AkzoNobel Modern Slavery Statement 2021

Introduction

Slavery, servitude, forced labor and human trafficking are infringements of human rights which have a profound, negative impact on people’s lives. AkzoNobel has a zero-tolerance approach to modern slavery of any kind. We define modern slavery within AkzoNobel to include child labor, debt bondage, forced labor, human trafficking, servitude, slavery and slavery-like practices. 

At AkzoNobel, we understand that through our roles as employer, manufacturer, business partner and member of many communities, we can potentially directly and indirectly impact the lives of many people. While we are committed to making a positive impact through our products and our AkzoNobel Cares programs, we are aware of the potential negative impact we might cause, contribute or be linked to. We recognize our responsibility to respect the human rights of all stakeholders across our value chain and are committed to assess (potential) human rights impact and take action where needed to ensure our impact on people’s lives is as positive as possible.

As part of our core values and in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs), we are committed in our operations and across our value chains to respecting all internationally recognized human rights as set out in the International Bill of Human Rights (consisting of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights) and in the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. We support the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises. We expect all our business partners to respect human rights and apply equivalent principles, and we seek to support them where needed.

We encourage our employees, business partners and people affected by our activities or products to raise grievances about any potential human rights concerns regarding our operations through our SpeakUp! website. We address these grievances fairly, in confidence and in accordance with laws.

Our business and supply chains

AkzoNobel is a leading global paints and coatings company. We have a passion for paint and supply to industries and consumers worldwide. In 2021, the turnover for the group was EUR 9.6 billion.

Headquartered in Amsterdam, the Netherlands, the Akzo Nobel Group employs approximately 32,800 talented people and is active in around 150 countries, while our portfolio includes well-known brands such as Dulux, Sikkens, International and Interpon. Everything we do starts with People. Planet. Paint. Our company purpose. By using our pioneering spirit and centuries of paints and coatings expertise, we can deliver the sustainable and innovative solutions that our customers, communities and the planet are increasingly relying on.

We have a fast and efficient way of working, with two clear focus areas – making and selling paint and coatings. AkzoNobel purchases and sells a wide array of diverse products catering to many customers in many different markets all over the world. Our supply chains are long and often complex. As a result, the company has many suppliers, large and small. While sourcing is centralized and key and large volume products are sourced company-wide, managing our supply chain will continue to be a significant challenge.

Policies and contractual controls

AkzoNobel’s policies include principles on how its employees and business partners should respect  human rights. Our Code of Conduct states that we will not tolerate abuses of human rights, whether at  the company or across our value chain, and that we will take any adverse impacts on these rights very  seriously and act accordingly. Our contracts with suppliers require compliance with all applicable laws.  Policies are developed by experts at the company and signed off at Executive Committee level. For  example, we have a specific policy on child labor and do not employ people under the age of 16,  irrespective of whether local laws provide for a lower minimum age. Each year, management in the  organization needs to certify compliance with our Code of Conduct and policies. If deficiencies are  noted, they must set and execute actions to remedy them.                                                              

We operate a whistleblowing mechanism known as SpeakUp! with supporting processes and staff. This  mechanism is available for both employees and third parties, including suppliers and their employees.  People are encouraged to report any concerns of wrongdoing, including human rights violations such  as modern slavery. All reports are investigated, and appropriate action is taken. 

All our business partners are required to sign and comply with our Business Partner Code of Conduct  before engaging in business with us, including a commitment to avoid impacting people’s human rights,  and to apply principles of the International Labor Organization (ILO) Declaration on Fundamental  Principles and Rights at Work. The code explains, for example, that people should not be employed  against their will, transported for exploitation, engaged in slavery or servitude, nor deprived of their  rights. In addition, legal minimum age requirements – as outlined in the relevant ILO conventions and  the laws of the countries of operation – should be adhered to and children under the age of 16 should  not be employed. The code is available in 22 languages.                         

A signing requirement of our Business Partner Code of Conduct was introduced and currently 98% of  the product related (PR) spend and 89% of the non-product related (NPR) spend are covered. 

We have a Business Partner Compliance Framework (“the Framework”) throughout the organization.  The Framework provides for a company-wide, risk-based screening of business partners before  engaging with them, both on the supply side and sales side. The scope for screening, which is supported  by a third-party screening system, includes adverse media which covers human rights and modern  slavery related issues.   

