Modern Slavery Act Statement
Convatec Group Plc
16 May 2024
Background
Modern slavery is defined as the recruitment, movement, harbouring or receiving of children, women or men through the use of force, coercion, abuse of vulnerability, deception or other means for the purpose of exploitation. Incidents of modern slavery can occur in any sector, industry, and geographic region.
Convatec has zero tolerance for any form of modern slavery in our operations and supply chain.
With around 10,000 colleagues, we provide our products and services in almost 100 countries, united by a promise to be forever caring - a promise we extend to all our stakeholders. Our vision of Pioneering trusted medical solutions to improve the lives we touch, refers not only to the lives of those who use our products, but also the lives of our colleagues and all those involved in our supply chain.
Section 54 of the UK Modern Slavery Act 2015 requires that each organisation within the United Kingdom which has an annual turnover in excess of £36 million produces an annual public statement, approved by the board of directors, detailing the steps it has taken to prevent slavery and human trafficking in its local and global operations and full value chain. At Convatec, we take this as an opportunity to reflect on the ways in which we execute our core value of 'Do what's right' and how that impacts our people, culture, other stakeholders and business.
We are committed to preventing slavery and human trafficking, and so we implement policies and processes to prevent, assess, detect and report violations within entities listed in our 2023 annual report(pages 203 -205), which by extension includes how we support customers, as well as through our supply chains. This statement, which is published in accordance with Section 54
- of the Modern Slavery Act 2015, outlines our approach and activities during the period 1 January to 31 December 2023. This statement also serves to meet similar reporting requirements for other countries around modern slavery and human trafficking.
Our approach
'Do what's right' and 'Own it' are two of our core values that represent who we are at Convatec. We recognise that we need to make sure that our business decisions at all levels embody these values and that we embed ethical behaviour in everything we do. By doing so, we earn trust, build stakeholder confidence and ensure that, at all times, we act with integrity and do what we say we will do. This is essential if we are to achieve our vision and create value for our stakeholders.
All colleagues are involved in ensuring that modern slavery is not tolerated. To ensure that awareness around detecting and preventing modern slavery remains high, Convatec maintains a cross-functional Human Rights Committee that keeps our structures and processes current to global dynamics.
To prevent modern slavery in our business and supply chain, we must consider our:
- Organisational structure and supply chain
- Human rights-related policies
- Due diligence processes in relation to slavery and human trafficking
- Risk assessment and management structures
- Response to identified issues
- Training on modern slavery and trafficking
This statement details our activities and approach in each of these areas.
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Our organisational structure
Convatec develops and produces innovative medical solutions that give people living with certain chronic conditions improved confidence, freedom and mobility. Focused on the chronic care market, we offer a range of services to support these people and the healthcare professionals who care for them. We market and sell our solutions and services in four categories: advanced wound care, ostomy care, continence care and infusion care.
We market and sell our products and services in around 100 countries and at December 2023, owned and operated nine manufacturing facilities located in seven countries: the UK, Denmark, the United States, Slovakia, Netherlands1, the Dominican Republic and Mexico. Our reported revenue for 2023 was $2,142m, split geographically as follows: Europe ($648m - 30%), North America ($1,186m - 55%), and Rest of world ($308m - 15%). Our Group structure includes over 50 active companies. This statement is relevant to all our active companies, including the following three active companies located in the UK: Convatec Group Plc, Convatec Limited and Amcare Limited.
As noted above, we market and sell our products and services in four categories. We have a direct presence in certain markets and an extensive network of wholesalers and distributors in other markets.
- Advanced Wound Care (2023 revenue: $695m - 33%): advanced wound dressings for the management of chronic wounds resulting from ongoing conditions, such as diabetes, and acute conditions resulting from traumatic injury and burns.
- Ostomy Care (2023 revenue: $608m - 29%): devices, accessories and services for people with a stoma (a surgically-created opening where bodily waste is discharged), commonly resulting from causes such as colorectal cancer, inflammatory bowel disease and bladder cancer.
- Continence Care (2023 revenue: $457m - 21%): products and services for people with urinary continence issues related to spinal cord injuries, multiple sclerosis, spina bifida and other causes.
- Infusion Care (2023 revenue: $371m - 17%): disposable infusion sets for diabetes insulin pumps, or for pumps used in continuous subcutaneous infusion treatments for conditions such as Parkinson's disease.
Further information about our business, markets, products and financial performance is included in our 2023 Annual Report and Accounts which can be viewed here.
We have a clear vision - Pioneering trusted medical solutions to improve the lives we touch. This statement lies at the heart of everything we do. Along with our forever caring promise and core values, it guides how we run our business.
