Conducting environmental audits - DECATHLON's audit system

86.7% of concerned sites for Rank 1 and Rank 2 suppliers were rated A, B or C for their environmental management at the end of 2023, up 4% over 2022.

DECATHLON reached maturity level 2 under the Zero Discharge of Hazardous Chemicals Foundation classification4 (three levels) for its own chemical risk management.

DECATHLON continued modelling work to define a trajectory allowing it to reduce its plastic footprint so that it can keep its activities within planetary boundaries.

At the same time, the company also worked on reducing its use of single-use plastics by either phasing them out of packaging or recycling them.

DECATHLON added new questions to its environmental audit grid in order to improve its water management in production.

In each of its production countries, DECATHLON relies on OPM-SD (Sustainable Development Operational Process Manager) specialists responsible for coordinating sustainable development projects within the plants. Some of them are dedicated to environmental management and trained to carry out environmental audits.

Some of these audits are carried out by them in-house, and some externally, by an auditing firm with identical level of high standards. During each audit, the external auditing firm also performs air and water quality tests, which they analyse.

These topics are evaluated in audits to reflect a situation at a given time, which makes it possible to identify short, medium and long-term improvements at the production site.

DECATHLON requires its suppliers to obtain a minimum score of C (on a scale from A to E). If they are assigned a D, the supplier has a period of six months to a year to take corrective action and make improvements. If they receive an E score related to an immediate risk of environmental pollution, actions are instantly implemented and can include immediate suspension of production until the identified problem is resolved. 

Once the direct risk has been eliminated, the supplier is expected to set up a preventive action plan within three months to guarantee a lasting resolution.

In 2023, teams worked with a network of internal auditors and referents to update the existing audit system. When it is implemented in 2024, it will incorporate criteria that meet the standards of the Roadmap to Zero programme established by the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation. So, Decathlon is asking its suppliers to commit to performance indicators that are commonly used in the industry to facilitate reporting and better control its environmental impact.

The company is using its audit grid to verify five main areas:
1️⃣ Environmental risk governance: Suppliers must put in place a robust governance system that enables the effective management of environmental risks. This system assesses management organisation, environmental policies, continuous improvement strategies and the supplier’s ability to detect and mitigate their risks through regular self-assessments and the implementation of corrective action plans.

2️⃣ On-site industrial wastewater treatment: Discharged industrial wastewater must comply with DECATHLON’s requirements and local regulations. If there is a discrepancy between local standards and Decathlon’s specifications, the company applies the stricter rule. DECATHLON also requires precise monitoring of the water quantities used, as well as water management at the production facilities.

3️⃣ Hazardous waste management (chemical, bio-chemical, electrical or from production): Hazardous waste must be stored in specific areas, protected from weather events (rain and sun), and pose no risk of a leak reaching groundwater, the main source of drinking water. DECATHLON requires precise monitoring of the quantities of hazardous waste that enter the factory and that are generated by the supplier.

4️⃣ Air pollution: The release of fine particles, harmful gases (NOx et SOx) and other types of gaseous pollutants into the atmosphere must be limited and suitable filtration systems must be installed in the factories. To clarify its requirements, DECATHLON published a guide in 2021 establishing the maximum  recommended release level according to the energy sources used (coal, biomass, refined oil and gas)

5️⃣ Energy management: CO2 emissions must be measured on scopes 1 & 2, and long-term strategies must be put in place to align emission reduction trajectories with science and with the worldwide goal of limiting global warming to 1.5 °C.

To identify production sites concerned by environmental audits, DECATHLON has chosen an indicator based on the quantity of wastewater generated per day and per site. Until 31 December 2023, concerned sites were those generating more than 50 m3 of industrial wastewater. To better control environmental risks in production, DECATHLON will align its audit system with ZDHC standards in 2024 and then evaluate sites generating more than 15 m3 of industrial wastewater. High water use goes hand in hand with high chemical consumption, which poses a risk of direct pollution and endangers the health of local populations. This use also requires greater energy resources with the potential emission of pollutants.
Today, the countries with the most sites concerned by environmental management are Mainland China, Vietnam, India, Bangladesh, Turkey, Taiwan and Sri Lanka

In 2023, 86.7% of concerned sites for Rank 1 and Rank 2 suppliers were rated A, B or C on DECATHLON’s audit grid (83.4% in 2022).

In 2023, the company continued making improvements in aligning itself with its commitment to ensure that 90% of concerned sites for Rank 1 and Rank 2 suppliers are rated A, B or C by 2026. 

This progress can be explained by:
- strong motivation of production teammates to maintain ties with suppliers and guide them towards production practices that have less of an impact on the environment
- 137 audits (142 in 2022) and the establishment of 41 corrective action plans at production sites rated D and E 
- a growing number of internal auditors (26 vs 24 in 2022) and more teammates trained in auditor validation to achieve greater autonomy, and the ability to take corrective action more quickly