At AB InBev, we recognize the responsibility of the business community to respect human rights, and we seek to promote human rights as we strive to make the world a better place. Our Global Responsible Sourcing Policy outlines our approach to overseeing human rights and labor standards; health and safety; environmental management issues; and business integrity across our global supply chain. We are committed to working with Business Partners that share these values and commit to implementing this Policy in their operations.
Our Responsible Sourcing Policy enables us to cascade our human rights, anti-corruption and environmental management principles through our supply chain. We regularly review and update our policies to ensure they remain relevant and in alignment with AB InBev’s policy landscape.
Communicating our Responsible Sourcing commitments
In 2017, the changes to our Responsible Sourcing Policy were communicated to our procurement teams along with key information on how to embed responsible sourcing into our procurement processes. This was supplemented by in-person training to over 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 are creating an e-learning module for our procurement colleagues that will focus on how to embed responsible sourcing into our procurement processes.
We want our Responsible Sourcing Policy to be accessible and understood by our suppliers so we have translated it into several languages including Spanish, French, Dutch, German, Portuguese, Chinese, Korean and Russian. We have also provided introductory training to suppliers on responsible sourcing in India, China and Africa. In 2017, colleagues in our Latin America region trained more than 1,000 suppliers on our Responsible Sourcing Policy, and an additional 4,300 suppliers through online e-learning. Our global procurement team works closely with our regional teams to ensure training and policy guidance is tailored to each market and integrated into regional and market-level procurement practices.
In 2017, we developed a supplier pre-qualification process, which included responsible sourcing, the approach was embedded into our procurement ways of working and piloted in 2018. In 2019 we reviewed the effectiveness of the process and identified there were opportunities to improve it to better identify the greatest risks in our supply chain and drive more meaningful and impactful improvements.
We have evolved our Responsible Sourcing program away from supplier pre-qualification to be more focused on these high-risk supply chains and the potential impacts on people. We have looked at the types of supplier relationships we have across the business and how we can most effectively engage suppliers on responsible sourcing. We have developed a three tiered approach based on where we believe the greatest risks in our supply chain exist and the capacity of our suppliers in managing responsible sourcing risks
- For strategic suppliers we are building a benchmarking framework that will help us to identify how suppliers are managing responsible sourcing within their business and supply chains including what grievance mechanisms and remediation processes this group of suppliers have in place to support responsible sourcing and sustainability. This will allow us to not only to identify gaps but also best practices that can be shared more broadly.
- With core suppliers we are working with our local teams leveraging external risk information to identify the highest risk supply chains and conduct focused assessments. Rather than auditing specific supplier sites, we plan to conduct third-party audits at a sample of supplier sites.
- We are conducting human rights market workshops that will enable us to identify sector-specific risks in each country enabling us to build more targeted industry action plans.
We know that in some cases suppliers may refuse to accept the principles of the Responsible Sourcing Policy and the Supplier Anti-Corruption Policy, or to undergo an assessment and address identified issues, these cases can result in suppliers not being selected for business. In rare cases when suppliers are not willing to adopt improvements, our Procurement teams are empowered to de-authorise 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. Since 2015, we have taken steps to de-authorise six suppliers for refusal to adhere to responsible sourcing practices.
Supporting suppliers to improve performance
We recognise that our suppliers value support to implement responsible sourcing principles, including human rights, in their businesses. In 2017, we collaborated with AIM-PROGRESS, Partner Africa, The Coca-Cola Company and Diageo to create a Business Toolkit. It covers the principles in our Responsible Sourcing Policy and ILO Core Labour Conventions as well as training on productivity and efficiency, quality, safety, time management, workforce cooperation and communication, workforce management, environmental management, business integrity and land rights. In 2018, the toolkit has been made available to companies to help enhance their approach to Responsible Sourcing and will be available as online learning and in-person workshop materials to enable scale.
In 2019 we worked with our Supplier Value Creation team, that work with suppliers to improve productivity and efficiency, to create a Rapid Responsible Sourcing Assessment that forms part of the diagnostic assessment for small businesses. We started using this in South Africa, training both our SVC and Enterprise Development teams on using the module and understanding what risks can look like in sites and have used the module with our first supplier in October 2019. We will continue to work with our teams to refine our approach and provide support to our suppliers.
Roles and responsibilities
Responsible Sourcing is primarily led by the Global Procurement function due to its relationship with suppliers and their role in supplier selection and management. Our Chief Procurement and Sustainability Officer, and related Procurement function are accountable for the implementation of our Responsible Sourcing Policy into our supplier selection and management processes.. As our approach matures, we are developing more cross-functional collaboration on human rights and responsible sourcing, while we recognise the important role that procurement plays in selecting suppliers we know that in many cases other functions within AB InBev engage with suppliers on a regular basis. We want to leverage these relationships to help us to better implement our responsible sourcing principles.
Compensation and performance reviews are aligned to developing and progressing our approach on responsible sourcing. The targets are shared across relevant teams including Sustainable Agriculture and relate to building on previous year’s work and further refining and embedding Responsible Sourcing into the way we operate. In 2019, compensation and performance reviews for our Responsible Sourcing Manager and Sustainable Agriculture Manager are linked to deepening transparency and assessment of issues in our direct Agriculture supply chain. This activity is undertaken in close collaboration with our regional and local agriculture development teams.
Responsible Sourcing in Agriculture
We recognize there are unique challenges that affect our agricultural supply chains, in 2018 we developed our Responsible Sourcing Principles for Farms and included them into our direct farmer agreements. In 2019 we began training our agronomy teams on responsible sourcing and what risks can look like on farms, we are working with our agronomy teams in each of our markets to understand the responsible sourcing challenges that we face. We are developing action plans based on the priority issues identified and will begin implementation of those plans in 2020. Our ambition is to embed responsible sourcing into the way we work with farmers and farming communities enabling us to take a holistic approach to driving positive impact with farmers.