Responsible Sourcing

Responsible Sourcing Program Overview

Best Buy is a retailer and a manufacturer of private-label products. We partner with factories on the design, production and testing of these products, and we also partner with them to ensure they meet our expectations for safe workplaces where workers are treated fairly. Our Responsible Sourcing program was developed to adhere to the OECD Due Diligence Guidance for Responsible Business Conduct and the UN Guiding Principles for Business and Human Rights. Our company measures responsible sourcing risks in the supply chain on an ongoing basis.

All our supplier contracts require adherence to our Supplier Code of Conduct. Additionally, we engage with internal cross functional teams including sourcing, engineering and supply chain, to promote awareness of our program and deepen the integration of the work into all functions of our business.

Through our Responsible Sourcing program, we seek to mitigate risk, enhance our partnership with these private-label suppliers, and create value for all stakeholders. This program consists of a five-step process in which we work closely with our suppliers to manufacture quality products while ensuring workers are treated fairly in a safe environment.

1. Code introduction

Before working with new suppliers, we provide comprehensive training, resources and material on our Supplier Code of Conduct and Responsible Sourcing Program. We set clear expectations with suppliers about risks related to human trafficking and forced labor.

Our Supplier Code of Conduct is updated every five years to ensure its relevance to international norms and issues members may face in their supply chains. The Code review process is extensive and includes a thorough consultation process with members and stakeholders. Last updated in 2024, Version 8.0 of our Code of Conduct provided additional provisions for workers on topics like equal pay for equal work, reasonable accommodation for workers with disabilities and tightened requirements for facilities in creating a comfortable, safe and appropriate work environment.

We regularly update our due diligence processes, procedures and protocols to ensure their continued adherence to international norms and effectiveness for the issues we encounter in the supply chain.

2. Self-reporting

New suppliers are required to complete a self-assessment questionnaire (SAQ) in the supplier qualification process.

To maintain strong expectations, due diligence, and compliance practices, existing suppliers assess their performance against the Code by completing an SAQ on a 1- or 2-year basis. If Priority non-conformances exist, further clarification will be conducted through remote or on-site assessments via Corrective Action Plans (CAPs).

3. Monitoring

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 workers and other vulnerable groups. We then apply increased due diligence to those suppliers accordingly.

Audits: We conduct third-party audits at 100% of our potential supplier factories, which include 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.

At least every other year, full audits are conducted at supplier facilities to identify any gaps between suppliers’ management systems and practices, and our Supplier Code of Conduct. This ensures ongoing and continuous improvement of working conditions within all our suppliers’ facilities throughout the duration of our business relationship with them.

Our audits include worker interviews and visits to all structures on the factory premises, including warehouses, dormitories and canteens.  We review and assess the performance of labor, health and safety, environment, ethics and supply chain management systems.

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.

Non-Conformance Violations

While we require suppliers to adhere to our rigorous Supplier Code of Conduct, we understand that additional measures for labor due diligence are necessary to ensure supplier alignment and prompt remediation and corrective actions. If any non-conformance is discovered, we distinguish between priority, major and minor non-conformances. Any form of forced or child labor we discover would fall into the priority non-conformance category, requiring immediate remediation and corrective action by the supplier. We have a specific remediation policy to address instances of child labor and forced labor found in our supply chain:

  • We provide the remediation policy and guidelines to guide suppliers to remediate and take corrective action,
  • Monitor progress against remediation and corrective action and require evidence of such remediations and corrections, and,
  • Require an on-site assessment by a third-party audit firm to verify and confirm the remediation and corrective actions.

When any 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 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.

  • 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, major or minor — are resolved. All instances of nonconformance require a CAP, which we approve and monitor.

CAP Closure

We believe continued dialogue with suppliers drives 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 issue(s) and indicate how they intend to improve it and measure progress. The suppliers then must close the non-conformances according to Best Buy’s timelines and provide 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, focusing on coaching and remediation creates sustainable impact and improved supplier management systems. 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.

4. Capacity Building and Communication

We are committed to transparency with our suppliers on our priorities, our monitoring approaches, audit assessment steps, code requirements, key elements of a supply chain sustainability management system, and the steps to improve their adherence to our requirements. Every year, we host an annual supplier meeting aimed at disseminating important information regarding our Supplier Code of Conduct and deepening relationships and transparency with our suppliers on a global level.

In addition to our private label suppliers, we train our internal private-label teams including product managers, Sourcing and the Leadership team.

For more information on our latest capacity building efforts, please see our most recent Corporate Responsibility & Sustainability (CR&S) Report.

5. Reporting

Each year we publicly disclose our suppliers’ compliance against our Code of Conduct in our CR&S Report, which can be found in our Resource Library.

