2015/16

Sedex Annual Review

Making it simpler to do business that’s good for everyone

sedexglobal.com

I would also like to extend my thanks to Chris Start (the

previous Chair), for his expert guidance which saw the

organisation grow and thrive in the five years of his

leadership.

As Chair, my aim is to bring insight and experience

from 25 years working within the retail and

manufacturing industry, coupled with my knowledge

as an experienced board member and chair of

private and public companies, to help Sedex realise

its ambition and potential. Sedex presents an

extraordinarily exciting challenge; the huge reach of

the platform, the sheer number of sectors covered by

our membership and the complexity of global supply

chains all lead to a great potential for impact.

Continuous improvement in supply chains is not a box

to be ticked, but an ongoing process. In the financial

year 2015-16 we have been working to shape our

offering around what we see as the ideal responsible

sourcing cycle, so that we can best guide and support

our members at every stage.

We have consolidated the foundations of our new

platform, Sedex Advance, which was launched in

October 2015. It is now one of the largest collaborative

platforms in the world for buyers, suppliers and

auditors to store, share and report on supply chain

information quickly and easily, and is used by more

than 40,000 Sedex members in over 150 countries.

We also continued collaborative partnerships with

various stakeholders, and remained at the driving edge

in social and ethical monitoring through the newly

formed Sedex Stakeholder Forum and the SMETA best

practice audit methodology.

In 2016 we held two world-class responsible sourcing

conferences – one in London in March, the other in

Shanghai in June. These events bring hundreds of

Sedex’s global members and leaders in responsible

sourcing together for discussion, insight, networking

and practical advice. If you haven’t been to one yet,

I urge you to attend one of the three conferences

we will hold in 2017 – in London, Shanghai, and – in

conjunction with KPMG – in Sydney.

The business and sustainability landscape is changing

rapidly. More and more companies are taking action

to improve performance within their supply chain, to

reduce risk and secure their businesses for the future.

I would like to take this opportunity to thank all our

members, stakeholders and the very dedicated Sedex

team for their commitment to making it simpler to do

business that’s good for everyone. I look forward to

working with you all during my time as Chair.

Steven Esom, Chair of the Board

I am honoured to join the Sedex Board as Chair and would like to thank the members of the Board and all of the Sedex team members I have met so far in my journey for the warm welcome to the organisation.

About Steven

Steven is an experienced board member of consumer-

facing businesses and chairs a number of boards. His

current directorships include Cranswick Plc, The Rank

Group, Advantage Travel Partnership, British Retailing

Consortium and GB Boxing, responsible for developing

potential Olympic medal athletes.

His retail career included Executive Director at Marks

& Spencer responsible for food. Prior to that, he was

Managing Director of Waitrose from 2003, rapidly

expanding the business with two major acquisitions

and leading the successful re-positioning of Waitrose

as a national fresh food lead retailer, after initially

joining the John Lewis Partnership as Waitrose’s

Director of Buying in 1995. Before joining the

Partnership, Steven spent most of his career at

Sainsbury’s in senior commercial roles.

Letter from the Chair

Letter from the CEO

Despite these hurdles, we continue to advance our

mission to reduce complexity, increase collaboration

and help our members build their value chains, simply

and sustainably.

We’re leading the transformation of supply chain data

sharing and reporting for companies around the world.

We have now established a strong, stable financial

position. And we’re well placed to continue our

ongoing investment into our data management tools

and platforms, together with investing for the industry

around new areas of risk, geolocation, reporting and

visibility.

This year we have – along with the industry – reflected

on how data and services can illuminate discussion

around the question: “what comes next after a pure-

audit approach?”. Working with some of our partners

and likeminded initiatives, we find that we are

increasingly well-placed to lead discussion on this and

further collaboration topics.

I’ve been working hard to expand and re-energise our

global Sedex team, strengthening our professionalism,

culture and values, reflecting the core principle that

our members come first. Speaking to our members

across the globe has given me a clearer picture of

where we are delivering well. It’s also shown me the

key areas for future growth, and occasionally, where

the pressure to do even more is now evident. It’s a

pleasure to see the roll-call of global brands which

choose to partner with Sedex to ensure their supply

chain is sustainable. But even down to our smallest

member companies, each one is equally important

to me and my team. We never forget that Sedex

exists because of, and for, our members. It is simply a

privilege to work with you all.

