We have approximately 30.000 suppliers delivering to our around 90 production facilities worldwide. Suppliers are classified as critical based on sustainable and ethical criteria, covering areas related to environmental, climate, social, health & safety, modern slavery, human rights, and business integrity. Critical suppliers are also defined based on their business impact related to factors such as spend, business critical materials/services, impact on profitability, quality, exchangeability as well as supplier capabilities, such as innovation. Essity identifies critical suppliers in order to manage risks by identifying, prioritizing, and addressing them according to their potential impact and risk probability. Critical suppliers are also defined in order to create maximum internal efficiency, cost efficiency, and added value.
Essity has long-term commercial relationships with many of these suppliers, with close collaboration and high focus on innovations. In 2022, 68 strategic suppliers (Tier-1) were classified as critical and corresponds to approximately 38% of our total purchase spend and includes suppliers cross several spend categories.
Also critical sub-suppliers (i.e. suppliers further upstream the supply chain) are identified in order to manage potential ESG risks. In 2022, approximately 1 500 sub-suppliers were identified as critical. In order to mitigate potential impact various risk mitigation activities, e.g. certifications and corrective action plans, have been executed.
Sustainability Risk Assessment Well Embedded in Established Routines
To safeguard sustainability considerations and to minimize any environmental or social impact related to our procurement activities and suppliers, we have integrated the requirements into our standard processes and normal routines – more information: Due Diligence for Responsible Procurement (essity.com)