Human Rights and Social Standards

We are committed to respecting internationally acknowledged human rights along the entire value chain.

Henkel is a company with integrity and high ethical standards, and respecting internationally acknowledged human rights along the entire value chain is an integral part of our mindset and our business practices. As early as 1994, Henkel’s Mission and Principles emphasized the respect of social values and standards as an integral part of our company policy. Since then, we have developed a comprehensive set of codes, standards and processes to provide our employees, customers, suppliers, investors and the communities we operate in with a clear definition of the ethical and social values we uphold – including the expectation to respect human rights.

In 2000, we introduced our Code of Conduct, providing for a clear and proactive commitment to support human rights; that we expect our employees to respect local customs, traditions and social values, and to respect human rights for a free and fulfilling life. We underscored our commitment to human rights when we joined the United Nations Global Compact in 2003. This commitment is still a fundamental element in our Code of Conduct, our Code of Corporate Sustainability, as well as in our SHE Standards and Social Standards.

In addition to auditing and compliance processes designed to ensure compliance with our Codes and Corporate Standards, we also recognize our responsibility to respect human rights along the value chain through our supplier management system. Our membership of Together for Sustainability – Chemical Supply Chains for a Better World ‏(TfS) and our commitment to the Forced Labor Resolution of the Consumer Goods Forum (CGF) support this approach.

We follow ongoing human-rights-related developments very closely at both international and national level, including the National Action Plans for Business and Human Rights, the German Supply Chain Due Diligence Act, the Corporate Sustainability Due Diligence Directive (CSDDD) proposed at European level, and the UK Modern Slavery Act. We continue to develop our approach in line with the resulting expectations. In 2021, an internal cross-functional core team working across business units was established with overall responsibility to conduct a comprehensive review of our due diligence processes in consideration of the new legal requirements of the German Act on Corporate Due Diligence in Supply Chains [Lieferkettensorgfaltspflichtengesetz], which came into force on January 1, 2023. Work within this team continues and has been further developed to add more contextual depth to our approach to human rights due diligence throughout 2022 and 2023. This included, among other, establishing the role of a human rights officer and setting up an internal cross-functional and cross-business unit human rights office. By expanding and further formalizing our activities we aim to drive forward our commitment to due diligence. Based on this work, we have updated and produced supplementary guidance to support the implementation of our commitments and provided global training for internal and external stakeholders, such as employees and suppliers. 
 

Our set of comprehensive codes and standards provide our employees, customers, suppliers, investors and the communities we operate in with a clear definition of the ethical and social values we uphold – and underscore our commitment to respecting human rights along the entire value chain. They also provide a framework for decision-making and engagement within our sphere of influence worldwide, alongside local legal requirements. Our key policy documents include:

Alongside legal requirements, our codes and standards provide a basis for decision-making and engagement within our sphere of influence worldwide. In this context, we adhere to international labor standards as a minimum, and local statutes where these are more exacting. Our codes and standards also reflect our commitment to the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Conventions of the International Labour Organization and the UN Global Compact, as well as the expectations set out in the UN Guiding Principles on Business and Human Rights. Our codes and standards cover a wide range of topics including working hours, occupational health and safety, data protection, non-discrimination, fair working conditions, freedom of association and collective bargaining, and zero tolerance of child and forced labor. We have formulated the codes and standards according to the expectations relevant to our specific business. We revise the documents on a regular basis to conduct our business in a way that reflects our commitment to support and respect internationally proclaimed human rights. Internally, we promote awareness of our obligation to respect human rights by integrating relevant content into eLearning courses and training sessions attended by our employees. We are in constant dialogue with external stakeholders on human rights issues and actively participate in industry initiatives. 

The UN Guiding Principles were adopted in 2011 and, through their “Protect, Respect, Remedy” framework, contribute to clarity regarding the different roles that states and companies play in relation to human rights. Within their own sovereign territory, states are responsible for protecting against human rights violations and ensuring access to the full range of human rights. Companies are expected to respect human rights, comply with national legislation, and establish reporting channels and provide access to remedy in the event of human rights violations. These guiding principles include key elements such as principles and policies, risk analysis, effective measures, and reporting and complaints mechanisms, which we have incorporated into our approach to respecting human rights. In addition, the OECD Due Diligence Guidance for Responsible Business Conduct acts as a benchmark for our approach, which we continuously review and develop as necessary.

At Henkel, we engage with our suppliers to drive sustainable practice and promote respect for human rights along the value chain. For example, we work with partners from across the chemical industry through our membership of Together for Sustainability ‏(TfS), the chemical industry initiative for sustainable supply chains. Henkel joined forces with five other companies in the chemical industry to found this initiative in 2011, with the aim of harmonizing supply chain management processes with regard to sustainability and optimizing dialog among worldwide business partners, as well as using resources more efficiently.  In 2023, the initiative already consisted of 50 members.

You can find more information about Together for Sustainability in our Sustainability Report.

We conduct annual and ad hoc risk analyses to identify potential human rights and environmental risks in our own business operations and in the supply chain. The risk analysis, which is subject to continuous improvements, serves as the basis for defining and prioritizing preventive measures Where relevant human rights risks are identified, they are prioritized based on the severity of the potential violation and the likelihood of occurrence. To distinguish between an individual violation due to a specific incident and a human rights risk that is relevant to the business, we also focus on identifying risk factors that could exacerbate the situation. This could be, for example, a structural lack of protection by the government in question or conditions that could potentially encourage repeated or systemic violations.

