Doing the Right Thing with Our Supply Chain

Dec 18, 2018 11:30 AM ET
Article

Read more in the 2018 Citizenship Report

Our supply chains are the backbone of our products, and we are making intentional choices to leverage the footprint of our suppliers, buyers and manufacturing sites to be a driver for good. From transparent sourcing practices that aid consumer decisionmaking to growing shareholder value through innovation-driving programs like global supplier diversity, P&G is proud to be a leader in supply chain responsibility. This work is built on three pillars: Responsible Sourcing, Supplier Diversity and Sustainable Innovation, all managed by a dedicated Supplier Citizenship team in Purchases.

Our External Business Partner Guidelines establish clear expectations of our direct business partners, including an expectation to respect internationally recognized human rights, comply with all applicable laws and conduct their business ethically and responsibly. We will not knowingly condone or contribute to adverse human rights impacts caused by the actions of our business partners. When we become aware of an adverse impact, we will engage to be part of the solution to address the issue or dilemma, including seeking to prevent or mitigate the adverse impact. We also support our business partners in providing remedy to the affected individuals.

Since 2010, P&G has tracked the performance and improvement of key partner-related environmental measures via the Supply Chain Environmental Sustainability Scorecard. In 2017, we launched our inaugural Supplier Citizenship Scorecard, which builds on the strong legacy of the Environmental Sustainability Scorecard and incorporates all five focus areas of P&G’s Corporate Citizenship Strategy: Ethics & Corporate Responsibility, Community Impact, Diversity & Inclusion, Gender Equality and Environmental Sustainability. Developing this new Scorecard allowed us to leverage a more holistic approach to understanding Citizenship efforts in our supplier ecosystem that could allow strategic collaboration while equipping our external business partners with resources that they can use to advance their own Citizenship efforts so that we may all be a force for good and a force for growth. 

More than 120 of our strategic partners completed the scorecard, and the results were invaluable. Our partners confirmed that they are actively engaged in their communities, with 87% of them having well-established initiatives such as supporting children’s health and education, empowering women economically, protecting the environment, fighting against hunger and poverty and many others. More than 75% of our partners have a documented responsible sourcing plan or are working toward developing one, and more than 60% have programs to recycle, reduce and reuse potential waste materials. 

Responsible Sourcing

Responsible Sourcing is a critical pillar in our Citizenship program, and one that every P&G buyer touches through his or her work to drive environmental sustainability and human and social rights. Our vision is to be the company with the most responsible, ethical and transparent supply chain. We are continually assessing risks in our supply chain and driving clarity and resolution if needed. This is part of our desire to be a force for good. We execute this vision by focusing across the global business, with greater emphasis on high-risk countries and spend areas. Our partnerships with key NGOs and suppliers ensure we are focusing on the most critical areas. This external input was strengthened by our mapping of our salient issues, and we now have developed strategies to reduce risk and protect our environment and people who work in the supply chains.

We empower responsible supply chains through a supplier education and audit system. Our risk-based program supports this effort by assessing partners through third-party audits that identify and remediate issues with labor standards, health and safety concerns, environmental issues and business ethics. To date, we have completed two waves of social audits with more than 400 suppliers, with a third wave already underway. We screen new vendors through a robust third-party risk management process to identify and remediate top risks before hiring. In these and other efforts, we build a robust system of business partners that is fully integrated and synchronized with P&G’s business and values.

Sustainability Guidelines for External Business Partners

Read more in the 2018 Citizenship Report, which highlights the Company's progress in its Citizenship priority areas of Community Impact, Diversity & Inclusion, Gender Equality and Environmental Sustainability, all of which are based in a foundation of Ethics and Corporate Responsibility.