Our Responsible Sourcing Policy in action
The impact of our Responsible Sourcing Policy (RSP) depends on the desire and ability of our suppliers to put its requirements into action in their operations. We’re working closely with suppliers to help them and to show why we believe that growth and sustainability are linked.
We know that moving up the continuous improvement ladder takes effort and often requires changes in a supplier's mindset to address root causes rather than the obvious symptoms of non-conformances. It can also require systemic and industry change. We’re working directly with suppliers to build skills and develop capabilities across important issues such as eliminating forced labour, avoiding child labour, wages, working hours, management systems, fire safety and the environment. We also run joint projects on responsible sourcing innovation to help more of our suppliers move from the RSP’s Mandatory Requirements towards its Good and Best Practice levels.
How do we drive compliance with our Responsible Sourcing Policy?
Underpinning our RSP is the process of due diligence and compliance assurance, which includes third-party audits where our suppliers have been assessed as representing a potential high risk.
Service suppliers that we classify as high risk undergo a desktop auditing assessment, provided by an industry-recognised third-party organisation. Raw material and finished goods suppliers undergo an on-site audit. We feel this differentiation is appropriate and proportional to the risks for the respective workforces.
If the audits identify non-conformances to the Mandatory Requirements of the RSP, the supplier must develop and deliver a corrective action plan to remediate the issue within a set time period. Third-party auditors assess the effectiveness of the supplier's remediation actions and confirm they have been sufficient to close the non-conformance. A supplier must close all non-conformances to be considered compliant and continue to supply us.
The full process is described in our Human Rights Report 2017 (PDF | 10MB), where we also provide an insight into the work we are doing on our eight salient human rights issues. See our Human Rights Report 2020 Supplier Audit Update (PDF | 2MB) and Human Rights 2019 Supplier Audit Update (PDF | 4MB) for an analysis of the latest findings from our supplier audits.
New dashboard for faster compliance tracking
To help us track global compliance with the RSP, in 2019 we introduced a new dashboard for our Procurement teams. This makes it faster for us to track compliance by supplier, region and procurement portfolios, and to view all red flags and key incidents identified in our due diligence and RSP audit processes. This also raises the internal visibility of our programme with senior leaders.
The data from the dashboard is also available on a supplier console, where a supplier can see their own RSP performance as well as a number of procurement, quality and delivery indices. Our Procurement teams and suppliers need to have a common view of the importance of the RSP in our sourcing decisions.
While audits are a core part of our process, we’ve learned that we and other companies need to keep refining our overall approach to drive change across the industry.
Our RSP: improving conditions for workers & supporting the SDGs
Our third-party audit process plays a crucial role in identifying issues and driving up standards in our supply chain. We see that as critical to our efforts both to build a stronger business, and to advance human rights and support the Sustainable Development Goals (SDGs).
In 2017, for the first time, our Human Rights Report (PDF | 10MB) contained a detailed breakdown of our audit findings against our eight salient human rights issues. We published an update on this data in our Human Rights 2018 Supplier Audit Update (PDF | 4MB) and our Human Rights 2019 Supplier Audit Update (PDF | 4MB).
Over the three years of audit reports, the most prevalent findings consistently relate to health and safety issues, followed by issues related to fair wages and working hours.
When the audits find non-conformances, the result is corrective action, of the kind that has potentially saved lives or prevented human rights abuses.
We know that audit, while a vital part of the process, cannot transform our supply chain on its own. But we believe our overall RSP work contributes directly to SDG 8, which is about promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. And it aligns with the individual targets within SDG 8. Addressing equal pay, for example, is part of SDG 8.5. Working to eradicate forced labour is at the heart of SDG 8.7. And protecting labour rights and promoting safe working environments contribute to SDG 8.8.
This work contributes to the following UN Sustainable Development Goal
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 reported non-conformity reported in good faith and discuss findings with the supplier. If remediation is needed, we will 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.
Seeing the impact of audit
Simon Hindley, our Social Accountability Director, explains the impact audit can have – and the need to keep working on wider solutions.
“People in my team are passionate about driving up standards for workers in our supply chain. We know that third-party audits of suppliers help identify hugely important issues – such as dangerous working practices or discrimination against women. And finding these non-conformances triggers a process that leads to better conditions.
We also know that there are even greater challenges on issues that are harder to identify and remediate through audit, such as forced labour. Audit is vital – but it cannot transform our supply chain on its own, and the biggest advances in supply chain standards come from collaborative efforts between us and suppliers, and with peer companies across industries.
So we’ll keep refining what we do, using audit in the knowledge that these efforts are making a difference to people’s lives every day they go to work, while looking beyond audit at the systemic changes that are needed to put an end to abuses of workers' rights.”
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.
Fundamental Principle 10 of our Responsible Sourcing Policy
This Principle states that: “All workers have access to fair procedures and remedies”.
The Mandatory Requirement for suppliers in the RSP is that their workers have access to a confidential grievance mechanism which prohibits retaliation against the worker, ensures the matters are investigated and results in swift, unbiased and fair resolutions.
Over and above a supplier’s own grievance mechanisms, Unilever also provides a hotline that anyone can access to report on responsible sourcing issues. We have also developed a specific grievance procedure for workers in our palm oil supply chain (PDF | 2MB).
Collective action to drive progress on human rights with our suppliers
We know neither we nor our suppliers can solve all the endemic challenges in our supply chain on our own. We also understand the complex demands made on suppliers by their customers, including us. Improving standards within the supply chain requires a common approach and focused, sector-based initiatives involving many participants.Simon Hindley, our Social Accountability Director, 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 (formerly the Grocery Manufacturers Association) in North America.
Along with four other companies, we’re part of the Leadership Group for Responsible Recruitment (PDF | 645 Kb), facilitated by the Institute for Human Rights and Business. This promotes ethical recruitment and helps combat the exploitation of migrant workers in global supply chains. It includes the commitment to the ‘employer pays’ principle, meaning that no worker should pay for a job.
We are 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’re also part of 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, in order 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.
See also Working with others on human rights. More on our commitment to achieving positive impacts in our supply chain can be found in Inclusive business and our Human Rights Report 2017 (PDF | 10MB).