Over the years Sedex has achieved great things, and

today we see our industry at the beginning of an

incredible new wave of innovation and opportunity.

Together with my dynamic new team, I am determined

to ensure that Sedex is part of that journey. Legislation

such as the UK Modern Slavery Act demonstrates

how the movement we helped start 13 years ago

is now firmly rooted in public and governmental

consciousness. The tide has turned and sustainability

is no longer optional for leading businesses.

I look forward to continuing this exciting journey with

our members, partners and stakeholders, and extend

thanks from myself and the Sedex team for their

continuing support for Sedex.

Jonathan Ivelaw-Chapman

CEO

In my first year as CEO, I’m proud of the progress we’ve made as an organisation, transforming our UK, international business and partnership structure. There have of course been challenges; from the transition of technology providers, to the changes in our legal and corporate governance, and our financial structure and planning. I have also had to reflect on many of the basics within the business, to ensure that we are a robust and scalable organisation, fit for our mission of making it simpler to do business that’s good for everyone.

Highlights and achievements 2015/16

Delivering enhanced supply chain technology and data reportingIn October 2015, we launched Sedex Advance, built

over an 18-month research and development process

in response to Sedex members’ demand for improved

tools to help them organise, understand and act

on their supply chain data. Sedex Advance enables

buyers, suppliers and auditors to share their data

quickly and easily, in a way that makes it simpler to do

business that’s good for everyone.

In September 2016, we launched a new version of

our Data Monitor reporting platform. This improved

reporting tool enables members to customise their

reports using multi-select filters, along with the

ability to generate graphical/chart reports. We are

continually delivering improvements to this reporting

platform and in 2017 we will dramatically reduce the

time it takes to run reports.

Sedex Risk Assessment Tool upgradeIn September 2016, Sedex released a major upgrade

to the Risk Assessment platform.  Historically,

Sedex’s tool reported on country and product risk

only. We increased our risk offering to include a pillar

breakdown so members are able to ascertain the risk

in four specific areas of their supply chain; labour

standards, health & safety, business ethics and the

environment.  In addition to this we brought the offline

and online Risk Assessment Tools into sync.

Delivering modular SAQ functionalityIn October 2016 we launched the new Modular SAQ

functionality within Sedex Advance - after much

demand from our members. This allows members to

request the addition of a bespoke set of questions

to be hosted within Sedex Advance, or to collaborate

within their industries to request an industry-wide

SAQ. These modular SAQs can be shared with buyers

and suppliers for completion. Our hope is that this will

enable members to collaborate and reduce duplication

of data capture, thereby enabling members to focus

on core sustainability initiatives.

Expanding our global community2015/16 was an extremely busy year for the Sedex

Membership team, with our largest annual growth of

new Buyer (A and AB) member organisations joining

Sedex in this period. An additional 125 companies

partnered with Sedex to support their responsible

sourcing programmes. There was a particular focus

from companies operating in the UK, where the

Modern Day Slavery Act 2015 came into effect.

We also saw significant growth of members across

Continental Europe, North and South America, Australia

and Japan. There was a diverse representation of

businesses from a number of sectors including

transport, retail, cosmetics, pharmaceutical, banking,

chemical and our first automotive member; McLaren

Automotive. Other new members included; Ansell,

Australia Post, Coles, Compass Group, Lidl, One World,

Perth Mint, Remy Cointreau, Virgin Atlantic, Virgin

Trains and WH Smith.

To meet the needs of the increased numbers of

members, we have continued to expand our team and

infrastructure in the UK, USA, South America, Australia

and Japan. This has seen the team increase in numbers

in London whilst also building on our partnerships and

strategic alliances In Chile, Japan and Australia.

Raising awareness and providing leadershipIn 2015/16 Sedex has continued to raise awareness

and educate our members about existing and

emerging supply chain issues. We have been

regularly featured in high profile international and

sustainability publications such as The Guardian,

Sustainable Brands, Supply Management, CIPS,

Pioneers Post, 2degrees and Green & Blue

Tomorrow. We continued to promote Sedex

members’ success stories and communicated

news to our members in our quarterly newsletter.

