Regulatory frameworks and assurance
External regulations and internal steering documents
Essity monitors the development of and ensures compliance with social, environmental and financial legislation that is relevant to its sustainability governance. Essity has developed a position in the form of position papers in which the company states its views in several areas. The position papers are available at www.essity.com/sustainability.
Code of Conduct
Essity’s Code of Conduct is the Group’s steering document for responsible business operations. All of the Group’s employees are subject to the Code of Conduct, which is based on such international standards as the UN Declaration of Human Rights, the ILO Core Conventions, the OECD Guidelines for Multinational Enterprises, the UN Global Compact Principles and related legislation. Systematic activities, such as risk analyses, regular training, audits and other monitoring processes are in place to ensure compliance with the Code. Essity also uses the Supplier Ethical Data Exchange (Sedex) tool to make risk assessments of the company’s own production units. Sedex is a global database in which companies share information about their production units with their customers. The information concerns working conditions, the environment and business ethics as well as health and safety.
All employees are regularly trained in the Code of Conduct. The Code of Conduct is included in all onboarding programs across the company. Essity expects its joint-venture companies to implement a Code of Conduct and guidelines equivalent to those stipulated in Essity’s Code of Conduct.
Essity has a program for compliance with competition rules. The program includes risk analysis, e-learning, guidelines and recurring training sessions. The training program is mandatory for employees who encounter these issues during the course of their work.
Reporting violations of the Code of Conduct
Essity offers its employees a number of internal channels to report violations of legislation or the Code of Conduct. All Essity employees have the opportunity to use a whistleblower system managed by an external party. Where permitted by law, there is the possibility of reporting breaches anonymously. Essity’s Compliance & Ethics department receives all incoming reports from the whistleblower system. Reports are presented to Essity’s Compliance Council, whose chair is the company’s General Counsel. The Committee also monitors Essity’s Code of Conduct. Read more about work in 2019 with the Code of Conduct and with anti-corruption efforts in Note H2.
Essity’s commitment to human rights is based in the company’s Code of Conduct. Essity’s approach for ensuring respect for human rights in conjunction with the company’s operations is built on the UN Guiding Principles on Business and Human Rights (UNGP). In accordance with this framework, due diligence audits are conducted regarding the management of the company’s impact on human rights. Essity conducts regular Group-wide and local risk assessments to evaluate the risks and effects on human rights.
Essity’s Code of Conduct, as well as its Anti-bribery and Corruption Policy, represent the most important steering documents in the area of anti-corruption. An evaluation and risk assessment of the company’s anti-corruption program is conducted regularly. The program includes third-party reviews of suppliers and distributors. An anti-corruption e-learning course is part of Essity’s onboarding program. The course is compulsory for employees in particularly vulnerable positions such as sales and purchasing, who also undergo special training tailored for their activities.
Compliance and monitoring
Essity’s Compliance & Ethics department is responsible for the anti-corruption program and for the Code of Conduct training program.
Essity’s internal audit unit monitors compliance with the Code of Conduct through audits. The operations to be audited are determined by such factors as a country’s social and environmental risks, and indications of non-compliance with Essity’s policies or information from Essity’s management teams. The content of the audits emanates from Essity’s Code of Conduct. The methods are based on the SA8000 standard. The audits are conducted by cross-disciplinary teams from Essity, and include representatives from the Internal Audit, Human Resources and Sourcing functions. The audits involve a review of documentation, inspection of the facility with a focus on health and safety, and interviews with managers, employees and union representatives. Every audit results in a report and action plan, which are followed up. The results of the audits are reported to Essity’s Board via the Audit Committee.
Essity’s business practice audits are conducted by the Internal Audit unit. The audits focus on business ethics and Essity’s relationships with customers, suppliers and authorities and one important element is the type of management culture among managers. The content of the audits is based on Essity’s Code of Conduct. Interviews are conducted with managers and employees to ensure the effectiveness of the control environment and challenges in the local environment.
In addition to Essity being reviewed by external auditors, its operations are subject to external reviews, for example, in connection with life cycle assessments. Essity’s own control systems include segregation of duties in critical processes and defined management responsibilities with regard to internal control. In addition to this, Essity has a separate internal audit function that continuously works to evaluate and improve the effectiveness of governance processes, risk management and internal reporting. The unit contributes to the maintenance of high standards of business ethics and is involved in the monitoring of Code of Conduct compliance, including through audits. To support its work, the internal audit unit has a number of steering documents and policies.