Human rights in our extended value chain
Average read time: 15 minutes
Our value chain connects us with millions of people. We have a responsibility to ensure their rights are respected – and an opportunity to harness those connections to contribute to the fairer, more socially inclusive world we want to see.
Human rights: the foundation of our success
The success of our business relies on many thousands of partners who supply our goods and services and distribute our products.
We couldn't do business without them. At the same time, the way we do business with our suppliers and distributors is a huge opportunity to drive the change we want to see.
In 2020, our supply chain alone included around 56,000 suppliers in over 150 countries (PDF 1.47MB). Our distribution network includes small stores, entrepreneurs and sales agents, as well as major retailers. Taken together, that's an impact that reaches millions of workers – every one of whom shares the universal entitlement to have their rights respected.
€32 billion Our spend on goods and services in 2020
We want to work with all our partners, including through our commitment to Partner with Purpose, to use this scale and influence to contribute to a fairer, more inclusive, and more equitable way of doing business. We've set ourselves ambitious goals for the positive economic, environmental and social change we want to achieve, described in Raise living standards, Climate action and Promoting diverse suppliers. These ambitions, like all our work, can only be achieved if they are underpinned by a fundamental commitment to respect and promote human rights.
That means that every day, all over the world, we're seeking to embed respect for human rights into everything we do.
Part of growing responsibly is making sure all Unilever’s partners work in line with our standards around responsible sourcing, sustainability and human rights.Dave Ingram, our Chief Procurement Officer
Human rights are non-negotiable
Our work to embed respect for human rights in our value chain relies on partnerships – and these partnerships have to be based on a clear set of standards.
Our Responsible Sourcing Policy (RSP) and Responsible Business Partner Policy (RBPP) set out our commitment to conduct business with integrity and transparency, with respect for universal human and labour rights as well as environmental sustainability.
The RSP focuses on our suppliers. The RBPP focuses on the partners who bring our products to consumers – our distribution network.
The RSP and RBPP share a commitment to our 12 Fundamental Principles, which are set out in full in our RSP. The RSP also defines the Mandatory Requirements that suppliers must meet or exceed to do business with us.
Our 12 Fundamental Principles
Beyond our RSP and RBPP, we assess specific commodity suppliers against the Unilever Sustainable Agriculture Code (PDF 7.88MB) and our new People & Nature Policy (PDF 2.04MB), which includes Respecting and Promoting Human Rights as one of its four Principles.
We introduced the RSP in 2014, updated it in 2017, and keep it under review, building in suppliers' feedback to ensure it keeps driving positive change. As part of our Unilever Sustainable Living Plan (USLP) (PDF 8.02MB), we set out to source 100% of our procurement spend from suppliers meeting the Mandatory Requirements of the RSP: we reached 83%* by 2020 when the USLP concluded.
We keep the RSP under regular review to ensure it continues to drive our ambitions in terms of sourcing from partners who understand and share our respect for human rights and conducting business with integrity – as this remains an important goal within our new Unilever Compass strategy (PDF 3.46MB). At the USLP’s conclusion, we evaluated the RSP’s impact. This included reviewing our risk assessment approach to better identify where specific risks occur across geographies and within different supplier types, which will lead to more targeted due diligence and auditing for the goods and services we source.
We’re also analysing the issues we see as most critical on the future horizon and will build these into the RSP. These include issues that we’ve set out in our Unilever Compass goals, such as plastic use and living wages. By doing this now, we’re helping to inform our suppliers of our future requirements and giving them time to prepare for them. Our evaluation enabled us to draft policy amendments over 2020-2021 as preparation for the introduction of a refreshed RSP with an expanded focus on climate and nature.
More information on the RSP and our other policies can be found in our Human Rights Report 2020 (PDF 7.13MB).
Knowing where, and how, to take action
We want respect for human rights to underpin every business decision. That means sourcing from suppliers and business partners who adhere to our values. It also means proactively carrying out risk-mapping and ongoing due diligence, so that if issues do arise, we know where to take action to drive change.
Our third-party audit process plays a crucial role in identifying issues and driving up standards in our supply chain. Each year, we provide detailed breakdowns of our audit findings against our eight salient human rights issues. We put remediation plans in place for every issue identified.
Human rights impact assessments
Our RSP includes a process of desktop and on-site audit, depending on risk. This audit process is supplemented by Human Rights Impact Assessments (HRIAs), carried out by independent expert organisations who visit a representative sample of our operations, our suppliers and other business partners. Engagement with workers is a key element of these assessments.
Each HRIA's key findings result in a time-bound action plan to address issues, with local teams assigning responsibility for leading on each issue. This may include, for example, reviewing our local planning or purchasing practices, or running local training.
At the same time, we work with suppliers, or through industry or other multi-stakeholder initiatives, to address specific issues such as the eradication of forced labour, or fair terms and conditions for temporary workers or transport workers.