Our values are:
- Improve care: We are passionate about serving and supporting people with deeply personal and challenging medical conditions
- Deliver results: We consistently deliver excellent work, say what we do and do what we say
- Grow together: We celebrate diversity and respect one another. We help our colleagues around us grow, develop and thrive, so we can all fulfil our potential
- Own it: We take personal ownership of all our work: taking the initiative, innovating and never settling for second best
- Do what's right: We behave ethically, are honest and trustworthy, operate with the highest standards of integrity, uphold policies and make a positive difference
1 Site closes end of Q1 2024
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Supply chain
Our supply chain includes third party operations in all parts of the world, including but not limited to Taiwan, UK, USA, Canada, China, Denmark, Slovakia, Italy, Switzerland, Sweden, France, Ireland, Spain, Poland, Turkey, Germany, The Netherlands, Mexico and Dominican Republic.
Our suppliers provide raw materials (e.g. chemicals, adhesives, films, PVC compounds, etc.), part finished products (e.g. moulded items), finished products, services (e.g. sterilisation) and research and development support. Our spend is concentrated towards a relatively small number of suppliers. For example:
- Nine suppliers represent approximately 80% of our contract manufacturing spend;
- Five suppliers represent approximately 60% of our logistics spend; while
- Our raw materials supply chain is more diverse, with 42 suppliers representing approximately 80% of our total raw material spend.
Given the relative concentration of suppliers engaged in our contract manufacturing and logistics spend, we have started to focus the scope of engagement around our responsible business priorities with these partners, which will continue to evolve in the year ahead.
We are committed to working with our customers to address any concerns they have, including sharing best practices wherever requested.
Our human rights-related policies
We implement a number of policies and codes which are relevant to slavery, people trafficking, and human rights and ethical behaviour more broadly. We publish these policies and codes on our website, and they can be viewed here.
In 2022, we updated and republished our Human Rights and Labour Standards Policy (Policy), which applies to our own operations and employees, specifically addresses the United Nations Universal Declaration on Human Rights, the International Labour Organization's Declaration on Fundamental Principles and Rights at Work and the Ten Principles of the United Nations Global Compact. The Policy, which underpins the way we work with each other, with partners, and with customers and suppliers, was updated to include: explanation of our process for evaluating suppliers to ensure they align with our principles and practices; articulation of our approach to labour standards, including compliance with relevant laws and regulations in the countries in which we operate; and explanation of the Convatec Human Rights Committee and its role in monitoring implementation of the policy and leading any additional steps required. The Policy clearly states that "Convatec does not accept nor condone any form of modern slavery whether forced, compulsory or trafficked labour. Without limitation, Convatec does not engage sweatshop labour, convict labour or indentured labour under penal sanction."
The Policy is referenced in our Code of Ethics and Business Conduct (Code) which defines our core principles of ethical business practice and our standards for professional and personal behaviour. The Code includes sections on human rights, discrimination and harassment.
Every Convatec employee is required to report any actual or potential violation of either the Policy or the Code and communication channels are in place within the Group to facilitate and encourage such reporting, including an independently-managed confidential Compliance Helpline, described further below.
In many countries we conduct our business via third party distributors. We evaluate third party distributors prior to engagement (see further below) and require that our distributors comply with all applicable laws and regulations and our Global Third Party Compliance Manual(Manual). We also require that the Manual is cascaded with any parties in their value chain that are involved in Convatec business. Like many medical device companies, our products are often sold by third parties, such as distributors.
We also undertake periodic audits of distributors to ensure compliance with the manual. Our Manual addresses issues of human rights and the prohibition of child labour, compulsory labour and human trafficking. Each third party that goes through our due diligence process will receive
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online Anti-Bribery and Anti-Corruption training that requires the third party to certify adherence to the Manual. All new Direct and Contract Manufacturing suppliers, and existing suppliers when their contracts are renewed, are also required to comply with the Manual.
Our cross-functional Human Rights Committee, chaired by the Chief People Officer, met twice in 2023 and briefed our ESG Steering Committee on progress. The Committee oversees Policy matters relating to human rights, as described further on page 5. The Committee includes senior representatives from our HR, Supply Chain, Procurement, Legal, Ethics and Compliance, and Environmental, Social and Governance (ESG) teams, and sits as a working group with oversight from our Executive-level ESG Steering Committee. The Committee ensures we regularly review and update our policies and codes which are relevant to slavery, people trafficking, and human rights and ethical behaviour.
