Responsible Sourcing and Manufacturing

We ensure the products we curate are made in factories that use rigorous environmental standards for production. We follow-up through factory audits, surveys, and on-going communication to hold our suppliers accountable.

Our Commitment

We expect that all merchandise offered by Qurate Retail Group is produced by business partners who share our commitment to corporate responsibility. We will only conduct business with suppliers who comply with our Global Business Partner Code of Conduct, which requires products be produced in conditions that support:

  • Human Rights
  • Fair Labor Standards
  • Employee Safety
  • Environmental Stewardship

Read more about our Sourcing Social Responsibility (SSR) program

This commitment to global human and labor rights and our program for verifying that our products are made in safe and responsible facilities, aligns with the United Nations Sustainable Development Goals* 8 and 12.

UNSDG Goal 8 (Decent Work and Economic Growth) and UNSDG Goal 12 (Responsible Consumption and Production)
*The United Nations Sustainable Development Goals (SDGs) emcompass 17 goals that aim to align international efforts to leave a better planet for future generations

Our Strategy

Qurate Retail Group has a 4-part responsible sourcing strategy to address supply chain risks:

  1. Code of Conduct
    Establishes Qurate Retail’s requirements for business associates on social and environmental issues through its Global Business Partner Code of Conduct.
  2. Risk Evaluation
    Qurate Retail evaluates the risks of our vendors based on several criteria.
  3. Enforcement
    Qurate Retail conducts audits of certain vendors according to a risk-based methodology and reserves the right to audit all vendor factories to confirm that they comply with the Global Business Partner Code of Conduct.
  4. Team Member Training and Accountability
    Global sourcing staff and others who are involved in sourcing activities are trained on Qurate Retail’s sourcing policies and procedures and are accountable for complying with such company policies and procedures.

Diagram of 4-part responsible sourcing strategy

Code of Conduct

We expect all of Qurate Retail’s vendors and their suppliers of finished goods to comply with our Global Business Partner Code of Conduct, which is incorporated by reference into each of our purchase orders or similar agreements. These standards are mandatory for all of our suppliers.

Risk Evaluation - at the country level

Qurate Retail uses a risk-based approach to determine the scope of our Sourcing Social Responsibility (SSR) program - which audits manufacturers of our finished goods (factories) around the world. A key element of this approach is represented by a manufacturing country risk assessment, so that we focus our efforts and resources in the sourcing regions with greater levels of concern. We do not knowingly engage with factories in high-risk areas known for forced, undocumented, child or other illegal labor.

Under this approach, our SSR program targets all our proprietary brands’ factories and the top market-vendors that we do business with at QVC (US, Germany, UK, Italy), HSN, and selected Zulily factories. Starting in 2021, we began the process of expanding the scope of our current SSR Program beyond manufacturers of finished goods in order to gain visibility of the various entities involved in the manufacturing supply chain including, in some cases, raw materials.

Country Risk Assessment

 

Map of world showing SSR Risk assessment levels

Source: Corruption Perception Index

Risk Evaluation - at the factory level

Risk is also assessed at the factory level. Because of the large number of individual suppliers we source our merchandise from, we take a variable, risk-based approach to auditing companies within our supplier base. A number of factors are used to evaluate which of these suppliers will be subject to a factory audit. These factors include: geographic location, the volume of purchases from the market-vendors (the top 70% value threshold for market-vendors for QVC US, Germany, UK, Italy, HSN, and selected Zulily factories), and whether the product is a proprietary or exclusive brand to Qurate Retail Group.

Within this framework, we group our suppliers into certain categories to determine how to best deploy our auditing capabilities and minimize the greatest risks in our supply chain:

  • Strategic Factories – are those manufacturing our Proprietary Brands (Private Label) and Exclusive products.
  • High Risk Factories – are those scoring very low during a factory audit.
  • Critical Factories – are our strategic factories that are high-risk factories as a result of scoring very low on the factory audit.

 

Diagram of Factories in the SSR Program

as of December 31, 2020

Enforcement - through factory audits

We have an enforcement program for our vendors and their factories that produce finished goods. Our Sourcing Social Responsibility (SSR) program verifies supplier compliance with our Global Business Partner Code of Conduct through periodic factory inspections by a third-party certification company. Intertek is our exclusive auditing company to carry out Workplace Conditions Assessment (WCA) audits for our factories around the globe. Our SSR Team audits Intertek on a regular basis to verify the quality and consistency of the WCA audit services they provide.

Logo - Intertek, Workplace Conditions Assessment

The WCA audit take place at periodic intervals (ranging from every year to every two years) against the 5 areas of risk, shown below. Each report resulting from an audit includes a score for each of the five areas which are benchmarked against global, country and industry scores. And for each country where one of our manufacturers is being audited, Intertek also prepares periodic country-level audit reports benchmarking that country in these same 5 areas of risk.

