Modern Slavery and Human Trafficking Statement 2019

At Beiersdorf UK Ltd we want to play an active role in making positive contributions to society. Beiersdorf UK Ltd acknowledges that as a global corporate citizen it has a responsibility to address and seek to eliminate the risk of slavery and human trafficking in its operations, as part of the respect that the company has for human rights, in line with the principles contained in the United Nations Universal Declaration of Human Rights and the UK Modern Slavery Act 2015.

By this statement, we set out Beiersdorf UK Ltd’s commitment to taking steps to identify and eradicate slavery and human trafficking from its business and from its supply chains. We do not tolerate slavery and human trafficking either within the supply chain or within any part of Beiersdorf UK Ltd’s business.

As required by the UK Modern Slavery Act 2015, this statement reports on the steps Beiersdorf UK Ltd and the Beiersdorf group have taken in this regard during the financial year ended 31 December 2019.

Beiersdorf UK Ltd, based in Birmingham, is a part of the Beiersdorf group, a global leader in the consumer goods industry. Beiersdorf UK Ltd’s principal activity is sales, marketing and distribution of products for the care and protection of skin marketed under major brands such as NIVEA, Eucerin and Elastoplast. An overview of where Beiersdorf UK Ltd fits within the global business, as well as details of the company’s core values and product brands appears in the online company profile. Information about the parent company Beiersdorf AG can be found on its homepage.

Beiersdorf UK Ltd is integrated into a supply chain whose processes take place predominantly within Europe. Only a very few suppliers who directly supply Beiersdorf UK Ltd are located outside of Europe. More precisely, in 2019, Beiersdorf UK Ltd sourced 81% of the volumes of the finished goods from eight Beiersdorf owned factories, 19% from 21 third-party manufacturers or third-party co-packers. 63% of these volumes were sourced from Germany, 15% from Spain, 10% from Poland, 7% from Netherlands, 2% from France and 2% from Portugal and the remaining 1% from the rest of the world.

Regarding goods and services not directly related to the production of products, 88% of spend was with suppliers located in the UK, 9% with those based in Europe and 3% with suppliers outside of Europe. 53% of spend (19% of suppliers) were covered by the corporate Procurement function based in the company’s head office in Germany and 47% of spend (81% of suppliers) by the local organization.

All Beiersdorf UK Ltd employees (>200) are provided with a Code of Conduct for Employees. An updated version of the Code of Conduct was officially introduced by the Board of Directors to all employees and managers during a general meeting in 2019. Everyone in the organisation received a booklet of this policy, handed-over by its supervisor. New employees receive a booklet as well. In addition, everyone is trained on this policy through e-learning.

The Code of Conduct is designed to help employees and managers to understand the company’s principles and to act in accordance with them. The Code clearly states that Beiersdorf will not support or tolerate slave labour or human trafficking. Equally, Beiersdorf does not support or tolerate child labour. Beiersdorf also stands for fair working conditions and promote health and safety at work.

Beiersdorf UK Ltd also has a Code of Conduct for Suppliers, which is under revision by Corporate head office in Germany and planned to be communicated to all Beiersdorf businesses in 2020. It will include references to the Modern Slavery Act.

Among other things, the current Code of Conduct already prohibits the use of forced labour and inappropriate disciplinary measures and prohibits child labour. Other minimum employee rights regarding working hours, remuneration and freedom of association are also covered. Suppliers are required to accept the standards required by the Code of Conduct and to inform their employees. They agree that they will keep adequate records to demonstrate compliance and agree that Beiersdorf UK Ltd or its nominated representatives may make announced or unannounced inspections to suppliers’ premises to verify compliance. These requirements are also mentioned in the sustainability report.

In 2019, more than 95% of the suppliers used by Beiersdorf UK Ltd were signed up to the Code of Conduct for Suppliers before they started supplying to Beiersdorf UK Ltd. This has improved by another 5 percentage points vs. the previous year. Further suppliers have confirmed compliance via individual commitments. Beiersdorf’s ambition is to increase Code of Conduct acceptance by suppliers year on year.

