Given the importance of an ethical supply chain to us, we have developed a Socially Responsible Supplier (SRS) programme encompassing all of our businesses, supported by a working group comprised of colleagues with operations, distribution and procurement expertise, and a dedicated SRS Director from the Global Procurement team. As part of the SRS programme, we maintain a database with comprehensive information, including Supplier Code versioning and signing, initiative tracking, audit dates, remediation plans and compliance.
To strengthen adherence to our Supplier Code, we embedded it into purchase order terms and conditions. In the year, we processed more than 32,000 purchase orders valued at nearly $600m, all of which included the Supplier Code.
In 2015, the SRS tracking list included 399 key suppliers, 43 of which we deemed to be high risk by using a supplier risk tool developed specifically for the Group by sustainability consultancy Carnstone. The tool incorporates indices covering human rights and labour, environment, research and development, and governance quality. Review the SRS risk rankings.
The tracking list changes year-on-year based on the number of suppliers that meet the required criteria: those with which we spend >$1m (306 suppliers), suppliers with which we spend $100k based in a high risk geography (84 suppliers) and suppliers on the Publishers’ database for Responsible Environmental Paper Sourcing (PREPS) (54 suppliers). There are currently 399 suppliers meeting one or more of these criteria (and some meet more than one). In 2015, we continued refining our supplier classification and supplier hierarchy data, which contributed to a decrease in the number of suppliers tracked over 2014 (from 499 to 399).
In addition to internal audits, the SRS programme Terms of Reference stipulate that external audits be performed on a regular basis (suppliers with repeat code violations are subject to annual external audits). During the audit, Intertek examines how well a supplier is meeting all aspects of the Supplier Code and issues a Continuous Improvement Report (CIR) as necessary, summarising audit findings and detailing remediation plans agreed by the auditor and the supplier to ensure compliance with the Supplier Code and local laws. Remediation target dates are agreed and the CIR is signed and dated by both parties; the CAPA programme requires audited suppliers to submit completed Continuous Improvement Plans, responding to all required findings. Intertek staff review evidence of corrections and accept or reject it, working with suppliers until full remediation is reached. See the SRS audit workflow and process
and sample remediation reports