CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT
At Mars, we believe everyone should be treated with fairness, dignity and respect. We are a privately-held, family-owned company seeking to promote and advance respect for human rights across our value chain - from farms, to our suppliers’ factories, to our own workplaces. For more than 100 years, we’ve sought to bring The Five Principles of Quality, Responsibility, Mutuality, Efficiency and Freedom to life every day, in pursuit of creating shared growth and opportunity across the communities we touch.
Our goal is to work with suppliers who share our principles-based approach to business, and we expect our suppliers to respect human rights in their workplaces. Our global human rights approach includes efforts across our own workplaces, our first-tier suppliers and extended supply chains. We have worked with experts to identify salient human rights issues present across the industry in the extended supply chains of a number of our key agricultural materials, including cocoa, palm oil and fish. We engage our first tier suppliers through our Next Generation Supplier program, which is underpinned by our Supplier Code of Conduct.
Our Supplier Code of Conduct is informed by the International Bill of Human Rights, the principles set forth in the International Labour Organization’s 1998 Declaration on Fundamental Principles and Rights at Work, and the United Nations Guiding Principles on Business and Human Rights. It describes the human rights standards we expect our first-tier suppliers to uphold, covering forced labor, including modern forms of slavery. The Code prohibits the use of all forms of forced labor, including any form of prison, trafficked, indentured or bonded labor. The following areas are included in the Code:
- Child Labor
- Compensation & Benefits
- Forced Labor
- Freedom of Association
- Health & Safety
- Issue Reporting
- Work Hours
1. VERIFICATION OF SUPPLY CHAINS
We use publicly available data from third party sources such as the U.S. Department of Labor, United Nations Development Program, public media and civil society reports, and proprietary analysis provided by Verisk Maplecroft’s team of human rights risk analytics experts, to assess the social and environmental risks associated with our supply chains. Forced labor and related risks are included in this analysis. This risk assessment and verification helps us determine the actions expected of specific suppliers, which could include a range of efforts, such as completion of a site-specific, third-party validated assessment or a longer-term collaboration as suppliers activate plans to address targeted issues in their workplaces.
Suppliers are expected to respect rights in their workplaces, and they have an important role in promoting responsible sourcing policies and principles in their own supply chains. As part of our commitment to building supplier capability, we periodically engage suppliers in training and awareness raising to drive continuous improvements.
2. AUDITS OF SUPPLIERS
We evaluate human rights risks associated with operating in specific geographies or purchasing specific commodities and services. We engage with relevant suppliers to assess how they manage these risks and their implementation of the expectations set forth in our Code.
In 2019, we launched our Next Generation Supplier program - an enhanced approach to responsible sourcing with a focus on engaging and supporting relevant first-tier suppliers as they deliver greater positive impact in their workplaces. Our Responsible Sourcing program previously used an industry-standard approach that leveraged on-site social compliance audits to identify workplace issues and issue corrective action plans where risk is highest. However, research shows that it is difficult to address the root causes of the most complex sustainability challenges through audits alone – and that it is critically important to engage suppliers and their workers in identifying issues and shaping solutions.
Our Next Generation Supplier program builds on our years of experience and long-standing commitments while introducing new tools and technologies that we believe will deliver better results for Mars, our suppliers and the people who work in our supply chains. This includes leveraging the use of third party analysis tools and on-site assessments to understand our suppliers’ workplace conditions. Under this program:
- We continue to align all of our suppliers with our social, environmental and ethical expectations through our Supplier Code of Conduct. Our Code is a key part of our engagement with our first-tier suppliers.
- We assess the sustainability performance and existing social compliance audit results of prioritized suppliers using the EcoVadis online platform, which includes analysis of forced labor risks. EcoVadis is an online platform providing validated performance assessments based on supplier responses, used by more than 70,000 businesses around the world, including Mars. Our prioritized suppliers – selected based on risk and relevance - will complete the EcoVadis process, receiving a performance score and the opportunity to receive customized advice, guidance and support from a third party as they take steps to improve or maintain their scores. With these insights, our suppliers can strengthen their management systems to address social, environmental and ethical performance.