Forced Labor Not Acceptable

In alignment with the Universal Declaration of Human Rights, the International Labor Organization Core Conventions, and the International Labor Organization Declaration on Fundamental Principles and Rights at Work, Best Buy is committed to respecting human rights as outlined in the United Nations Guiding Principles on Business and Human Rights, including forced labor.

Risk Assessment

We recognize that forced labor conditions are a risk in some of the regions in which we source our private label products, especially for foreign migrant and other vulnerable workers. Therefore, we conduct both country-level risk assessments and an annual factory-level risk assessment that considers both business and social risks to help us identify where additional due diligence may be needed.

For country-level forced labor risks, we leverage data from:

  • The Worldwide Governance Indicators Project
  • The U.S. Trafficking in Persons Report
  • The Global Slavery Index

We conduct factory-level risk assessments annually based on our suppliers’ annual self-assessment questionnaire and their previous priority non-conformances related to forced labor.

Training and Education

We make our expectations on forced labor clear for our suppliers in a variety of ways, including:

  • Provisions prohibiting forced labor in our vendor contracts.
  • Providing training on our Supplier Code of Conduct to 100% of our private label vendors, which includes our expectations on critical risks such as human trafficking and forced labor. We deliver this content annually at our supplier meeting as well as leverage virtual trainings related to this content.
  • Requiring and training our suppliers to disseminate the Code in their supply chain through a cascade approach. Supplier responsibility is a requirement of our Code and supplier audits.
  • Requiring our relevant suppliers in high-risk countries who rely on foreign migrant workers and their associated labor recruitment agencies to complete additional training on responsible recruitment courses, including methods and tools to eliminate recruitment fees.
  • Providing specific training to our suppliers in China on student workers. We partnered with an NGO and created a toolkit for the factories we contract with in China to help identify and prevent forced labor conditions among student workers. We continue to send the Student Worker Management Toolkit and alert our suppliers during summer and winter holidays on the proper handling of student workers. Suppliers that hire student workers are required to finish the Self-Assessment for Student Worker Hiring Management System, as well as participate in worker interviews twice a year.
  • In addition to our private-label suppliers, we train our internal private label teams, including product managers, sourcing and the leadership team.
Audit & Remedy

Beyond training, we ensure our private label suppliers are complying with our expectations through a rigorous monitoring program. We conduct due diligence on each factory in multiple ways including:

  • Auditing 100% of potential private label factories before doing business.
  • Conducting a full audit of existing suppliers at least every other year.

Our audits include assessments of the factory and dormitories, review of numerous documents and policies, and interviews with factory management and workers. Auditors look for any conditions that indicate potential for forced labor (for example: withheld passports, restricted movement, recruitment fees and withheld pay), and interview workers, either directly or via worker surveys, to better understand their working conditions.

If we do find conditions of forced labor, we immediately take action to hold our supplier accountable including, but not limited to:

  • Requiring the specific action(s) to cease immediately.
  • The supplier must complete a CAP, which then must be approved by Best Buy.
  • Workers are paid their due wages, including the reimbursement of all recruitment fees, which is verified through spot checks and ultimately 3rd party audits.
  • The supplier must establish a policy preventing all conditions of forced labor and conduct a training on the policy for all relevant employees.
  • We leverage partners with expertise on foreign migrant workers and forced labor to conduct required trainings so that factory management and staff fully understand our requirements.
  • Moving forward, the supplier is designated as high-risk and is subject to additional due diligence.

If the supplier refuses to comply and does not complete a Best Buy-approved CAP, we will terminate the relationship with the factory.

Grievance Mechanism

Our team spends substantial time building trust with workers to effectively deploy our grievance mechanism. We require suppliers to post the Best Buy grievance hotline in their facility in the language of the workers. Upon any case reports, we investigate and follow up.

To empower workers to voice their opinions and concerns in the workplace and beyond, our Worker Voice program enables supply chain workers to answer customized survey questions through their personal mobile devices. Workers are surveyed anonymously and remotely in their native language. See current data pertaining to our Worker Voicer program in our annual CR&S Report.

Industry Collaboration

In addition to our direct suppliers, we respond to allegations of forced labor in raw material sourcing and engage with smelters who may be sourcing from mines where forced labor may be present. In these cases, we assist in industry efforts to engage the smelters in question to determine what actions they are taking to verify and, if necessary, address conditions of forced labor at the mine. By partnering with industry peers, we build leverage that is then applied to the smelters. This increases their engagement and improves their oversight of source mines.

Our focus on eliminating conditions of forced labor is just one example of how Best Buy seeks to ensure the responsible sourcing of our private-label products. We are dedicated to driving continuous improvement of our sourcing practices and our vendor’s working and environmental conditions. We firmly believe one of the best methods to enhance our responsible sourcing efforts is through engagement and collaboration with stakeholders, including suppliers, peer companies, investors, academics and civil society organizations.