In January 2021 Ethical Consumer searched the NIBE group company website for information on how the company managed workers' rights in its supply chain. On the basis of what was found, the company was rated as follows:
Supply chain policy (rudimentary)
A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.
The company had a Supplier Code of Conduct but it was private - a login was required to download it. The company stated in its annual report that it was "based on the ten principles of the UN Global Compact and the ETI Base Code" and that it dealt with matters such as forced and child labour. However, NIBE was not a member of the ETI, and without being able to see the code Ethical Consumer had to rate it as poor.
Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
No evidence of any of this could be found. Overall the company was rated as poor.
Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
The company stated in its annual report 2019 that "suppliers are regularly evaluated in terms of quality, environment, health and safety, ethics, corruption, human rights, worker rights and risks...We have identified 48 suppliers in countries at high risk of not following certain conventions such as human rights, worker rights, corruption or the like. These suppliers have signed our Business Code for Suppliers and, if necessary, audits are conducted. Where we see nonconformities, we work together with the suppliers to improve their internal working conditions, transparency and ethical business practices. If we identify unacceptable risks in exceptional cases, or a lack of desire to make improvements, we may ultimately stop working with a supplier. In 2019, we did not receive any reports of child labour, dangerous work for young workers, forced labour or other serious violations of human rights or labour law policies. In 2018, we began to set goals for the evaluation of new and existing suppliers of direct materials. Our goal is to have evaluated all new suppliers in the global system and existing suppliers, who represent 80% of purchase value, to have undergone a periodic evaluation by 2021."
However, there was no further significant detail given. Overall the company was rated as poor.
Difficult issues (poor)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
The company did not have these and was rated as poor.
Overall the company received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark in this category.
Nibe website (13 January 2021)