Dedicated to remaining one of the world’s most trusted brands, Lowe’s is committed to doing business responsibly everywhere we operate. We expect the same from those who manufacture and supply our products. Lowe’s sources products through LG Sourcing (LGS), a wholly owned subsidiary of Lowe’s. LGS works with 570 vendors in 21 countries, with the largest concentration in Asia, and provides clear guidelines for product quality and safety, and social responsibility by manufacturers.
In 2013, LGS performed more than 750 factory certifications and more than 470 random social compliance audits. In addition, approximately 14,500 product and packaging tests were conducted at independent testing facilities, with many products pulled from production lines for testing during random audits. LGS also inspects orders at manufacturing facilities before approving them to ship. Last year, Lowe’s performed approximately 17,000 pre-shipment inspections, evaluating nearly 1.75 million products to ensure they met performance requirements.
As part of Lowe’s sustainable and socially responsible sourcing strategy, LG Sourcing regularly works with third-party audit companies and other experts to incorporate best audit practices and refine our social accountability and environmental audit program.
Vendors and suppliers are expected to comply with all applicable laws and regulations of the country in which they conduct business with Lowe’s. Their products must meet U.S. federal and state regulatory requirements in addition to typical industry standards.
Lowe’s Vendor Code of Conduct sets forth the basic requirements that all vendors must comply with to do business with Lowe’s. If we believe that any vendor has violated this Code of Conduct, Lowe’s has the right to terminate our business relationship with the vendor.
With more than 940 factories producing products for Lowe’s, LGS ensures compliance with these standards with the help of operations in the United States, China, Hong Kong, Taiwan, Mexico and India. LGS uses internal and third-party quality assurance teams to help validate that our vendor partners operate safe and ethical factory environments and produce safe, reliable, high-quality products.
Bundled Audit Program
Lowe’s conducts an annual bundled audit on all factories providing products to LGS. The bundled audit includes quality, social/environmental and Customs-Trade Partnership Against Terrorism (C-TPAT) audits. As part of Lowe’s sustainable and socially responsible sourcing strategy, LGS regularly works with third-party audit companies and other experts to incorporate best audit practices and refine our social accountability and environmental audit program.
Every factory sourced by LGS is audited at least once each year. Except for issues that result in a denial of business, vendors and factories are required to implement corrective action plans for all violations. All corrective action plans must be approved by Lowe’s personnel. In 2013, we worked with factories to complete more than 1,300 corrective actions. Three audits had findings that resulted in a denial of business.
Audit Focus Areas
Lowe’s is focused on auditing and assessing these primary areas of vendor activities:
1. Compliance with Laws and Lowe’s Policies
Vendors must fully comply with Lowe’s policies as well as all applicable national and/or local laws and regulations relevant to the country of manufacture. To the extent that Lowe’s policies impose a higher standard than applicable laws and regulations, Lowe’s higher standard will prevail.
2. Forced Labor
Vendors shall not use any form of forced, bonded, indentured, trafficked, slave or prison labor. All work must be voluntary and workers shall be free to leave work or terminate their employment with reasonable notice. All workers must not be required to surrender any government-issued identification, passports or work permits as a condition of employment.
3. Discrimination, Harassment and Abuse
Vendors shall not discriminate in any form, and harassment and abuse of any nature will not be tolerated.
4. Child Labor
Child labor is strictly prohibited. The minimum age for employment shall be the higher of 16 years of age, the minimum age for employment in that country or the minimum age for completing compulsory education in the country of manufacture.
5. Young Labor
Vendors shall be in compliance with all local and national laws that regulate restrictions for young workers in the country of manufacture.
6. Compensation and Working Hours
Vendors shall pay all workers at least the minimum wage and benefits required by applicable laws and regulations. Workers shall be compensated for overtime hours at the premium rate required by applicable laws and regulations. Working hours are audited to international labor standards and the limits allowed by the country of manufacture. Suppliers must ensure that, except in extraordinary circumstances, workers shall not be required to work in excess of 60 overtime hours per month or exceed the maximum permitted under the applicable laws and regulations of the country of manufacture.
7. Freedom of Association
Vendors must respect the rights of all employees to lawfully associate or not to associate with groups of their choosing, as long as such groups are permitted by law. Vendors should not unlawfully interfere with, obstruct or prevent legitimate, lawful employee associations and related activities.
8. Health and Safety
Vendors shall provide all workers with a safe work environment, appropriate personal protective equipment and workplace health and safety information and training. Dormitories and canteens shall be maintained in accord with the regulations of the country of residence.
9. Hiring Practices
Vendors must have hiring practices that accurately verify age and ability to work legally.
10. Conflict Minerals:
The term “conflict minerals” means cassiterite (tin), columbite-tantlite (a/k/a coltan or tantalum), gold, or wolframite (tungsten). Vendors shall not provide products to Lowe’s that contain conflict minerals sourced from the Democratic Republic of the Congo or an adjoining country, including Angola, Burundi, Central African Republic, Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda and Zambia (collectively and with the Democratic Republic of the Congo, the “covered countries”) unless the conflict minerals are sourced from a certified mine or a conflict-free smelter. Vendors shall have programs in place that satisfy this requirement, and part of such programs shall include (i) maintenance of records that support the vendors’ obligation to provide products to Lowe’s that do not contain conflict minerals originating in covered countries unless the conflict minerals are sourced from a certified mine or a conflict-free smelter and (ii) participation in any information requests by Lowe’s related to the inclusion of conflict minerals in vendors’ products.
Vendors must comply with all national and local environmental laws applicable to air emissions, waste handling and disposal, water use, wastewater discharges and hazardous and toxic substances. Vendors shall also validate and maintain records demonstrating that source materials were harvested in accordance with all international treaties in addition to national and local laws.
In addition to these assessments, Lowe’s comprehensive Vendor Code of Conduct includes anti-corruption requirements. Vendors must not tolerate, permit or engage in bribery, corruption or unethical practices in dealings with public officials or individuals in the private sectors. Vendors must conduct business in compliance with all applicable laws and shall avoid engaging in any activity that could be deemed a corrupt and/or unethical practice. Vendors also must maintain integrity, transparency and accuracy in all records of matters relating to their business with Lowe’s. For the purpose of obtaining or retaining business for the benefit of Lowe’s, vendors must not make or receive, offer to make or receive, or cause another to make or receive, payments or anything of value, to or from any public or private officials.
Compliance and Reporting
We have implemented monitoring and enforcement activities to assure the integrity of the compliance program. Lowe’s, by itself or with the assistance of a third party, will take affirmative measures, such as announced and unannounced inspections of production facilities, to ensure compliance with this Code of Conduct. Vendors must maintain all documents to demonstrate compliance with this Code of Conduct and make those documents available to Lowe’s upon request.
Suspected violations of Lowe’s Code of Conduct can be reported confidentially in a local language by telephone or via the internet at EthicsPoint.com.
Driven to provide high-quality products produced by socially responsible vendors, we will continue to review our sourcing policies and work with our employees, vendors, industry partners and other experts to ensure we have the best practices in place.
Lowe’s performed approximately 17,000 inspections last year to ensure that products manufactured by our vendors met performance requirements and were approved for shipping.
Internal and third-party quality assurance teams help validate that our business partners are in compliance with our Vendor Code of Conduct and operating ethical factory environments for workers.
Lowe’s vendors are required to provide appropriate personal protective equipment and health and safety training to all workers. Every factory is audited at least once a year.
Ethics & Governance