With our leading approach to responsible sourcing, we aim to enable purposeful growth by driving sustainability throughout our supply chain – for the benefit of people and the planet.
- Our supplier base is one of our most important resources. It constitutes millions of workers around the world and is a huge lever for accelerating our joint impact on a sustainable future.
- For this reason, we maintain intensive dialog and collaboration with our suppliers to promote sustainable practices and respect for human rights along the value chain.
- Henkel’s goal of becoming climate-positive, our commitment to promoting a circular economy, and our dedication to supporting social progress are three focal areas at the heart of our responsible sourcing agenda.
- Our contributions to these focal areas are facilitated by the four key strategic enablers of collaboration, transformation, innovation, and empowerment that will guide our progress toward 100 percent Responsible Sourcing.
- Henkel currently has suppliers and other business partners from around 120 countries. More than 76 percent of our purchasing volume comes from countries that belong to the Organization for Economic Cooperation and Development (OECD).
- In selecting and working with our business partners, we consider their performance with regard to safety, health, environment, social standards and fair business practices as decisive criteria.
- We have defined a strategic framework that is built on our robust risk management and compliance approach.
- Part of this framework are our globally applicable purchasing standards, our Responsible Sourcing Policy and our Safety, Health and Environmental Protection (SHE) Standards, which were first defined already in 1997.
- Compliance with the cross-sector Code of Conduct of the German Association of Materials Management, Purchasing, and Logistics (BME) is mandatory for our suppliers worldwide.
- 100% Responsible Sourcing
- What we expect from our business partners and suppliers
- Responsible Sourcing Process
- Early warning system for risk markets
- Initiatives for greater Sustainability
With our leading approach to Responsible Sourcing, we aim to enable purposeful growth by driving sustainability throughout our supply chain – for the benefit of people and the planet. Our mission is to go beyond compliance, to drive impact and change across our entire value chain, and to create sustainable value for our customers.
In 2020, our new 100% Responsible Sourcing Strategy was published, emphasizing our aim to make 100 percent Responsible Sourcing decisions globally, across all regions, business units, and material groups. The strategic framework is built on our robust risk management as well as compliance approach and puts our three sustainability focal areas of climate-positive, circular economy and social progress at the heart of our Responsible Sourcing agenda. Our contributions to these focal areas are facilitated by the four key strategic enablers of collaboration, transformation, innovation, and empowerment that will guide our progress toward 100 percent Responsible Sourcing.
Global supply chains are very complex – raw materials are often handled by many different companies and travel long distances before reaching their final destination. This creates challenges for companies when seeking to boost sustainability at every step in their supply chain.
To accommodate these increasingly globalized value chains and complex procurement activities we, at Henkel, ensure a holistic supplier management process. Together with our business partners, we are further shaping our collaborative approach and driving this process forward.
Expectations towards our supplier base
We place the same exacting demands on our suppliers and business partners worldwide. We expect them to conduct themselves in a manner consistent with our sustainability requirements. In selecting and working with our business partners, we consider alongside key commercial and operating indicators their performance with regard to safety, health, environment, social standards and fair business practices as decisive criteria. This is based on our globally applicable corporate purchasing standards and the Safety, Health and Environmental Protection (SHE) Standards that we formulated as early as 1997, thereby demonstrating even at that time our commitment to assuming responsibility along the entire value chain. We supplemented these with a Responsible Sourcing Policy. Our aim is to make 100 percent Responsible Sourcing decisions globally, across all regions, business units, and material groups.
Binding supplier code
Compliance with the cross-sector Code of Conduct of the German Association of Materials Management, Purchasing, and Logistics (BME) is mandatory for our suppliers worldwide. Henkel joined the BME in 2009, as its code is based on the ten principles of the United Nations Global Compact and is therefore internationally applicable. Alongside our Responsible Sourcing Policy, the BME code also serves as the basis for contractual relationships with our strategic suppliers, who have either recognized the cross-sector BME code – and hence the principles of the Global Compact – or produced their own comparable code of conduct.
Cooperation with strategic suppliers and partners
Additionally, we collaborate intensively with our strategic suppliers to ensure the procurement of sustainable raw materials. We aim to initiate positive change throughout the value chain through joint projects for process optimization, resource efficiency, innovation, and environmental and social standards. Furthermore, Henkel has been honoring sustainable innovations by its suppliers for eight years.
Henkel has also engaged in targeted dialog with its most important strategic partners on the subjects of sustainable innovations and responsible supply chains, for many years. The dialog centers on the definition and implementation of a common plan for Henkel’s sustainability goals for 2025 and beyond. The focus is on creating transparency about the sustainability performance of our direct suppliers and the responsible sourcing programs they have been implementing in their upstream supply chain beyond the second level. To support Henkel’s long-term goal of becoming climate-positive, we also require our suppliers to provide transparency about the emission values of their product portfolios. In addition, we expect them to make a contribution to reducing CO2 emissions along their supply chains in line with our science-based target for Scope 3 emissions.
