Within its responsible sourcing commitment, Givaudan strives to ask all its strategic suppliers – whether for synthetics or natural ingredients – to adhere to standards set out by the Supplier Ethical Data Exchange, Sedex. Sedex is a data sharing platform and its standards ensure that suppliers address four key responsible sourcing pillars, namely Labour Standards, Business Integrity, Environment and Health & Safety. Sedex members can go on to carry out an audit – the Sedex Members Ethical Trade Audit, SMETA, as final validation of their commitment.
One of the benefits of SMETA audits is that they represent ‘an audit for one and an audit for all’. Across the industry, this process helps to reduce suppliers’ ‘audit fatigue’. Thus, if a supplier works with Givaudan as well as with other industry players, one audit will suffice.
In recent years, Givaudan exceeded its targets set out for 2015, which was for 200 of our priority suppliers to register with Sedex. By 2014, 268 raw materials suppliers were registered and 144 suppliers were audited.
Givaudan’s Procurement Sustainability Manager, Aisha explains why these results are so positive: “The suppliers that joined Sedex include strategic suppliers who are important to our business. We have a specific way of identifying which suppliers to address first: our starting point is to look at our spend with a company, namely the volume of ingredients they provide to us. We also call upon our category managers who know the suppliers and are aware of local country risks. We will assess if they’re a single supplier, i.e. we can only source a particular ingredient from them. We also use the Sedex assessment, which provides us with a high, medium or low risk ranking, and that helps us understand how to prioritise our audits.”
As more customers strive to make their supply chains more transparent, suppliers realise that these audits make good commercial sense. Aisha explains how Givaudan approaches those who are not yet on-board: “At the start of each year we identify the suppliers that need to be audited and explain the process to them. We can do this in person or take the opportunity of a supplier event, such as the recent AIM-PROGRESS meeting in Miami to raise the topic. The benefits are very clear, as most suppliers also have common customers, i.e. not just Givaudan but other players in the industry.”
In 2014, Givaudan continued on-boarding new suppliers into Sedex, but widened the scope, as Aisha states: “The 400 suppliers we initially chose were not selected simply because of their size, but because of their business risk. Now we have set new targets, and are including suppliers who provide ‘indirect materials and services’ (IM&S). This means we are not just focusing on the raw materials – the ingredients that go into the final product - but also on service providers such as logistics partners or labour agencies. In 2014, we included IM&S suppliers for the first time, and 25 of these companies are already registered with Sedex. Just like raw materials suppliers, they are also evaluated to the same stringent Sedex criteria.”
Givaudan is well on its way to having a secure database of suppliers, and also has a process in place for any outstanding issues of non-compliance. Aisha outlines what these typically relate to, and how they are dealt with: “Givaudan follows up with suppliers on the closure of all non-compliant items. Once the audit has been completed, if there is an outstanding action, we contact the supplier to determine what the issue is and to make sure actions are taken to close the non-compliances.”
Aisha concludes with Givaudan’s aims for the coming months: “In 2015, we will continue to on-board suppliers in this process. This will include engaging new partners in Sedex, pursuing our target of 200 audits completed by the end of 2015, and actively working with suppliers to close any outstanding audit non-compliances.