Reporting basis and governance of non-financial indicators (continued)
O O Qs
Report of the Executive Board
Report of the Supervisory Board
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2019
Other Information
Number of different local
sourcing initiatives
Local sourcing approach
HEINEKEN Supplier Code
Supplier
HEINEKEN operating companies sourcing any agricultural raw material
within the AME Region. Each value chain is counted individually and
some involve working with smallholder farmers, while others work with
larger scale commercial farmers
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), and Dutch NGOs Agriterra, 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
Supplier Code
four-step procedure
We safeguard compliance through a risk-based step-by-step process:
1. Signing. By signing the HEINEKEN Supplier Code, suppliers agree
to comply with our principles of integrity, environmental care and
human rights.
2. Risk analysis. 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 identifies 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. In 2019, we updated the SRA questionnaire and the
methodology of risk assessment to reflect current developments in
business environment. As a result, more suppliers go to Step 3 as in the
previous years.
3. Screening. We screen our suppliers based on four key risk drivers:
(1) sanctions, (2) anti-bribery and anti-corruption, (3) state-owned
entities and politically exposed persons, (4) adverse media (human and
labour rights, health, safety and environment, fair competition, fraud,
and anti-money laundering).
4. Action. All medium and high risk suppliers identified in Step 3 have
to go through the Step 4 "Action", which has several options of follow
up actions: contract termination, training, contract clause, enhanced
due-diligence, annual certification, or supplier on-site audits.
Average level of compliance We calculate compliance as the number of suppliers compliant with all
of all operating companies applicable four-steps of the Supplier Code Procedure divided by the total
with four-step Supplier number of our suppliers. Suppliers with derogations are included in the
Code Procedure calculation as compliant
The definition excludes: tax authorities, charities, sponsorships, customer
refunds and intercompany suppliers
