Global approach
In 2007, together with some of our peer companies, we established a global Programme for Responsible Sourcing (PROGRESS).
Now constituted as a task force within the European Brand Association (AIM), AIM-PROGRESS currently has more than 25 members, including The Coca-Cola Company, Nestlé, Danone, Diageo, PepsiCo, Kraft, Colgate-Palmolive and Procter & Gamble. AIM-PROGRESS is also supported by the Grocery Manufacturers Association (GMA), giving the initiative a global scope. Unilever's Procurement Compliance Director was the inaugural Chair of the AIM-PROGRESS programme, until the end of 2010. This position is now occupied by Diageo's Compliance & Ethics Programme Director.
The main mission of this task force is to develop common methods to evaluate the social and environmental performance of suppliers across specific groups of goods and services, and thereby enable the mutual recognition of the audit standards deployed by AIM-PROGRESS members. This will further facilitate a process whereby suppliers can confidently share their audit reports on the principle that ‘an audit for one is an audit for all’, thus reducing unnecessary duplication and complexity. In turn, this will accelerate the process of assessing suppliers and free up resources to focus on implementing improvements within the supply chain.
SEDEX
The majority (80%) of the members of AIM-PROGRESS have joined the Supplier Ethical Data Exchange (SEDEX) system in order to use its well-established evaluation methodologies and database to share supplier assessments and audit reports.
SEDEX is a not-for-profit organisation founded in 2004 by a group of major UK retailers who recognised the need to collaborate on ethical supply chain assessment. Like AIM-PROGRESS, its two goals were to ease the burden on suppliers and drive improvements in labour standards at production sites. SEDEX now has global reach, with more than 400 retailers and branded goods manufacturers using the system. The sites of at least 22,000 suppliers are registered within the database.
During 2008, Unilever started to invite its suppliers to register with SEDEX in order to complete the social and environmental assessment of their sites. By the end of 2011, approximately 4,000 suppliers to Unilever had been invited to register with SEDEX, and complete their self-assessments, and 1,000 audits had been completed by third-party audit companies to verify suppliers’ operational practices.
This programme is ongoing work to ensure we continuously monitor compliance with Unilever’s Supplier Code. Processes to deal with non-conformances are in place to ensure that standards are raised within the extended supply chain through continuous improvement.
If we become aware of serious abuses of human rights, we take a zero-tolerance approach. In implementing this approach, we aim to follow the guidelines developed by Professor John Ruggie, former special adviser to the UN Secretary-General on the integration of human rights into business. Our goal is effective remediation. In those cases where our own influence is diluted, as may be the case with suppliers in lower supply chain tiers, remediation will involve working with industry peers and partners.
Reducing greenhouse gas emissions in the supply chain
The question of greenhouse gas (GHG) emissions is now firmly on the supply chain agenda. It is widely acknowledged that for many businesses a higher level of emissions lie not in their direct operations but in their supply chains. Through our commitment to sustainable agricultural practices we expect to reduce the impact of our GHG footprint within the extended supply chain.
We are founding members of the Carbon Disclosure Project (CDP) Supply Chain Leadership Collaboration. CDP aims to increase companies’ disclosure of their GHG management plans and impacts, and to encourage them to put reduction plans in place. CDP’s supplier programme has global reach and involves collaboration of businesses within the supply chain.
We are promoting the involvement of suppliers of both agricultural and non-agricultural based raw materials in the CDP as it represents a global standard approach for disclosure of GHG management plans and performance. We believe that involvement in the CDP is of intrinsic value to our suppliers and we encourage their participation.
Other reporting platforms exist and may be preferred by suppliers. Regardless of which platform is used, we expect the GHG agenda to become part of ‘business as usual’ with our suppliers, with the express intent that they undertake emission- reduction programmes and set ambitious targets to achieve them.
Supplier awareness activities
We are engaging in outreach activities to our suppliers to help raise awareness of the importance of responsible sourcing practices.
Unilever Turkey hosted the inaugural workshop in November 2009. Since then Unilever has hosted a further event in Brazil and participated in supplier awareness seminars held in Russia, India, South Africa, Mexico and, Kenya hosted by our other AIM-PROGRESS partners. Together we estimate that we have reached out to more than 1,500 supplier companies globally, engaging their key business leaders and functional managers from their operations.
The purpose of these seminars is twofold: to highlight the importance of responsible sourcing practices among suppliers to fast-moving consumer goods (FMCG) manufacturers and to inform suppliers of the assessment frameworks, such as SEDEX, that our industry uses to evaluate suppliers' operational practices. These frameworks address the four major areas of responsible sourcing required by many brand manufacturers and that align with Unilever's Supplier Code: labour standards, health and safety, environmental management and business integrity.
This is an ongoing programme of work into 2012 for both Unilever and AIM-PROGRESS members to ensure that responsible sourcing practices are adopted consistently across the world. Only by getting the whole FMCG industry together can real impacts be achieved and duplicated efforts avoided.
By using common evaluation methods across the industry, suppliers should not only benefit from avoiding duplicated audit requests from their customers, but also better understand the requirements for responsible sourcing, making it easier for them to adopt and adhere to its standards. The success of this programme is clear from the number of key suppliers now adopting similar practices within their supplier base. Suppliers are also cascading the responsible sourcing principles deeper into their own supply chains.
These events are now well established at a global level, with many more of the AIM-PROGRESS members participating and additional workshops due to be held in other countries during 2012.