Developing successful partnerships
As part of our Sustainable Living Plan, we aim to source all our agricultural raw materials sustainably by 2020– and good partnerships with suppliers are crucial to achieving this target. Working with partners to manage our supply chain is critical to delivering on our Plan’s goals, and creating a truly sustainable global business. That is why we are setting industry-leading standards for ourselves and for our suppliers – strengthening the foundation upon which we can develop our businesses together.
To support the successful delivery of our Plan objectives, we have introduced a range of initiatives which have become intrinsic to the way we do business. To fully adhere to these commitments, support from our supplier partners is vital. Through the Unilever Code of Business Principles, we set high standards for our sustainability practices within the company, and we need our partners to adhere to business principles that are consistent with our own.
As a minimum, we encourage and support all our supplier partners in upholding the standards set out in Unilever’s Supplier Code, and seek assurance from our suppliers around the world that their practices meet our guidelines. This is all part of shaping a sustainable value chain.
In 2011 we launched our Partner to Win programme. This involves working closely with more than 150 strategic suppliers to support the growth and innovation we need. We share strategies and growth plans, including on sustainability issues. We continue to assess our suppliers against Unilever’s Supplier Code and where applicable, the Unilever Sustainable Agriculture Code (USAC).
The USAC was launched in 2010, after 15 years’ work. Our sustainable sourcing programme relies on compliance with this Code, through self-assessment or through external certification standards. We are developing partnerships with our agricultural raw material suppliers to achieve our goal of sourcing 100% of our agricultural raw materials sustainably by 2020. For example, we established the Knorr Sustainability Partnership Fund to support vegetable suppliers on complex sustainable agriculture projects that they are unable to tackle alone.
We source raw materials and packaging for our production operations from more than 12,000 suppliers. Non-production goods and services come from up to 160,000 businesses. These two groups are the suppliers with whom we have direct business relationships. Managing this supply chain and achieving responsible sourcing standards is a complex task.
Our expectation is that our business partners subscribe to principles consistent with our own and have the same requirement of their supply chain. To facilitate our process we have our Supplier Code, derived from Unilever’s Code of Business Principles. The Supplier Code provides the framework through which we set out our approach and our responsible sourcing requirements. It is founded in local laws and internationally accepted norms. The Code addresses the key areas of human rights, business ethics, labour standards, quality, consumer safety and the environment.
Ensuring consistency across our value chain supports the sustainable growth of our business.
We respect that suppliers have their own compliance codes and are committed to implementing policies and values in their businesses. Unilever requires suppliers to compare, contrast and confirm alignment of their business codes to the principles of Unilever’s Supplier Code. In the absence of its own supplier code, the supplier must acknowledge Unilever’s Code and implement similar principles throughout their supply chain. Unilever’s Supplier Code is a minimum standard and should not prevent a supplier from exceeding its requirements when applying their own principles.
Based on our assessment of supplier risk, we may request further verification from suppliers in the form of self-assessments and audits to verify that their operational practices meet our Supplier Code requirements.
If the practices do not meet our requirements, our suppliers need to take the necessary actions to achieve compliance. This work is a continuous process, and we rely on collaboration with our suppliers to make it possible. In cases of non-cooperation or final non-compliance, we will cease doing business with that supplier.
We work with industry peers to deploy a common approach to supplier assessments that is recognised across our industry. In doing so, our suppliers may exchange their assessments with other customers. This facilitates a process where suppliers can confidentially share their audit reports on the principle that ‘an audit for one is an audit for all’. This reduces unnecessary duplication and complexity and accelerates the process of assessing suppliers. It also allows our partners to focus on improving their supply chains.