OkCBP

Proactive engagement
on responsible sourcing
Responsible sourcing is a top priority
for Ericsson. We work towards
continuous improvement to ensure
our suppliers meet high social, ethical,
human rights and environmental
standards.
Through transparency and engagement, we
work to build trust across the value chain
from suppliers to customers. Our “beyond
monitoring” approach develops our relationship
with suppliers across three phases:
“require,” “assess” and “improve.”
> > First, we provide suppliers clarity
around our sustainability and CR
requirements.
> > Second, we evaluate suppliers’ sustainability
performance through monitoring
and audits. This includes identifying
and auditing high-risk suppliers.
> > Third, to ensure continuous improvement,
we engage with suppliers
through audit follow-up, Code of Conduct
seminars and training sessions,
and web-based learning.
Setting expectations
Suppliers must comply with the requirements
of the Ericsson Code of Conduct
which are included in supplier contracts.
The Code of Conduct was updated in
2014 to include stronger human rights language
in accordance with the UN Guiding
Principles on Business and Human Rights
as well as international labor standards.
Specifically, maximum working hours
are more clearly set out. Another new provision
prohibits deduction from wages as a
disciplinary measure.
In 2014 we carried out over 30 supplier
seminars to raise awareness on our Code
of Conduct, Occupational Health and Safety
and environmental requirements, and to
emphasize the importance of compliance.
Assessing risk
Ericsson uses a risk-based approach to
identify relevant suppliers for Code of
Conduct audits. Prioritized risk areas
include working at heights, road and vehicle
safety, anti-corruption, working hours,
labor rights, environmental management,
and communication of requirements
further down the supply chain.
Monitoring performance
In 2014, 595 supplier Code of Conduct
audits and on-site assessments were
performed by Ericsson’s 197 Supplier
Code of Conduct auditors. We view each
of our audits as an improvement activity
and expect suppliers to address identified
findings. Auditors follow up the actions to
ensure there is continual improvement in
the supply chain.
Year on year, analyses of our audit
results demonstrate significant improvements
in areas such as better working
conditions, fire prevention, training and
environmental management. Critical findings
among 32 selected high-risk suppliers
audited in both 2013–2014 declined
60% (from 18% to 7%). (See graph p.18).
We prefer to use leadership and transparency
with suppliers to encourage
continuous improvements over time.
However, suppliers who repeatedly fail
to comply with our Code of Conduct risk
being disqualified for further business.
Ericsson | Sustainability and Corporate Responsibility Report 2014
17