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Modern Slavery Statement

Modern Slavery Statement and Human Trafficking Statement

Introduction

Headlam Group plc (‘Headlam’ or the ‘Company’) is committed to trading ethically, with zero tolerance for Modern Slavery (including human rights violations, child and forced labour or human trafficking in any form) in both its operations and supply chain.

This is Headlam’s modern slavery and human trafficking statement for the financial year ended 31 December 2022 and is published in compliance with the Modern Slavery Act 2015 (the 'Act'). It sets out the steps taken by Headlam and its two wholly owned trading subsidiaries HFD Limited (‘HFD’) and MCD Group Limited (‘MCD’) to prevent human trafficking and slavery in its business and supply chain. The Modern Slavery Statement is published on Headlam’s website (www.headlam.com) and additionally on each of the websites of the various trading businesses operated by HFD and MCD. It has also been uploaded to the Government’s online registry.

Responsibility

The Chief Executive has responsibility for this statement on behalf of the Board, supported by the UK Operations Director who has day-to-day oversight of the Company’s supplier base. Local management have day-to-day responsibility for supplier relationships within each business.

Our Business

Operating for 30 years, Headlam is Europe's leading floorcoverings distributor, providing the channel between suppliers and trade customers of floorcoverings.
Headlam works with suppliers across the globe manufacturing a diverse range of floorcovering products, and provides them with a cost efficient and effective route to market for their products into the highly fragmented customer base. Alongside long-established processing and distribution expertise, suppliers benefit from Headlam’s marketing and customer servicing into the most extensive customer base.

To maximise customer reach, Headlam operates 67 businesses across the UK and Continental Europe (France and the Netherlands). Each business operates under its own trade brand and utilises individual sales teams while being supported by the Company’s network and centralised resources.

The Company’s customer base covers both the residential and commercial sectors, with the principal customer groups being independent retailers and smaller flooring contractors alongside other groups such as larger retailers, housebuilders, specifiers, and local authorities.

Headlam is focused on providing customers with a market leading service through:

  • the broadest product offering;
  • unrivalled product knowledge and tailored solutions;
  • sales team and marketing support;
  • ecommerce support; and
  • nationwide delivery and collection service.

Headlam's UK distribution network currently comprises four national distribution hubs, 18 regional distribution centres and a supporting network of smaller warehouse premises, trade counters, showrooms and specification centres.

In 2022, Headlam worked with 329 suppliers from21 countries and fulfilled approximately 3.6 million customer orders.​

Our Supply Chain

In 2022, purchases from suppliers in the EU (including the UK) accounted for approximately 90% of total purchases (based on actual purchase prices from suppliers). According to the Company’s risk assessment the greatest risk of modern slavery and human trafficking arises from non-EU parts of the supply chain (‘Higher Risk Areas’) which represent 10% of total purchases during 2021.

Our Policy and Approach

Headlam is committed to ensuring that there is no modern slavery or human trafficking in its supply chain or in any part of its business. This reflects the Company’s commitment to acting ethically and with integrity in all its business relationships and to implement and enforce effective systems and controls to minimise the possibility of slavery and human trafficking occurring within its supply chains.

The Company policy is to immediately suspend purchasing from any supplier, pending an investigation, if it believes there to be any evidence of slavery or human trafficking. The investigation will be overseen by an independent specialist and should the results prove the existence of human trafficking or modern slavery, Headlam will cease the trading relationship.

One of the Company’s main businesses (National Carpets) is registered on Sedex (Social, Ethical Data Exchange), an online platform which allows suppliers (including certain of the Company’s suppliers) to register and provide company information/audit reports which can be viewed by their customers. Sedex includes a self-assessment questionnaire which is required to be completed which includes a section on human rights, and the Company views its registered suppliers’ responses.

Supplier Due Diligence

In 2022 following the role out of our Supplier Code of Conduct, we continued to strengthen our approach to Supplier due diligence, determining supplier risk and expectations for corrective action plans for areas needing performance improvement.