Our series of insight briefings also continued with

guidance for businesses around the UK Modern

Slavery Act. Advocacy by our CEO, Jonathan Ivelaw-

Chapman, was featured in publications as part of

the Paris Summit on Climate (COP21) and the United

Nations Association UK (UNA UK).

Through event partnerships with Bloomberg,

BSR, Ceres, Edie, Innovation Forum, ProcureCon,

2degrees and more, the Sedex team promoted

Sedex at major business conferences around the

world.

The Sedex Conference 2016, held in London

on 2-3 March, brought hundreds of leaders in

responsible sourcing together for two days of

discussion, insight, networking and practical advice.

Attendees from over 40 countries joined the event

both in person and online to hear from experts on a

range of key topics around the theme “simplifying

supply chain sustainability”. Delegates heard from

companies including Kellogg Company, Mondelez

International, M&S, Sky, The Body Shop, WPP, and

from organisations such as Carbon Trust, CDP, ETI,

Oxfam, Thomson Reuters and others.

The 2016 Sedex China Responsible Supply Chain

Conference, held in Shanghai on 23 June, was also a

great success. The conference welcomed over 250

participants to focus on “sustainable supply chains

and collaboration” in the current international and

Chinese context.

In addition to these large conferences, in 2016

we also supported membership events in Sydney,

Tokyo, New York and Santiago.

Expanding our global training offeringThe Sedex training team grew internally with two

new trainers and we expanded the external Global

Trainer Programme to now support 11 languages in

30 different countries. The first SMETA Foundation

Workshop was held in South Africa, meaning that

our licenced SMETA trainers now offer workshops

in Latin America, North America, China, Europe and

Africa.

A significant amount of additional guidance

was added to the Knowledge Hub and the team

delivered more Bespoke Training sessions than ever.

Developing our Helpdesk serviceSedex’s multilingual global Helpdesk team

continued building on the work and successes of

the previous 12 months. The team reviewed the

ways we interact and respond to enquiries, investing

in new initiatives and technologies to enhance our

service offering. They also worked to improve all

our interactions with members by reviewing the

combined skills, experience and language abilities

across the team. The team continued to meet

industry standards, receiving and responding to

69,469 enquires in FY 2015-16, with over 90 percent

answered within 48 hours.

In addition to supporting member enquires, the

team continued to build on the successful 2014/15

period by coordinating and completing supplier

engagement projects, audit management projects

and bespoke assignments. Across the year the team

connected with 6,852 suppliers via 45 projects.

The results delivered were well received by the

members who commissioned the work.

Continuous improvement and collaboration in practice In 2015/16 we continued to make a strong case

for continuous improvement and advancing best

practice in social auditing. After consultation with

existing members, the Associate Auditor Groups

(AAG) were re-constituted as the Sedex Stakeholder

Forum (SSF). Potentially open to a larger

membership than the AAG, the SSF brings together

leaders and practitioners from across the ethical

trade and responsible sourcing industry to discuss

the challenges they face and solve those problems

collaboratively.

The various outputs of the AAG/SSF working

groups in 2015/16 have shown the impact of their

collaboration across the value chain. With Sedex

Guidance on Operational Practice and Indicators of

Forced Labour, published in March 2016, the group

offered guidance on how to spot the signs and

likelihood of forced labour during a social audit. And

with a SMETA supplement on the UK National Living

Wage published in December 2016, the group was

able to give up-to-date guidance on the recent UK

legislation.

The release of a new Issue Titles scheme

in November 2016 was a further example of

collaboration. With the support of the SSF

we undertook the most comprehensive issue

title review to date, with input from over 120

stakeholders. Brands, retailers, audit firms and

suppliers around the world contributed to this

extensive project.

Even more stakeholders have been involved in the

development of SMETA 6.0 – the next version of our

best practice audit methodology. Throughout 2016

we have been reviewing how to incorporate current

best practices into the next SMETA, and we look

forward to launching the resulting update in April

2017.

