In March 2020 Ethical Consumer viewed Procter and Gamble's supplier pages www.pgsupplier.com. This included a document entitled 'Sustainability Guidelines for External Business Partners' dated 2015 which set out the company's expectations of suppliers. Ethical Consumer also viewded the company's 2019 Citizenship report for additional information. On the basis of these documents, Procter and Gamble was rated as follows:
SUPPLY CHAIN POLICY - RUDIMENTARY
The guidelines stated that the company would not use forced labour, would permit freedom of association, would not employ a child under 15 (or 14 if ILO exempt) and would not allow discrimination by race, sex or for any other reason. However, the guidelines did not state that the company would pay a living wage, only that external business partners must comply with applicable wage laws. Nor did the guidelines specify that working hours would be restricted to 48 hours plus 12 overtime (without exception). P&G was therefore considered to have a rudimentary supply chain policy.
STAKEHOLDER ENGAGEMENT - RUDIMENTARY
Ethical Consumer also deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. It is also constructive for Trade Unions, NGOs and/or not-for-profit organisations to have systematic input to verify the company's supply chain audits. P&G had neither of these. The company did, however, have a system for workers to have access to an anonymous complaints system, free of charge and in their own language. Therefore P&G was considered to have rudimentary stakeholder engagement.
AUDITING AND REPORTING - POOR
The Citizenship Report stated that "We are in our third year of conducting social audits at our supplier’s facilities, focused on suppliers in Asia, South America and Europe." However, no publicly available results of these supplier audits were found.
Ethical Consumer also deemed it necessary for companies to have an auditing and reporting system. Results of audits should publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company. P&G had none of these things and was therefore considered to have a poor auditing and reporting system.
DIFFICULT ISSUES - POOR
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chain. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and other measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
P&G did state, "We have been working to strengthen education and develop awareness-raising tools for the company and extended supply chain. As part of a wider learning program, we have developed a series of short videos (less than 2 minutes each) to help our employees and those of our vendors and contractors recognize human rights issues in the workplace." However, it was not stated whether this training was ongoing, so this was considered inadequate.
As P&G had none of these things and was therefore considered to have a poor approach to difficult issues.
Given that P&G had a rudimentary supply chain policy, rudimentary stakeholder engagement, poor auditing and reporting and a poor approach to difficult issues, the company received Ethical Consumer's worst rating for supply chain management.
Sustainability Guidelines for External Business Partners 2015 (6 May 2019)