The Code shows the way
SCA works intensively to increase awareness of ethical issues and its Code of Conduct in the organization. Sound business practices, good working conditions and respect for human rights are some of the company’s focus areas. Training and supplier audits are tools to help the company achieve its targets.
Training in the Code
SCA’s Code of Conduct is a tool for creating confidence and translating SCA’s core values of respect, responsibility and excellence into action. All new employees are trained in the Code of Conduct as part of their induction program. Continuous follow up takes place to ensure that all employees have sound knowledge and awareness of the Code (refer to chapter Code of Conduct). SCA has a system where employees can report breaches of the Code. In 2015, the system was supplemented with third-party hotlines for reporting in the UK and Mexico. During 2016, hotlines were introduced in a number of countries in Latin America, the Nordic region and in Eastern Europe.
Choosing the right partners
The more SCA grows at global level, the more important it becomes for the Group to review its local suppliers and choose responsible business partners. The aim is to identify risks and develop the social and environmental performance of suppliers.
SCA’s objective is to drive shared values and priorities throughout the supply chain in line with SCA’s Global Supplier Standard.
We will maintain compliance with our SCA Code of Conduct. All employees will receive regular training in the Code.
We evaluate all of our supply streams from a total risk perspective. By 2020, we aim to source 100% of our procurement spend from suppliers committed to the criteria specified in our Global Supplier Standard.
91% of employees have received Code of Conduct training.
At year-end, 46% of the hygiene operations’ procurement spend was sourced from suppliers committed to the criteria specified in SCA’s global supplier standard. Of Forest Products’ 23 largest suppliers, 87% had signed the Global Supplier Standard.
Ethics – from compliance to leadership
During the year, we developed our position on ethics and integrity. We wanted to move beyond regulations and controls in order to also understand the sociological and psychological factors behind rule breaches. Or to put it simply; why good people sometimes exhibit inappropriate behavior.
A culture characterized by integrity begins with two key insights: that surroundings have a major impact on the actions of individuals and that it is necessary to understand and handle ethical gray areas. It requires in turn that ethics becomes an issue of leadership rather than a question of obeying rules. This approach is advocated by Guido Palazzo, professor in business ethics at the Lausanne School of Economics, and the person who helped SCA with a training initiative that began during the year.
The initiative was in two parts: a lecture on culture, peer pressure and other environmental factors, and a card game about ethical dilemmas. By playing the game, participants were asked to discuss difficult situations, such as relationships toward customers and suppliers, conflicts of interest and issues concerning coworkers. By showing that there is rarely one correct answer, we wanted to strengthen the ability of participants to handle various situations. These discussions also helped the participants to feel more comfortable in sharing dilemmas they had faced themselves.
The training initiative began with the Executive Management Team and was then taken to SCA’s management conference with 150 of the company’s top managers. About 1,000 managers will have taken part in the project by the beginning of 2017. It will then be incorporated into SCA’s ordinary leadership development activities.
Extensive antitrust program
Free and undistorted competition is a cornerstone in every society and a precondition for every sustainable business operation. SCA conducts extensive operations in a large number of countries with different cultures. SCA is therefore exposed to the risk of violating competition rules and is also subject to certain investigations (refer to chapter Code of Conduct) by national competition authorities. Violating these rules is never acceptable and is in direct conflict with SCA’s values. SCA takes a very serious view of this and has therefore created an extensive internal training program, which was strengthened in 2016. The program includes a risk analysis, various forms of training (e-learning, workshops), guidelines, an approval requirement for certain competitor contacts and recurring reminders.
Focus on human rights
Human rights was an important theme for the year. To ensure that human rights are respected in all aspects of SCA’s business, we are constantly working to understand and manage the risks in the area.
During the year, we developed a model to help SCA’s various units to map the risk of rights violations. SCA’s business unit in Latin America was the first to use the model. This work began with a workshop for SCA management in Latin America. Participants received an introduction to the UN’s Guiding Principles on Business and Human Rights and then drew up an overall risk map for the region. The second step included similar workshops and risk mapping for Mexico, Chile, Brazil and Central America. Action plans will also be drawn up to manage high-risk areas. The plans will be finalized in early 2017.
The mapping of Latin America is a continuation of the global review carried out in cooperation with BSR (Business for Social Responsibility) in 2014. We will evaluate the results in Latin America and decide on the continued roll-out.
Improving knowledge within SCA’s purchasing organization
During the year, SCA defined new, ambitious targets for the Group’s supplier base. SCA should promote sustainable and responsible business by choosing and rewarding partners that share our values. We want to ensure the safety and quality of our products and that they are manufactured and supplied with respect for people and nature.
- All SCA suppliers will be assessed on the basis of social and ethical risk.
- By 2020, all sourcing of SCA’s raw materials, goods and services will derive from suppliers that comply with SCA’s global supplier standard.
The earlier focus was on SCA’s global, regional and other strategically important suppliers, which together accounted for about 70% of our purchasing costs. The risk analysis mainly looked at the country of purchase.
The new target means we will look at all purchases, even in other categories, such as local sourcing, services and logistics. The risk analysis has become stricter with regard to several risk parameters and has a stronger link to current sourcing work.
In real terms, this means that about 28,000 suppliers, compared with 600–700 suppliers previously, will be gradually included in SCA’s risk analysis and supplier assessment.
The purchasing organization was offered training in the Code of Conduct in conjunction with SCA’s new goals for its supply chain. During the year, we trained 16 of our 19 sourcing teams in the Americas, Europe and Asia. The purpose was to increase understanding among our purchasers about what sustainability means to SCA, what role the Code of Conduct plays for SCA’s sourcing and how they should integrate the Code into their daily work. We also discussed SCA’s new goals for its supplier base and how risks can be identified and managed.