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Responsible Sourcing Forum
Kuala Lumpur, Malaysia – 24th October 2017
Welcome & Introductions
David Lawrence
Executive director
AIM-PROGRESS
Safety and logistics notice
Anti-trust caution
The Association shall not enter into any discussion, activity or conduct that may infringe, on its part or on the part of its members, any applicable competition law. By way of example, members shall not discuss, communicate or exchange any commercially sensitive information, including non-public information relating to prices, marketing and advertising strategy, costs and revenues, trading terms and conditions with third parties, including purchasing strategy, terms of supply, trade programmes or distribution strategy. This applies not only to discussions in formal meetings but also to informal discussions before, during and after meetings.
Agenda
• 9.00am – 9.15am – Welcome and introductions• 9.15am - 10.00am - Overview of AIM-PROGRESS and of the
responsible sourcing programs• 10.00am – 11.30am – South-East Asia and Malaysia overview• 11.30am – 12pm – Testimonials• 12pm – 1.15pm – Lunch• 1.15pm – 2.15pm First round of workshops• 2.15pm – 2.30pm – Break• 2.30pm – 3.30pm – Second round of workshops• 3.30pm – 3.45pm – Break• 3.45pm - 4.45pm – Third round of workshops• 4.45pm – 5.00pm – Closing remarks
Afternoon workshops
Workshop A – Managing migrant labour- What are the specific vulnerabilities of migrant workers to abuse and exploitation?- What can we all do to address these vulnerabilities including due diligence?
Workshop B – Sustainable land use- What is the journey of early adopters in communicating and implementing sustainability/NDPE (No Deforestation, No Peat, No Exploitation) policies?- What can we learn?
Workshop C – Grievance mechanisms- Why are they important?- How to handle complaints?- Are all employees aware of how to file complaints or report issues?
Welcome & Introductions
Annemarieke de Haan
General Manager Malaysia & Singapore
Unilever
Rahul Vashistha
Head of Procurement ZAOA,
Nestlé
Welcome & Introductions
Annemarieke de Haan
General Manager Malaysia & Singapore
Unilever
MAKESUSTAINABLE
LIVINGCOMMONPLACE
A NEW WAY OF DOING BUSINESS
EQUAL OPPORTUNITY & SUSTAINABLE LIVELIHOODS
SUSTAINABLY SOURCEDRAW MATERIALS
THE PLANET PROTECTEDFOR FUTURE GENERATIONS
ACCESS TO WATER SANITATION & HYGIENE FOR ALL
OUR VISIONTO GROW OUR BUSINESS,
WHILST DECOUPLING OUR
ENVIRONMENTAL FOOTPRINT
FROM OUR GROWTH AND
INCREASING OUR
POSITIVE SOCIAL IMPACT
POSITIVE SOCIAL IMPACT
BUSINESS GROWTH
DECOUPLEENVIRONMENTAL
FOOTPRINT
TAKING ACTION
THERE’S NEVER BEEN
A BETTER TIME TO CREATEA BRIGHTER FUTURE
Welcome & Introductions
Rahul Vashistha
Head of Procurement ZAOA,
Nestlé
Overview of AIM-PROGRESS
Benjamin Ware
Global Responsible Sourcing Leader
Nestlé
AIM-PROGRESS co-chair
Brian Kramer
Director, Global Sustainability
PepsiCo
AIM-PROGRESS co-chair
AIM-PROGRESS:
A global forum of branded, fast moving consumer goods manufacturers (FMCG) and common suppliers
Our mission: “Positively impacting people’s lives through our combined leadership of robust responsible sourcing practices throughout our supply chains”
AIM-PROGRESS comprised of 40+ member
companies
AIM-PROGRESS Member Scope
Our purpose
Raising the bar for responsible sourcing…
…in the FMCG supply chain…
…through converging standards and practices….
…thereby making a positive impact on people’s lives
Our 3 key objectives
1. Building member capability All member organisations are competent and executing robust responsible sourcing programs
2. Effectively assuring compliance in our supply chainsEnsuring increasing supplier compliance as expectations rise through having in place increasingly aligned practices, standards and metrics
3. Driving continuous improvement Demonstrating activities of responsible sourcing which go beyond relevant legislation, international standards and company codes
Our activities
➢Mutual Recognition - “An audit for one is an audit for all”
➢Capability Building - of members and suppliers
➢Human Rights - implementing UNGPs
➢Business Integrity - tackling bribery and corruption in the supply chain
➢Environment - taking your commitments through the supply chain
➢ Impact measurement - are we positively impacting people’s lives?
Mutual Recognition of Audits
An Audit for one AIM-PROGRESS member can be an audit for
all AIM-PROGRESS members
The purpose of Mutual Recognition is to reduce audit duplication in
the supply chain. Recognizing ethical compliance audits conducted
on behalf of another member helps:
• Reduce audit fatigue and cost burden on suppliers
• Reduce time investment of buyers
• Shift focus from audits to performance
Mutual Recognition of Audits
Framework Agreement
• All AIM-PROGRESS members
agree to the Mutual
Recognition framework
• Suppliers can share their audit
results in order to meet
multiple customer needs
• Shared list of over 19,000
audited suppliers
Getting Your Audit Recognized – 3 steps
✓ Complete an audit conducted by a recognized audit firm and to a recognized
standard as outlined in the framework.
