We choose to work with suppliers who treat people with dignity, respect the environment, and never engage in corrupt practices. We believe in being transparent with our suppliers and have created a Responsible Sourcing Policy to outline our minimum expectations for all suppliers.
Our Responsible Sourcing Policy enables us to cascade our ethical, environmental and human rights principles through our supply chain. In 2017, the policy was updated in alignment with our Global Human Rights Policy. Our Responsible Sourcing Policy is supported by our Supplier Anti-Corruption Policy, covering the expectations we have of our suppliers on issues of bribery and corruption.
How We Assess Our Suppliers on Responsible Sourcing and Ethics
We have developed a supplier prequalification process that is comprised of three pillars — financial stability, business integrity, and responsible sourcing and human rights — and embedded it into our procurement system. We continue to build on this process with requirements for responsible sourcing within our online sourcing tools, enabling greater visibility and management of responsible sourcing within our procurement processes. The process is applied to both new and existing suppliers, and is triggered by our contracting cycles.
The prequalification process includes an initial questionnaire for suppliers that is aligned to the three pillars of supplier prequalification. For each of the pillars, we assess the responses from our suppliers. We then couple these responses with risk data from external sources, including the International Trade Union Confederation Global Rights Index, the Trafficking in Persons Report from the U.S. State Department, and data on child labor prevalence from UNICEF. The outcome of these assessments determines the action required.
If a supplier is identified as potentially higher risk in terms of responsible sourcing and human rights, they are required to undergo a four-pillar Sedex Members Ethical Trade Audit (SMETA) . At the end of each audit, the auditor and supplier agree on a time-bound corrective action plan for each gap identified. Our Procurement teams engage proactively with our suppliers to ensure the action plan is completed. In rare cases when suppliers are not willing to adopt improvements, our Procurement teams are empowered to de-authorize the supplier. This action is always a last resort, as our preference is to work in partnership with our suppliers to support them in effectively implementing responsible sourcing practices.
In the business integrity pillar, if potential high risks are identified we work with our Compliance teams to conduct further investigations to understand the nature of the risk and determine whether we can proceed to work with the supplier.
We recognize there are limitations to the supplier prequalification process and audits alone. To better understand how systemic human rights risks relate to our supply chains, we partner with other organizations to help us to identify and understand the social and environmental risks within our global supply chains.
Responsible Sourcing in Agriculture
We recognize there are unique challenges that affect our agricultural supply chains, and we’re developing the tools and approaches needed to better understand them, while supporting farmers with practical interventions. As part of our efforts in agriculture, we partnered with the World Wide Fund for Nature to carry out a supply risk analysis covering key social, environmental and economic risks, including human rights risks, for our priority agricultural crops globally.
Responsible Sourcing Training
In 2017, the changes to our Responsible Sourcing Policy were communicated to our Procurement team along with key information on how to embed responsible sourcing into our procurement processes. This was supplemented by in-person training for more than 140 procurement colleagues. The training covered key topics, including: the importance of human rights and the need to embed this into our procurement decision-making processes, an overview of our Responsible Sourcing Policy, and the process to ensure our supplier selections take into account human rights practices.
To further strengthen our internal training, we’re building an e-learning module for our procurement colleagues that will focus on how to embed responsible sourcing into our procurement processes.
We take part in industry and NGO initiatives that seek to improve supply chain performance.
We’re a member of AIM-PROGRESS, a global forum of consumer goods companies that promotes responsible supply chain and sourcing standards covering labor practices, health and safety, environmental management, and business integrity. We actively engage with AIM-PROGRESS through participation in mutual recognition and capability building.
We also engage with others within the sector through AIM-PROGRESS and other forums to help further our approach toward responsible sourcing. In 2017, we worked with Partner Africa, AIM-PROGRESS, Coca-Cola and Diageo to develop a business toolkit to support suppliers and help them to improve their businesses.
We’re also a member of Sedex, a not-for-profit organization dedicated to driving ethical and responsible business practices in global supply chains. Sedex is an effective management solution that helps us reduce risk, protect our reputation, and improve our supply chain practices.