AIM

Responsible Sourcing Forum

17th Nov, Frankfurt am Main

Summary

AIM I

AIM Progress Responsible Sourcing Forum

Overview of AIM-PROGRESS

and Responsible Sourcing

Paul Pickard, Nestle

1. What is AIM-PROGRESS? Global forum of consumer goods companies assembled to enable & promote Responsible

Sourcing practices

Sponsored by the Grocery Manufacturers Association (GMA) and the European Brands Association (AIM)

35+ Companies

Representing > USD$ 618 billion annual revenue

www.aim-progress.com

2. What do we AIM for?

Responsible Sourcing is the process

of purchasing goods and services

without causing harm to, or

exploiting, humans or the natural

environment.

Labor Standards

Health & Safety

Environment Business Integrity

We AIM to PROGRESS !

3. Why?

…in Europe

Source: Sedex data from AIM-PROGRESS member companies

4. AIM-PROGRESS Activities Maximize synergies

NOT: Create a new set of codes or create new audit standards

• Benchmark company assessment protocols

• Sharing best practice

Mutual Recognition

• Common assessment methods

• Maximize synergies

Data Exchange

• Promoting supplier awareness

• Helping suppliers build capabilities, go beyond compliance

Engaging others

Step 4:

Corrective

Action Plan

Commit to

continuous

improvement

5. How suppliers can demonstrate compliance

Step 1:

Suppliers

Engaged by

Aim-Progress

Members

AIM to

PROGRESS

Step 2:

Supplier Self

Assessment

(if applicable)

Tool to help to

assess overall

capabilities

Step 3:

3rd Party

Assessment

Tool to

demonstrate

good practices

6. Value Proposition

1. Meets multiple customer requirements

2. Builds & protects reputation

3. Increases employee morale and productivity

AIM II

AIM Progress Responsible Sourcing Forum

Understanding the Pillars of

Responsible Sourcing Pascal Becker, Givaudan

The Four Pillars of Responsible Sourcing

Labor Standards &

Human Rights

Health & Safety

Environment Business Integrity

AIM-PROGRESS members commit to at least the same standards

Supplier Code Elements

1. Legal Compliance/ Management Systems

2. Forced Labor

3. Wages & Benefits

4. Hours of Work

5. Freedom of Association

6. Child Labor

7. Discrimination

8. Abuse of Labor

9. Health and Safety

10. Environment

11. Bribery & Corruption/ Business Practices

Assessment Criteria

SMETA – Sedex Members Ethical Trade Audits

► ETI Base Code – Labor rights, minimum requirements

► SMETA Additions – UDHR, Health and Safety (OSHA)

► Environment – OECD guidelines, CDP, UNCBD

► Business Practices – UNGC

Legal Compliance/ Management system & Code

Implementation

Baseline Requirement: Comply

with all applicable local, national laws,

rules, regulations and requirements

SMETA Requirements: Management systems and code

implementation

• Develop and Maintain systems

• Appoint an Executive responsible for

compliance

• Communicate code to employees,

suppliers and supply chain.

FREEDOM of

EMPLOYMENT Baseline Requirement: Supplier will not

use forced, bonded or compulsory labor.

SMETA Requirements:

• Employment is Freely Chosen

• No forced, bonded or involuntary prison

labour.

• Workers not required to lodge

“deposits” or their identity papers

• Free to leave their employer

WAGES & BENEFITS

Baseline Requirement: Comply with all applicable local and national wage and benefits laws. SMETA Requirements: • Living Wages are Paid • Standard working week meet national

legal standards or industry benchmark standards.

• Written and understandable information about employment conditions and wages.

• Deductions from wages not permitted

HOURS OF WORK

Baseline requirement: Comply with all applicable local and

national working hours and overtime laws.

SMETA Requirements: Working Hours are not Excessive

• Working hours comply with national laws and benchmark industry standards.

• No work in excess of 48 hours per week and at least one day off for every 7 day period, on average.

• Overtime shall be voluntary, shall not exceed 12 hours per week.

FREEDOM OF ASSOCIATION

Baseline Requirement:

Respect employee’s right to join, form or not to join a labor union without fear of reprisal, intimidation, or harassment.

SMETA Requirements:

• Freedom of Association and Right to Collective Bargaining are Respected.

• Workers have right to join or form trade unions

• Employer adopts open attitude

• Workers’ representatives are not discriminated against

• Employer facilitates development of independent

and free association and bargaining.

CHILD LABOR

Baseline Requirement:

Comply with all applicable local and

national child labor laws SMETA Requirements: Child Labour Shall Not Be Used • No recruitment of child labour.

• Provide for the transition of any child found to be performing child labour

• Children and young shall not be employed at night or in hazardous conditions.

