1st December 2014

To our stakeholders:

I am pleased to confirm that Neal’s Yard Remedies reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this, our first annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations.

We are proud of our progress over the year and the awards that are rolling in to prove it. Just last week we were proud and delighted to be recognised as a Sustainability Pioneer in the 2014 Sustainable Beauty Awards. The judges were particularly impressed by all the work we do to source sustainable ingredients, as well as our CarbonNeutral® status. We have spent the last 30 years developing strong ethical, sustainable supply chains, so it’s fantastic to have our decades of hard work acknowledged.

And earlier this year we were awarded 100 out of 100 for ethics by the Ethical Company Organisation. The accreditation recognises companies that have a proven track record in protecting the Environment; Animal Welfare and Human Rights.

We commit to share our progress with our stakeholders on our website www.nealsyardremedies.com and our other primary channels of communication.

Sincerely yours,

Peter Kindersley,
Chief Executive Officer
Neal’s Yard Remedies

As an independent, ethical organic health and beauty company respecting human rights throughout our business is at the heart of our company ethos. We fully support the Universal Declaration of Human Rights.

We are a relatively small company, with our eco-factory and Head Office based in Dorset in the UK. Therefore the majority of our human rights risk is in our supply chain. We have a goal to source 100% of our natural ingredients from either organic and/or fair trade certified suppliers. All organic and fair trade certifications contain standards and principles related to Human Rights.

Further details on our commitment to fair trade can be found here:
http://www.responsible100.com/qatest.php?company_id=525&question_id=81

To reduce human rights risks in the rest of our supply chain, we have joined Sedex, the Supplier Ethical Data Exchange, a member based organisation whose goal is to drive improvements in ethical and responsible business practices in global supply chains. A core principle of the SEDEX model is the avoidance of unfair or unsafe labour practices, which includes slavery and human trafficking.

In our company, we operate a staff forum which meets on a quarterly basis, where any concerns and ideas are fed back from each business area to senior managers for a response.

In our supply chain, we monitor the percentage of our natural ingredient supply chain that is independently certified organic and/or fair trade by recognised organisations. All organic and fair trade certifications contain standards and principles related to Human Rights. For our essential oils currently 91% are certified organic, 14% fair trade certified and only 8% neither.

We choose to work through traders who import ingredients for us, some with whom we have worked for over 25 years. Though our trusting trading relationships, we have visibility and contact with their growers/producers in order to find out more about the projects which form our supply chain and their working conditions.

Over past 24 months, our Director of Natural Health has visited our Moroccan argan oil producers, tea tree essential oil growers/suppliers in Kenya, frankincense collectors in the Kenyan bush, rose absolute producers in Turkey, organic beeswax supplier in New Zealand, and has just returned from Madagascar visiting essential oil producers (and one of our carbon offsetting projects in the Makira forest). There has been no evidence of Human Right violations during these visits.

Suppliers that we do not visit we are often in contact with, and take a keen interest in how ingredients are grown, harvested, what benefits projects have on the community and local environment

Since the company began in 1981, we have striven to be an ethically responsible company – we believe in ‘People Helping People’. It has always been part of our company ethos to maintain respectful relationships within our company, with our customers and with our suppliers.

In our supply chain, we have a goal to source 100% of our natural ingredients either organic and/or fair trade certified. All organic and fair trade certifications contain standards and principles related to Labour Rights. Further information on our commitment to fair trade can be found here: http://www.responsible100.com/qatest.php?company_id=525&question_id=81

As a company we have clear HR policies that cover employee rights, responsibilities and benefits. For example:
• All employees have a contract of employment and a copy of the staff handbook which covers Terms and Conditions of employment. NYR is an equal opportunities employer, as highlighted in our contracts of employment and employee handbook.
• We do not have any agreements with trade unions for collective bargaining. However employees are welcome to be members of unions if they wish.
• We offer enhanced maternity and adoption leave (first 10 weeks at full pay) and enhanced paternity pay (2 weeks at full pay). We actively encourage flexible working, with around 50% part time workers. We receive a number of flexible working requests which are often granted, and offer a salary sacrifice childcare voucher scheme to support parents with the cost of childcare.

To reduce labour risks in our company, NYR has a Health & Safety (H&S) Committee and H&S Steering Group. Both groups meet monthly. We have a written Health and Safety policy available on our Intranet, and have an external consultant, contracted one week every month to help embed the policy throughout our business. All employees receive a H&S induction when starting with the business covering fire exits, manual handling, COSHH and safe working practices

At NYR we hold regular company briefings at head office and we operate a staff forum which meets on a quarterly basis, where ideas are fed back from each business area to senior managers. Retail managers meet on a monthly basis to receive updates on key changes / events. We have statutory grievance procedures.

In our supply chain, we have joined Sedex, the Supplier Ethical Data Exchange, a member based organisation whose goal is to drive improvements in ethical and responsible business practices in global supply chains. A core principle of the SEDEX model is the avoidance of unfair or unsafe labour practices.

As a company we have just completed our first Fair For Life company audit (November 2014), both as a handler of fairtrade ingredients, and as a socially responsible company. Fair For Life certification is a demonstration of social and fair business practices through an independent third party certification from the Institute for Market ecology (IMO).

In our supply chain, we monitor the percentage of our natural ingredient supply chain that are certified organic and fair trade. All organic and fair trade certifications contain standards and principles related to Labour Rights. For our essential oils currently 91% are certified organic, 14% fair trade certified and only 8% neither.

