H13. Code of conduct and work with anti-corruption

Essity’s target is for all employees to receive regular training in the Code. During 2018, 90% of all new employees had received training in Essity’s Code of Conduct.

Essity has an anti-corruption e-learning course, translated into 21 languages, which is included in onboarding programs. Essity also trains employees using e-learning courses on EU competition law and US antitrust legislation.

Risk analysis

Essity’s human rights and corruption risk analysis is based on assessments carried out by Amnesty, Transparency International and Sedex. Approximately 30% of Essity’s revenue is generated in countries with a high risk of human rights violations. About 31% comes from countries with a relatively high risk of corruption. In the 2018 Sedex assessment, all of Essity’s main facilities received a low to medium risk classification.

Reported breaches

In 2018, 81 (63, 71) cases of potential breaches of laws or of the Code of Conduct were reported to Essity’s whistleblower function. Of the 81 reported complaints, 24 were still subject to investigation at year-end. Among the reported complaints, three related to the suspicion of corruption. All of the three investigations were closed during the year without any corruption being identified and no one was dismissed on suspicion of corruption. Other reported complaints included 58 HR-related incidents and concerned accusations of discrimination and harassment and the remaining 20 cases concerned potential violations of the company’s other policies.

Internal audits conducted of the Code of Conduct

In 2018, Code of Conduct audits were conducted at two sites in Colombia and South Africa. Both are acquired units from BSN medical and a number of areas for improvement were identified to raise levels to normal Essity standard, in areas including working environment, health and safety. In addition, there was little or no knowledge of BSN medicals’ or Essity’s Code of Conduct among employees. An action program is in place and has been implemented or will be implemented in 2019.

Internal audits conducted of business ethics

In 2018, business ethics audits were conducted in the US, Mexico, the UK and Indonesia and of exports to Kazakhstan and countries in the Middle East. The audits in the US, Mexico and Indonesia related to the acquisition of BSN medical units in 2017. These have a number of areas for improvement to reach Essity’s standard. For example, staff require further training in the Code of Conduct and other policy documents, performance reviews need to be introduced and encryption of e-mails is necessary. The audit in the UK resulted in few and minor improvement measures. The unit for export sales was generally considered to follow Essity’s guidelines but implemented internal training in the Code of Conduct and other policy documents needs to be better documented. Action plans are in place and have been carried out or will be carried out 2019.

Ongoing anti-trust cases

In May 2018, the Andean Community imposed fines of approximately USD 18m on Productos Familias S.A.’s operations in Ecuador and Colombia. The company has appealed the decision. In the same year, the Hungarian competition authority withdrew its investigation into the company. In early 2019, the Supreme Court in Spain rejected the company’s appeal against the Spanish competition authority’s decision to impose a fine from May 2016.