• Conform to the provisions of the relevant ILO Standards.

DISCRIMINATION

Baseline Requirement:

Maintain workplaces free from

discrimination.

SMETA Requirements: No Discrimination • in hiring, compensation,

• access to training, promotion,

• termination or retirement

ABUSE OF LABOR Baseline Requirement: Maintain workplaces free from physical or verbal harassment. SMETA Requirements: • No Harsh or Inhumane Treatment is

Allowed • Physical abuse, • Threat of physical abuse • Sexual harassment • Other harassment • Verbal abuse • Other forms of intimidation Are prohibited.

HEALTH & SAFETY Baseline Requirement:

Comply with all applicable local and national health and safety laws.

SMETA Requirements: • Working Conditions are Safe and

Hygienic

• Health & Safety responsibilities assigned

to a senior manager

• Access to clean toilet facilities and to

potable water

• Workers shall receive regular and

recorded Health & Safety training

FIRE EXTINGUISHERS

EMERGENCY WAYS

EMERGENCY EXITS

PROTECTIVE DEVICES

ELECTRICAL SAFETY

CHEMICAL SAFETY

First Aid Box

PPE Usage Emergency Information

OTHER GOOD EXAMPLES

INFESTATION

ENVIRONMENT

Baseline Requirements: Comply with all applicable local and environmental laws

SMETA Requirements: • Comply with local and national

laws related to environmental standards.

• Demonstrate possession of valid permits

• Be aware of client’s environmental standards/code

• Have a management system

BRIBERY AND CORRUPTION/ BUSINESS

PRACTICES

Baseline Requirement:

Operate honestly and fairly in

accordance with local law

SMETA Requirements:

Conduct business ethically, without

bribery, corruption, or any type of

fraudulent Business Practice.

TOOLS: ECOVADIS, SEDEX

AIM Progress Responsible Sourcing Forum

Why working with EcoVadis to

monitor your CSR (Corporate Social Responsibility) performance?

Sustainable

Procurement

For your clients, it means also integrating CSR into their Supply Chain and Procurement process. This is called

All over the world, companies are faced with Sustainable Development challenges.

CSR or Corporate Social Responsibility, is how Businesses integrate Sustainable Development issues into daily business.

monitoring

As a result, knowing their

environmental and social performance, and Suppliers’ it over the years is becoming of outmost importance for your clients.

From CSR to Suppliers’ Sustainability performance monitoring

Home

CSR goes beyond compliance

10,000+ per year

70% SME’s

150 Industry

sectors

100 Countries

130 Customers

600 bn€ spend

#1 Suppliers Sustainability Monitoring platform

Your Peers Your Clients

About EcoVadis

“Companies should use databases such as EcoVadis that collect supplier audit data and provide buyers with a one-stop tool for evaluating suppliers against a set of sustainability criteria”

United Nation report « Unchaining Value » - sept 2008

International Recognition

• Company monitoring in 100 countries

• 130 p team – Paris, NYC, Port Louis – 26 nationalities

Worldwide presence

• With members of DJSI, GRI, INSEAD, HEC… working with EcoVadis to improve the methodology

International Scientific

Committee

Partnerships & membership

with leading

organizations

5

Energy consumption & GHG (CO2) Water

Biodiversity Local Pollutions

Materials, Chemicals, Waste

Product Use Product End-of-Life

Customers Health & Safety Sustainable Consumption

Employees Health & Safety Working Conditions

Social Dialog Career Management & Training

Child & Forced Labor

Discrimination Fundamental Human Rights

Corruption & Bribery Anticompetitive practices

Responsible Marketing

IV. SUPPLY CHAIN

The EcoVadis assessment: a standard and recognized methodology

Suppliers Environmental performance Suppliers Social practices

I. ENVIRONMENT III. ETHICS II. SOCIAL POLICIES

MEASURES

RESULTS

What elements of CSR management systems are

taken into account in the evaluation ?

POLICIES

• Mission Statement

• Endorsement of external CSR initiatives

ACTIONS

• Measure/Actions

• Implementation coverage

• Certificates/Labels

RESULTS

• Reporting / KPI’s

• 360°

Assessment Process and Multiple Inputs

Online Questionnaire Customized to the supplier size, industry, and geographical location

360°Watch EcoVadis collects Stakeholders information on more than 500 reliable sources (NGOs, Trade Unions, etc.)