Training

Training on our Code of Conduct (which includes respect for human rights within all our operations) and grievance mechanism are mandatory to all employees of AkzoNobel.

In addition, we roll out role-based risk-based training in order to ensure that our employees and our business partners respect human rights in their own operations and in their value chains.

Due diligence and audits of suppliers and supply chain

AkzoNobel is fully aware that multiple risks come with a complex and long supply chain, including the risk that modern slavery may exist in these supply chains. The company has taken various initiatives to address this risk and will continue to assess their effectiveness to ensure these risks continue to be mitigated.

Supplier sustainability framework

We work together with our suppliers to create a sustainable supply database. Our supplier sustainability framework continuously monitors the sustainability level of our suppliers, including their performance on human rights.

Together for Sustainability (TfS)

TfS is an industry initiative made up of 30 leading global chemical companies and continues to expand.  It aims to improve sustainability practices within the global supply chains of the chemical industry,  building on established global principles such as the United Nations Global Compact, UN Guiding  Principles on Business and Human Rights and the Responsible Care Global Charter. With TfS, we aim  to implement effective, leading edge practices across the industry. We are implementing standardized  global sustainability assessments and continue to engage independent, third parties to conduct  announced audits of our suppliers, which incorporates a review of their social compliance program,  including respecting human rights.                         

The results of our TfS assessments and audits allow us to identify common areas for improvement and  focus improvement activities relating to the suppliers that are assessed through the platform.  Improvement areas include the introduction of a formal reporting system on our suppliers’ sustainable  procurement performance and business ethics issues, including human rights. 65% of the identified risk  suppliers already participated in the 2019 EcoVadis assessments. In 2020, we increased this to 75%  by adding suppliers prioritized by risk. Currently 51% of risk suppliers meet our expectations using the  EcoVadis score result. In 2021, we aim to accelerate our program by continuing to request  improvements and inviting additional suppliers to take part in the assessment. The results of our TfS  assessments and audits allow us to identify improvement activities with our suppliers.   Read more about our supplier sustainability framework in our annual report.  

2. Assessment of modern slavery risk within our operations and supply chain

As mentioned before, we are aware that multiple risks come with complex and long supply chains, including the risk that modern slavery may occur in these supply chains. As an outcome of the latest comprehensive human rights risk assessment (2020/2021) covering our entire value chain including our own operations and which resulted in our salient human rights issues, we recognize that there is an inherent risk of modern slavery in our global supply chains, and particularly as we move into tier two and onwards (indirect) suppliers. In our own operations the risk was found to be low and addressed and mitigated by our policies and process (such as regular HSE&S audits that are carried out at our operating locations).

In 2021, we further accelerated our due diligence program of several high-risk raw materials, identified as possibly impacting human rights in our supply chain, in particular regarding modern slavery. In 2021, we conducted in-depth research into our raw materials portfolio and added barytes, calcium carbonate, copper, fluorspar and talcum to our human rights due diligence in the supply chain. These were added to cobalt, mica minerals and tin, which were already in scope. We’ve surveyed all suppliers that directly, or indirectly, supply us these materials. By the end of the year, we had an 85% response rate.

For cobalt and tin, we surveyed all 132 identified suppliers, using templates from the Responsible Minerals Initiative. Of those suppliers who confirmed using high risk materials necessary for the functionality of the product, 90% disclosed their smelters. In total, 87% of these smelters were either listed as active or conformant smelters in the Responsible Minerals Assurance Process. Suppliers with a “conflict-free statement”, but who didn’t disclose the smelters in their supply chain, haven’t been included in the aforementioned percentage since our due diligence is based on the Organization for Economic Cooperation and Development Guidance for Responsible Mineral Supply Chains.

For the other materials, we have sent out surveys to 180 suppliers to increase transparency of these supply chains. The results gave us further insight into our supply chain complexity and risks. We can now set up new actions, such as planning mine audits where insufficient controls seem to be in place.

This statement covers AkzoNobel N.V. and its group companies, with reporting companies proceeding with their own Board approvals according to the UK Modern Slavery Act 2015 and Australian Modern Slavery Act 2018.

This Statement was approved by the Board of Management and Executive Committee of Akzo Nobel N.V. and adopted by the Board of Directors of Imperial Chemical Industries Limited on 30 June 2022.

Signed,

José Antonio Jimenez Lozano

Director