Working with our suppliers
The Unilever Business Partner Code outlines our requirements on health and safety at work, business ethics, labour standards, consumer safety and the environment. We continue to assess our suppliers against this Code.
The scale and complexity of the task have been a challenge for our global business. Unilever sources from more than 10 000 suppliers of raw materials and packaging, and up to 100 000 suppliers of 'non-production' goods and services. Having made good progress in mapping and engaging with this vast network of suppliers through our supplier assurance process, we are now moving forward on specific improvement initiatives with individual suppliers. We have also founded a collaborative industry approach with several peer companies to accelerate the programme further still.
Supplier assurance
In early 2007, we completed the process of communicating with our 'first-tier' suppliers of raw materials and packaging. This was followed by a risk assessment of supplier sites that presented potential concerns in terms of their compliance with our Code. During the course of 2007, approximately 15% of these sites were prioritised for more detailed assessment, and a programme of audits has been initiated, using third-party auditors, to identify areas for improvement and remediation. This programme, involving approximately 50 sites as a pilot, will continue through 2008 and the learning used to embed this procedure into our ongoing process of supplier assurance.
In common with other large firms, we are increasingly buying in goods and services, such as plant and equipment, human resources, information technology and finance support. This supply base for such non-production items is large, often highly localised and complex. In 2007 we also completed a prioritisation of this group of suppliers. They are now integrated within our overall supplier assurance process, and site audits are being carried out as part of the pilot programme.
Though in its early stages, preliminary findings from the audit programme have yet to reveal areas of critical non-compliance. However, in a number of cases the management systems and capacity of suppliers, especially in developing markets, will need to be addressed and more consideration given on how this may be best achieved.
Embedding our approach
We are embedding the procedures for supplier assurance against our Business Partner Code within routine supplier management processes. Purchasing departments are being trained so that these considerations are taken on board when supplier approvals are being made.
We are also working with our Sustainable Agriculture Programme team, who are proceeding with an in-depth assessment of suppliers of fruit and vegetables against their Good Agricultural Practice Guidelines.
Working with others
It is clear that building management capacity within the supply chain will require a common approach and focused, sector-based initiatives involving many participants. Moreover, suppliers of all types are encountering difficulties with the multiplicity of information requests from companies like us. In 2007, together with some of our peer companies, we established a global Programme for Responsible Sourcing (PROGRESS). As part of this, we have agreed on a common approach to evaluate the social and environmental performance of suppliers across specific groups of goods and services. We have also agreed to share the data that results from the assessment and audit process.
This will help reduce duplicated effort for PROGRESS members and suppliers alike, accelerate the process of assessing suppliers and free up resources to focus on implementing improvements within the supply chain.
To facilitate this process, PROGRESS members decided to join the Supplier Ethical Data Exchange (SEDEX) system and use its well-established evaluation methodologies. Almost 20 000 supplier production sites are already registered within SEDEX. PROGRESS members are now in the process of requesting their suppliers to register on SEDEX in order to complete the social and environmental assessment of their sites.