As part of our regular risk analysis, which we conduct for our own business, our supply chain, and our services and products, we identify issues and risks that we consider to be a priority due to  their potential extent and our ability to influence them. We use an early warning system for sustainability risks in our global supply chains.  This includes defining the risk potential in our procurement markets and evaluating value chains across sectors. In doing so, we focus on countries that international institutions have classified as risk countries. Based on this, we define the riskiest markets by combining this analysis of risk countries with issues of particular relevance to our supply chains at that time, and initiate appropriate measures.

In addition to the self-assessment tools, we use externally audited tools to validate and supplement the information provided by suppliers in order to increase the reliability and depth of our assessments. This approach enables us to identify areas for improvement and potential risks more effectively. We actively engage in industry initiatives and standards to assess supplier performance and align our assessment criteria with best practice. By leveraging established frameworks and collaborative industry efforts, we promote transparency, accountability and continuous improvement among our suppliers, fostering a culture of responsible business practices and sustainability.

The results of our risk analysis determine the definition of appropriate preventive measures and the monitoring of compliance with human rights/environmental standards at our sites. Preventive measures include documentation and process guidelines such as our codes, standards and guidelines with accompanying training. In addition, a Group-wide audit and evaluation program, is used to independently and objectively assess and improve corporate governance and controls. This also includes audits, which are part of our supplier management system.

The findings of our risk analysis determine the appropriate preventive measures and the monitoring of the respect of human rights at our sites. Preventive measures include documentation and process guidelines such as our codes, standards and guidelines with accompanying training. This is complemented by our Group-wide audit and assessment program, which we use to independently and objectively assess and improve corporate governance and controls. This includes the audits that are part of our supplier management system. 

Based on our risk analysis, we have essentially identified the following areas with potential exposure for systemic  human rights risks in our upstream supply chain at present: raw materials based on palm oil and palm kernel oil, raw materials associated with the sourcing of so-called “conflict minerals” and mica.. We are closely monitoring these areas with regard to their potential impact on human rights. 

Henkel purchases ingredients derived from palm oil and palm kernel oil for use in many of our products – the majority is surfactants based on palm kernel oil, which are active washing substances in our detergent and cosmetic products. The palm oil industry has been linked to negative impacts on the environment, as well as on people living and working in communities affected by its activities. One human rights risk related to the palm oil industry is the risk of discovering violations of people’s rights to own property within our supply chain. This risk emerges from the practice of converting land inhabited by indigenous peoples or customary law communities into palm oil plantations without adhering to the principle of Free Prior Informed Consent (FPIC). Other human rights risks related to palm-based materials include forced labor and child labor on plantations, as well as gender discrimination, unfair working conditions, and dangerous working practices. In order to reduce risks in the palm oil industry, we have made a commitment to procure our palm-oil-based raw materials in line with the principles and criteria of the Roundtable on Sustainable Palm Oil (RSPO). We also work closely with stakeholders along the value chain, from our suppliers to the RSPO, NGOs and smallholder farmers, to promote sustainable practices and respect for human rights. In 2019, Henkel joined the cross-industry initiative Action for Sustainable Derivatives (ASD) as a founding member. The primary objective of the initiative is to generate more transparency in the complex value chain for palm derivatives. Activities include assessing identified risks, promotion of sustainable production and procurement of palm (kernel) oil derivatives and sharing best practices. You can find more information about Henkel’s approach to promoting sustainable practices and respect for human rights in the palm oil industry on our website here.

For the materials associated with the identified 3TGs ‏(tin, tungsten, tantalum, gold) and mica, we go beyond our standard measures and have introduced additional due diligence procedures. Recognizing that systemic risks often extend beyond our direct suppliers, we have implemented comprehensive procedures in line with the OECD Due Diligence Guidance to collect information on the origin of raw materials. We check whether the source complies with the standards of the Responsible Mineral Initiative ‏(RMI) and adheres to them. As part of the RMI process, external auditors are commissioned to carry out audits to confirm that the RMI requirements are met. We have established a general approach for all minerals in scope to have our suppliers disclose the origin of minerals and ensure sourcing through an established procurement process in line with our values.

You can find information about our responsible sourcing approach on our website here.

Henkel employees and stakeholders (e.g. customers, suppliers, service providers), as well as anyone else affected by Henkel’s business activities, can report potential misconduct via the whistleblowing system. We have established clear due diligence and compliance processes to identify and assess the potential adverse impacts of our business activities (based on the risk analysis). We also ensure that access to remedy is established and accessible, where necessary.

We carry out regular audits at our production and administration sites, and at our subcontractors and logistics centers, to verify compliance with our codes and standards. This also includes relevant human rights issues. All audit results, including the review of our SHE and Social Standards, are reported directly to Henkel’s Management Board in the annual report compiled by the Corporate Audit team. For 2023, we publish our first annual report in accordance with the requirements of the German Supply Chain Due Diligence Act. This report forms an integral part of our general compliance reporting practices. The Henkel Management Board bears overall responsibility for the compliance organization. Any compliance issues and potential violations are reported to the Management Board, the Audit Committee of the Supervisory Board, the Shareholders’ Committee and other local committees on a regular basis. Regular in this context means at least twice per year as part of the compliance report and on other occasions where required. This information is provided based on the results of audits or investigations by the human rights officer, the Audit department, the Compliance department and the relevant business unit/function representatives working in the human rights office, as well as external investigators where applicable. In each individual case, a case-specific protocol is created to define the relevant measures and monitor the implementation of these measures in accordance with the aforementioned guiding principles ‏(prevention, detection, response). 

We publish information about our due diligence and supplier management processes in our independently audited Sustainability Report every year, which you can access here.