How Do We Secure Competence about Potentials Risks?

Well-trained Staff

For Essity, sustainability in procurement is not a bolt on or a parallel organization. Sustainability considerations are part of normal processes and procedures that are guiding the decisions and actions of the procurement organization. By working according to agreed routines in supplier selection, supplier qualification and during regular risk assessments, sustainability risks are identified and mitigated or avoided altogether. 

Essity staff is kept up to date through regular trainings, and procurement people are also sensitized and updated about specific issues through ad hoc information sharing. A specialized sustainable procurement team is responsible for making sure human rights and environmental aspects are covered in normal working routines for the rest of the organization They are also responsible for identifying changing conditions, new risks or new legal or market requirements that might necessitate updated procedures, tools and / or training programs.

In 2022, procurement staff training covered items such as Code of Conduct, Sustainability Risk Assessment, and the new Human Rights Due Diligence in Supply Chains Legislations. The trainings were performed as face to face meetings, through live webinars and recorded presentations.

Sources of Information

Essity is relying on several information channels to form a picture of a supplier, of the risks associated with certain materials or with a particular geographical area. Suppliers with manufacturing sites are visited and audited regularly – and information from these site visits are shared with relevant functions. Essity is favoring long term relationships and extended collaboration with suppliers, leading to better knowledge about how the suppliers are performing and potential risks. External indexes such as Sedex, Dow Jones Risk Center, Transparency International, and various media and legal screening services contribute to general risk awareness.

More in depth insights are also shared through industry associations, collaboration with NGOs and active participation in webinars and external trainings. Supplier and site specific information is obtained through different questionnaires, like the more general Sedex Self-Assessment Questionnaire or Essity’s own questionnaire to fiber suppliers. The sharpest information is obtained through on-site audits.

Essity supplier competence development is relying on several different channels, depending on the topics of the training provided and the nature of the supplier.

Third party trainings

Many learning occasions are performed through third parties, through membership organizations and certification schemes that provide trainings to support for instance the fulfillment of sustainability certification criteria. Examples of trainings can be those made available through Better Cotton Initiative (BCI), Forest Stewardship Council (FSC) or Sedex to just name a few.

Audits and corrective action plans

Capacity building and best practice sharing with suppliers can also be part of an audit. Essity staff visit suppliers on a regular basis to evaluate quality procedures, health and safety, sustainability issues among many topics. A risk assessment can also result in a supplier having to undergo an ethical SMETA audit which is performed with the help of an external consult. Both the Essity audit and the SMETA audit will result in a Corrective Action Plan - how to close any non conformities or findings. The Corrective Action Plan is also the starting point of future discussions and follow up meetings around best practice and of the closing activities progress. The closing of any findings can be done based on evidence sent by mail or through a site visit.

Targeted trainings

Further trainings can be provided to particular groups of suppliers, with specific focus on certain topics. These trainings can be targeting service providers, maintenance people or subcontractors who in their work come to Essity sites to perform certain tasks. Trainings that are provided to these groups are often focusing on health and safety, risk assessment, collaboration, and best practice with regards to the particular staff. In 2023, trainings have been given to Essity subcontractors in the US. Training in health and safety and in particular about warehouse safety, about loading and unloading, and load awareness has also been provided to providers of certain raw materials, such as bundled recycled paper

Coverage and progress of our supplier development and competence building

In 2022 a total of 1.629 suppliers were assessed as part of our development and competence building program. In order to secure suppliers are aligned with Essity’s requirements and to mitigate potential risks 45 suppliers were supported via different variants of corrective actions, e.g. SMETA audit CAPA, request to source certified materials (e.g. sustainable cotton) and getting training and support close the gap, CAPAs related to our requirements as per our Global Supplier Standard (www.essity.com/gss ).

As described above, Essity supplier ESG competence development is relying on several different channels, depending on the topics of the training provided and the nature of the supplier and during 2022 approximately 50% of our critical suppliers, corresponding to some 800 suppliers, participated in our competence building programs.