Labor

Child/Forced Labor

Discrimination

Discipline

Harassment/Abuse

Freedom of Association

Labor Contracts

Wages & Hours

Wages

Benefits

Working Hours

Overtime

Minimum Wages

Rest Days

Health & Safety

Occupational Injury

Machine Safety

Fire Hazards

General Work Facility

Emergency Preparedness

Management Systems

Documentation

Records

Worker Feedback

Participation

Internal CAP Processes

Environment

Waste & Air Emissions

Legal Compliance

Environmental

Management Systems

Chemical Handling

Enforcement - through factory audits

All factory audits with moderate, major or severe issues require a Corrective Action Plan (CAP) to be implemented by the manufacturer, and then validated with a follow-up audit conducted by Qurate Retail’s SSR team.

Major/Severe issues CAP are developed to address major or severe audit findings: if a factory does not implement the CAP within the timeline agreed upon, we stop doing business with the factory. Continuous Improvement CAP are issued to address moderate findings.

If a Strategic factory scores a very low rate during the audit, the CAP implementation is also coupled with a Business Continuity Plan, factory support and education events conducted by our SSR team. These internal resources are provided to the factory with the purpose of ensuring the factory is capable to develop long term plans for sustained compliance.

Qurate Retail’s SSR team also carries out announced, semi-announced and unannounced audits to ensure factories maintain a satisfactory
level of compliance between full audits. In addition, the SSR team conducts monthly seminars to ensure our manufacturers understand our expectations and their obligations regarding remediation plans.

 

Rating and Review
Each audit report assigns a rating which informs any action needed and allows our team to focus on the factories that require greater attention to remediation.

 

WCA Audit Performance Scoring Scale

Diagram showing WCA Audit Performance Levels and continuous improvement recommendations

 

2020 Scoring Performance

(out of 883 audits completed)

Pie Chart Diagram showing 2020 Audit Scoring Performance; High + Medium, 66%; Low, 27%; Very Low, 7%

Team Member Training & Accountability

Global sourcing staff and others who are indirectly involved in sourcing activities have been trained on Qurate Retail’s sourcing policies and procedures and are held accountable for complying with such company policies and procedures. Training occurs every 2 years, where team members learn about our ethical sourcing commitment and why ethical sourcing is important. At the end of the training, they are more attentive to potential risks and issues that they may encounter in their jobs, what their role is in helping us source product ethically, and what to do if, for whatever reason, they find evidence of unethical practices in our supply chain.

More About Our Supply Chain

 

Merchandise Mix (Cost of Goods)

as of December 31, 2020

 

Cost of Goods
Sourced for the US*

Percentage of Cost of Goods
by Merchandising Mix

 

Pie Chart Diagram - Cost of Goods by Merchandising Mix for US

 

* Includes QVC USA and HSN only. Zulily and Cornerstone Brands excluded

 

Cost of Goods Sourced for the
International Markets**

Percentage of Cost of Goods
by Merchandising Mix

 

Pie Chart Diagram - Cost of Goods by Merchandising Mix for International

 

** Includes QVC Germany, QVC United Kingdom, QVC Italy. QVC Japan excluded

Manufacturers (Factories)
Covered by the SSR Program
(Total: 981)

as of December 31, 2020

 

Pie Chart Diagram - Factories by Merchandising Area

 

 

Pie Chart Diagram - Factories by Country of Manufacturing

 

* Others include: Cambodia, Bangladesh, Turkey, Pakistan, Portugal, Thailand, Guatemala, Peru, Egypt, Jordan, South Korea, Bahrain, Bosnia, Canada, Dominican Republic, Morocco, Germany, Greece, India

981 Manufacturers (Factories)
in 27 Countries

as of December 31, 2020

 

World Map Diagram of 981 Manufacturers in 27 Countries

 

2020 Metrics

 

World Map Diagram of 2020 Metrics relating to factories and audits

 

Number of factories subject to the SSR Program 981
Number of audits completed in 2020 883
Number of Strategic Factories in the SSR Program 329
Number of audits completed at Strategic Factories in 2020 317
Number of CAP implemented in 2020 466
Severe/Major CAP (107 factories) 100% CAP completed
Continuous Improvement CAP (359 factories) 100% CAP completed

Number of factories rated as High Risk 59
Number of High-Risk factories (part of the 59) we stopped doing business with 18
Number of factories classified as Critical 0

Definitions

  • Strategic Factories
    Those manufacturing our Proprietary Brands (Private Label) and Exclusive products
  • High Risk Factories
    Those scoring very low during a factory audit
  • Critical Factories
    Our strategic factories that are High-Risk factories because of scoring very low on the factory audit
  • Severe/Major CAP
    Corrective Action Plan for all factories found to have major or severe issues during a factory audit
  • Continuous Improvement CAP
    Corrective Action Plan for all factories found to have moderate issues during a factory audit
  • Factory
    Manufacturer of finished goods
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