Advancing human rights in our extended supply chain
From the fields and factories from which we source our raw materials to our distribution network, our value chain connects us with millions of people. It gives us one of our most important opportunities to advance human rights and address risks – and helps us build the trust that is vital to our business success.
A supply & distribution network with purpose
Our business success is intertwined with the integrity, strength and sustainability of the many thousands of business partners in our value chain.
We have a responsibility to everyone who is affected by our business. We believe that by working with and supporting our suppliers, distributors and other business partners and their workers, we can create a socially and environmentally sustainable value chain. Advancing human rights directly in our supply chain gives us the opportunity to make a positive difference to the lives of many hundreds of thousands of workers and their families, and to contribute to the Sustainable Development Goals. It also provides a lasting foundation for our growth.
As the pace of business change accelerates, and we need to move faster and with more agility, we do not want to sacrifice doing things the right way. This is the responsibility of everyone who works for or with our business.Alan Jope, our Chief Executive Officer
Our spend on goods and services in 2019
Our aim is to drive profit and growth while using our scale to create positive change. Our supply chain includes around 60,000 suppliers in over 160 countries, and plays a vital role in delivering our ambitions. See our Supply Chain Overview Spend Analysis (PDF | 834KB) for details of our supply base.
At the heart of our ambition: our Responsible Sourcing Policy & Responsible Business Partner Policy
Our Responsible Sourcing Policy (PDF | 9MB) (RSP) and Responsible Business Partner Policy (PDF | 8MB) (RBPP) embody our commitment to conduct business with integrity and transparency, and with respect for universal human and labour rights, and environmental sustainability.
The RSP applies to all types of suppliers, while the RBPP applies to the business partners who deliver our products to consumers.
While the Responsible Sourcing Policy is our overarching policy, we also assess specific commodity suppliers against the Unilever Sustainable Agriculture Code, our Sustainable Paper and Board Packaging Policy or the Unilever Sustainable Palm Oil Sourcing Policy.
We introduced the RSP in 2014 and updated it in 2017. It sets out our 12 Fundamental Principles and defines the Mandatory Requirements that suppliers must achieve to do business with us.
The RSP gives guidance and tips on how suppliers should progress up the ‘continuous improvement ladder’ and defines Good and Best Practices. We expect suppliers to work with us and to make progress over time from the Mandatory Requirements towards these Good and Best Practices. We review and update supporting guidance regularly, working with suppliers and external experts to share examples of Best Practice and to set a benchmark that the industry can aspire to. We’re committed to applying our RSP across our entire supply chain.
Our Responsible Sourcing Policy is crucial to creating change at scale
Marc Engel, our Chief Supply Chain Officer and member of the Unilever Leadership Executive
“As a company sourcing from around 160 countries and around 60,000 suppliers, and with communities all over the world touched by our value chain, the Responsible Sourcing Policy shapes how we operate. We expect the highest standards of behaviour from ourselves and this extends to all our suppliers, their workers and those with whom we do business.
We have a responsibility and opportunity through the Responsible Sourcing Policy to create fundamental, positive change at scale for both people and planet.”
Our Responsible Business Partner Policy
Our Responsible Business Partner Policy complements our Responsible Sourcing Policy.
Our Responsible Business Partner Policy
The partners who bring our products to consumers are a vital part of our business model. Through their work as distributors, retailers, franchisees, joint venture partners and sales agents, they help deliver our brands with purpose and drive the sustainable growth on which our future depends.
We introduced the RBPP in 2015 to invite these business partners to join us in upholding high standards of business integrity. In 2017 we aligned it with the RSP, with its additional focus on human and labour rights and environmental sustainability. The two now set out common values and principles in terms of the Mandatory Requirements, and use similar self-assessment questionnaires and risk evaluation methodologies. The RBPP shares the same principles as the RSP, grouped as:
- conducting business lawfully and with integrity
- respecting terms of employment and human rights, and
- a commitment to sustainability (which includes the need to respect the land rights of communities).
We’ve translated the RBPP into over 30 languages, see Downloads.
Empowering our distribution network is a core element of our vision of an inclusive business that unlocks people's potential to flourish, in line with the ambitions of the UN's sustainable development agenda and our commitment to promote human rights.
Why a responsible business needs responsible partners
Ritva Sotamaa, our Chief Legal Officer, explains why we need a Responsible Sourcing Policy and a Responsible Business Partner Policy.
“From sourcing raw materials into our factories to the way consumers access and use our products, Unilever’s global reach gives us a unique opportunity to lead the way in championing ethical business practices. We want business integrity to be business as usual across our entire operational footprint.
Breaches of human rights ruin lives and livelihoods. The cost of corruption is a powerful obstacle to sustainable economic growth. Doing business with integrity is a non-negotiable for Unilever: we’re committed to working with others who share our values and seek to operate to the same standards as we do. Collective action is vital to successfully upholding human rights and fighting corruption in all its forms.”