We continue to support the strengthening of certification programmes, particularly their social dimensions. We want to see more focus on implementation, on the proactive identification of issues, on root-cause analysis and, critically, on the remediation of issues where they are found.
Going beyond compliance
We're clear about our expectations – but we don't want our supplier partnerships to become tick-box exercises. The RSP depends on the desire and ability of our suppliers to put its requirements into action in their operations. We’re working to help them, and to demonstrate our conviction that growth and sustainability are linked. Our RSP aims to go beyond compliance and improve conditions for workers through guidance and tips on how suppliers should progress up the ‘continuous improvement ladder’.
We expect suppliers to work with us and to make progress from the Mandatory Requirements towards the Good and Best Practices defined in the RSP. We know that moving up this ladder takes effort, and often requires changes in a supplier's and their workers’ mindset to address root causes. It can also require systemic and industry change.
We’re working directly with our partners to build skills and develop capabilities across important issues such as eliminating forced labour, avoiding child labour, paying fair wages for reasonable working hours, management systems, fire safety and the environment. We also run joint projects on responsible sourcing innovation to help suppliers.
Protecting health and safety: the RSP in action
During an audit of one of our deodorant suppliers in India, we found fire sprinklers were not installed in the factory. This meant the supplier was in breach of our RSP’s Fundamental Principle 9 and was putting its workers and the operation of the factory at risk.
Poor practices like this count as a ‘key incident’ and require urgent action. We raised the key incident with the supplier and agreed a remediation plan to fix the issues. Just after the installation of a sprinkler system was completed, there was a fire at the factory.
Thanks to the newly installed sprinklers, the fire was contained and no one was injured. But the outcome could have been far worse.
As we were working through the remediation plan, we found the supplier lacked the correct mindset and the detailed understanding of health and safety we expect. While we’re pleased to have prevented potential injuries, this incident underlines just how important it is to keep working with suppliers to help them reach Good and Best Practices.
Focusing on efficiency for a bigger impact
We know that addressing endemic human rights issues often depends on collaborating with suppliers and others in our industry. While upholding the principles of our RSP, we collaborate with others in the industry and listen to our suppliers’ experience of working with us, so together, we and our suppliers can have the biggest impact.
We employ a ‘mutual recognition’ approach, which means recognising suppliers who have their own mature, comprehensive compliance and responsible sourcing programmes in place, and agreeing that, through their policies and procedures, they meet or exceed our RSP’s Mandatory Requirements.
Over the years, we've also expanded the ways we can monitor and verify human rights issues beyond the use of our own audit standard, the Understanding Responsible Sourcing Audit (URSA).
We now also encourage the use of industry-accepted auditing systems. Sedex is the largest platform for sharing responsible sourcing data. Since Sedex upgraded its audit standard in 2017, we use its SMETA audits where we require an on-site audit, and use EcoVadisto evaluate suppliers where desktop assessments are more appropriate. Our RSP’s Audit Requirements (PDF 152KB) set out the details of compatible approaches.
By reducing the burden of compliance without compromising standards, these approaches help us, and our suppliers, free up resources to tackle the actual issues found.
Acting on breaches
We expect our suppliers and their employees or contractors to report actual or suspected breaches of our RSP. We will investigate any non-conformity reported in good faith and discuss findings with the supplier. If remediation is needed, we work with the supplier to identify the root causes of the issue and to develop a time-bound corrective action plan to resolve the failure effectively and promptly.
Raising grievances in our extended supply chain
Alongside worker representation, effective grievance mechanisms play an important part in hearing the voices of workers throughout our supply chain.
While we require our suppliers to provide their workers with their own robust internal procedures to raise issues, our Code of Business Principles support line is also open to third parties. That means our suppliers and distributors and their employees can contact us if they’re concerned about any breaches (by us or within their own operations) of our Code, our RSP, or RBPP. Business Integrity describes our Code of Business Principles in more detail.
We also have channels available for specific sectors and industries. For example, our palm oil grievance mechanisms can be accessed by third parties in our value chain or those who support or represent them. This is described in our Palm oil grievance procedure (PDF 1.01MB), which includes details of how to lodge a Palm oil grievance.
Keeping our suppliers informed and engaged
We work with our suppliers to help them understand our values and expectations in a range of ways. For example, we use this video to explain the process and requirements of our Unilever Supplier Qualification System.
Thinking bigger: collective action
We’ve learned that to drive systemic change, we need to take action beyond our own business and supply chain.
We’re founder members of AIM-PROGRESS, a forum of consumer goods manufacturers and suppliers who enable and promote responsible sourcing practices and sustainable production systems. It’s a global initiative, which is supported and sponsored by AIM in Europe and the Consumer Brands Association in North America.
We are part of the Leadership Group for Responsible Recruitment, facilitated by the Institute for Human Rights and Business. This promotes ethical recruitment and combats the exploitation of migrant workers. It includes the commitment to the ‘employer pays’ principle, meaning that no worker should pay for a job, and is targeting the eradication of these recruitment fees by 2026.