Documents Collection Supplier uploads the documents required to support its answers

3. Scorecards and Performance Monitoring

1. Supplier & Stakeholder Inputs

• Global and themes scores • Strengths and

improvement areas

2. Analysis by CSR experts

EcoVadis analyzes its answers and audits the

documents

Platform Registration Suppliers register directly online by providing company basic information

ECOVADIS® 2014 CONFIDENTIAL

Your Platform Subscription: The Scorecard

* Premium and Corporate only

CSR Performance

Benchmark*

Strengths and Improvement

Areas

360° Watch *

Beyond your client request: the benefits for your company of monitoring your CSR performance

CSR

assessment

Get extensive feedback on your CSR practices and benchmark them with sector practices

Reuse your EcoVadis results for all your clients’ requests

Use advanced communication tools to highlight your good practices

Prioritize your actions

Manage improvement plans directly online

Embrace a continuous

improvement process

Access up-to-date

information on your CSR performance

Sedex Introduction

AIM-Progress Supplier Event Frankfurt

17th November 2014

Copyright © Sedex 2012. All Rights Reserved. No part of this document may be reproduced or redistributed in any form without written consent from Sedex.

Sedex – Who are we?

Sedex is the largest system and services provider for managing supply chain risk

Global leader in supply chain risk and sustainability

Driving collaboration, transparency and reducing duplication

End-to-end process to address Environmental, Social and Governance issues

Sedex team: Global – offices in London, Shanghai

New York, Brussels & Santiago

International team, multi-lingual support & resources

Worldwide training support and hotline/call centre facilities

Global presence: 37,000+ supplier organisations

across 150+ countries

700+ purchasing organisations including FTSE 100/Fortune 500 brands

70,000+ audits on Sedex

Impacts 24 Million workers globally

The worlds most respected sustainable organisations choose Sedex

Sedex – Global Spread of Members

Sedex team: Global – offices in London, Shanghai

New York, Brussels & Santiago

International team, multi-lingual support & resources

Worldwide training support and hotline/call centre facilities

Global presence: 37,000+ supplier organisations

across 150+ countries

700+ purchasing organisations including FTSE 100/Fortune 500 brands

70,000+ audits on Sedex

Impacts 24 Million workers globally

Membership Types A Members AB Members B Members

Visibility and traceability of supply chain information • Increase supplier engagement and collaboration • Support improvements in ethical performance

Risk management and mitigation • Carry out risk assessments • Run supply chain reports to analyse issues • Prioritise resources • Reduce reputational risk

Generate supplier value and demonstrate to stakeholders your commitment to responsible sourcing

Share company information with customers • Upload audits, certificates & corrective action plans • Complete assessment for own sites

The Sedex Process – delivers your objectives

Risk filter

Dynamic SAQ

2c

Identify risks SAQ Management Risk Management

Identification of potentially risky suppliers through internal risk filter

Hosts supplier documents | identifying data gaps | historical audits/NCs etc.

Pre-Screening Tool

Sedex & Maplecroft tool

Risk identification based on inherent risk | spend | brand proximity | product etc.

Engagement

Sedex engages with suppliers based on their risk rating

Interactive SAQ with risk specific focus sections

Data Management

Data Analysis Track SAQ progress | NC analysis| trend analysis | Impact assessment | SAQ v Audit etc. Risk Assessment

Risk rating | risk forecasting | risk scorecard | risk mapping | individual supplier risk report | comparison report | benchmarking

Sedex & Maplecroft tool

Risk Management Bespoke corrective action planning & recommendations to improve risk rating | Supplier guidance to rectify issues

Audit Management

Process management| Booking, uploading & corrective action submission | NC analysis | issue criticality| NC closing | reporting

Capacity Building

Dedicated training support| Guidance and educational resources | Raise awareness | Continuous improvement

Support

Dedicated Hotline| Multi-lingual team & support| SAQ support | Training resources| Supplier Workbook*

*Sedex & Verite tool

It is your program – use the tools as you need – totally flexible solution

Sedex Developments

Copyright Sedex Solutions 2014

Sedex: Knowledge Hub

Copyright Sedex Solutions 2014

Sedex: Data Monitor

Summary

For more information on Sedex go to www.sedexglobal.com

To learn more about Responsible Sourcing please also see our new

‘Insights’ page with films, webinars and reports

www.sedexglobal.com/films

1. Register to Audit/Assessment

2. Continue the process

3. Roll out to your supply chain

NEXT STEPS

Questions? Sedex Audit related (Offer, Scheduling, Process):

SGS - http://www.sgs.com/

Bureau Veritas – http://www.bureauveritas.com/wps/wcm/connect/bv_com/group

Intertek - http://www.intertek.com/

Ecovadis Assessment related (Offer, Scheduling, Process):

http://www.ecovadis.com/website/l-en/home.aspx

Sedex related:

http://www.sedexglobal.com/

Other questions:

Your strategic buyer at AIM member company