Supplier Code of Conduct

2.1 Responsible sourcing and human rights and environmental due diligence

All our business partners, including suppliers, distributors, consultants and independent contractors are expected to adopt and comply with the ethical business standards and values set out in this GSS, and to actively communicate such standards when dealing with their own (sub-)suppliers.

Supplier must have ethical and responsible sourcing practices in place and source only from companies that satisfy the requirements of this GSS.

Supplier must secure a due diligence framework to ensure that the supplier has policies and processes in place to identify, prevent, mitigate and account for adverse impacts in their own operations and related to their own (sub-) suppliers in regard to human rights and environmental risks. The due diligence framework shall be governed by the supplier’s senior management and the approach shall be based on the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct. Essity reserves the right to verify compliance of the supplier’s human rights policy and due diligence framework, to secure it operates in line with the mentioned principles and guidance documents.

Also, supplier shall be aware of all sites and companies involved in their production and supply chain, and upon request should be able to provide Essity with adequate details of the supply chain for the goods supplied to Essity.

2.2 Ethical business practices

2.2.1 Integrity

Supplier shall conduct their business in a professional and independent manner at all times, and in accordance with standards set forth in all applicable international and national laws and regulations while recognizing that Essity’s requirements may sometimes exceed those standards. At minimum, supplier must act with integrity, honesty and fairness in all aspects of their business.

2.2.2 Fair competition

Supplier and all persons acting on their behalf shall comply with national and supranational antitrust and competition laws. They shall not enter directly or indirectly into any illegal agreements with their competitors nor exchange sensitive information, e.g. regarding markets, customers, strategies, prices and the like. All suppliers and all persons acting on their behalf shall participate in public tenders and private sector bidding procedures by strictly following the applicable laws and regulations.

2.2.3 Conflicts of interest

Supplier shall inform Essity if any Essity employee has an interest in the supplier’s business which might cause a conflict of interest. Supplier and persons acting on their behalf must avoid conflicts of interest with respect to their private activities, entities in which they, their close relatives or associates have an interest, their business activities with other parties and their part in the business relationship with Essity. Supplier shall inform Essity about existing conflicts of interest as soon as it becomes aware of such conflicts.

2.2.4 Anti-corruption and bribery

Supplier and all persons acting on their behalf shall comply with all applicable anti-corruption laws while conducting business with Essity. Bribery and any other form of corrupt business practice are strictly prohibited. The direct or indirect offer, granting or acceptance of illegitimate benefits to generate, maintain or accelerate business is unacceptable. Supplier must ensure that no such benefits are exchanged in the course of their business.

Supplier shall conduct appropriate risk-based due diligence prior to engaging any sub-supplier to ensure that such third parties comply with all applicable anti-corruption laws.

2.2.5 Gifts and entertainment

Supplier must not provide any gift, meal or entertainment to an Essity employee that might influence, or appear to influence, an Essity employee’s decision in relation to Essity’s business with the supplier.

Essity representatives are not allowed to accept gifts or hospitality if this may influence or appear to influence a business decision. Essity employees shall always pay for their own travel and accommodation, e.g. when visiting supplier or attending conferences.

2.2.6 Accurate books and records and tax compliance

Keeping accurate books and records as well as declaring truthfully all required taxes and duties is an indispensable part of running a lawful and transparent business in a sustainable way. Essity expects its supplier to act with the highest degree of diligence in this respect.

2.2.7 Data protection

Supplier shall comply with all applicable data protection laws in collecting, processing, storing or otherwise handling personal data of any individuals, including, without limitation, their own employees and employees of their customers, suppliers and business partners.

2.2.8 Trade restrictions and sanctions

Supplier should ensure its business is conducted in compliance with any applicable trade restrictions and sanctions, as well as rules concerning export controls.

2.2.9 Duty to report

Supplier must report to their Essity representatives any suspicions of a material breach of any of Supplier’s obligation under this Supplier Code of Conduct section including any breach by Supplier’s sub-suppliers

2.3 Occupational health and safety

Suppliers must take the necessary steps to ensure a safe, hygienic and healthy working environment for all their employees in accordance with local legislation.

As part of this effort, Supplier must have in place a documented Health and Safety Management System providing for continuous monitoring and improvement of the working environment. The preferred standard is the ISO 45001 certification. Supplier must also have a senior manager within its organization who is directly responsible for Health and Safety. All suppliers are required to provide relevant information to enable Essity to fulfil its obligations regarding occupational health and safety.

