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Reporting basis and governance of non-financial indicators
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
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
Partnership (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 reduce 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 have supported 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 have included 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 preceding the assessment of the
status of the supplier in the 18 months prior to the cut-off date of
13 October 2020.
Supplier Code We safeguard compliance through a risk-based step-by-step process:
four-step procedure 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 (S^) 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.
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
