Human Rights and Social Standards

Our policy of doing business in an ethical and legal manner is inseparably linked with respect for human rights, as well as respect for the customs, traditions and social values of the countries in which we operate. In 1994, Henkel’s Mission and Principles emphasized that respecting the social values and standards of the countries we operate in is an integral part of our company policy. In 2000, we introduced the Henkel Code of Conduct including a clear and proactive statement on supporting human rights: "Our employees should honor local customs, traditions and social values that respect human rights for a free and full life." In 2003, we confirmed our commitment to support and respect the protection of internationally proclaimed human rights by joining the United Nations Global Compact. This is now referenced as a fundamental principle in Henkel’s Code of Conduct and detailed in Henkel’s Code of Corporate Sustainability and Social Standards. Every year, we also summarize our progress and commitments on human rights in our Sustainability Report. We are following the current developments related to human rights – such as the National Action Plans on Business and Human Rights, and the UK Modern Slavery Act – very closely and will further evolve our approach in line with resulting expectations.
Our codes, standards and processes reflect our commitment to the International Labour Organization’s (ILO) Fundamental Principles and Rights at Work, as well as the Universal Declaration of Human Rights and the expectations set out by further frameworks such as the UN Guiding Principles on Business and Human Rights. This set of principles was endorsed in 2011 and provides further clarity on our role regarding human rights through its ‘Protect, Respect, Remedy’ framework: States are responsible for protecting against human rights abuse within their territory and ensuring access to the full range of human rights. Businesses are expected to respect human rights – while observing local laws set by the state – and provide access to remedy following any breach of human rights. Alongside fulfilling the expectation to respect human rights, Henkel takes steps to identify and mitigate relevant human rights risks connected to its specific business activities and supply chain. For Henkel, a relevant human rights risk is identified when it meets all four of the following criteria:

• Potential for significant negative impact on people
• systemic lack of protection by government
• conditions that potentially enable repeated or systemic non-compliance
• influence or potential influence by Henkel ‏(positive or negative).

In line with these criteria, we have currently identified two areas in our supply chain, which relate to raw materials sourced from the palm oil industry and from regions associated with military conflict. We closely monitor these two areas in terms of potential human rights impacts. You can find specific information on these risks, as well as the measures that Henkel is engaging in to mitigate them, under the title “How does Henkel identify relevant human rights?”

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:

• Code of Conduct
• Code of Corporate Sustainability
• Social Standards
• Safety, Health and Environment ‏(SHE) Standards
• Responsible Sourcing Policy

You can also download an overview of human rights in Henkel’s framework for responsible business practices below. This document indicates how the specific aspects of human rights addressed by the ILO’s Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights – and the related expectations for Henkel’s business activities – are integrated into our codes and standards.

We further promote human rights awareness across our organization by embedding relevant topics into e-learning and face-to-face training courses. In June 2016, our compliance eLearning focused on Sustainability, Social Standards and SHE, including specific content directly addressing human rights topics. Completion of this training was mandatory for all of our managers across the globe.

We have clear due diligence and compliance processes in place to identify and assess social and human rights impacts, and ensure that – if necessary – access to remedy is available. These processes include our company-wide Corporate Audit approach as well as supply chain auditing. Henkel employees, workers at our suppliers or other affected parties are able to report violations of our codes and standards by directly informing the appropriate contact partner within our organization. Our compliance hotline is operated by an independent external provider and is available globally. In addition, an email can be sent anonymously to the Henkel Compliance Office using a contact form.

The definition of human rights continues to be shaped by new developments, guidance frameworks and evolving legislation. Relevant milestones that have shaped the world’s understanding of human rights include:

The ILO’s Declaration on Fundamental Principles and Rights at Work (1998): This document aims to stimulate national efforts to make sure that social progress goes hand-in-hand with economic progress – while also respecting the diversity of circumstances, possibilities and preferences within different countries. It commits Member States to respect and promote principles and rights in four categories: Freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labor, the abolition of child labor and the elimination of discrimination in respect of employment and occupation.

The Universal Declaration of Human Rights ‏(1948): This internationally proclaimed statement provides support in defining the fundamental freedoms and human rights that are referenced in the United Nations Charter, which is binding for all UN member states. It contains 30 articles that set out key general principles of human rights. While the declaration itself is not legally binding, it has influenced a large number of national constitutions and acts as the foundation for national and international laws worldwide.

The United Nations Global Compact: The Global Compact is an initiative founded in 2000 that brings companies and cities together with UN agencies, labor groups and civil society. It aims to align strategies and operations by encouraging members to report on their contribution to the implementation of 10 universal principles on human rights, labor, environment and anti-corruption. It also aims to encourage actions that advance societal goals: For example, members are encouraged to support and pay into the UN Sustainable Development Goals.

