In March 2020 Ethical Consumer looked at the Church & Dwight website for details of the company's supply chain management. On the basis of what was found, the company was rated as follows:

Supply chain policy - Reasonable

The company's 'Global Operations Guiding Principles' prohibited the use of forced labour, the exercise of discrimination on the basis of belief, culture or personal characteristics and the use of child labour below the age of 16 years of age if not specified by law. It stated that "Church & Dwight expects its vendors to respect the right of workers to join and organize associations of their own choosing." It stated that "wages should be enough to meet basic needs and to provide some discretionary income", which was a considered to be a definition of living wages. Although it stated that working hours should be at least equal to the ETI Base Code requirements, this was not considered adequate as it was not an ETI member, and did not refer to the working week being limited to 48 hours plus 12 hours overtime. Ethical Consumer considered that the company had a reasonable supply chain policy.

Stakeholder engagement - rudimentary

Ethical Consumer found no evidence of: a) membership of multi-stakeholder processes (MSI) such the Ethical Trading Initiative, the Fair Labor Association or Social Accountability International; b) engagement with trade unions, NGOs or other not-for-profit organisation int the verification of labour standards audits. The company did have anonymous toll free hotlines administered by an independent third-party, to report concerns.

Auditing and reporting (poor)

The company stated, "We reserve the right to audit any of our vendors at any time to ascertain whether they and those in their supply chains are complying with these Guiding Principles.... If non-compliance with these Guiding Principles is suspected or discovered, we reserve the right to investigate such breach or take such other remedial steps as we consider appropriate."

Its 2018 Sustainability Report stated "We engaged independent social audit firms to audit 42 (35%) of our higher potential risk raw material and component suppliers and contract manufacturers to ensure their compliance with our Principles that represented 95% participation by our targeted highest risk suppliers".

The company did not provide an auditing schedule, results of past audits, a whole supply chain commitment or say which party shoulders the costs of audits. Ethical Consumer considered the auditing and reporting of the company to be poor.

Difficult issues (poor)

Finally, Ethical Consumer considered that the company's publications did not address any difficult issues in supply chain management such as audit fraud, and the training of buyer agents on broader labour standards, as well as modern slavery and human trafficking.

Overall, the company was awarded Ethical Consumer's middle rating for supply chain management.

Reference:

https://churchdwight.com/ (25 February 2020)

In March 2020 Ethical Consumer viewed Church & Dwight's May 2019 Form SD on the SEC website. This form detailed the company's approach to conflict minerals, which were used in its battery-operated toothbrushes, water flossers, pregnancy testing kits, and other products.

Church and Dwight stated: "after having identified the relevant products, the Company, consistent with the OECD Guidance, requested that the Suppliers provide certifications (“Certifications”) confirming in writing that, either (i) the products did not contain Conflict Minerals or, (ii) if present in the product, such Conflict Minerals either (a) came from recycled or scrap sources, or (b) did not originate in the Covered Countries."

It also stated that the one supplier that "indicated that the products it supplies contained Conflict Minerals sourced from the Covered Countries", "completed a Conflict Free Sourcing Initiative’s Conflict Minerals Reporting Template (CFSI CMRT) version 5.11 at the company level. The completed CFSI CMRT indicated that the Reporting Supplier was able to identify 100% of the smelters that it and its sub-tier suppliers used to manufacture all of the Reporting Supplier’s products (including those not supplied to the Company)."

Ethical Consumer expects policies to "articulate a company's commitment
- to conflict-free sourcing
- to continue to source from the DRC region
- to ongoing due diligence."

and "demonstrate its commitment by supporting conflict free initiatives in the region either through membership of a multi-stakeholder initiative supporting the conflict-free minerals trade and / or financially supporting in-region mining initiatives."

Other than ongoing due diligence, Church & Dwight did none of these things. As a result Church and Dwight received Ethical Consumer's worst rating for conflict minerals, and was marked down in the human rights and habitats and resources categories.

Reference:

Generic ref 2020 (27 February 2020)