Prioritising ethics – human and labour rights and good working conditions in Alko’s supply chain

Complex supply chains pose a challenge

The beverage supply chain consists of a broad range ofoperators, including suppliers, bottling plants, producers and ingredient suppliers. The number of operators in the supply chain varies depending on the product in question. The main ingredients for wine are produced in vineyards, while the ingredients for beers and spirits often come from more complex sources. Some ingredients, such as molasses and sugar, are also purchased on international stock exchanges, which makes it difficul.

Determining the origin of a product is the key to planning sustainability measures. We currently collect information about products in our general selection, at least to the production facility level. Information about products from high-risk countries is traced all the way back to the raw-material level. Multi-tier and continually changing supply chains pose their own challenges for data collection. Our objective is that by 2030, we are able to fully trace all of the products in our selection right back to their main ingredients. To achieve this objective, we need collaboration and commitment at all levels of supply chain. 

Primary production involves the greatest risks

In 2022, Alko’s general selection contained products from 80 countries, of which approximately half are risk countries. To identify risk countries, we use amfori BSCI’s listing, which is based on a list published by the World Bank and Maplecroft’s risk assessment tool. The high-risk areas identified in our supply chain are e.g. South Africa, Chile, Argentina and coastal Mediterranean regions. In addition to these areas, certain products involve high risk due to the conditions in which their ingredients are produced, such as sugarcane in the rum supply chain.

Risk countries are those in which deficiencies in social or environmental issues have been identified in beverage production. By "social risks", we mean negligence with respect to human rights. The most common forms of this in agriculture are deficiencies relating to seasonal workers’ employment terms, health and safety issues. These may involve inadequate training, a lack of personal protective equipment or overtime that violates the legislation on working hours and compensation. The use of child labour or forced labour are examples of serious human rights violations.

Alko’s declaration of human rights

Alko is committed to respecting all internationally recognised human rights in all business operations.

Alko’s operations have both direct and indirect impacts on the human rights of our staff, our customers, and the people working in our supply chain. We engage our stakeholders in dialogue on human rights, and pay attention to them in everything we do.

We require our staff and partners to respect all internationally recognised human rights. We also encourage our partners to make continual improvements in their own operations in this respect.

President & CEO Leena Laitinen signed Alko’s declaration of human rights in December 2017.

UN Global Compact membership demonstrates a commitment to responsible business practices

The UN Global Compact is the largest corporate responsibility initiative in the world. Companies and organisations that are committed to the initiative comply with international obligations on working conditions, human rights, the environment and anti-corruption in all the countries in which they operate. The initiative provides companies with a responsibility framework that is known all over the world.

The UN Global Compact offers information, support, training and tools for companies that seek to build responsible and successful business. The initiative supports companies in their responsibility efforts through the 10 Global Compact principles and the UN Sustainable Development Goals.

The UN Global Compact operates in over 160 countries and involves over 15,000 companies and more than 3,000 other organisations. Alko has been a member of the UN Global Compact since 2023.

Alko participates in UN Global Compact Finland’s Science Based Targets initiative (SBTi). In this initiative, companies develop their environmental action in accordance with the Science Based Targets Network framework and are provided with tools for science-based environmental action.

Amfori BSCI provides tools for promoting ethical operations

Alko has been a member of amfori BSCI (Business Social Compliance Initiative), which promotes ethical international trade, since 2011. The organisation provides its members with information, tools and training to drive ethical operations in international trade.

We require all our beverage suppliers to complete amfori BSCI’s online training on its Code of Conduct and to commit to promoting the realisation of its principles in their own supply chain as well.

To ensure that operations in the supply chain comply with these principles, Alko organizes different kind of trainings and capacity building in the supply chain. In addition Alko commissions an independent third party to audit production facilities and farms in countries of origin. We report on the results of these audits in our Annual Report. Read our latest Annual Report.

Dialogue is the most important tool

Due to cultural differences and the multifaceted nature of supply chains, open and proactive discussion is the most important tool to achieve change. Beverage producers, goods suppliers and retailers alike must engage in cooperation to ensure that the beverage industry is responsible and takes both ethical perspectives and environmental impacts into consideration.

In addition to our own actions, we regularly organize webinars and trainings for parties in the supply chain. For instance, in 2022 we invited supplier and producers in round table discussions regarding Living Wage. Our long-term goal is to ensure living wage to all employees in our supply chain.

Ethical certificates help ensure transparency

The ethical certification of products is a means to inform beverage producers of measures to promote human well-being in the product supply chain. There are many certificates and their requirements vary. Unfortunately, a symbol or certificate does not always guarantee that everything is in good shape in the supply chain, but they do enable more effective and visible communication about the work done to ensure that products are ethical. Read more about the ethically certified products in Alko’s selection.