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 2021, a total of 92% of Essity’s new employees underwent this mandatory training.

Reported breaches of the Code of Conduct

The summary on the following page presents reports submitted to the whistleblower system and to Essity’s Compliance & Ethics department.

Of the total of 64 reported cases in 2021, 57 were closed and seven cases are still under investigation. Of the 14 reported cases in the Regulatory breach, Fraud and Corruption category, one person was dismissed for breaching the company’s anti-corruption policy and a further seven people were dismissed for violations of the Code of Conduct. Of the 43 reported cases in the Human Resources category, 18 concern accusations of discrimination and harassment. None of the breaches identified were financially material.

Internal audits conducted of the Code of Conduct

Five audits of the Code of Conduct took place in 2021. These were mostly conducted remotely due to travel restrictions related to the COVID-19 pandemic. The audits were carried out in Gennep in the Netherlands, Gien in France, Hamburg in Germany, Harrodsburg in the USA and Uruapan in Mexico. The audit is based on the SA8000 standard and is divided into nine chapters. Roughly half of all observations were related to health and safety, such as fire drills that were not conducted on a frequent enough basis. Just under one third were related to management systems, such as the implementation of a conflict of interest register or the repetition of training in the Code of Conduct. A minor share was related to working hours, where the most common problem was that personnel worked more than permitted. The remaining small portion of observations were for disciplinary measures, discrimination and remuneration. There were no observations for child labor, forced labor or freedom of association.

Internal audits conducted of business ethics

Four audits of business ethics took place in 2021. These were mostly conducted remotely due to travel restrictions related to the COVID-19 pandemic. The audits were carried out in Brazil, Mexico, Poland and Russia. The audits were based on Essity’s Code of Conduct and the focus by area is decided in a risk assessment prior to the audit. The observations vary but included a need to revisit parts of training in the Code of Conduct, a need to improve internal control, employment contracts and a need to increase awareness of the whistleblower channels.

An action program is in place and has commenced or will be carried out in 2022. Read more about how Essity works with business ethics in the chapter Business ethics and human rights.

Ongoing anti-trust cases

In 2021, the company was the subject of an anti-trust case, which was concluded during the year.