Business ethics and human rights

We are firmly committed to our zero-tolerance approach to violations of human rights in the value chains we have control over. This also encompasses our suppliers’ employees and workplaces.

Code of Conduct

Work with business ethics and human rights requires constant perseverance. There will always be new challenges and new ways to demonstrate a commitment. This is why we are continuously learning, listening and raising standards.

Essity’s Code of Conduct describes how employees are to act, how the company operates, 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 of Conduct. To ensure that all of Essity’s employees comply with the Code of Conduct, it is included as a training course in all of the company’s onboarding programs. It is the responsibility of the respective line manager to ensure that the training is completed. In addition to training in the Code of Conduct, there is a program for compliance with competition rules, which is mandatory for employees in particularly exposed positions. In order to address the risk of corruption, Essity has an anti-corruption program that includes due diligence programs for business partners, training programs for employees 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 ensure 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 to human rights and employee relations, as well as health and safety. Compliance with these principles is a key factor when choosing suppliers and other business partners.

Reporting breaches

Essity encourages an open and honest culture in which all employees can report suspicions of violations of the Code of Conduct or legislation. Retaliation against individuals who submit reports in good faith will not be accepted. Essity offers its employees a number of internal channels to report violations of legislation or the Code of Conduct. Essity’s Code of Conduct includes a section on how the company’s whistleblower system works. All employees have access to the whistleblower system, Essity’s reporting hotline, which is managed by an external party. Essity’s reporting hotline is available 24/7 by phone or online in more than 25 languages. Where permitted by law, breaches can be reported anonymously. Essity’s Compliance & Ethics department receives all submitted reports from the whistleblower system and is responsible for ensuring that necessary action is taken. Reports are presented regularly to Essity’s Compliance Council and the Board of Directors.

Risk management

Essity is potentially exposed to a number of risks given that Essity’s solutions are produced in and sold in several markets around the world. Essity conducts regular assessments and risk analyses related to human rights, which comply with the UNGP. Risk analyses are based partly on assessments carried out by Transparency International and the Supplier Ethical Data Exchange (Sedex) tool. Corruption risks are followed up and analyzed regularly within the scope of the anti-corruption program. In 2021, about 36% of Essity’s revenue was from sales to countries with a relatively high risk of corruption. In the 2021 Sedex assessment, 98% of Essity’s production facilities received a low to medium risk classification relating to human rights and corruption.

Compliance and monitoring

Systematic activities, such as audits and other monitoring processes, take place to ensure compliance.

For Essity’s own and wholly owned production facilities, compliance with the Code of Conduct and business practice is ensured through audits under SA8000 conducted by the Internal Audit unit. Essity’s own wholly owned production facilities that have conducted self-assessments in Sedex are available to Essity’s customers who are also part of Sedex. Customers conduct audits in accordance with SMETA at Essity’s production facilities.

Essity requires that the company’s suppliers use Sedex to conduct a self-assessment linked to working conditions, environment, business ethics and health and safety. Suppliers of raw materials and finished products located in countries that Sedex considers high-risk countries undergo an ethical audit that focuses on areas such as human rights, employment conditions and corruption. An ethical audit may also be initiated on the basis of other indicators, such as a low rating in Sedex or a low score in Essity’s quality audits of suppliers. The preferred audit format is SMETA, which is the most widely used method in the world for social and ethical audits. Many of the strategic suppliers’ production facilities located in Asia and South America are part of large multinational corporations based in Europe and the USA. This is a conscious choice by Essity to reduce the social and ethical risks within the supply chain.

We are firmly committed to our zero-tolerance approach to violations of human rights in the value chains we have control over. This also encompasses our suppliers’ employees and workplaces.