Responsible purchasing and sustainable selections

Supply chain

The social responsibility of the production of own direct imports from high-risk countries has been assured.

Kesko's suppliers in high-risk countries had 200 factories or farms within the scope of the BSCI process. 107 BSCI full audits and 80 BSCI re-audits were conducted in the factories and farms of suppliers in high-risk countries. The social responsibility of the production of Kesko's grocery trade's own direct imports from high-risk countries was 100% assured.

We continued our work related to the human rights impact assessment. We published the manufacturing plants of private label and own import clothes, accessories, shoes and bags operating in high-risk countries on our website.

210 BSCI full audits and 60 BSCI re-audits were conducted in the factories and farms of Kesko’s suppliers in high-risk countries. At the beginning of 2017, Kesko’s suppliers in high-risk countries had a total of 386 valid social responsibility audits.

The social responsibility of the production of Kesko’s grocery trade's own direct imports from high-risk countries was 100% assured. Kesko Onninen Purchasing Office (KOPO) started operations in Shanghai, China. Kesko’s grocery trade and ICA Global Sourcing launched a sourcing cooperation in the home and speciality trade.

As part of the human rights assessment, we conducted a human rights survey at factories in high-risk countries in cooperation with the Trade Union Solidarity Centre of Finland (SASK). The country-specific reports by SASK provided valuable information for the development of our operations. We forwarded the information received to BSCI in order to develop the audit procedure. 

A total of 157 of Kesko’s suppliers' factories or plantations underwent full amfori BSCI audits. In addition, 146 suppliers’ factories or plantations underwent amfori BSCI follow-up audits. At the beginning of 2018, Kesko’s suppliers in high-risk countries had a total of 423 valid social responsibility audits.

Two responsibility trainings were arranged for the ICA Global Sourcing (IGS) suppliers: 24 suppliers took part in the Hangzhou training in China and 23 suppliers in the Delhi training in India. As part of our cooperation with Plan International Finland, three amfori BSCI supplier trainings were arranged in Bangkok, Thailand. A total of 25 suppliers from the Thai fishing industry took part in the trainings.

Continuing our human rights assessment we conducted a review of working conditions in the supply chain of grapes in collaboration with the Trade Union Solidarity Centre of Finland (SASK).

We assure the responsibility of the ingredients (Tier 2) of private label Pirkka and K-Menu food products.

Using the risk assessment tool, we started the process of assuring the responsibility of the ingredients of Pirkka and K-Menu products. We established the origin of the ingredients of 1,923 own-brand grocery products. Among these, 233 contained ingredients which require further investigation concerning the responsibility of the ingredient manufacturer based on the risk assessment.

We continued work in order to assure the responsibility of ingredients in the own-brand grocery products. We conducted ingredient risk assessments on 160 new Pirkka or K-Menu food products. Among these, 29 products contained ingredients which require further investigation in terms of responsibility.

The responsibility of ingredients used in 150 new Pirkka and K-Menu food products was assessed using our own risk analysis tool. Based on the risk analysis, 20 products contained ingredients which require further investigation in terms of the social responsibility of the producer.

Our analysis of ingredients in our own brand products received recognition at the annual meeting of amfori (previously Foreign Trade Association, FTA). Thanks to the risk analysis, Kesko was elected among the top three finalists of the FTA member of the year award.

We identify and take account of water risks in our supply chain.

We initiated a water risk assessment for our own brand products in order to identify the water basins most affected by water scarcity and contamination issues in our supply chain.  The target is to conclude the water risk assessment in 2016.

The water risk assessment is in progress and the aim is to use the results to plan actions.

Our water risk assessment work continued and we aim to use the results to plan actions.

Policies

Fish and shellfish: The selections of Kesko’s grocery trade and K-food stores do not include species on the red list of the WWF’s fish guide. Kesko’s grocery trade and K-food stores promote green list species in their selections. When making decisions concerning selections, we favour sustainable stocks of fish and MSC- and ASC- certified suppliers. The K Group's fish and shellfish policy has been in effect since 2008.

The Pirkka range included 41 MSC-certified fish products.