Due diligence processes for slavery and human trafficking
Currently we use the following mechanisms to evaluate our suppliers and ensure their adherence to our values and ethics:
Third-party supplier assessment
To support our internal assessment of suppliers' compliance with the terms set out in our Manual, we operate a process managed by a third-party provider, EcoVadis. This process includes an evidence-based assessment which follows existing best practice and codes and is based on a comprehensive set of ethics, labour rights, health and safety, and environmental criteria which are closely aligned with the requirements set out in our Manual. Each assessment is tailored to fit the size, sector and geography of the individual supplier and covers issues including: health and safety, working conditions, child and forced labour, discrimination, energy and greenhouse gas emissions, water and waste management, use of chemicals, local pollution, corruption and bribery, information management, and the supplier's own supply chain assessment processes.
In 2023, we achieved our ESG target of engaging with suppliers to utilise the EcoVadis platform, consistent with our target to ensure that suppliers representing 80% of Convatec's spend by Q4 2023 are asked to submit responses to this external ranking system. Utilising the EcoVadis platform helps identify improvement areas to focus on with our supply chain partners, including human rights matters. We take a proactive role in supporting key suppliers to take actions that can prompt feedback from their assessment score, as part of our overall approach to responsible supply chain stewardship. In 2023, these actions have helped contribute to a 7% increase in the average score of our rated partners. Further detail on the scoring can be viewed here.
In 2023, we included an assessment of potential new suppliers' ability to participate in the EcoVadis assessment or Sedex process as part of our new sourcing process. This assessment is part of the Request for Information (RFI) and Request for Proposal (RFP) phases. In order to supply Convatec, all new suppliers must specify whether they have already been assessed by EcoVadis and Sedex, or are willing to do so. The new RFP process encourages all suppliers that we potentially do with business with to assess their own sustainability performance, focussing on labour standards.
For 2024, we have refreshed our sustainable procurement process, based on a well-designed Supplier Relationship Management programme, which sets out clear expectation for our key vendors. All vendors identified as 'key' must go through an EcoVadis assessment and score above our minimum threshold (45). All key vendors who do not meet our minimum requirements will be subjected to an on-site audit and in certain circumstances, where performance does not improve, vendors will be removed from our supply base.
We also evaluate our suppliers using a business review process that focuses on the quality of the product manufactured, the standard of documentation in place and other performance indicators. We use a third-party platform, Risk Methods, that feeds alerts and insights on labour standards and compliance issues directly to category managers. Suppliers are added to the platform in real time after selection. We also carry out cyclical quality audits assessing compliance with relevant regulations, as described below. All new direct material and contract manufacturing suppliers receive and are required to certify adherence to our Manual.
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Supplier agreements
We require our direct material and contract manufacturing suppliers to comply with the laws of the country in which they operate. To help ensure our suppliers respect and enforce our standards regarding anti-slavery and human trafficking, our template supplier agreements contain contractual representations, warranties, and undertakings in relation to compliance with employment and working time laws and rights, freedom from discrimination and harassment, manufacture under appropriate conditions and absence of child labour.
As described in the previous section on our policies, each third party that goes through our due diligence process receives online Anti-Bribery and Anti-Corruption training that requires the third party to certify adherence to the Manual. Our Manual addresses issues of human rights and the prohibition of child labour, compulsory labour and human trafficking.
Audits
In accordance with the term of our Manual, we are entitled to perform various types of audit assessments to verify the current state of supplier compliance and undertake routine monitoring of the supplier's on-going compliance. If a supplier fails to comply with our Manual, we can either put in place a remediation plan or, in cases of severe non-compliance, refuse to pursue or terminate an existing relationship.
At the end of 2023, these processes did not reveal any issues that warrant an 'onsite' audit focused on trafficking and modern slavery to be conducted.
In 2023 we continued our work with Sedex, with whom we will risk assess our third-party supply base to segment by level of potential human rights and labour standard risk factors. We used the Sedex platform to identify high risk suppliers within our supply chain. Those identified as high risk are expected to complete a Sedex Members Ethical Trade Audit (SMETA). From suppliers covering our top 80% of spend, five suppliers were identified as high risk, three of those suppliers completed an audit and we are currently reviewing corrective actions. Audits with the remaining two suppliers are planned for 2024. Further information can be viewed here.
Open communication and whistleblowing/speaking-up
For colleagues, we are committed to fostering a work environment where open, honest communications are the expectation, not the exception. We encourage our employees to approach their supervisor or other management in instances where they believe violations of policies or standards may have occurred, including in relation to trafficking or slavery issues. We also encourage them to ask if they require guidance about any of our policies and procedures.
