We hold ourselves to high standards, and we expect our suppliers and third parties acting on behalf of Whirlpool Corporation to do business the right way as well.
Doing business the right way means we expect our business partners to do the same. Our suppliers are key to our success and to maintaining the high standards and reputation of our brands. We require our suppliers not only to be technically qualified, but also to commit to our ethical standards and business practices.
Our Supplier Code of Conduct (SCoC) outlines the standards required to conduct business with Whirlpool Corporation. In 2019, we established a global dedicated team with the main focus on driving our responsible sourcing program that considers ethics, labor rights, and social and environmental issues when sourcing products and services across all purchasing categories and regions. Our goal is to minimize negative impacts and make a positive contribution to the businesses, people, and communities we support.
We require all of our suppliers to abide by the SCoC. Whirlpool Corporation is committed to preventing human rights abuses in its operations and supply chain. The SCoC states, in part, that suppliers must recognize and respect human rights, including any rights of workers to exercise lawful rights of free association, compliance with local and international laws regarding young workers, compliance with laws prohibiting human trafficking in any form (e.g., forced labor, debt bonded slavery), providing safe and healthy work environments, and respecting any legal right of workers to bargain collectively.
We have a robust supplier auditing program, which is mandatory for all new suppliers. We also deploy risk-based on-site audits for existing Whirlpool Corporation suppliers. One hundred percent of suppliers that were found to have a high risk audit result implemented a corrective action plan. In certain circumstances, follow up audits were completed to verify that the findings were closed.
The number of supplier code of conduct audits conducted per region
1. Environmental-specific audits
Our environmental assessment requires suppliers to comply with all local environmental laws applicable to the workplace, the products produced, and the methods of manufacture. Additionally, suppliers must not use materials that are considered harmful to the environment, but should encourage the use of processes and materials that support sustainability of the environment. In 2019, 20 supplier audits identified improvement areas related to the environment and corrective action plans were approved by Whirlpool Corporation and implemented. We also continued our special focus on China suppliers in response to the China Air Pollution Action Plan, in which we supported our suppliers’ actions to reduce the amount of air, water, and noise pollution.
Through our robust efforts in auditing suppliers and performing environmental assessments, including monitoring and conducting third-party audits of top-tier suppliers, we have strengthened and sustained our requirements that suppliers comply with our SCoC. This resulted in no discovered instances of corruption, or terminating any supplier contracts.
An additional requirement of our suppliers is the prohibition against the use of any type of involuntary or forced labor. Where there is no local legal requirement, or if a local legal requirement is not as strict as the requirement included in the SCoC, suppliers are required to follow the requirements in the SCoC. In 2019, our audits identified one instance of child labor in a supplier, which implemented a corrective action plan. We also identified three vendors that had significant social findings, and we demanded an immediate corrective action plan. Evidence was provided to show the findings were resolved.
Material failures to comply with our SCoC may result in the termination of our relationship with a supplier, as may be permitted by applicable law. In order to ensure our suppliers are meeting our standard of integrity, we will continue to conduct independent audits of a sampling of our suppliers’ practices.