The retail selection of Kesko’s grocery trade included 178 MSC-certified fish products, of which 37 were Pirkka products. Kespro was granted MSC and ASC traceability certificates. All stages of Kespro’s fish and shellfish supply chain have been audited, and Kespro and its certified customer restaurants can use the MSC and ASC ecolabelling in their marketing. Kespro’s HoReCa selections included nearly 300 MSC- and ASC-certified products, and the number continues to grow. Kespro's Menu range had more than 25 MSC-certified products and 2 ASC-certified ones.

The retail selection of Kesko’s grocery trade included 196 MSC-certified fish products, of which 41 were Pirkka products and 1 K-Menu product. Our selections had 7 ASC-certified products, of which 4 were Pirkka products. 

Kespro’s HoReCa selection had a total of 304 MSC-certified products, of which 30 were Menu products. Kespro's selection had 10 ASC-certified products, of which 2 were Menu products.

Palm oil: By 2020, all palm oil in our own brand groceries will be responsibly produced (CSPO).

Approximately 20% of the palm oil in the Pirkka food products was certified sustainable palm oil (CSPO).

Approximately 34% of the palm oil in our own brand groceries (Pirkka, K-Menu and Kespro’s Menu) was certified sustainable palm oil (CSPO).

Some 82% of the palm oil in Kespro’s Menu food products sold in 2017 was sustainably produced (CSPO), of which 0.2% was Identity Preserved, 74.3% Segregated, 20.7% Mass Balance, and 4.9% RSPO credits.

Some 43% of the palm oil in Pirkka and K-Menu food products sold in 2017 was sustainably produced (CSPO), of which 19% was Segregated, 79% Mass Balance, and 2% RSPO credits.

Soy: By 2020, all soy used in the production chain of our own brand products will be responsibly produced, and be either RTRS or ProTerra certified. The policy concerns ingredients of soy origin in grocery trade’s own brand food products and soy fodder used in the production of products of animal origin.

The objective was added in 2016.

We were a founding member in the Finnish soy commitment group, which started operations in February 2016. The members of the Finnish soy commitment group pledge to ensure that by 2020 all the soy used in the production chain of their private label products will be responsibly produced, and be either RTRS or ProTerra certified. The commitment covers both the Finnish production chain and sourcing from other countries. We joined the Round Table on Responsible Soy (RTRS) and thereby committed to promote responsibility in the production chain of soy on a long-term and target-oriented basis. 

We reviewed the share of responsibly produced soy in our own brand food products and their supply chain. The soy used in our own brand food products (Pirkka, K-Menu and Kespro’s Menu) sold in 2017 and their supply chain was not yet responsibly produced.

Timber and paper:  By 2025, there will be only sustainable origin timber and paper products in Kesko's product range. Timber and paper products will be FSC or PEFC certified or made of recycled materials. In the grocery trade, the policy applies to our own brand products.

The PEFC certification percentage is announced monthly at Kesko's web pages.

The average PEFC certification percentage was 91.2% for pine and 84.6% for spruce. We are investigating the opportunities to expand the timber policy to cover the entire Group.

All divisions that sell timber and paper products drew up a timber and paper policy, according to which all timber and paper products in Kesko's range will be of sustainable origin by the year 2025.

In 2013, Kesko’s building and technical trade was awarded the PEFC certificate, which covers sawn pine and spruce timber and processed timber as well as the wholesale distribution of MDF boards in Finland (percentage-based method). The average PEFC certification percentage in 2017 was 89.7% for pine and 85.5% for spruce.

Of the timber and paper products in the grocery trade’s Pirkka and K-Menu ranges, 54% contained sustainable raw material. In Kespro’s Menu range, 14% of timber and paper products contained sustainable raw material.

Plastic: We promote the recycling and reuse of plastic. We create operating models which prevent plastic from ending up in bodies of water and elsewhere in the natural environment. We seek alternatives to plastic as a packaging material. By means of consumer communications we will increase the sales share of alternative shopping bags (cotton bags, reusable bags and jute bags) and cardboard boxes to 10% by 2025. We will look for solutions to replace PVC as a material.
 

More reusable bag alternatives were added to the grocery store selections: a new Vallila design, a Summer Day bag, and a Red Nose Day bag.