We encourage all our stakeholders to 'speak up', in situations where either employees or any third-party prefers to place a report in confidence. We provide access to an independent Compliance Helpline, hosted by a third- party provider. This Compliance Helpline (Speak up) is available internally and on our website. Where there may be restrictions on confidential or anonymous employee reporting, employees are also directed to an internal confidential Convatec resource to help review and resolve any reports of concern. This would include issues relating to trafficking and slavery.
Risk assessment and management structures
The world is dynamic, and we face evolving variables that affect risk factors for modern slavery. In 2023, Convatec's Board of Directors adjusted Convatec's risk profile to reflect both the ongoing enhancement in our business resilience capability and the continuing challenges from the macroeconomic and political environment. Since 2020, the risk profile has been elevated as a result of various global factors, and we continue to manage the challenges facing the wider business landscape and build further resilience into our operations. Having considered severe but plausible scenarios that took these factors into consideration (either explicitly or implicitly), the Committee concluded that Convatec will be able to continue to operate during the three- year viability period to 2026.
As mentioned above, our cross-functional Human Rights Committee includes representatives from our Supply Chain, Supplier Quality, Legal, Ethics and Compliance, ESG and Human Resources teams. Its scope of work includes:
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Overseeing audits from business partners/third party adherence to our global human rights policies, standards and practices
Review of the annual Modern Slavery Act Statement to support disclosure arrangements follow any changes in stakeholder expectations and sharing best practices on Human Rights-related topics to further embed these across the Group and its operations.
Commissioning additional activities in furtherance of our global human rights policies, standards and practices that further embed these in our business operations such as education and training of employees and third parties.
Our approach to human rights within our own operations and within our supply chain is assessed regularly by one of our key customers, the UK National Health Service (NHS), using its Labour Standards Assurance System which outlines the principles and guidelines the NHS requires its suppliers to comply with to ensure good labour standards are driven throughout its supply chain. Assessments relate to particular product category tenders and cover all the aspects of a management system approach to human rights, including topics such as roles and responsibilities, policy, communication and awareness, risk assessment, operational control and training.
Overall, based on our business structure, due diligence process, and output from our third-party Risk Methods tool, we believe the risk of slavery and trafficking in our own operations to be very low and well managed.
Training
Convatec requires mandatory training in relation to our Code for all new and existing employees (which also extends to all Board members) on an annual basis. This training is delivered through online training, via Townhall meetings and in virtual or face-to-face sessions. As part of our management induction process, new members of our management team participate in training in relation to our Policy.
To hold ourselves accountable to monitoring and tracking this requirement, in 2021, we set a target to ensure at least 95% of employees are trained on our Code annually. We achieved that target in 2022, and due to a transition to a new learning management system in 2023, training rates dropped to 90%. Plans are in place to drive participation on our new system in 2024.
We developed and launched a Global Human Rights e-learning module to all Convatec employees in 2023. The interactive module guides all employees through important subjects such as human trafficking prevention, speaking up and environmental issues.
Effectiveness
We believe our policies, training and procedures are effective in reducing the risk of slavery and human trafficking taking place within our own business. During 2022 and to date, we have not received any reports of these activities.
In relation to our supply chains, the audit assessment processes we operate have not revealed any issues that warrant an onsite audit focused on trafficking and modern slavery to be conducted. As highlighted above, we are taking steps to further expand our existing third- party- led supplier assessment process and have set a committed target against which we can measure our success. We have not received any reports of slavery or people trafficking in our supply chain during 2022 and to date.
To further strengthen effectiveness, the Human Rights Committee intends to:
- Roll out a new risk management tool to better identify where the highest risks for modern slavery are in our supply chain.
- Continue to expand the scope of our audit arrangements in 2024.
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Summary of action
- Convened cross-functional Human Rights Committee, under the oversight of our executive-level ESG Steering Committee.
- Raised awareness of our Human Rights and Labour Standards Policy, including the launch of a new mandatory Human Rights e-learning module
- Onboarded a third-party risk assessment provider for human and labour rights in the supply chain
- Assessed 140 suppliers using a process managed by a third-party provider, EcoVadis. Improved average EcoVadis key supplier ratings by 7%.
- Direct and Contract Manufacturing Suppliers continue to sign adherence to the Convatec Global Third Party Compliance Manual.
This statement has been approved by the Board of Directors of Convatec Group Plc on 16 May 2024, and is signed by the director responsible for ensuring compliance with the Modern Slavery Act 2015.
Karim Bitar
Chief Executive Officer
Published on 16 May 2024
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Disclaimer
ConvaTec Group plc published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 15:22:04 UTC.