Sourcing responsibly

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The Group does not only take responsibility for the social and environmental impact of their own activities, but also takes a critical look at the impact of the activities of business partners the Group engages with. This to ensure that the Group will not be part of or party to activities that do not align with the Groups’ purpose and standards of environmental, social, or ethical conduct. This may refer to specific products or services, individual companies, specific industries or also segments thereof. While they may be perfectly legal, they may expose the Group to reputation and/or financial risk.

The Group has therefore made responsible business practice a core element of our procurement strategy, Third-Party risk management and day-to-day operations. The Group has focused on evolving the existing Third-Party Risk Management Framework placing particular emphasis on Environmental, Social and Governance Risks to ensure compliance with existing and emerging regulations and to make a positive contribution to sustainable development by proactively working with Third Parties to identify, manage and mitigate ESG risks and where possible, convert them into opportunities.

The Group’s Third-Party Code of Conduct  serves as an integral part of our supplier selection process, our contract documentation and is imperative to the Third-Party Risk Management (TPRM) Framework.

 

ESG Regulatory Scope

The Group’s risk management process follows international best practice standards and is based on the principles and approach of the UN Global Compact, to which the Group was the first company in its industry to commit in 2003, as well as other globally recognized standards, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, and the applicable international and local laws and regulations such as German Supply Chain Due Diligence Act, Duty of Vigilance law (Loi de Vigilance), UK Slavery Act, Corporate Sustainability Due Diligence Directive (CSDDD) etc.

German Supply Chain Due Diligence Act

The Adecco and Akkodis Group Germany have been subject to the German Supply Chain Due Diligence Act since 1 January 2023.

 

The new law regulates corporate responsibility regarding:

•Twelve human rights risks and three environmental risks in the supply chain
•Implementation of a full due diligence process defined by the legislator relates to the:
–Own business area
–Direct suppliers
–Service providers
–Indirect suppliers
•Implementation of a complaint mechanism
•Introduction of a Human Rights Responsible

 

Obligation under the German Supply Chain Due Diligence Act (LkSG)

•Implementation of due diligence process, placing particular focus on ESG risks in scope
•Identification of actual and potential adverse impact and their assessment
•Measures to prevent and mitigate adverse impact including the introduction of appropriate contractual safeguards
•Elimination of actual adverse impact
•Whistleblowing – procedure for reporting
•Introducing a Human Rights Officer to the organization
•Monitoring of effectiveness of the measures taken
•Communication and reporting

Impact on the Group’s Third Parties

 

Third Parties are obliged to adhere to the Groups’ standards of sustainable business conduct and to support relevant risk-based due diligence activities.

In addition, selected Third Parties are obliged to contractually commit to the rules defined by in the Groups Third-Party Code of Conduct and reflect those rules further in their own supply chain.

 

The Third-Party Code of Conduct

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Supply Chain Responsibility

  • The definition of a supply chain includes the company’s own business, indirect and direct suppliers inclusive of their services, merchandise and products across their value chain both at home and abroad.
  • The supply chain includes all steps from the extraction of raw materials to the delivery of merchandise, services or products to end customers.

Supply Chain Impact

  • Supply chains are becoming increasingly complex, accounting for over 90% of environmental impacts in industry around the globe.
  • In 2022, 28 million people worldwide were affected by forced labour.
  • In 2022, 160 million children were engaged in child labour; whereof 79 million were performing hazardous work.
  • Trade unionists were killed in eight countries, 42% of countries denied or constrained freedom of speech and assembly, workers experienced arbitrary arrests and detentions in 46% of countries, and 65% of countries denied or restricted workers access to justice.

Responsible Supplier Selection and Engagement

The Adecco Group seeks to engage in long-term relationships with suppliers and service partners who are committed to sustainable development and who demonstrate responsible supply chain management. We have established methodologies and guidelines to ensure we conduct procurement and supplier relationship management in a fair, competitive and transparent negotiation process, in line with our policies and values.

We verify and monitor supplier compliance through a formal assessment process.