The UN Guiding Principles on Business and Human Rights ‏(2011): This global standard provides clarity on the role that businesses should play in preventing their activities from having a negative impact on human rights, and addressing any negative impacts that occur. It is built around the ‘Protect, Respect, Remedy’ framework, which is also known as the ‘Ruggie Principles’ – a reference to John Ruggie, who developed the framework while he was the UN’s Special Representative on Business & Human Rights. In line with this framework, states are responsible for protecting against human rights abuse within their territory and ensuring access to the full range of human rights. Businesses are expected to respect human rights, while also observing local laws that are set by the state and providing access to remedy following any breach of human rights.

Ongoing activities to shape the understanding of human rights: National Action Plans on Business and Human Rights are currently being developed to structure states’ approaches to implementing the UN Guiding Principles on Business and Human Rights. Henkel is following the development of the plans very closely, and we will further evolve our approach in line with its expectations. The Modern Slavery Act, introduced in the UK in 2015, is a similar measure. This Act of Parliament was introduced to tackle slavery, and address issues related to slavery and people trafficking. It includes a clause on slavery in business supply chains, and expects businesses with an annual turnover above £36 million to publish an annual statement confirming the steps they have taken to ensure that slavery and human trafficking are not present in their business or its supply chain. You can find Henkel’s statement responding to the Modern Slavery Act here.

The UN Guiding Principles on Business and Human Rights provides clarity on the different roles of states and businesses with regard to human rights. States are responsible for protecting against human rights abuse within their territory and ensuring access to the full range of human rights. Businesses are expected to respect human rights, while also observing local laws that are set by the state and providing access to remedy following any breach of human rights. One of the main challenges that businesses face is in meeting these two expectations when operating in countries in which the state is not performing its role effectively, or where local laws contradict one or more of the principles set out in the Universal Declaration of Human Rights. Situations of this type present businesses with a challenge, as they aim to meet the high expectations of their customers and other stakeholders – while also observing local laws. At Henkel, our response to challenges of this type is built around two pillars: Driving risk mitigation through involvement in industry and stakeholder initiatives, and building constructive relationships with governments and other stakeholders to avoid negative impacts while working within the law.

Businesses also face challenges in defining their sphere of influence: The trend toward increasing globalization brings with it increasingly complex supply chains. Many companies purchase raw materials that have been through tens or even hundreds of processing and handling stages around the world before arriving at their production site – and these multiple stages often present challenges in terms of tracing materials back to a definite point of origin. For this reason, companies seeking to eradicate breaches of human rights from their entire supply chain face challenges in defining how far back they are able to exercise influence.

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 initiative for sustainable supply chains. Henkel joined forces with five other companies in the chemical industry to establish this initiative in 2011, with the aim of harmonizing supply chain management processes with regard to environmental and social topics – and generating synergies across the chemical industry. Suppliers only have to go through one assessment or one audit, and the results are made available for all TfS members through a shared online platform. By 2018 the number of members had grown to 22.

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

We implement our commitment to respecting human rights through our set of comprehensive codes and standards. These provide our employees, customers, suppliers, investors and the communities we operate in with a clear definition of the ethical and social values we uphold. They also provide a framework for decision-making and engagement within our sphere of influence worldwide, alongside local legal requirements. We are committed to strict adherence to international labor standards as a minimum, and local statutes where these are more exacting. Our codes and standards cover a wide range of topics including working hours, occupational health and safety, data protection, non-discrimination, fair remuneration, freedom of association and collective bargaining, and zero tolerance of child and forced labor.. Henkel has shaped its codes and standards in line with relevant expectations for our specific business, and we regularly review these documents to ensure that we conduct business in a way that reflects our commitment to support and respect the protection of internationally proclaimed human rights. You can find an overview of how we integrate human rights expectations into our codes and standards below.

Our key policy documents include:

Code of Conduct: A set of guidelines for Henkel employees’ behavior, based on our Vision and Values, and also encompassing the UN Global Compact. It aims to ensure ethical conduct in all daily business, strategic planning and decision-making.

Code of Corporate Sustainability: A set of rules that aligns Henkel’s business operations with its commitment to leadership in sustainability in all countries in which we operate.

Social Standards: Defines the ethical and social values we respect, as well our commitment to uphold human rights across our business operations worldwide. This underscores our commitment to strict adherence to international labor standards as a minimum, and local statutes where these are more exacting.

Safety, Health and Environment ‏(SHE) Standards: Addresses Safety, Health and Environmental Protection as an integral element of Henkel’s commitment to sustainable development. It is complemented by binding procedures describing relevant requirements in more detail, and guidance documents including best practice examples to support implementation.

Responsible Sourcing Policy: Summarizes our expectations for sustainable and ethical business practices, and underscores our intention to develop and maintain ethical supplier relationships.