Headlam Suppliers are prioritised for due diligence using a risk- based approach, as follows:

  • Spend – The Headlam spend with a supplier is a measure of the depth and scope of the supplier partnership
  • Geography – Headlam will use the most current Global Slavery Index to determine supplier risk. The risk will be assessed based o the supplier corporate office location, the site location and/or where the raw material supply chain originates.

This assessment then determines the timing of the due diligence assessments which leads to the supplier assessment scores and any recommended Corrective Action Plans to aid the improvement of supplier performance.

Work on Assessing the Headlam Supply Chains in 2022

We have a partnership with Verisio for sustainability monitoring, using their universal platform for scoring, benchmarking, and performance improvement tools.  This monitoring focuses on Environment, Labour, Human Rights & ethics.  Suppliers are assessed against all aspects of their treatment of people, including a requirement to provide evidence of how they guard against modern slavery.

At the end of 2022, we confirmed suppliers representing 82% of our spend have declared which countries they manufacture in allowing Verisio to perform an initial risk assessment of our supply chains against the Global Slavery (Human Rights) index.

By the end of 2022, we had contacted our strategic suppliers with Self-Assessment Questionnaires to risk assess in more detail their supply chains representing 80% of our spend.  We will continue to work with all suppliers to gain high levels of participation in these assessments and to encourage them to address any gaps in their performance.

Training

Our strategy for modern slavery training involves raising awareness across our business of the issues and giving confidence to our suppliers and colleagues to raise concerns. Modern slavery thrives when it is hidden and therefore empowering our colleagues who work within our supply chain, manage teams or agency workers and third-party contracts is essential to eliminating it throughout the supply chain.

During 2022, Headlam continued to rollout the Supplier Code of Conduct to all suppliers. Headlam  hosted its first ever Supplier conference, inviting our top 50 strategic suppliers to collaboratively talk about the importance of ESG and our plans going forward.

Ongoing support and resources are provided to the Company’s employees interacting with suppliers to better help them identify slavery or human trafficking practices. Training has previously been provided by management as part of equipping our colleagues to perform specific roles. Modern Slavery Awareness training will become a standard part of colleague induction when a new induction programme is rolled out later in 2023.

Additionally, employees are protected by certain policies the Company has in place, including Anti-Corruption and Bribery, Fraud and Anti-Money Laundering and the Speak Up Policy and these were reviewed and approved by the Board during 2022 to ensure they remained appropriate.

Speak up Policy

The Company’s Speak Up Policy, sets out the formal process by which an employee may, in confidence, raise concerns about possible improprieties in financial reporting or other matters, including any concerns relating to modern slavery. Under the Speak up Policy, colleagues have direct access to an external managed help line that they can use to report any concerns should they feel they are unable to raise their concern with management.

Our Plans for 2023

Headlam Group plc and its subsidiaries will continue to assess suppliers and address any gaps in suppliers’ performance and will continue the roll out the self-assessment questionnaires to current and new suppliers.  The creation of an onboarding process, will allow us to perform due diligence prior to engaging in any purchases with a potential new supplier.

Due to the success of the supplier conference, we will be hosting another in 2023 to further discuss the ESG actions and our ongoing plans with our strategic suppliers.  Headlam has recruited an ESG manager to develop and oversee all aspects of our environmental, social, and corporate governance policies and procedures.

Effectiveness of procedures

We have a zero-tolerance approach to modern slavery.  Through the steps we are taking with our assessments of our supply chains we believe we have a low risk of modern slavery in our business and supply chains.

To date, no instances of modern slavery have been raised within our business or supply chains, we however recognise our responsibility to report instances of slavery to authorities and support any victim of slavery.  All concerns are taken seriously and investigated thoroughly. We will, through our supply chain audit, continually assess our supply chains by repeating our tailored modern slavery and human trafficking questionnaire to cover a wider range of suppliers to confirm that their policies and processes meet our high standards.

This policy applies to Headlam, its subsidiaries and its supply chain.

This statement was approved by the Board of Headlam Group plc on 2 March 2023 and signed on its behalf by

Chris Payne
Chief Executive