We published our plastics policy in October 2016 and pledged to implement measures aiming at reducing the use of plastic bags. Plastic bags have been subject to a charge in the K Group's grocery stores as well as building and home improvement stores, and, at the beginning of 207, they became subject to a charge in the agricultural and machinery stores as well as in furniture stores. By the end of 2017, thin small plastic bags will no longer be available at the checkout. Our selections offer alternatives to plastic bags; reusable bags, cotton bags, jute bags as well as paper bags and bags made of recycled plastic. The share of paper bags in the sales of all different shopping bags was approximately 1.5% and that of reusable bags was approximately 1.5%. In spring 2017, we included the Pirkka ESSI circular economy bags made by Amerplast Oy in our selections. They are manufactured from plastic packaging waste recycled by households through the Rinki eco-points. We will discontinue the use of microplastics in our private label cosmetics brand products in 2017. The packaging of our private label cosmetics does not contain PVC. We will discontinue using PVC as the material for Kesko’s gift cards in 2017. We will work to eliminate PVC from the material of the K-Plussa card in 2017.

We removed environmentally harmful microbeads from all our own brand cosmetic products. During 2018, microplastics will be removed from all our own brand detergents. The Pirkka ESSI circular economy bags were introduced to K-food stores' shopping bag selections at the start of 2017. The bags are made of over 90% recycled materials, around half of which is plastic packaging separately collected from households. By the end of 2017, small thin plastic bags were only available at checkouts by request for e.g. flowers. We reduced the consumption of small plastic bags by 20% in 2017.

We successfully piloted the new wood fibre-based EcoFishBox produced by Stora Enso in K-food stores. Since 2017, K Group gift cards have been made from PVC-free materials. In Onninen Express stores in Finland, regular customers have been handed shopping baskets that the customers can use to carry products to their construction site and bring back the next time the visit the store.

Own brands with responsibility 
labelling

We offer an extensive selection of own-brand products with responsibility 
labelling.

The Pirkka range included 40 Pirkka Fairtrade products, 134 Pirkka Organic products, 41 Pirkka MSC-certified fish products, and 17 Pirkka UTZ-certified products.

The Pirkka range included 36 Pirkka Fairtrade products, 118 Pirkka Organic products, 37 Pirkka MSC-certified fish products, 32 Pirkka UTZ-certified products and 65 Nordic Swan label products. All Pirkka and K-Menu coffees are Fairtrade or UTZ-certified. The Pirkka range includes 15 Fairtrade or UTZ-certified chocolate and baking chocolate products. In 2017, all Pirkka range chocolates will be Fairtrade or UTZ-certified.

Kespro’s Menu range included 7 Fairtrade products, 5 organic products, 25 MSC-certified products, 2 ASC-certified products, 13 products with the Nordic Swan ecolabel, and 5 UTZ-certified products.

All interior and exterior paints in the K-Rauta's Cello range carry the Nordic Swan ecolabel. 62 Cello products carried the M1 label and 105 Cello products had the Allergy Label. 15 products in the PROF range carried the M1 label.

The Pirkka range had 37 Pirkka Fairtrade products, 116 Pirkka Organic products, 41 Pirkka MSC-certified fish products, 35 UTZ-certified products, 76 Nordic Swan label products, 137 products with the Key Flag symbol, 88 Seed leaf label products, 220 Hyvää Suomesta (Produce of Finland) products, and 5 products with the Finnish allergy label (Allergiatunnus).

Kespro’s Menu range had 4 Fairtrade products, 5 organic products, 30 MSC-certified products, 2 ASC-certified products, 15 products with the Nordic Swan ecolabel, 10 UTZ-certified products, 21 products with the Key Flag symbol, 4 Hyvää Suomesta (Produce of Finland) products and 23 Seed leaf label products.

In the building and technical trade, the Cello range had 411 Key Flag products, 30 Nordic Swan label products, 35 M1 label products, and 116 products with the Finnish allergy label (Allergiatunnus).

Product safety

The product safety of the K Group’s selections has been verified. The Product Research Unit's laboratory monitors the product safety and quality of the private labels and own imports in the grocery trade. All of our food product operations have a self-control plan in place.

The Product Research laboratory analysed 8,037 product samples and conducted 20,396 analyses. Seven audits were performed.

The Product Research laboratory analysed 7,770 product samples and conducted 17,176 analyses. The product safety of 539 suppliers was verified by means of a certified auditing procedure. The number of own audits was 13.

The Product Research laboratory analysed 7,350 product samples and conducted 15,076 analyses. In total, 522 suppliers of Kesko’s own brands of food products have international audit certifications that assure product safety. The number of own audits was 59.