimise environmental damage, for example avoiding deforestation, which is a serious issue globally. We are working to increase the traceability of key raw materials used, and are also working towards sourcing them responsibly. In 2015/16, we will review our sourcing strategy to help us on our sustainability journey.

Avoiding deforestation and habitat loss

According to the World Resources Institute, the world has lost nearly 13 million hectares of forest – an area roughly the size of England – every year between 2000 and 2010. According to the WWF, demand for wood is set to triple by 2050 and currently only around 10% of the world’s forests are protected. There is an increasing risk of illegally logged timber ending up in complex supply chains that retailers are not able to easily trace. In this context it becomes ever more important for us to ensure the sustainability of the timber we source, for example through third-party accreditation schemes.

The European Timber Regulation (EUTR) aims to limit the trade in illegal timber. Since it came into force, our focus has been on due diligence in our diverse supply chains, through a process which in fact exceeds the scope of the regulation.

All of our own-brand wooden outdoor living ranges use FSC certified wood.

We have experienced a number of challenges getting the right information from our suppliers, many of whom were not ready for this level of engagement. While we have invested time educating them on our requirements, this has also meant we have had to face the reality that we would not meet our previously stated targets. These were to source all own-branded wooden products from certified sustainable or recycled sources by the end of January 2016, and paper by the end of 2015. In 2014, our focus has been to reassess how we achieve our ambition by improving our data, driving engagement, and continuing to implement and ensure compliance with our policy.

Driving best practice

We continue to work with expert non- governmental organisations (NGOs) to deepen our understanding of our material issues. For example the Rainforest Alliance is providing us with expert advice on our timber sourcing policy, as we work towards our new 2020 ambition.

Sourcing sustainable cotton

John Lewis is a member of the Better Cotton Initiative (BCI) which aims to make global cotton production better for the people who produce it, better for the environment it grows in, and better for the sector’s future. We have now switched 50% of the cotton used in our schoolwear polo shirts to using Better Cotton sources. In 2014, BCI supported our efforts to create an on-pack message “Made with Cotton which supports more responsible production”. We have a target to source 50% of cotton from more sustainable sources by the end of 2020/21. See more on our website.

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