H2. Business ethics

Code of Conduct

Essity’s target is for all new employees to receive training in the Code of Conduct as part of their onboarding program. Training is mainly conducted online. The courses are held through classroom instruction at production facilities. In 2020, a total of 92% of Essity’s new employees underwent this mandatory course.

Risk analysis

About 36% of Essity’s revenue comes from sales to countries with a relatively high risk of corruption. In the 2019 Sedex assessment, all of Essity’s main facilities received a low to medium risk classification relating to human rights and corruption. In 2020, work with the COVID-19 pandemic was prioritized ahead of updating Sedex.

Reported breaches of the Code of Conduct

Essity encourages employees to always report suspected breaches of the Code of Conduct. Essity provides a whistleblower system where employees can submit reports anonymously, if permitted by local legislation. The summary below presents reports submitted to the whistleblower system and to Essity’s Compliance & Ethics department. In 2020, five people were dismissed for breaches of the Code of Conduct. No one was dismissed on suspicion of corruption. The 45 HR-related reports include accusations of discrimination and harassment. Of 61 reported cases in 2020, 56 were closed and 5 cases are still under investigation.

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Reports submitted to the whistleblower system and to Essity’s Compliance & Ethics department by category

Category1)

2020

2019

2018

Regulatory breach, Fraud and Corruption

11

17

20

Security Incidents

2

–

–

Operations

1

6

3

Sustainability

–

–

–

Human Resources

45

65

58

Other

2

–

–

Total

61

88

81

1)

Essity’s Compliance & Ethics department allocates the submitted reports into the relevant category. The category may be changed during the course of an investigation.

Ongoing anti-trust cases

In early 2020, the Supreme Court in Chile rejected the company’s appeal against the Chilean competition authority’s decision to impose a fine in December 2017.

Internal audits conducted of the Code of Conduct

Travel restrictions due to COVID-19 have limited the number of audits of the Code of Conduct. The method used for the audits was adapted to allow these to take place remotely. In 2020, an internal audit took place at the facility in Slovakia. The facility fulfilled 5 of 9 parts of SA8000, but can with minor improvements fulfill all parts. An action program is in place and has commenced or will be carried out in 2021.

Internal audits conducted of business ethics

Travel restrictions due to COVID-19 have limited the number of audits conducted. The method used for the audits was adapted to allow these to take place remotely. In 2020, an audit was conducted of business ethics in the Health and Medical Solutions operation in Poland. Essity Health and Medical Solutions in Poland must improve its control of marketing services and increase compliance with Essity’s internal guidelines. An action program is in place and has commenced or will be carried out in 2021.

Read more about how Essity works with business ethics.