The central element of our strategic risk and compliance management is our six-step Responsible Sourcing Process which we established to assess the sustainability performance of our suppliers. Through this six-step process, we support our purchasers and suppliers in making their contribution to continuous sustainability improvements in the supply chain through targeted collaboration and cooperation – for example, through knowledge transfer and continued education about process optimization, resource efficiency, and environmental and social standards.
The Responsible Sourcing Process is an integral part of our purchasing activities and is applied both at the beginning of any cooperation and in the repeated cycle of review, analysis and continuous improvement with existing suppliers. Using this process for the audit and assessment of the sustainability performance of our suppliers, we cover about 91 percent of our purchasing volume in the areas of packaging, raw materials, and contract manufacturing.
Henkel uses an early warning system for sustainability risks in global purchasing markets. We begin by evaluating the potential risks in a region or country. In doing so, we concentrate on countries identified by international institutions as being associated with heightened levels of sustainability risks. The assessment includes the criteria “human rights,” “corruption” and “legal environment” as well as risk value chains. Risk value chains are related to industries and sectors that we consider to potentially represent a sustainability risk for our company. This helps us to identify countries and purchasing markets that may require special precautions.
The most prominent contemporary example for a risk country associated with materials posing a sustainability risk are the eastern provinces of the Democratic Republic of the Congo (DRC), where various armies, rebel groups, and outside actors have profited from mining while contributing to violence and exploitation during wars in the region. The four mined minerals which are extracted from Eastern Congo and its neighboring countries are the so called ‘conflict minerals’. These minerals embrace Columbite-tantalite (ore of tantalum), Cassiterite (ore of tin), Wolframite (source of tungsten) and Gold, used for the final production of the metals Tantalum, Tin, Tungsten and Gold, known as 3TGs.
Since it is difficult to know, if a sourced raw material is funding human rights abuses or other crimes, we request every year that our direct suppliers of metals provide recognized documentation as evidence that they do not purchase or process metals from such critical sources.
Together for a sustainable supply chain
In 2011, Henkel and five other companies in the chemical industry co-founded the initiative “Together for Sustainability – Chemical Supply Chains for a Better World” (TfS). It is based on the principles of the United Nations Global Compact and the Responsible Care Initiative of the International Council of Chemical Associations (ICCA). At the heart of the initiative is the core idea: “An audit for one is an audit for all!”. TfS aims to harmonize increasingly complex supply chain management processes with regard to sustainability and to optimize dialog among worldwide business partners. Above all, synergies are to be created so that resources can be used more efficiently and with a minimum of administrative effort, not only among the member companies but also with all of our shared suppliers.
Around 16,000 assessments and audits have been conducted since TfS was founded. Performance is assessed in the areas of management, environment, health and safety, labor and human rights, and issues of ethical corporate governance. The TfS initiative has grown strongly in recent years and now consists of 30 members that represent a total spend of more than 228 billion euro (status: March 2021).
In September 2020, TfS launched its new strategic framework “TfS Grow&Deliver.” This new strategy builds on the initiative’s past achievements and will pivot TfS from an initiative focused on measurement to a community that delivers tangible impact. TfS members will continue their commitment to promoting higher standards, as well as improving the insights and data gathered from assessments and audits. This will enable TfS to train suppliers in topics and areas that offer the largest potential sustainability impact. TfS has also decided to expand its work in emerging markets such as China and India. Taking collaborative action is another building block for the new strategy. In this way, TfS aims to further extend its contribution to sustainability. On top of this, fostering the TfS community is another key factor that will enable TfS to achieve its aims.
Since May 2019, Bertrand Conquéret, Chief Procurement Officer (CPO) at Henkel, has been President of the TfS initiative. He played a key role in developing the new “Grow&Deliver” strategy.
Responsible Sourcing together with our partners
Henkel is additionally member of AIM-PROGRESS, a forum of companies from the consumer goods industry. The objective here is also to encourage member companies to share experiences in the area of sustainable sourcing and utilize synergies. The forum also focuses on holding regional supplier events to communicate and improve CSR performance within the value chain.
In line with our strong belief in the power of multi-stakeholder and cross-industry initiatives, we are also a founding member of the “Action for Sustainable Derivatives” (ASD). It brings together organizations from along the palm oil derivative supply chain to support efforts to increase transparency and promote compliance with NDPE (No Deforestation, No Peat, No Exploitation) principles, with the overall aim of positively transforming the palm oil industry.