Engaging with stakeholders In 2015/16, we reaffirmed our strong relationship

with the UN Global Compact (UNGC) by publishing

our 2014-16 Communication on Engagement,

demonstrating our commitment to promoting the

values of the UNGC among our membership and

stakeholders.

In May 2016, Sedex signed a Memorandum of

Understanding (MoU) to collaborate with the

Business Social Compliance Initiative (BSCI). The

partnership will see the organisations work together

to drive scale within the responsible sourcing

industry, creating numerous benefits for both

memberships. We also joined the Social and Labour

Convergence Project, overseen by the Sustainable

Apparel Coalition (SAC) which sees major brands

working together in order to transform working

conditions in the global apparel and footwear

manufacturing sector. And we signed an MoU with

Sustainable Agricultural Initiative (SAI) Platform,

to work together to improve the availability of

agricultural supply chain data.

Other examples of driving cooperation across

sectors include our collaboration with BSR on

gender equality, and our work on various projects

with EICC, Transparency International, CDP and the

European Commission.

Hands on guidance for our members As part of our drive to help members learn about

key responsible sourcing issues, we offered various

forms of guidance over the course of 2015/16. Our

webinar series about responsible sourcing saw

record-breaking attendance and received very

positive feedback. With the help of guest speakers

from SGS, Ergon Associates and ALP, we introduced

Sedex documents, the process of a social audit, and

answered questions from the audience. A special

webinar gave information about the Modern Slavery

Act and its implications for companies.

In April 2016 we released a new suite of free

e-learning modules for suppliers. The modules build

on content from the Sedex Supplier Workbook and

have been designed to help build capacity within

the supply chain with an engaging new online

learning system.

Partnering with ILO Egypt, we released the Sedex

Supplier Workbook in Arabic to make it more

accessible to a larger number of Supplier members.

786Buyer (A) and Buyer/Supplier

(AB) members

Sedex in numbers

Audit information in numbers 137,998

Total number of audits on Sedex Advance

21,862Total number of audits added from 01 Sept,2015 to 31 Dec, 2016

51,888Total number of corrective actions added from 01 Sept,2015 to 31 Dec, 2016

230,332Total number of corrective actions on Sedex Advance

Sedex membership in numbers 39,679

Supplier (B) members

117Audit companies (excludes independent auditors)

3.54Average number of customers that companies are linked to on the Sedex system

Sedex members represent over 25 industry sectors

1 Clothing 12.55%

2 Produce 10.30%

3 Grocery 6.76%

4 Chemicals 5.46%

5 Packaging 5.16%

6 Service providers

4.38%

7 Homeware 3.72%

8 Tools & Machinery

3.30%

9 Toys, Games & Hobbies

2.88%

10 Processed Foods

2.76%

11 Logistics 2.55%

12 Publishing & Printing

2.52%

13 Engineering 2.42%

14 Textiles 2.33%

15 Accessories 2.33%

16 IT, Telecom & Electrical

2.28%

17 Stationery 2.26%

18 Drinks 2.22%

19 Construction 1.79%

20 Dairy 1.70%

21 Meat, Fish & Poultry

1.29%

22 Health & Beauty 1.04%

23 Horticulture 0.89%

24 Agriculture 0.71%

25 Footwear 0.49%

26 Drugs and PharmaceuticalsProducts

0.24%

27 Metals & minerals

0.22%

28 Other 15.44%

21-2

8

28

1

2

3

4

5

6

7

89

10

11

1213

1415

16

17

1920

18

6.64%

4.73%

38.04%

4.58%

Sedex offices London, European HQ Shanghai, China

Sedex Regional Representatives Santiago, Chile Sydney, AustraliaTokyo, Japan

1 Asia & Australasia 18,674 46.01%

2 Europe 15,437 38.04%

3 North America 2,694 6.64%

4 Africa & Middle East 1,858 4.58%

5 South & Central America 1,919 4.73%

Top 5 non-compliances Sedex around the globe Top 10 countries uploading audits to Sedex system

