Once a supplier is chosen, we work cooperatively with each supplier through a process of capacity building that includes monitoring, training and addressing any identified non-conformances. This ensures ongoing and continuous improvement of working conditions within all our suppliers’ facilities throughout the duration of our business relationship with them.

We take a multi-pronged approach to monitoring suppliers based on risk to enable their adherence to code expectations in their own operations and in their next tier supply chain management:

• Risk Assessments: We conduct overall supply chain risk mapping annually to identify priority due diligence efforts. For example, we understand that forced labor conditions are higher risk in some sourcing regions, especially related to foreign migrant and other vulnerable workers.. We then apply increased due diligence for those suppliers accordingly.

• Audits: We conduct third-party audits at 100% of our potential supplier factories, which includes environmental and human rights screening criteria. If we identify any issues not in conformance with our code, we require the supplier to take corrective action. If there is a priority non-conformance violation found, it must be addressed immediately. Suppliers that are unwilling or unable to address priority violations are rejected.
  • For existing suppliers, Best Buy conducts a full audit at least every other year to identify any gaps between suppliers’ performance and the code. We align our own audit protocol to that of RBA which are conducted by firms and auditors who have been trained and approved by the RBA. We also accept other approved third-party audits. Our audits include management and worker interviews, document review, and visits to all structures on the factory premises, including warehouses, dormitories and canteens. We not only assess their social and environmental performance, but we also review the management systems they have in place.

• Corrective Action and Remedy: Once a gap is identified between the Code and the factory management system, it is referred to as a non-conformance, and corrective action is required to remedy the issue within the required timeframe.
  • We provide established guidelines for suppliers to take corrective action and remedy.
  • We monitor corrective action and remediation progress and require evidence of the remediations.
  • For the most severe findings, we require a third-party on-site assessment to verify and confirm the remediation and corrective actions.

• Responsible sourcing integration in business decisions: Business impacts occur if priority non-conformances are discovered during an audit.

When a non-conformance violation is discovered, we classify it by severity:

• Priority non-conformance is the highest-severity audit assessment finding, requiring escalation by the auditor and immediate attention by the supplier. Priority non-conformance consists of findings that represent:
  • A serious non-conformance of the RBA code or applicable legal requirements;
  • An immediate threat to life or health; or
  • Risk of serious and immediate harm to the community or environment.
• The identification of any priority non-conformance (such as forced labor) automatically results in a failed audit. Suppliers must take immediate action to remedy all priority non-conformances through the priority non-conformance remediation process. If the factory is unable or unwilling to address the priority non-conformance, we will terminate the relationship.
• High-risk major non-conformance is a significant failure in the management system that affects the ability of the system to produce the desired results and/or satisfy legally mandated requirements. Two high-risk warnings for the same non-conformance finding within a single year is considered the equivalent of a priority non-conformance.
• Major non-conformance is a significant failure in the management system that affects the ability to produce the desired results.
• Minor non-conformance is an isolated or random incident which, by itself, does not indicate an inherent problem with the management system.

For all types of non-conformances, we follow up to determine if violations — whether priority, high-risk major, major or minor — are resolved. All instances of nonconformance require a corrective action plan, which we approve and monitor.

We believe continued dialogue with suppliers results in more meaningful improvements for supply chain workers, promotes healthy and safe working conditions, and reduces negative environmental impacts.

Therefore, whenever non-conformances are found during an audit, we expect our suppliers to identify the root cause of the issues and indicate how they intend to improve the issue and measure progress. The suppliers then must close the non-conformances according to Best Buy’s timelines and provide the supporting evidence. Due to the nature of issues related to working hours and social insurance, we allow factories to provide longer-term risk mitigation plans with phased targets, maintaining continuous dialogue to foster transparency and accountability.

While we recognize the time and effort it takes suppliers to address non-conformances, we believe we can make a stronger impact on remediation efforts by implementing a monitoring mechanism. We require an additional third-party audit if the supplier does not submit a CAP or if they do not remediate the non-conformance within the reasonable timeframe allowed.