- We support the suppliers of our top 10 raw materials, and other strategic suppliers, as they advance their performance through a new, longer-term collaboration model focused on driving systemic change and engagement of their workers. This model leverages the expertise of external advisors including our global strategic human rights partner, Verité. It includes a third-party (independent), announced assessment, which builds upon a traditional audit approach, that gathers information about workplace conditions, including forced labor. Our collaborative approach helps suppliers access third party expert support, facilitates on-site engagement, and leverages new technologies so suppliers can engage with and hear the voices of workers. This model is designed to help suppliers drive systemic change that is measurable and meaningful over time.
The Next Generation Supplier Program helps us achieve our goal of working with suppliers that share our values and commitments, and ceasing work with those who are unable or unwilling to meet our expectations.
The applicability of certain programs may vary based on the differences between consumer goods and veterinary health supply chains and their risk profiles. More recently-acquired businesses are in the earlier stages of program rollout.
3. CERTIFICATION BY SUPPLIERS
We expect our first tier suppliers to align with our Code of Conduct, including its provisions on forced labor. Under the Next Generation Supplier program, the expectations outlined in our Code of Conduct are to be included as part of our agreements with suppliers. Under the Code, suppliers are also expected to comply with applicable laws and regulations, which include any laws related to forced labor, including modern slavery and human trafficking.
As outlined in our Code, to identify whether a supplier is in compliance with our Supplier Code of Conduct, Mars may “request suppliers to complete self-assessments, disclose relevant policies or procedures, or to be subject to announced and unannounced on-site direct and/or third-party audits or evaluations of the supplier’s facilities, including housing provided by the supplier or labor providers, and workplaces to which the supplier has sub-contracted production of Mars-procured products. Mars reserves the right to audit the operations, records, policies, and procedures of the aforementioned entities and to conduct confidential worker interviews in connection with such audits or evaluations as appropriate and as agreed. Upon request, distributors, brokers and agents supplying to Mars will also provide Mars with access to the workplaces, records, policies, procedures, and workers of their first-tier suppliers.”
4. INTERNAL ACCOUNTABILITY
Our Code of Conduct describes the human rights standards we expect our first-tier suppliers to uphold, covering forced labor, including modern forms of slavery. The Code prohibits the use of all forms of forced labor, including any form of prison, trafficked, indentured or bonded labor.
Mars reserves the right to not initiate, to suspend or to terminate its relationship with a supplier if the supplier refuses to consent to the expectations set forth in the Supplier Code of Conduct or to take the appropriate steps to come into compliance with the expectations in the Supplier Code of Conduct, including its provisions on forced labor.
Moreover, Mars has our own internal programs where we maintain internal accountability standards and conduct assessments to ensure that Mars sites are complying these standards. These standards are consistent with the expectations in our Supplier Code of Conduct.
Guidance on our Code of Conduct is available to our suppliers and to our Associates, including good practice implementation examples. Mars University, our internal framework for learning and development opportunities provided to Mars Associates, includes a Supplier Code of Conduct course that is required for specific Associates. All of our procurement Associates are expected to take our Next Generation Supplier training course –content includes our human rights standards and expectations of our suppliers, including with regard to forced labor. Additional training is available for all other Associates, and we continue to develop further resources.
A dedicated global human rights team establishes our human rights policies, strategies and programs, and provides expertise and guidance to colleagues around the world who are engaged in this work. To govern the application and implementation of our policies, our Human Rights Steering Committee meets regularly to review our progress and opportunities. Our Board of Directors is informed annually of our human right plans and performance.
Mars serves on the Leadership Team of AIM-PROGRESS, a leading manufacturing and supplier forum promoting responsible sourcing practices and supplier capability building across the industry. Through AIM-PROGRESS, we work with peer companies to support awareness raising and select trainings related to forced labor.
Additionally, for the past four years we have played a leadership role within the Consumer Goods Forum (CGF) to champion the importance of business action on forced labor. The CGF brings together the CEOs and senior management of over 400 retailers, manufacturers, service providers and other stakeholders across 70 countries focused on four strategic pillars – sustainability, product safety, health and wellness and end-to-end value chain and standards. Grant Reid, our Chief Executive Officer, serves on the CGF Board of Directors and is a Co-Sponsor of its Sustainability work. Barry Parkin, our Chief Procurement & Sustainability Officer, is Co-Chair of CGF’s Sustainability committees. We also co-lead the forced labor taskforce, where we played a leadership role in developing CGF’s Priority Industry Principles on Forced Labor.