Examples include: SMETA 6.0, URSA, SGP
**Ensure you utilize the most updated SMETA version for full recognition
✓ Pay for the audit to ensure you own the audit report and can share the
results
✓ Upload the results to a common platform like Sedex or share the report
directly with customers
Why are your customers interested in Responsible Sourcing
➢ Consumers expect brands to behave in a responsible manner
➢ Companies need to know their supply chains and be able to trust their
suppliers
➢ Companies need to ensure that responsible sourcing assessment are
conducted to highlight gaps in the supply chain
➢ Responsible Sourcing enables ongoing improvement in the industry
AIM-PROGRESS helps increase efficiency by sharing data –
“an audit for one is an audit for all”
4 pillars of Responsible Sourcing
➢ Workers are treated fairly
➢ The workplaces are safe and protect the
worker’s health
➢ Companies care about their environmental
impact
➢ Companies behave with integrity and
honestyEnvironmental
ManagementBusiness Integrity
Health & SafetySocial/Human
Rights
Responsible Sourcing Cycle – Commonalities on the supplier assessment
journey
Synergies towards common
methods & data
Supplier Engagement
Supplier Assessment
Risk Assessment
Audit
Corrective Action Plan
Building Supplier
Capability
Common formats
include Sedex and
EcoVadis SAQs
Companies make
individual risk
assessments
Determined by
individual companies
Mutual Recognition: Companies agree to recognise audits done on behalf of
other customers. Audits can also be shared using online platforms.
Sharing of
methodologies for
corrective action plans.
Common supplier
training events
Reputations: Hard to build... Easy to lose
33
Legislation Trend: Disclosure/Certification
• Disclosure Requirements - e.g. UK Modern Slavery Act, CA Transparency in
Supply Chains Act
• Compliance Requirements – e.g. Executive Order 13627, Dodd-Frank,
Consumptive Demand Repeal
The Requirements reach across the supply chain
Overview of the co-hosts’ Responsible Sourcing Programs
Eugeny Krapovnitsky
Procurement Director Markets(Thailand, Malaysia, Singapore)
Unilever
Michele Pisetta
Sustainability Manager
Ferrero
Yann Vuillerod
Responsible Sourcing Manager
Nestlé
Brian Kramer
Director, Global Sustainability
PepsiCo
Overview of AIM-PROGRESS and
the Responsible Sourcing Programs
Michele Pisetta
Sustainability Manager
Ferrero
This document must be disclosed only to authorized individuals. Any reproduction and/or disclosure must be subject to Information Owner prior consent.
Our Responsible Sourcing Program
&
Sustainable Supply Chain
Sustainable Agriculture:Ferrero Farming Value Program
Supplier Engagement:Supplier Sustainability Program
Supplier CSR Assessment
Ethical Compliance
✓ Ferrero‘s Code of Business Conduct & long term relationship with suppliers✓ International guidelines (OECD, ILO, UN, FAO) 6
SHARING VALUES TO CREATE VALUE• Partnerships• Focus on impact and results• Beyond certifications
Overview of AIM-PROGRESS and
the Responsible Sourcing Programs
Yann Vuillerod
Responsible Sourcing Manager
Nestlé
38
Nestlé Responsible Sourcing
AUDITING
Audits, carried out by independent
verification firms, check
whether our direct suppliers are
implementing our Supplier Code
(led by CO-PRO).
FARM ASSESSMENTS
Farms and plantations are assessed
on their implementation of our
Responsible Sourcing Guideline
by partner organisations such as
Proforest and The Forest Trust
(led by CO-PRO).
FARMER CONNECT – SOURCING
DIRECT FROM FARMERS
We purchase directly from
farmers or farming collectives,
and plantations around
the world (led by CO-AGR).
TRACEABILITY
We work with our direct suppliers
to map the supply chain back to
origin, right down to farm and
smallholder level, identifying
everyone involved at every stage
(led by CO-PRO).
Tier 1 (direct) suppliers
Sub-tier suppliers
Farm and plantations
RS AuditsTier1
Targets
2017
60%
RSUpstream
Palm OilSugar
Pulp & Paper
Fish & Seafood
SoyaVanilla
DairyMeat, Poultry &
EggsHazelnutsCocoa
Coffee
40%
60%
« Go, See, Think, Do »
Overview of AIM-PROGRESS and
the Responsible Sourcing Programs
Brian Kramer
Director, Global Sustainability
PepsiCo
Escalation of Critical Issues
Initial Risk
Assessment
Supplier Code
of Conduct
Training
Site Level Self-
Assessment
Questionnaire
(SAQ)
On-site Audit
(SMETA 4 Pillar)
-or-
Mutually
Recognized
Audit
CAP
Verification
&
Follow-up
Audit
PEPSICO SUSTAINABLE SOURCING PROGRAM (SSP)
Focused on continuous improvement
within business critical 3rd party
manufacturing sites.
Overview of AIM-PROGRESS and
the Responsible Sourcing Programs
Eugeny Krapovnitsky
Procurement Director Markets
(Thailand, Malaysia, Singapore)
Unilever
The Unilever responsible
sourcing program
Let’s hear from the audience…
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