Business ethics and human rights

Essity impacts the lives of many people. It is essential that we conduct our business in a responsible manner. Essity is to act with integrity toward all its stakeholders. At work, in the market and in society.

Essity’s Code of Conduct describes how employees are to act, how the company does business, stakeholder expectations of Essity and Essity’s commitment to human rights. The Code is based on international standards such as the United Nations Guiding Principles on Business and Human Rights (UNGP), the ILO Core Conventions, the OECD Guidelines for Multinational Enterprises, the UN Global Compact Principles and related legislation.

All of Essity’s wholly owned subsidiaries are bound by the Code of Conduct. Essity expects its joint-venture companies to implement a Code of Conduct and guidelines equivalent to those stipulated in Essity’s Code. To ensure that all of Essity’s employees comply with the Code of Conduct, it is included in all onboarding programs throughout the company. Essity also has the target of all new employees receiving training in the Code when they join the company. In addition to general training, there is a program for compliance with competition rules, which is compulsory for employees in particularly exposed positions. To address corruption risks, Essity has an anti-corruption program that includes control documents, training programs, third-party audits and risk analyses. Essity’s Compliance & Ethics department is responsible for the Code of Conduct training program and for the anti-corruption program.

All of our suppliers and other business partners are expected to follow principles equivalent to those included in the company’s Code of Conduct. Essity also has a Global Supplier Standard to routinely promote responsible business operations and respect for human rights in the company’s supply chain. This standard contains requirements concerning quality, product safety, the environment and chemicals. It also contains a Code of Conduct for Suppliers that includes Essity’s expectations as regards human rights and employee relations as well as health and safety. Compliance with these principles is a key factor in the selection of business partners.

Risk analysis

Essity conducts regular assessments and analyses of risks related to human rights, which comply with the UNGP. Corruption risks are followed up and analyzed regularly within the scope of the anti-corruption program.

Risk analyses are based partly on assessments carried out by Transparency International and the Supplier Ethical Data Exchange (Sedex) tool. Essity’s own wholly owned plants and global and regional strategic suppliers of raw materials and finished products in locations defined by Sedex as high-risk countries are audited with a focus on health and safety, human rights, employment conditions and corruption.

Compliance and monitoring

Systematic activities, such as audits and other monitoring processes, take place to ensure compliance. Compliance with the Code of Conduct and Essity’s business practice is ensured by audits conducted by the Internal Audit unit. The operations to be audited are determined by such factors as a country’s social and environmental risks, the outcome of the self-assessments in Sedex 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 and 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 result 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 encourages an open and honest culture in which all employees can report suspicions of violations of the Code or laws in good faith. 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.

Essity requires its suppliers to conduct self-assessments on labor standards, the environment, business ethics as well as health and safety through the Sedex database. Purchases from suppliers in countries classified as high risk are audited specifically with a focus on parameters such as human rights and employment conditions. An ethical audit can also be triggered by other indicators such as a low rating in Sedex or a low score in Essity’s supplier audit. Essity’s own wholly owned plants that have conducted self-assessments in Sedex are available to Essity’s customers who are also part of Sedex.

Essity’s stakeholders often have specific questions about how we conduct our business. Essity has developed positions in the form of position papers in which the company states its views on key topics. These are available at essity.com/sustainability.