AIM PROGRESS Responsible Sourcing

Supplier event

São Paulo, Brasil,

1st November 2016

Welcome & introductions

Zora Hadden - Procurement Director SH&H LATAM, RB

Wilson Toyama – Procurement Director, HEINEKEN Brasil

Safety and logistics notice

Agenda – Morning

FROM TO Topic Speakers

8:30 9:00 Registration & tea/coffee

9:00 9:15 Welcome & IntroductionsWilson Toyama - HEINEKEN

Zora Hadden - RB

9:15 9:30 Overview of AIM-PROGRESS Wilson Toyama - HEINEKEN

9:30 10:15Overview of Responsible Sourcing

programs

Laura Taal - HEINEKEN

David Pettet - RB

10:15 10:30 Comfort break

10:30 12:00 Deforestation in Brazil Wandreia Baitz - The Forest Trust (TFT)

12:00 13:00 Lunch

Agenda - Afternoon

FROM TO Topic Speakers

Simultaneous workshop - EcoVadis track

13:00 14:00Workshop 1 – EcoVadis Overview

Carina Miki - EcoVadis

14:10 15:10Workshop 2 – Good practice within

manufacturing facilitiesJuliana Scalon - DNV GL

Simultaneous workshop - Sedex track

13:00 14:00Workshop 1 – Good practice within

manufacturing facilitiesJuliana Scalon - DNV GL

14:10 15:10Workshop 2 – Sedex and SMETA

OverviewBruno Vio - Sedex

15:10 15:40 Coffee/tea Break

15.40 16.40 Business Integrity and Anti-Corruption Professor Luiz Eduardo de Almeida

16:40 17:00 Closing speech and Q&AWilson Toyama - HEINEKEN

Zora Hadden - RB

Anti-trust caution

The Association shall not enter into any discussion,

activity or conduct that may infringe, on its part or on the

part of its members, any applicable competition law. By

way of example, members shall not discuss,

communicate or exchange any commercially sensitive

information, including non-public information relating to

prices, marketing and advertising strategy, costs and

revenues, trading terms and conditions with third

parties, including purchasing strategy, terms of supply,

trade programmes or distribution strategy. This applies

not only to discussions in formal meetings but also to

informal discussions before, during and after meetings.

Overview of AIM-

PROGRESS

Wilson Toyama – Procurement Director HEINEKEN Brasil

AIM-PROGRESS is:

A global forum…

…of branded, fast moving consumer goods manufacturers…

…and common suppliers

Our mission: “Positively impacting people’s lives through our combined leadership of robust responsible sourcing practices throughout our supply chains”

A range of FMCG companies and suppliers,

with AIM and the GMA

Our purpose

Raising the bar for responsible sourcing…

…in the FMCG supply chain…

…through converging standards and practices….

…thereby making a positive impact on people’s lives

Our 3 key objectives:

1. Building member capability

All member organisations are competent and executing robust responsible sourcing programs

2. Effectively assuring compliance in our supply chains

Ensuring increasing supplier compliance as expectations rise through having in place increasingly aligned practices, standards and metrics

3. Driving continuous improvement

Demonstrating activities of responsible sourcing which go beyond relevant legislation, international standards and company codes

The four pillars of responsible sourcing areAligned to the 10 Principles of the UN Global Compact

Human Rights &

Labor Standards

Health &

Safety

Environment

Business

Integrity

Our activities

Mutual Recognition • “An audit for one is an audit for all”

Capability Building • of members and suppliers

Human Rights • implementing UNGPs

Business Integrity • tackling bribery and corruption in the supply chain

Environment • taking your commitments through the supply chain

Impact measurement• are we positively impacting people’s lives?

Key benefits for suppliers

Reduce audit duplication, costs and fatigue through mutual

recognition by customers

• Shared list of over 18,000 audited suppliers

A shared vision of responsible sourcing enabling alignment and

convergence of your customers’ requirements

Access to regular supplier events

• 29 events addressing 2,700 companies

• Network with other suppliers and customers

Develop your own responsible sourcing programme

Reputations: Hard to build... Easy to loose!

Overview of Responsible

Sourcing programmes

Laura Taal – Sustainable Procurement Manager, Heineken

David Pettet – Global Human Rights Manager, RB

Responsible Sourcing Cycle – Commonalities on the

supplier assessment journey

Synergies towards common

methods & data

Supplier Engagement

Supplier Assessment

Risk Assessment

Audit

Corrective Action Plan

Building Supplier

Capability

Common formats

include Sedex and

EcoVadis SAQs

Determined by

individual companies

Companies agree to recognise audits done on behalf of other

customers. Audits can also be shared using online platforms.

Sharing of

methodologies for

corrective action plans.

Common supplier

training events

Supplier engagement

Step 1:

Supplier

engagement

Communication of requirements and

expectations

Contact made by the customer, audit firms or

other third parties such as Sedex or

EcoVadis

Different channels: e-mail, supplier forums,

phone, contract negotiations, etc.

ENGAGE and PARTICIPATE

Common Method

Supplier assessment

Useful tool for suppliers and buyers to

assess overall capabilities and ensure

management processes are in place

If applicable, the Sedex self-assessment

covers the following:

• Site profile

• Labor standards

• Health & Safety

• Environment

• Business Integrity (anti-corruption)

Step 2:

Supplier

assessment

Common Method

among SEDEX members;

not required by all

Risk assessment

Identify suppliers which are higher risk

Can be conducted through platforms such as

Sedex and EcoVadis

Step 3:

Risk assessment

Common Method

Audit - Overview

Human Rights & Labour

Standards

Health & Safety

EnvironmentBusiness Integrity

Step 4:

Audit

Common method

Audit - ProcessOpening Meeting

Site Tour

Management & Worker Interviews

Document Review

Pre-closing Meeting

Closing Meeting & Summary of Findings

Step 4:

Audit

Common method

Audit - FAQs • Independent, accredited professionals (e.g. DNV-GL, Intertek, UL, SGS, BV, etc.)