  • Condition on purchase orders: Purchase Orders are mandatory (with potential exception of small procurement volumes which might not be covered by explicit procurement contracts) and must include commitment to The Adecco Group Third-Party Code of Conduct in the conditions of purchase.
  • Supplier Assessment, Qualification and Onboarding: The supplier onboarding process is initiated by The Adecco Group’s Procurement team. Suppliers must pass several requirements in our qualification process, including commitment to our Third Party Code of Conduct and participation in the Third-Party Risk Assessment.
  • Supplier Evaluation and Monitoring: We evaluate and monitor our supplier portfolio regularly for ESG risk factors, inherent risks from operations and production, and exposure to those risks. The frequency is based on a risk-based approach, to ensure our due diligence is carried out in a manner that is commensurate with the products and services that we buy. This includes recurring screenings, health-checks, risk assessments, and supplier base optimizations. See ‘Our Third-Party Risk Management (TPRM) Approach’ below for more details.
  • Contracting: All new and extended/renewing procurement contracts must include the contract clause which commits the supplier to our Third Party Code of Conduct and, additionally, defines self-assessment and audit rights.
  • Supplier diversity: We believe that a diverse and inclusive supplier-base benefits us by bringing different perspectives, innovative solutions, and a resilient supply chain. As such, we are committed to exploring opportunities to promote, increase, and improve the business participation of qualified underrepresented business enterprises in our procurement process, including but not limited to women, ethnic minority, LGBTQ++, disabled, and/or veteran owned small businesses.

Our Third-Party Risk Management (TPRM) Approach

Our TPRM Framework is based on some guiding principles to ensure a holistic and standardized approach

TPRM Process

 

Third-Party Risk Management is the process of identifying and mitigating risks introduced by third-party vendors via frameworks, policies, and procedures.

  • Identify risks: before onboarding a supplier, it is important for us to conduct an initial risk assessment as part of our decision-making. We conduct a basic risk assessment of the supplier and the nature of their product or service to gain a more comprehensive picture of the potential risk profile and thus reduce the likelihood of unknowingly taking unwanted risks.
  • Analyse and assess risks: the identified risks are categorized using The Adecco Group Risk Catalog, a library of the most common risks that may arise due to our business model. We assess supplier risk based on their inherent risk profile by applying a risk-based tiering approach. Based on the supplier's risk profile, the risk assessment can include multiple risk areas such as compliance, ESG, IT risk, data protection, and others.
  • Plan action: based on the analysis, appropriate remediation plans and steps are planned.
  • Implement: Risks must either be eliminated or mitigated. This is done by subject matter experts who define the necessary risk mitigation measures and monitor their implementation.
  • Measure, control and monitorsuppliers can be involved in several evaluation rounds to ensure continuous evaluation and to be able to continuously mitigate risks. Changes in the supplier profile, the relationship or, for example, regulatory changes can trigger a reassessment. Our supplier portfolio is continuously monitored to ensure that commitments are met and that The Adecco Group and its stakeholders are not exposed to undesirable risks.

Our Third-Party Risk Management (TPRM) Risks Areas in Scope

 

Risk Areas in Scope

  • Economic Crime
  • Sanction Risk and Export Control
  • Health and Safety Risks
  • Labour Risks
  • Human Rights Risks
  • Data Privacy/Security Risks
  • IT Security Risks
  • Conflict of Interest
  • Compliance
  • Financial Risks
  • Country Risks
  • Environmental Risks                  

Regulatory, reputational risks and Business Continuity are included in all the areas above.

Environment, Social and Governance (ESG)

At The Adecco Group we are embedding Environmental, Social and Governance considerations into everything we do. Our risk-based TPRM Framework applies a strong focus on ESG (Environmental, Social, Governance) related risks and opportunities.

Our approach towards ESG Risk Management

Environmental Risks

Risk of a Third Party contributing to environmental degradation and negative climate impacts (e.g. due to lack of appropriate environmental risk management and continuous improvement plans in place) and thus risk of non-compliance with/violating our own commitments and targets and contractual requirements, potentially leading to negative impact on reputation, fines, and/or loss of business.

Environmental conservation involves the protection, preservation, and restoration of ecosystems and natural resources. It is essential for maintaining biodiversity, mitigating climate change, and ensuring the long-term well-being of both humans and the planet.

 Human Rights Risks

Human rights are the rights we have simply because we exist as human beings – they are not granted by any state. These universal rights are inherent to us all, regardless of nationality, sex, national or ethnic origin, colour, religion, language, or any other status.


They range from the most fundamental – the right to life – to those that make life worth living, such as the rights to food, education, work, health, and liberty.