1 China 7,213

2 India 2,368

3 Turkey 985

4 United Kingdom

886

5 Bangladesh 874

6 Pakistan 427

7 Thailand 400

8 Sri Lanka 348

9 Brazil 328

10 Vietnam 304

Top 10 countries for member growth 2015/16

1 China 3,001

2 India 928

3 United Kingdom

740

4 Australia 412

5 United States 353

6 Italy 353

7 Turkey 278

8 France 276

9 Spain 269

10 Japan 210

1 Fire safety 62,687

2 Health & safety management

25,166

3 Level of overtime hours worked

23,036

4 Management systems

20,434

5 Machinery 20,291

NB. All data shown is correct as at 31 December 2016

Global spread of Sedex members

46.01%

1

2

3

4

5

Looking forward to 2017

In 2015/16 Sedex began development of our

data sharing functionality, which enables Sedex

to securely share supply chain data directly with

members for use in their own technology platforms.

Feedback has been promising from initial member

users and the final tool will be formally launched in

April 2017.

We believe that data, and the application of the

right technology, will underpin the development of

more responsible global trade. We look forward to

bringing our members more tailored products and

services to complement the Sedex Advance suite.

To reflect the changing industry landscape and

member needs, Sedex is evolving its offering to

cover a broader remit of topic areas. Through the

newly formed Sedex Stakeholder Forum working

groups, supported by the Sedex leadership team,

we will be launching a range of new solutions in

2017 to support members’ responsible sourcing

programmes around the Sedex Continuous

Improvement Cycle, which will be launched in

early 2017.

During 2016 we revisited the Sedex brand and

messaging, clarifying our core purpose and how we

communicate it. In 2017 we will see the fruits of this

project, as we launch a new Sedex website with a

fresh visual identify and a simpler way of getting our

message across. Our new website will be designed

to guide and support our members at every stage,

promoting Sedex’s library of resources and helping

our members learn about the sustainability topics

that matter most to them, as well as supporting

outreach to new members.

The year ahead will see us build upon the foundations of Sedex Advance to get the basics right, then start to launch a host of products and services that support the continuous improvement cycle. We will also strengthen our member offer with improved technology, an updated version of SMETA, and a fresh new brand identify.

The summary income and expenditure information

included on this page is taken from the Sedex

Information Exchange Ltd draft audited financial

statements for the year ended 31st December

2016. The draft audited financial statements were

approved by the Sedex Board of Directors on the

21st January 2017.

2015/16 was another significant year for further

investment in our operations including the new

Sedex Advance platform. These investments

were essential to ensure Sedex continues to meet

members’ needs globally. We remain committed

to future investment that ensures our system and

services meet the needs of our global members..

Not for Profit StatusSedex’s not for profit status allows the organisation

to be mission-driven and helps ensure the

organisation is representative of its members,

regardless of their size or the ‘share’ they have in the

business. Income over expenditure is re-invested

into the Sedex system, services and product

offering.

Board of DirectorsThe Sedex Board comprises up to fourteen

Directors. These include nine elected Member

Directors who together bring a wealth of experience

on responsible sourcing, four Independent Non-

Executive Directors who bring additional expertise,

and one Executive Director (the Sedex CEO). The

nine elected Member Directors are drawn from

each of the three membership groups and are

elected by Sedex members at the AGM. The Member

Directors are responsible for appointing up to four

Independent Non-Executive Directors (one of whom

is the Chair of the Board) and the CEO.

Sedex’s Global TeamThe Sedex team continued to expand during

2015/16 and as of 31st December 2016 included 60

employees; 48 located at Sedex’s European HQ in

London and 12 at Sedex’s China office.

Financial Data

2 Sedex Information Exchange Shanghai Ltd

Turnover £924,586

Overheads £(554,406)

3 Sedex Solutions Ltd

Turnover £1,753,296

Overheads £(1,839,019)

1 Sedex Information Exchange Ltd   

Turnover £7,941,529

Overheads £(6,607,260)

Group turnover

Group overheads

2

2

3

3

11

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sedexglobal.com

For more information

please contact:

Europe

helpdesk@sedexglobal.com

+44 (0)20 7902 2320

North America

helpdesk@sedexglobal.com

+1 888 487 6146

Latin America

helpdesklatam@sedexglobal.com

+56 2 22318251

China

helpdeskchina@sedexglobal.com

+86 (0)21 8031 1666

Japan

japan@sedexglobal.com

+81 (0)3 5728 6365

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