Who conducts the audits?

• Independent and impartial professionals trained to evaluate compliance to laws and responsible sourcing standards

What is the role of the auditor?

• Dependant on the size of the facility and scope of production

• 1-4 days

How long does the audit take?

• Site Manager / Director. Site HR and EHS Managers, Payroll clerk, Workers and Union or worker representatives

Which staff need to be present?

• Suppliers pay for the audits as this allows them to own the data and share the reports with multiple customers through Sedex and AIM-PROGRESS

Who pays for and owns the audit?

• Process and protocols are in place to ensure no personally identified information leaves the facility

• Goal of assessment is to protect employees not infringe on privacy

Does an audit adhere to Privacy Protection laws?

• There is no comprehensive standard that covers all the 4 Pillars

• Check with your customer for specifics, as requirements may vary

Are other standards acceptable (ISO, SQF, SA8000, etc)?

Step 4:

Audit

Common method

Not fault finding but solution finding

Audits for sustainable development

Collaborative effort

Focus on Continuous Improvement

Audit - Assessment philosophy

Step 4:

Audit

Common method

Corrective action plan

Ensure Corrective Actions permanently address audit NC

Not a tick box exercise – Tool to facilitate continuous

improvement

Implement a process to monitor CA implementation and

success

Timeframe and follow-up methods depend on the type of

issue and the severity

• Desk based verification vs. follow-up visit

• Critical, Major, Minor categorization of issues

Step 5:

Corrective

Action Plan

Plan Do Check

Building supplier capability

Through supplier conferences and direct engagement the

aim is to:

• Raise awareness and understanding of responsible

sourcing

• Increase supplier capability to improve compliance

within their own facility

• Work collaboratively to address regional challenges

• Provide the tools for suppliers to implement their own

programme

Step 6:

Building

supplier

capability

Confidential3

0

Engagement

Self-assessment

Risk-assessment

Audit

Addressing non-

compliances

Capability building

Legislation UK Modern Slavery Act 2015

Californian Transparency in

Supply Chains Act

Industry best practice United Nations Guiding

Principles on Business and

Human Rights (UNGPs):– Policy commitment

– Human rights due-diligence

– Remediation

– Access to remedy

PO

LIC

Y

RB’s Human Rights and Responsible Business

Programme

Further information on our policy and programme can be found

at: http://www.rb.com/responsibility/workplace/human-rights/

Industry Best Practice United Nations Guiding Principles

on Human Rights etc. (UNGP’s)

Ethical Trading Initiative (ETI)

Base Code

AIM-PROGRESS & SEDEX etc.

Initiatives & Objectives

Confidential3

1

Existing or New

Supplier

SEDEX & Self-Assessment

Risk-Assessment

SMETA 4 Pillar Audit

Action non-compliances

Capability building

Legislation UK Modern Slavery Act 2015

Californian Transparency in

Supply Chains Act

PO

LIC

Y &

PR

OC

ES

S

Britvic Soft Drinks Ltd – Ethical & Responsible

Sourcing Process

Email Chris.Walker@Britvic.com if you’d like further information

on our Ethical Supplier Approval Process or Responsible

Sourcing Policies.

The HEINEKEN Supplier Code Programme is our

way of conducting due diligence

32

3. Supplier Monitoring

2. Supplier Risk Analyses

1. Signing 4. Site Audit

Entire supplier base Potentially high

risk suppliers

High risk suppliers

By signing the Supplier Code, suppliers commit to working according to HEINEKEN’s

core values. Using a risk-based approach, we monitor suppliers who might find it

difficult to live by that commitment.

Supplier Comments

“Companies must take steps to manage

their impact on the natural

environment... External validation of

our activities in this area is key to

maintaining our credibility.”

“Earn the trust of our customers, licensing

partners, suppliers, and consumers by

manufacturing and purchasing quality

products using ethical standards”

MWV

Tate & Lyle Sugars

“Over 20 customers have asked for SEDEX

information – All we have to do is go into

SEDEX and give access to those companies

to view the questionnaire and audit we already

completed.”

Givaudan

What to do after the conference?

Review your customer specific requirements

If required by your customer, register with Sedex or EcoVadis and

conduct an assessment to identify areas for improvement

Schedule an audit and share results with AIM-PROGRESS

companies

Focus on continuous improvement by:

• addressing non-compliances in requested timeframes

• implementing proactive social, H&S and environmental initiatives

• engaging your suppliers in similar work and requirements

www.aim-progress.com

Short breakPlease be back for 10:30

LunchPlease be in the correct workshop by

13:00 and back here at 15:40FROM TO Topic Speakers

Simultaneous workshop - EcoVadis track

13:00 14:00Workshop 1 – EcoVadis Overview

Carina Miki - EcoVadis

14:10 15:10Workshop 2 – Good practice within

manufacturing facilitiesJuliana Scalon - DNV GL

Simultaneous workshop - Sedex track

13:00 14:00Workshop 1 – Good practice within

manufacturing facilitiesJuliana Scalon - DNV GL

14:10 15:10Workshop 2 – Sedex and SMETA

OverviewBruno Vio - Sedex

15:10 15:40 Coffee/tea Break

15.40 16.40 Business Integrity and Anti-Corruption Professor Luiz Eduardo de Almeida

16:40 17:00 Closing speeches and Q&AWilson Toyama - HEINEKEN

Zora Hadden - RB

Closing speeches and

Q&A

Zora Hadden - Procurement Director SH&H LATAM, RB

Wilson Toyama – Procurement Director, HEINEKEN Brasil