2.4 Fair labor practices and free association and collective bargaining

Essity expects its suppliers will treat their employees and all persons acting on their behalf with the highest ethical standards. Supplier must adhere to international and national conventions and laws in the area of fundamental rights, including, but not limited to, non-discrimination, freedom of association, the right to collective bargaining, protection of children and mothers and the right to form works’ councils. Also, the supplier is expected to adopt an open attitude towards the activities of trade unions and their organizational activities. Furthermore, Essity suppliers are not allowed to use or threaten to use corporal punishment or other forms of abuse.

If required by local law, all employees of an Essity supplier must have an employment contract. Suppliers’ working hours shall comply with national laws and local industry standards, and wages and other benefits provided by supplier must be fair and at least equal to the minimum relevant legal and industry standards. Payment of wages shall be made directly to the employee or an employee-controlled account. Payment frequency shall be at least once per month and there shall be no late payment of wages.

2.5 Forced labor

Essity does not accept any form of forced labor, bonded labor or involuntary prison labor. Supplier shall take measures to ensure they do not engage in or support the use of any form of forced, bonded labor or involuntary prison labor as set forth in the ILO conventions No. 29 and 105. This includes all forms of human trafficking and working against one’s own will or choice. No employee shall be required to lodge deposits or identity papers when commencing employment and every employee should be free to leave their employer after reasonable notice. If Supplier uses a staffing recruiter or agency, in no event shall workers be charged fees or expenses related to their recruitment.

2.6 Child labor

Essity does not accept child labor or any other form of exploitation of children. Suppliers shall always strictly follow legal requirements as well as ILO convention No. 138 on the minimum age for work. Suppliers should work actively to prevent all forms of child labor or exploitation in their sphere of influence. Preventive measures expected from suppliers include, at minimum, establishing a system to verify the worker’s age at the time of employment and eligibility to work. Documentation shall be maintained to demonstrate due diligence. In the event of any failure to comply with the requirements of not using any child labor, the supplier is expected to remedy the situation as quickly as possible and in the best interest of the child.

2.7 Discrimination

Essity suppliers are expected to adopt and enforce policies which effectively prohibit discrimination or harassment on the grounds of gender, marital or parental status, ethnic or national origin, caste, sexual orientation, religious belief, political affiliation, age, disability, or of membership in a trade union or employee organization.

2.8 Conflict minerals and human rights

Essity products must not be linked to armed conflicts or human rights abuses. No raw materials or supplies should originate from any conflict area, and components included in electronics supplied to Essity shall be the subject of a documented responsible supply chain. Relevant information shall be provided to Essity in the form of a completed CMRT document. Included components may not contain the minerals defined as conflict minerals (tantalum, tin, tungsten and gold) or their derivatives unless they are sourced through recognized and responsible certification schemes.

2.9 Respect for the environment

At all times, Essity suppliers are expected to act in an environmentally responsible manner, and to respect applicable legislation. Essity suppliers are expected to implement procedures and standards that, at minimum, meet legal requirements and cover environmental aspects of waste management, handling and disposal of chemicals and other hazardous materials, emissions to air and water as well as energy and water use.

Essity requires its suppliers to make continuous improvements in environmental protection and to minimize the environmental impact and pollution generated by their activities. Environmental aspects shall not be limited to the supplier’s own operation. Local, regional and global environmental issues shall be taken into consideration.

2.10 Community relations and impact on local communities

Essity encourages suppliers to be a positive influence within and act with respect for the communities in which they operate. Essity values suppliers who provides their employees with a thriving workplace environment and development opportunities.

2.11 Supplier diversity

Essity values relationships with a broad spectrum of suppliers and work towards providing the maximum attainable opportunity for small and diverse businesses in the performance of all vendors. Therefore, Essity seeks to extend and develop its Supplier Diversity program, and values suppliers who utilize ethnic- or gender-neutral means to allow opportunities for small and diverse businesses to participate in subcontracts, where participation opportunities are present. Small and diverse businesses, as referred to by Essity, includes groups that are certified 51% owned, controlled, operated and managed by ethnic minority (MBE), women (WBE), service-disabled veteran (SDVOB or DVBE), LGBT+ (LGBTBE), disabled (DOBE) and/or as defined locally.

2.12 Grievance mechanisms

Essity expects its suppliers to have in place effective grievance channels through which individuals who may be adversely impacted by the supplier’s business practices can report complaints and grievances about violations to the principles outlined in this GSS.

2.13 Essity’s grievance mechanism

External parties such as suppliers’ work force can report what they believe to be a violation of this Supplier Code of Conduct at www.essity.com.

2.14 Breach of the supplier code of conduct

If a supplier or any of its own (sub-)suppliers fails to comply with the requirements set forth in this Supplier Code of Conduct, the supplier must take appropriate action to remedy the breach and prevent a recurrence of such breach in the future. Essity reserves the right to terminate the business relationship with any supplier who deviates persistently from or breaches this Supplier Code of Conduct in a material way.