Reporting basis and governance of non-financial indicators (continued) Average level of compliance of all operating companies with four-step Supplier Code Procedure O Q, Heineken N.V. Annual Report 2018 Report of the Executive Board Report of the Supervisory Board Financial Statements Sustainability Review Other Information Local sourcing approach HEINEKEN Supplier Code Supplier As a large buyer of crops, we can have a significant economic impact on local agricultural communities. Our local sourcing Public-Private Partners (PPP) projects work with smallholder farmers and aim to help them raise yields and compete against imported crops. They empower farmers and their communities by helping to alleviate poverty and improve local food security. At the same time, HEINEKEN benefits by reducing import-related duties and securing a sustainable supply of raw materials. To achieve more, faster, we support a number of PPPs in which HEINEKEN and a public sector donor (e.g. the Dutch Ministry of Foreign Affairs and the German GIZ development agency) jointly fund agricultural development projects. Other partners include the European Cooperative for Rural Development (EUCORD), International Finance Corporation (IFC), International Fertilizer Development Center (IFDC), and Dutch NGOs ICCO and FairMatch Support Much of our impact lies indirectly with our suppliers, so we work with them to embed the right practices. Every supplier is asked to abide by our Supplier Code, which sets out clear guidelines for how we expect them to act in the areas of Integrity and Business Conduct, Human Rights, and the Environment. The Supplier Code procedure is implemented among all our suppliers, and we expect our suppliers to ensure that their suppliers adhere to the same standards A supplier is an entity: - that delivers goods and/or services on a regular basis, more than once a calendar year, and - is registered in the vendor master database as an active supplier, and of which invoices are registered in the central systems for payment on behalf of Heineken N.V. or one of its affiliates, and - with which there has been spend in the 18 months preceding the assessment of the status of the supplier The definition excludes: tax authorities, charities, sponsorships, customer refunds and intercompany suppliers Supplier Code four-step procedure We safeguard compliance through a risk-based step-by-step process: 1By signing the HEINEKEN Supplier Code, suppliers agree to comply with our principles of integrity, environmental care and human rights. 2. The intensity with which we monitor compliance against our Supplier Code depends on the risk profile of a supplier. Our supplier risk analysis (SRA) tool assesses suppliers based on their type of business and level of supplier-specific risk. All potentially high-risk suppliers are required to go through step three of the programme. 3. We use the EcoVadis26 sustainability monitoring and scorecard to assess the strength of potentially high-risk suppliers' management systems for ensuring compliance with our Code. Suppliers complete an online questionnaire and provide supporting evidence, which EcoVadis analyses alongside a 360° scan which looks at whether a supplier has been mentioned positively or negatively in the media, by NGOs or trade unions. They then create a supplier scorecard. Suppliers that are still considered high-risk go on to Step 4 and undergo a site audit. 4. The final step is a site audit by a third party using our Supplier Code as the basic assessment criteria. We use the SMETA27 four-pillar protocol. It enables us to contribute to and use the global database of audits held by AIM-Progress, the responsible-sourcing platform used by over 40 of the world's leading fast-moving consumer goods companies. We strive for continuous improvement to ensure ongoing compliance with our Supplier Code. If a case of non-compliance is found, we discuss corrective actions with the supplier and allow for commitment to correct the non-compliance within a given timeline. If commitment and action is not forthcoming, HEINEKEN will cease to do business with the supplier We calculate compliance as the number of suppliers compliant with all applicable four-steps of the Supplier Code Procedure divided by the total number of our suppliers. The calculation method has changed in 2018 as compared to the previous years Number of contract terminations Number of suppliers with which any commercial relationship ended, because: a) they were unwilling to sign our Supplier Code b) or refused to subscribe to EcoVadis c) or refused to undergo a site audit

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 150