Supply chain sustainability - Li & Fung

Our strategy

Supply chain sustainability

We partner with our customers and suppliers to raise the sustainability performance of the supply chain.

We convene the global supply chain, creating customized end-to-end supply chain and logistic solutions for global brands and retailers. We design, source and deliver a diverse range of products from a network of 4,800+ factories in 40 production countries to our customers globally.

Our priority is to develop and operate responsible, sustainable and agile supply chains that meet the demands of a dynamic global retail sector while safeguarding and enhancing the lives of all those who are touched by it.  We aim to make lives better for a billion people along the supply chain.

At Li & Fung we understand that building sustainable supply chains cannot be done alone. Therefore, we work with suppliers around the world and alongside industry partners to address the development challenges our industry faces.

You can also read more about our services and initiatives for suppliers in our Suppliers section.

Managing risk and compliance

We manage supply chain risk through a process of risk assessment and strategic decision making whereby we direct and develop business with suppliers who have greater capability and reduced risks, while supporting other suppliers to improve their performance.

Supplier risk assessment starts with Li & Fung’s Supplier Code of Conduct. This is our supplier engagement document and it outlines the minimum standards required in accordance with the ILO’s Core Conventions, the California Transparency in Supply Chains Act, the UK Modern Slavery Act and local laws, for human and labor rights, safety, environment and security, as well as transparency and ethics. All suppliers must accept these minimum standards as a condition of doing business with us. You can learn more on the Supplier section.

Compliance against the Code of Conduct is assessed by Li & Fung as well as external audit firms approved by us or our customers and/ or independent industry organizations. The audits may be unannounced, semi-announced or announced, depending on the requirements of our customers. Adding the capabilities and resources of our appointed third-party audit firms to our own has increased our visibility into our supply chain. At the same time, we are also establishing a stronger and more consistent methodology in our auditing program by regularly hosting joint training sessions with our third-party auditors.

Key elements of our factory engagement, monitoring and services are outlined below.


Raising sustainability performance

Amidst global supply chain disruptions, we are committed to embedding sustainability into our operations alongside our customers, suppliers and industry partners to address the challenges of building a more responsible supply chain. Read our Environmental, Social, and Governance (ESG) report 2022 to learn more about our progress and focus for the future.

Li & Fung’s commitment to protect ancient and endangered forests

Responsibly managing our environmental footprint as we work to mitigate global climate change is central to our sustainability strategy and protecting our forests is essential for a sustainable future. Li & Fung is committed to leveraging its convening power to collaborate with stakeholders along the supply chain to make our industry more environmentally and socially responsible, and sustainable. We can better protect our forests through sustainable procurement and consumption of resources, in responsible material sourcing and product manufacturing, and in the transportation of products to our customers. Read about Li & Fung’s collaboration with Canopy.

Harnessing 3D design to eliminate waste

Accelerating the adoption of virtual design and sampling into our sourcing processes is critical to transforming our supply chain to achieve our priorities of speed, innovation, and digitalization. Not only are these innovations helping us to share concepts, perfect designs, select materials and tweak product attributes quickly, we also avoid environmental impacts from travel and transportation and reduce wastage from sample and product production. We have introduced virtual design and sampling to key customers and look forward to expanding this innovative, effective and sustainable sourcing solution going forward.


Collaborating with industry

We recognize the power of collaboration to bring about change in the industry. We are involved in industry initiatives that bring our customers and industry partners together to effect change. Our collaboration efforts are focused on implementing programs that address the challenges of our industry and specific production countries where we operate.

We collaborate with our industry partners and implement a number of initiatives that aim to address specific health and safety, labor and environmental issues in the supply chain, as well as educate and empower workers, thereby creating a more socially-inclusive business, all with the aim of raising sustainability performance.