Founded in 1967, Oriflame is an international social-selling beauty company present in more than 60 countries across Europe, Africa, Asia and Latin America. Oriflame believes that integrating sustainability criteria within procurement practice, is an essential part of moving towards a more sustainable value chain. Tweet This!
This case study is based on the 2020 Sustainability Report by Oriflame, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Oriflame operates in over 60 countries and has a supplier base with a broad geographical footprint, which brings numerous challenges with it, as Oriflame takes a strong stance on social and ethical issues. Should any non-conformances become apparent in its own or its suppliers’ operations, Oriflame is committed to act. In order to promote sustainability across its supply chain Oriflame took action to:
- implement a Supplier Evaluation programme
- audit suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Oriflame has identified;
- How Oriflame proceeded with stakeholder engagement, and
- What actions were taken by Oriflame to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2020 Sustainability Report Oriflame identified a range of material issues, such as economic and value creation, sustainable packaging, climate impact, female empowerment. Among these, promoting sustainability across its supply chain stands out as a key material issue for Oriflame.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Oriflame engages with:
To identify and prioritise material topics Oriflame engaged with its stakeholders through the following channels:
|Stakeholder Group||Method of engagement|
|· Employee NPS
· CEO Connect – live broadcast with the opportunity for employees to ask the CEO any questions
· Continuous trainings and feedback, e.g. the Oriflame way
· Dialogue and sharing through Oriflame’s intranet and internal social media
· Sustainability Brand Ambassador Forum
|· Brand Partner NPS
· Brand tracking of social and environmental attributes
· Business meetings, training, conferences and events
|· Meetings/calls with investors
· Conference calls for the financial community in connection to quarterly reports
· Attending seminars for the financial community
· Corporate affairs meetings incl. Direct Selling Association (DSA) meetings
· Responding to ongoing investor questions and data reporting requests
|· Consumer research, primarily product focused
· Consumer surveys, sometimes including Oriflame Brand Partners in their role as consumers
· Brand Tracking
|· Meetings/site visits with Oriflame teams regarding purchasing, packaging etc.
· Sustainability audits
· Sustainability desktop assessment
· Supplier self-assessment tool EcoVadis
|· One-on-one meetings discussing both general strategy and more specific topics
· Discussions at industry events
· Partner with Rainforest Alliance on paper assessment
|· Participation in industry initiatives and standardisation bodies
· Community involvement, including Oriflame Foundation initiatives
· Participation in conferences and events
In its 2020 Sustainability Report Oriflame reports that it took the following actions for promoting sustainability across its supply chain:
- Implementing a Supplier Evaluation programme
- The Oriflame Global Supplier Evaluation programme for direct suppliers is significant in helping Oriflame improve its sustainability performance across its whole value chain. This programme allows Oriflame to objectively assess suppliers on a range of sustainability criteria, including human rights and specify its requirements on how suppliers are evaluated, scored and developed. The foundation of this process is the Oriflame Supplier Code of Conduct, which outlines Oriflame’s requirements regarding working conditions, health and safety, discrimination and environmental impact, among others. The Code applies primarily to all first-tier direct suppliers, though Oriflame encourages its suppliers to implement the Oriflame Supplier Code of Conduct in their own value chain. In 2020, 99.5% of Oriflame’s direct suppliers signed its Code of Conduct or implemented an equivalent Code of Conduct. The second step of this process is the supplier assessment tool, EcoVadis. EcoVadis is used to understand the level of management system implemented, prioritise audits as well as identify and co-drive improvements. During 2020, Oriflame continued to target new direct suppliers and invite them to the tool, in order to continuously increase the suppliers covered by the tool. The tool provides detailed scorecards that make it easy for Oriflame to understand the supplier’s sustainability performance. It is an evidence-based assessment, adapted to hundreds of business categories and takes relevant industry labels and certifications into account.
- Auditing suppliers
- If a supplier is located in a risk country, or received a low score in the EcoVadis assessment, a sustainability audit will be conducted either by Oriflame’s audit team or by trading partner agencies (for accessories’ suppliers). Oriflame conducts audits for new suppliers and repeats audits for ongoing suppliers. The audits include both environmental and social criteria. Due to the Covid-19 pandemic and the subsequent travel restrictions, it was difficult to conduct physical audits during 2020. As a result, Oriflame initiated a process of remote audits in order to protect the health of employees and ensure business continuity, service and support to stakeholders. Remote audits have a similar process as on-site audits; a real-time assessment is conducted via online video where the team is interviewed, the site is inspected and records and documents are verified. The same audit grade and scoring system applies to remote audits as on-site audits. In 2020, 23% of the audits conducted were remote audits. The categories audited include cosmetics, wellness, packaging and accessories suppliers. When non-conformances are found, a corrective action plan is agreed upon with the supplier and put into place. The supplier is then given a set amount of time (general timeline is within three months) to complete the actions required to close the non-conformances. Suppliers are scored on a scale A to E, with A being the best score. To pass an Oriflame audit, suppliers should score a minimum C grade. The D- and E-graded potential suppliers either improve significantly or are not awarded business. The D- or E-graded existing suppliers are most often willing to improve and to close non-conformances. If not, they are up for exit-plan discussions. Each supplier’s current progress status is regularly reviewed by the procurement team and by the global quality and sustainability team. The focus in the past years has been on working together with suppliers to reduce non-conformances and improve their sustainability performance.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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This case study is based on published information by Oriflame, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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