We choose to work through traders who import ingredients for us, some with whom we have worked for over 25 years. Though our trusting trading relationships, we have visibility and contact with their growers/producers in order to find out more about the projects which form our supply chain and their working conditions.

Over past 24 months, our Director of Natural Health has visited our Moroccan argan oil producers, tea tree essential oil growers/suppliers in Kenya, frankincense collectors in the Kenyan bush, rose absolute producers in Turkey, organic beeswax supplier in New Zealand, and has just returned from Madagascar visiting essential oil producers (and one of our carbon offsetting projects in the Makira forest). Suppliers that we do not visit we are often in contact with, and take a keen interest in how ingredients are grown, harvested, what benefits projects have on the community and local environment

Our health and beauty products are made with the highest levels of certified organic ingredients possible, protecting land, people and wildlife from contamination by potentially hazardous chemical fertilisers and pesticides. Organic farming supports the environment in three main ways:

1. Organic farming develops and maintains healthy soil, and in doing so, captures carbon and locks it into the earth. This soil-enriching process also supports climate change adaption by reducing impacts of both flooding and droughts, helping to improve food security.

2. Organic farming avoids the use of artificial nitrogen-rich fertilisers, potent sources of greenhouse gas emissions.

3. Organic farming supports biodiversity. This has a vital impact on our future, protecting vital species such as the pollinators our food chain relies on. According to Soil Association research plant, insect and bird life is up to 50% greater on organic farms.

Further details on our commitment to organic certification can be found here: http://www.nealsyardremedies.com/why-choose-organic

We believe that what you leave out of a product can be as important as what you put in. We take a precautionary approach to health and the environment– we believe in safe cosmetics. You will not find any synthetic fragrances, silicones, parabens, GM ingredients, DEA or EDTA amongst others, in any of our products. Our full ingredients policy (what you won’t find in our products and why) can be found here: http://www.nealsyardremedies.com/whats-in-our-products

We are in the process of developing a sustainability strategy, which we aim to launch next year. As part of this process, our Board have identified our material environmental risks and opportunities. Like many agriculture based companies, our supply chain is at risk from climate change impacts. And across our whole value chain, industry studies show that consumer use of our products is our biggest impact area, so we have an opportunity to promote organic lifestyles and sustainable use of our products with our therapists and customers.

As part of our sustainability strategy setting process, we have set a long term goal of achieving ‘net positive’ operations. This will mean becoming ‘carbon positive’; in other words capturing more carbon than we produce. We have also made commitments to waste nothing, restore biodiversity, create wealth fairly and have a positive impact on the health and lives of people and communities.

Other relevant information includes:

Product / Services Information
http://www.responsible100.com/qatest.php?company_id=525&question_id=102

Climate change:
http://www.responsible100.com/qatest.php?company_id=525&question_id=83

We work to improve our environmental sustainability performance in all corners of our business.

Our purpose-built eco-factory was designed to help us avoid energy use. It is a green oak structure clad in untreated larch. It has large, ventilated, thermally-efficient glass windows for maximising natural light, while keeping the offices cool without the need for air conditioning. Solar panels on our purposely-angled roof provide power, while our grey water recycling system flushes our loos.

We continue to annually offset our carbon footprint. In 2008, we became the first high street retailer in the UK to be awarded the CarbonNeutral® certification, reducing our carbon footprint to net zero. Over the last year we have supported projects including the Makira Forest project in Madagascar. The project protects bio-diversity in the region by reducing deforestation and supporting local communities in sustainable agriculture. Seven of our fairly traded organic essential oils are produced in Madagascar, so it is a really important region to us.

We believe that all retailers have a ‘voice’; an opportunity to talk to their customers. We use our voice to campaign loudly on issues that are important to us as a company. For example, in 2011 we launched our Bee Lovely campaign to help protect pollinators. Over just three years we gathered 100,000 global signatures to help ban pesticides deadly to bees, and raised over £40,000 for bee charities and local community projects.

We will be developing environmental indicators over the coming year as part of our sustainability strategy development. In the meantime, we only have concrete outcomes to report as part of individual initiatives:

For example, over the past year we have increased the amount of our packaging that is UK-sourced. We have moved production of our iconic blue glass bottles from Spain to the UK, creating a new bespoke, bottle that is 100% recyclable and 100% British. This brings our blue glass bottle in line with our other main packaging items, which are all UK sourced

Moving our blue glass bottle manufacture from Spain reduces the equivalent transport mileage by 68%, or 30,000 miles annually (the equivalent of driving from Land’s End to John O’Groats very single day for a month). We currently use around 120 tonnes of blue glass bottles, a figure rising on average by 15% annually as we grow as a business. By reducing the mileage, we reduce related pollution and carbon emissions (CO2) from our supply chain by massive 12 tonnes per year.

Across the business, we annually measure our carbon footprint as part of our CarbonNeutral® certification process.

As a small, ethical business we are against bribery and corruption in all its forms. We commit to developing an anti-corruption policy for the forthcoming year as we continue to grow as a business.

At NYR we operate a staff forum which meets on a quarterly basis, where concerns and ideas are fed back from each business area to senior managers.

There have been no reported incidents of corruption over the last year via our staff forum, internal grievance procedures or supplier feedback.