Due diligence and supplier management

We identify and assess violations of these codes and standards through our due diligence and compliance processes: This includes our company-wide Corporate Audit approach, which independently and objectively evaluates and improves Henkel’s governance, processes and controls. It involves regular audits of our production and administration sites, as well as at our subcontractors and logistics centers. These audits aim to verify compliance with our codes and standards, and represent our key instrument for identifying risks and potential improvements. We conduct audits in the areas of purchasing, sales, marketing, finance, IT, human resources, supply chain, operations as well as in safety, health and environment (SHE) worldwide. You can read more about our Corporate Audit approach in our Sustainability Report.

Alongside ensuring adherence with our codes and standards through this due diligence process, we also fulfill our responsibility to respect human rights – including zero tolerance of child labor and forced labor – along the value chain through our supply chain management approach. This approach supports our commitment to the Consumer Goods Forum’s ‏(CGF) resolution on forced labor. Our membership of Together for Sustainability ‏(TfS), the chemical initiative for sustainable supply chains, is a strong example of this approach in action: It aims to harmonize supply chain management processes with regard to sustainability and human rights topics – and generate synergies across the chemical industry. Henkel joined forces with five other companies in the chemical industry to establish the initiative in 2011, and by 2018 the number of members had grown to 22. You can find more information about Henkel’s membership of TfS in our Sustainability Report, or on the TfS website.

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

Our approach begins with our commitment to promoting understanding and awareness of human rights across our organization, for example, by embedding relevant topics into e-learning and face-to-face training courses. In June 2016, our compliance eLearning focused on Sustainability, Social Standards & SHE, including specific content directly addressing human rights topics. Completion of this training was mandatory for all of our managers across the globe.

Beyond this, Henkel employees, workers at our suppliers or other affected parties are able to report violations of our codes and standards – including human rights topics – by directly informing the appropriate contact partner within our organization. Our compliance hotline is operated by an independent external provider and is available globally. In addition, an email can be sent anonymously to the Henkel Compliance Office using a contact form.

You can find more information about how our Compliance Office provides access to remedy in our Sustainability Report.

At Henkel, we analyze human rights risks in our business and along our value chains. For our global supply chains, for example, we use an early warning system for sustainability risks. This involves defining the risk potential of our procurement markets and evaluating value chains across industries by focusing on risk countries identified by international specialist institutes. We then define the highest-risk markets by combining this analysis of risk countries and hot topics in our supply chains, and initiate appropriate measures. We review this risk analysis annually and adapt it when necessary. Our process of identifying and acting against risks in our supply chain – from suppliers through to third party manufacturers and contractors – places particular focus on topics including child labor, migrant labor, female coworkers, contract workers and site service providers, and temporary labor.

We carry out regular audits at our production sites and, increasingly, at our subcontractors and logistics centers to verify compliance with our codes and standards, which include relevant human rights topics. All audit results, including the monitoring of our SHE and Social Standards, are included in the Internal Audit department’s annual report to the Henkel Management Board. Alongside this, we review and address all issues that are brought to our attention directly, through our compliance hotline or our anonymous email contact form. Together, these measures ensure that Henkel is able to identify and address any issues within our operations. In line with the criteria of our risk analysis process, our comprehensive Group-wide audit program in 2021 did not reveal any indications of human rights violations related to Henkel’s business operations.

Alongside this due diligence process, Henkel identifies relevant human rights risks by considering each case against the following four criteria:

Potential for significant negative impact on people, and systemic lack of protection by government, and conditions that potentially enable repeated or systemic non-compliance, and influence or potential influence by Henkel ‏(positive or negative).

A relevant human rights risk is identified when all four of the above criteria is met. This provides clarity in the distinction between an individual non-compliance issue that results from an isolated incident, and a relevant human rights risk for our business activities. We have currently identified two relevant human rights risks in our supply chain:

Raw materials derived from palm oil and palm kernel oil

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. To mitigate this risk, we are committed to sourcing our palm materials in line with the Roundtable on Sustainable Palm Oil's Principles and Criteria (RSPO P&Cs), which include a commitment to seeking FPIC and respecting human rights. We work closely with stakeholders along the value chain, ranging from our suppliers through to the RSPO, non-governmental organizations (NGOs) and smallholder farmers, to promote sustainable practices and respect for human rights. 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.

Raw materials sourced from regions associated with military conflict

Henkel purchases raw materials for soldering pastes and similar products for the electronics industry, which contain metals – mainly silver, copper and tin – to make them electrically conductive. In some countries, the mining of cassiterite ‏(the main source of tin) is often associated with military conflicts and human rights violations. To mitigate this risk, we have repeatedly reviewed our direct suppliers of metals in recent years, and requested them to supply documentary evidence that they do not purchase or process metals from critical regions.

Information on the nature of these risks, as well as the measures that Henkel is engaging in to mitigate them, can be found in our Sustainability Report.