Founded in 1864 in Amsterdam by 22-year- old Gerard Adriaan Heineken, HEINEKEN has grown to become the #1 brewer in Europe and the #3 worldwide, operating more than 160 breweries in 70 countries. HEINEKEN has a well- balanced geographic footprint with leadership positions in both developed and developing markets. HEINEKEN’s advanced program combines a diverse set of evaluation tools and analysis to drive results in their responsible procurement initiative. Through “Building a Better World”, HEINEKEN demonstrates best practices by outlining clear goals and expectations for sustainable sourcing by 2020:
- Aim for at least 50% of our main agricultural raw materials from sustainable sources
- Ongoing compliance with the Supplier Code Procedures
- Deliver 60% of agricultural raw materials in Africa via local sourcing within the continent
- Actions: a 4 — layer process combining multiple measurements and actions
In order to achieve the 2020 goals mentioned above, HEINEKEN put in place a multi- layered process that combines multiple measurement techniques actions. With regards to sustainable sourcing, in 2010 HEINEKEN was the first brewer to join the SAI (Sustainable Agriculture Initiative), which aims at developing principles and practices for more sustainable agriculture. Further, dedicated programs with local procurement teams were implemented to reach the Local sourcing targets.
The second Heineken sustainable sourcing 2020 goal is ensuring the compliance of all suppliers to the HEINEKEN Supplier Code. Outlined in 2010, the code provides clear guidelines for how the supplier is expected to act in the areas of integrity and business conduct, human rights, environment, as well as how it monitors and communicates progress within its own supply chain. The code lists out 12 commitments, which are based on relevant International Labour Organisation standards. All suppliers (of both product and non- product related products and services) are in the scope for the Supplier Code. The signature of Supplier Code of Conduct is only the first step of a 4-step process whose purpose is to screen and monitor the supply chain performance, highlight high risk areas in the supply chain and consequently establish improvement plans in collaboration with the suppliers.
Step 1: Supplier Code signature
Every new supplier is required to sign the supplier code.
Step 2: Supplier Risk Analysis
A risk analysis of the new supplier is performed using an internal Supplier Risk Analysis (SRA) tool, which look s at the industry sector, countries of sourcing and operations, and whether the supplier subcontracts any of their activities. The tool resulted from an initial EcoVadis Category & Country Risk Mapping analysis.
Step 3: EcoVadis sustainability assessment
High risk suppliers identified in step 2 are required to undergo an EcoVadis assessment. EcoVadis, whose methodology is based upon internationally recognized CSR standards such as Global Compact, Global Reporting Initiative and ISO 26000, performs a document audit on the supplier’s CSR policies and activities falling under 4 areas: Environment, Social practices, Fair Business practices and Supply Chain.
The results of the analysis are available to both HEINEKEN and the supplier via EcoVadis’ cloud- based platform in an easy- to- read scorecard, which contains quantitative information (rating on a 100- point scale in each of four themes and an industry benchmark tool) as well as qualitative details (in the form of strengths and improvement areas) of the supplier’s CSR performance. In addition, via the EcoVadis collaborative Corrective Action Plan tool, Heineken requests all scored suppliers to undergo corrective actions.
Step 4: 3rd party on- site audit Suppliers receiving an EcoVadis rating below HEINEKEN’s ‘minimum threshold’ are subject to a 3rd party site audit using the SMETA standard protocol. Audited suppliers are also included in the commonly- shared database of AIM- Progress, a responsible sourcing initiative led by 40 consumer goods companies.