Governance Risk

Risks of a Third Party disregarding and or violating sustainable business practices, regulations, laws, standard and ethical issues.

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Environmental
Social – Human Rights
Governance
Forest conservation
Soil conservation
Waste management
Public awareness
Pollution control
Child labour
Forced labour, slavery
Health and safety hazards
Freedom of association and the right to collective bargaining
Equality in employment
Fair wages
Destruction of vital natural resources by environmental pollution
Land rights
Abuse of power by public or private security forces
Business resilience
Business sustainability
Corporate compliance behavior
Governance-related certifications
Corporate governance
Board accountability
Business ethics
Business transparency
Shareholder rights
Risks
Reducing environmental impact
Conservation of biological diversity
Development of a circular economy
Climate protection
Avoidance of deforestation
Sustainable water management
Safe handling of hazardous materials
Waste reduction
Child labour prohibited
All forms of forced labour/slavery prohibited
Inclusive and diverse culture, respect and equal opportunity
Occupational safety regulations and laws followed
Fair and competitive pay salaries and employment benefits
Freedom of association
Information for due diligence
Safeguards and remedial actions followed
Raising concerns through the Adecco Compliance and Ethics (“ACE”) Line
Similar reporting mechanism introduced; retaliation prohibited
Human Rights Officer
Expectations Towards Third Parties
Supplier/Third-Party Code of Conduct
Risk management process with a conflict mechanism
Environmental audits/frequent ongoing risk assessments
Compliance with sustainability standards and certificates
Collaboration with local governments and NGOs
Contractual definition of audit rights and control clauses
Waste management systems
Supplier/Third-Party Code of Conduct
Risk management process with a conflict mechanism
Social audits and risk assessments
Contractual definition of auditing rights, control clauses
Control of proof of the employee age
Processes and controls to monitor work time; work time inclusive of breaks
Health and safety trainings
Actively informing employees about trade unions and labour associations
Equality
Minimum wages
United Nations Land and Human Rights Standards and Application – OHCHR
Minamata Convention
“Silo mentality” avoided
Governance, risk management, and compliance systems integrated
Responsibility of the C-Suite and board members to establish and enforce internal policies and good governance practices
Accurate sustainability reporting mechanisms
Transparency in executive compensation
Mitigation Measures

Human Rights Officer 

To ensure that the position of Human Rights Officer is successfully implemented, it is important to clearly define the officer’s role and tasks within the group and the group’s due diligence processes:

  • Internal coordination: the human rights officer shall act as the interface between the management and the operational side of human rights due diligence. This way, the topic is anchored at the highest management level at group/entity/GBU, as required under the GSCA.
  • External communication: the human rights officer shall play a significant role in communicating to stakeholders and the public the progress made by the group in terms of its work on human rights and the environment.
  • Implementation of the human rights and environmental policy: the human rights officer shall be the first contact person when it comes to the content and implementation of a group’s human rights and environmental strategy, enshrined in its policy statement. Therefore, the group’s executive management shall enable the human rights officer to acquire all the necessary expertise in this field and to equip them with the necessary resources. This is vital to ensure that human rights due diligence is appropriately implemented in “all relevant business processes”, as stipulated by the GSCA. The human rights officer shall encourage a continuous process of learning, to ensure the group can progress in implementing ever more effective measures.
  • Documentation and reporting: to address the supervisory authority’s (BAFA) specifications on the reporting requirements, the human rights officer shall play a meaningful role in gathering, processing, and publishing reports on a company’s progress regarding human rights due diligence. This is also necessary for complying with regulatory oversight.

The Group has implemented the Human Rights Officer responsible for internal coordination, external communication and implementation of the Groups human rights and environmental policies.

For The Adecco Group: SVP Sustainability and ESG, Karin Reiter

For Germany:


  • The Adecco Group: Head of Sustainability, Janine Bischoff
  • The Akkodis Group:

Grievance mechanisms

The Adecco Group offers an independent channel for employees and external stakeholders, including suppliers, to raise any concerns relating to potentially improper business conduct and to report any actual or suspected misconduct, including violations of the Third Party of Conduct, by using the Adecco Compliance& Ethics (“ACE”) Line. The Adecco Group will accept anonymous reports, consistent with applicable law.

We respect the right of all workers to speak up and raise grievances without fear of retaliation.