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SUPPLY CHAIN Agricultural Inputs Resources and Agriculture Cultivation & Harvesting Animal Keeping Supply Chain and Processing Production Processing Transportation Lidl Ireland/Northern Ireland | Sustainability Progress Report 2018/19 SO CIA Food supply chains LS TA N DAR As part of our due diligence process, we require all our ‘tier one’ nationally negotiated suppliers to The Risk Assessment Tool of the Sedex Platform be registered in the Supplier Ethical Data Exchange (Sedex) platform and to be linked to us. allows us to identify the supplier’s sites with ‘Tier one’ refers to the final packaging and production sites of our suppliers. We also require them potential social risks. The tool gives a risk rating to to complete the Sedex Self-Assessment Questionnaire (SAQ) and to update it every six months. The SAQ allows us to collect information such as the number, gender and nationality of their employees, the percentage of seasonal workers, the country of provenance of the raw materials purchased, whether a labour provider agency is used, the names of the labour providers and what systems are in place to monitor labour providers. all our suppliers’ sites based on the data captured with the SAQ and the ‘inherent risk’ data calculated by Verisk Maplecroft, a leading global risk analytics company. The ‘inherent risk’ is based on the country, product area, sector profile and site function. If a supplier’s production site is assessed as high risk on the Sedex Risk Assessment Tool, we will ask the supplier to complete a Sedex Members Ethical Trade Audit (SMETA) or to share the results of a SMETA ethical audit from within the past year. If non-compliances are found, our approach is to work collaboratively with our suppliers to address these areas on time in line with the agreed corrective action plans. Non-food supply chains In relation to auditing of our non-food supply chain, Lidl Group has been a member of the Business Social Compliance Initiative (BSCI) for over ten years. In this time, all tier one non-food suppliers regularly undergo a BSCI audit. When issues are identified, action plans are developed, and progress is monitored by ethical trading specialists within the business. Within our non-food supply chains, the tier one production facilities for our own-brand textiles and footwear are published on our Lidl Germany website. This list currently includes over 450 producers and is updated every six months. Contractors Regarding our contractors, we published our Modern Slavery Statement for Northern Ireland for the 2016 financial year, which sets out our expectations for the contractors that we use in Northern Ireland specifically. We require our contractors to agree to conduct a programme of annual training to ensure compliance with our Modern Slavery Requirements. If our contractors breach our Modern Slavery Requirements then we ultimately reserve the right to terminate our relationship with them. Operations and Processes Customer and Society Logistics Centre Transportation Stores and Services Purchase Usage Disposal Sedex is an online system widely used across the industry to gather information on labour standards, health and safety, environment and business ethics, enabling us to identify sectoral trends and priority areas within our supply chain. DS page 31