We’re also members of the Consumer Goods Forum (CGF) Social Sustainability Committee, having led the creation of its ambition on the eradication of forced labour and the creation of the Priority Industry Principles. We support the CGF’s Sustainable Supply Chain Initiative (SSCI), which is working to benchmark and recognise sustainability standards. The SSCI sets a standard for the content and governance of the responsible sourcing audit standards, to increase confidence in using mutually recognised standards.
We work through organisations such as the World Business Council for Sustainable Development, the United Nations Global Compact and the World Economic Forum to improve environmental and social sustainability, including human rights, in supply chains.
Our Responsible Sourcing Policy: 12 Fundamental Principles
Our RSP contains 12 Fundamental Principles based on internationally recognised standards, including the UN Guiding Principles on Business and Human Rights. It includes guidance and tips designed to assist our suppliers to improve their practices relating to all the Policy’s Fundamental Principles.
1. Business is conducted lawfully and with integrity
This addresses the issues of compliance with laws, bribery, conflicts of interest, gifts and hospitality, confidential and competitor information and financial records. It also addresses money laundering and insider trading, safeguarding information and property, product quality and responsible innovation, prohibition of any and all forms of facilitation of tax evasion, reporting concerns and non-retaliation.
2. Work is conducted on the basis of freely agreed and documented terms of employment
This focuses on the contracts or employment documents of workers, ensuring they are fair, legal, agreed and understood by the workers.
3. All workers are treated equally and with respect and dignity
This addresses the requirement that all workers are treated with respect and dignity. No worker is subject to any physical, sexual, psychological or verbal harassment, abuse or other form of intimidation. There is no discrimination in employment, including hiring, compensation, advancement, discipline, termination or retirement. Discrimination based on race, ethnicity, age, role, gender, gender identity, colour, religion, country of origin, sexual orientation, marital status, pregnancy, dependants, disability, social class, union membership or political views is prevented. In particular, attention is paid to the rights of workers most vulnerable to discrimination.
4. Work is conducted on a voluntary basis
This Fundamental Principle relates to the growing focus on the issues of forced labour and modern slavery. It is a Mandatory Requirement that under no circumstances will a supplier use forced labour, whether in the form of compulsory or trafficked labour, indentured labour, bonded labour or other forms. Mental and physical coercion, slavery and human trafficking are prohibited.
5. All workers are of an appropriate age
This relates to the avoidance and remediation of child labour. Under no circumstances will a supplier employ individuals under the age of 15 or under the local legal minimum age for work or mandatory schooling, whichever is higher. When young workers (below 18) are employed they must not do work that is mentally, physically, socially or morally dangerous or harmful or interferes with their schooling by depriving them of the opportunity to attend school. This Fundamental Principle recognises the particular importance of remediation on this issue, to avoid unintended negative consequences.
6. All workers are paid fair wages
This requires that wages are fair, legally compliant and properly delivered and understood. All workers are provided with a total compensation package that includes wages, overtime pay, benefits and paid leave which meets or exceeds the legal minimum standards or appropriate prevailing industry standards, whichever is higher, and compensation terms established by legally binding collective bargaining agreements are implemented and adhered to.
7. Working hours for all workers are reasonable
This provides our requirements on working hours, including where there are no local legal regulations. Workers are not required to work more than the regular and overtime hours allowed by the law of the country where the workers are employed. All overtime work by workers is on a voluntary basis. This Principle also addresses aspects of forced labour.
8. All workers are free to exercise their right to form and/or join trade unions or to refrain from doing so and to bargain collectively
This addresses the rights of collective bargaining and/or trade unions. The rights of workers to freedom of association and collective bargaining are recognised and respected. Workers are not intimidated or harassed in the exercise of their right to join or refrain from joining any organisation.
9. All workers’ health and safety are protected at work
This relates to the right of a worker to have risks to their health and safety properly controlled. A healthy and safe workplace is provided to prevent accidents and injury arising out of, linked with, or occurring in the course of work or as a result of the employer’s operations.
10. All workers have access to fair procedures and remedies
This provides for workers being allowed to express their grievances. All workers are provided with transparent, fair and confidential procedures that result in swift, unbiased and fair resolution of difficulties which may arise as part of their working relationship.
11. Land rights of communities, including indigenous peoples, will be protected and promoted
This aims to avoid and prohibit issues of land grabbing. The rights and title to property and land of the individual, indigenous people and local communities are respected. All negotiations with regard to their property or land, including the use of and transfers of it, adhere to the principles of free, prior and informed consent, contract transparency and disclosure.
12. Business is conducted in a manner which embraces sustainability and reduces environmental impact
This addresses our requirements with regard to the planet and environmental sustainability. Operations, sourcing, manufacture, distribution of products and the supply of services are conducted with the aim of protecting and preserving the environment.