Our Responsible Sourcing Policy – a source of growth & trust
We've set high ambitions for our RSP. We’re convinced of the moral and business case for working only with suppliers who commit to transparency, remediating shortcomings and driving continuous improvement – as these improvements not only benefit workers but also clearly improve the productivity and longevity of businesses that embrace them. We want our supply chain to be a trusted foundation for our growth and a force for good on human rights – this requires a continuous review and adaptation of our approach to achieve the greatest impact.
Adapting our Responsible Sourcing Policy for greater impact
We're reaching more of our suppliers than ever through our Responsible Sourcing Policy. And as we extend its reach, we're also focusing on impact. The RSP replaced our earlier Supplier Code, and when we introduced it in 2014 we also made it a target within the Unilever Sustainable Living Plan (see Targets & performance). Initially, we focused on our production item suppliers (suppliers of raw and packaging materials for our products) and a select number of other strategic suppliers. By the end of 2016, around 5,500 suppliers had made a commitment to the RSP – and they represented about two-thirds of our total procurement spend.
But we knew that the remainder of our spend represented roughly 90% of the total number of our suppliers, spread across thousands of small service providers. So, in 2017 we extended the RSP programme significantly, bringing into scope all our production item suppliers and all our indirect procurement suppliers (suppliers of goods or services such as marketing, workplace or professional services).
At the same time, we started to improve and simplify our processes for registration, including our self-assessment questionnaire. We refined our approach to risk evaluation, and increased due diligence by providing new tools and guidance for our teams on how to identify and mitigate instances of possible bribery and corruption. Finally, we strengthened our approach to how we calculate and report compliance.
In 2018 we introduced new verification and audit protocols for suppliers identified as representing a higher risk. In 2019, we began to align our spend and compliance systems, so that we can assess how a supplier is performing, both at the outset with new suppliers, and in our ongoing relationship.
Our aim is not simply to ensure compliance with our requirements, but to help identify the endemic issues that suppliers face within their industry or countries of operation, including cultural or local norms or local legal requirements that are at odds with the ambitions of the RSP. We aim to work with our suppliers on these issues to find the most appropriate way to overcome them.
Keeping our suppliers informed & 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.
Working together to improve human rights
We recognise that addressing endemic issues often depends on working closely with suppliers and others in our industry. While we will not compromise on the principles of our RSP, we collaborate with others in the industry and listen to our suppliers’ experience of working with us, so we and our suppliers can have the biggest impact.
Extending our reach
Until June 2017, we only recognised our own audit protocol, the Understanding Responsible Sourcing Audit (URSA), as a means of evaluating compliance. Since 2017, we've built on two ways to make advancing human rights in our supply chain more impactful and efficient, for us and our partners: through the concept of mutual recognition and the use of trusted monitoring systems.
We introduced the concept of ‘mutual recognition’
‘Mutual recognition’ means recognising those suppliers who have their own mature, comprehensive compliance and responsible sourcing programmes in place, and agreeing that they meet our RSP requirements through the implementation and governance of their own programme.
We only do this after an evaluation to check that their programme aligns with the RSP and appropriately addresses risks. We also check that the supplier has an effective remediation process.
This brings huge advantages. It means suppliers have a programme that is 'owned' by them, rather than taken from us. It allows suppliers to focus on making improvements, remediating issues and eliminating duplicate audits, and it allows us to focus our resources and efforts on other parts of our supply chain that are potentially higher risk.
Using trusted monitoring systems to reduce audit fatigue
We started to accept SMETA audits
We also work with external monitoring systems where we are confident they meet our goals and standards. This allows suppliers to demonstrate compliance to multiple customers using the same system. It helps limit unnecessary duplication and audit fatigue for suppliers, while freeing up their time and resources to make improvements when needed.
By June 2017 Sedex (the largest collaborative platform for sharing responsible sourcing data on supply chains) had updated and extended its Sedex Members Ethical Trade Audit, known as SMETA. This update incorporated critical elements of our RSP and our URSA audit protocol.
We now accept SMETA audits as a means of verifying compliance with the RSP, as long as the audit is performed by one of the audit companies that we recognise. We continue to use the URSA and SMETA protocols for production item suppliers which typically have manufacturing facilities needing on-site assessment.
We introduced EcoVadis for indirect procurement suppliers
In 2018, we introduced the use of EcoVadis to evaluate indirect procurement suppliers. EcoVadis is an online assessment and scorecard platform that evaluates suppliers across 21 criteria covering environment, labour and human rights, ethics and sustainable procurement. The EcoVadis assessment suits the different types of indirect procurement companies which may be office-based and less suited or appropriate for an on-site assessment. EcoVadis is a tool used by other industry peer companies for indirect procurement suppliers. Using a common tool allows us to align our approaches and increase the impact through industry peer companies, while reducing costs and audit fatigue for our suppliers.
Our RSP’s Audit Requirements (PDF | 136KB) set out the details of what we accept.
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 & 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 & 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 &/or join trade unions or to refrain from doing so & 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 & 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 & 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 & 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 & 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.