Beiersdorf UK Ltd will review annually the steps it has taken to address the risks of slavery and human trafficking in its business and in its supply chain, including the effectiveness of internal processes for reporting and escalation of issues.

Beiersdorf’s Corporate Sustainability team annually conducts a risk assessment of all approximately 25,000 direct suppliers of Beiersdorf affiliates including those who supply Beiersdorf UK Ltd. The process consists of appraising the country-related risk as well as the individual supplier’s significance to Beiersdorf in terms of procurement volume and brand proximity. The country-related risk is determined by taking into account the country-risk assessments made by the international organizations Transparency International (TI), the Walk Free Foundation, the International Trade Union Confederation (ITUC) and the Yale Center for Environmental Law & Policy, Yale University.

The screening differentiates between the risk levels low, medium and high. Direct suppliers rated medium or high risk are required to provide a comprehensive self-assessment via the Sedex platform to enable an even more thorough risk assessment. The Corporate Sustainability team in Hamburg then decides whether a subsequent audit is required. These audits are carried out by accredited external auditors commissioned by the supplier and follow the standardized “Sedex Members Ethical Trade Audit” (SMETA) 4-Pillar Audit Protocol. The audit results highlight specific challenges and any areas where action is required, for which our suppliers then work out corrective action plans with our support. In extreme cases, the audit results may lead to us excluding suppliers from our supply-chain network.

Additionally, Beiersdorf has a Supplier Code of Conduct Implementation Process which entails risk profiling, risk assessments and audits. This is also described in the sustainability report.

Lastly, incidents can be reported on Beiersdorf’s incident reporting platform. More information on this platform can be found on the global website and the platform itself.

In 2019, Beiersdorf UK Ltd executed a critical supplier risk evaluation. A substantial share of its suppliers has been analysed regarding certain criteria also relating to Modern Slavery. All suppliers considered higher risk committed to follow Beiersdorf’s Supplier Code of Conduct. Additionally, in order to drive ethical and sustainable improvements our top critical suppliers agreed to be part of Sedex.

Furthermore, by the end of 2020, Beiersdorf UK Ltd will perform supplier assessments focused on non-financial risks and non-compliance with the Modern Slavery Act aligning to Transparency In Supply Chains (TISC) reporting. The focus will be on managing and mitigating priority risks around external labour force (agency staff), facility management providers and suppliers delivering from countries that are at high risk of using slave labour (Eastern Europe and Far East Asia). This will help Beiersdorf UK Ltd to increase its supply chain transparency.

Additionally, the Beiersdorf group commits to the approach of sustainable development through the “Sustainable Development Goals” (SDGs) which is part of our new sustainable agenda available on the corporate website. Finally, Beiersdorf leverages the synergies of the recognized Sedex and AIM-PROGRESS collaborative platforms on which further information can be found in the sustainability report.

As mentioned in the sustainability report, in the initial risk screening in 2018 and 2019, 18 suppliers were identified as high-risk suppliers. They have been audited by an external auditor based on the "Sedex Members Ethical Trade Audit" (SMETA) 4-PiIIar Audit Protocol. All non-compliances have been discussed with the suppliers and were dealt with by the end of 2019.

In 2019, we did not have any cases of supplier relationship termination due to a major breach.

It is compulsory for every employee working in Procurement at Beiersdorf to attend an internal Procurement Academy. Training of the Code of Conduct for Suppliers forms part of this.

In 2019 an external training on Modern Slavery in Supply Chain (delivered by the Chartered Institute of Procurement & Supply – CIPS) was provided to a procurement representative. Following this training, internal briefing material has been developed and shared with the board members and the local procurement team.

Finally, Beiersdorf UK Ltd commits to deliver further awareness sessions to their employees in 2020.

This statement was approved by the Board of Beiersdorf UK Ltd on May 21st, 2020. It is made in accordance with section 54(1) of the Modern Slavery Act 2015 and constitutes Beiersdorf UK Ltd’s Modern Slavery and Human Trafficking Statement for the financial year ended 31 December 2019.

Signed
Thomas Riedner, Supply Chain Director Northern Europe
On behalf of the Board of Beiersdorf UK Ltd