Supply chain management

Global Supplier Standard

Essity has applied a Global Supplier Standard (GSS) for many years. The standard includes requirements concerning quality, product safety, the environment, energy and chemicals. The GSS also contains a specific section that includes Essity’s expectations of its suppliers with regard to human rights, employee relations, and health and safety.

To ensure the GSS is implemented by all suppliers globally and locally, it has been made available in 11 languages.

Many of the global, strategic suppliers’ production facilities located in Asia and Latin America belong to large multinational corporations based in Europe and the US, a conscious choice by Essity to reduce ethical risks within our supply chain.

Reporting in the Supplier Ethical Data Exchange, Sedex

Sedex is an online database that enables suppliers to share information with their customers on their trading practices (health and safety, labor standards, the environment and business ethics) in order to promote ethical and responsible supply chains. Essity requires suppliers to perform a self-assessment in Sedex and share their status. The long-term goal is for at least 90% of our purchases to come from suppliers that share information through Sedex. The answers are used for risk assessments (see below).

Processes for supplier risks

Essity continuously develops its supplier risk assessment to ensure compliance with social and ethical sustainability criteria, including respect for human rights and working conditions. Sustainability matters are taken into consideration both when evaluating potential suppliers and in the continuous risk assessment of suppliers and purchased materials, products and services. One source of input is the supplier data registered in Sedex, but other risk-related input is also considered.

Ethical supplier audits

Purchases from suppliers in countries classified as high-risk countries according to the Maplecroft Human Rights Index are audited with a focus on health and safety, human rights and employment conditions. An ethical audit of a supplier can also be triggered by other indicators, such as a low rating in Sedex, a low health and safety score in Essity’s supplier qualification audit or the outcome from Essity’s risk assessments.

The goal is to audit all high-risk suppliers, based on Essity’s risk assessment procedure. Essity works with the global auditing company SGS to perform the audits. Essity also accepts independent audits or audits performed on behalf of other clients if the topics covered match Essity’s audit requirements and information about corrective and preventive action is shared.

The Group evaluates potential suppliers prior to contracting and continues to review suppliers at regular intervals. New suppliers must sign the GSS prior to any business activities. Essity also conducts chain of custody audits of fiber suppliers.

In addition, Essity requires documented chain of custody from suppliers if a product may contain potential conflict minerals. This mainly applies to paper dispensers for public bathrooms with electronic components containing metals whose origins are to be reported using the Conflict Minerals Reporting Template from the Responsible Minerals Initiative.

Control of cotton providers

Some of Essity’s hygiene products contain cotton fibers. The volumes are exceedingly small but since cotton agriculture is associated with social risks, Essity pays particular attention to its cotton suppliers. In order to reduce the environmental and social impact, Essity’s goal is for all purchased cotton to be certified to ensure sustainable production. In 2017, Essity became a member of the BCI (Better Cotton Initiative), one of the world’s largest sustainability programs for cotton and the preferred cotton certification standard.

In early 2017, Essity acquired BSN medical, which conducts large-scale production of plasters and adhesive bandages. A review and risk analysis of BSN medical’s suppliers has been initiated based on production country and input materials, including cotton, with the aim of ensuring a long-term sustainable supply chain.