RESPONSIBLE
SOURCING

P&G BEAUTY RESPONSIBLE SOURCING

Introduction
As an industry leader, P&G Beauty believes it is our role to be a positive force for beautyin the world. We recognize that our scale means every decision we make can have adisproportionately big impact. We also recognize that with this scale we have a responsibility
to the communities and environments in which we operate. This sense of responsibility
influences everything we do.
We believe that this responsibility extends through our global supply chain, where we define
responsible sourcing as the production and procurement of goods and services in a mannerthat respects human rights, conserves resources, and protects natural ecosystems. We also
believe we can positively impact the world’s greatest challenges such as climate change andbiodiversity loss. Building a sustainable system that provides a great quality of life, respects
human rights, and protects the environment is possible.
Ensuring responsible sourcing through our global supply chain is an enormous challenge.
Progress will be made through a dynamic journey of collaboration and engagementwith our stakeholders. As we move forward, we will continue to look for opportunities toengage, learn from thought-leaders, and share learnings with our supply ecosystem. This
document provides a framework for our External Business Partners and Beauty Purchases
Organization to drive continuous improvement in responsible sourcing.

Marcus Ringdhal
Senior Vice President, P&G Beauty Purchases

P&G BEAUTY RESPONSIBLE SOURCING

Contents
General Perspective
Rationale and Need for P&G Beauty’s Responsible Sourcing
Expectations for Feedstocks of Natural Origin
Operating Principles

Specifics of the P&G Beauty Responsible Sourcing Program
SECTION 1:
Prioritization & Due Diligence
SECTION 2:
Transparency
SECTION 3:
Responsible Sourcing Expectations
for Feedstocks of Natural Origin

GENERALPERSPECTIVE

P&G BEAUTY RESPONSIBLE SOURCING

P&G Beauty Responsible Sourcing outlines
a key focus area: feedstocks of natural
origin (plant, animal, mineral), but is not acomprehensive statement of all standards
our External Business Partners are
expected to follow in working with P&G.
Additional requirements may apply basedon the country or industry of operation.
The term External Business Partners(EBPs) is defined as our suppliers, andtheir subcontractors and suppliers.
P&G Beauty Responsible Sourcing is
not intended to replace P&G’s Corporate
Responsible Sourcing Guidelines, butrather build upon this foundation, andprovide what P&G Beauty considers to
be relevant and additional expectations
concerning the responsible sourcing
of feedstocks of natural origin. There
are growing challenges associated withthe production of these feedstocks,
such as addressing changes in land use,building resiliency to climate change, andensuring the most vulnerable people andcommunities, reliant on or impacted by the
production of the natural feedstock, arerespected and supported. We encourage
our EBPs to set similar expectations with
their own suppliers. Given the importanceof this work, P&G reserves the right toconduct audits to assure compliance withthese expectations. P&G also reserves
the right to discontinue any relationshipshould an EBP violate, fail to correct,
or have a pattern of violating these
expectations.
P&G Beauty Responsible Sourcing
also outlines how we operationalize
responsible sourcing within our P&G
Beauty organization, supply chains, andin partnership with our EBPs. We seek tofacilitate conversations with our EBPs anduse P&G Beauty Responsible Sourcing
as a “common language” for discussing
responsible sourcing both internally andexternally.

P&G Beauty Responsible Sourcing

Expectations
for Feedstocks of
Natural Origin

Prioritization& Due Diligence

Corporate Foundation

Transparency

P&G BEAUTY RESPONSIBLE SOURCING

GENERAL PERSPECTIVE

Rationale and Need for P&G Beauty’s
Responsible Sourcing Expectations
for Feedstocks of Natural Origin
P&G Beauty procures a variety offeedstocks of natural origin (plant, animal,
mineral) from many EBPs, and locations,
globally. We understand there are social,environmental, and economic outcomes
associated with the primary production(growing, harvesting, extracting) of thefeedstocks of natural origin used to create
our products and packaging. There isalso a strong interconnectedness between
human health, planetary health, and thehealth of our business. This interplay ofrelationships, and their physical locations,can be viewed as the ecosystem in which
we operate. We are dependent upon thissystem being resilient.
As we look to address and positively impact
outcomes through our procurement
activities, we strive to take a science-based,consistent, and transparent approach. The
expectations outlined in this document are

not intended to act as a path toward a “P&G
Beauty certification”; but they articulate
what we consider the foundationalsocial and environmental expectations
for responsible sourcing feedstocks ofnatural origin. Having our expectations
clearly defined also provides a framework
for evaluating the scope and sufficiency
of available 3rd party standards. We
will utilize 3rd party standards andorganizations that align with our
expectations to verify and/or certify
activities in some of our supply chains.
The expectations for feedstocks of natural
origin will be applied to an individual
feedstock for a region of production. Theremay be instances where a feedstock has
additional expectations to be considered
responsibly sourced, and these will be
communicated where relevant.

We strive to take ascience-based, consistent,
and transparent approachP&G BEAUTY RESPONSIBLE SOURCING

Responsible
Sourcing
OperatingPrinciples
ACCOUNTABILITY
We hold ourselves and our EBPs
accountable for producing andprocuring goods and services in amanner that respects human rights,
conserves resources, and protects
natural ecosystems.

TRANSPARENCY
We expect our EBPs to be transparent in
the practices they use, and in the physicalsupply chain of the goods and services
they provide to P&G Beauty such that wehave a sufficient level of traceability toassess risk and compliance. In turn, we
will be transparent with our stakeholders
regarding the steps we take to ensure
responsible sourcing in our supply
chain ecosystem.

CONTINUOUS
IMPROVEMENT
We expect our EBPs to engage incontinuous improvement programs when
and where necessary.

CREDIBLE VERIFICATION
We expect our EBPs to monitor andverify their performance and continuous
improvement against P&G Beauty’s
expectations. In the case of highresponsible sourcing risk, or for Beauty
priority materials, Beauty reserves theright to verify such monitoring andperformance by independent assessment.

SPECIFICS

OF P&G BEAUTYRESPONSIBLE
SOURCING

P&G BEAUTY RESPONSIBLE SOURCINGof Natural Origin. We prioritize feedstock
supply chains for additional due diligenceto verify they are responsibly sourced.
We prioritize feedstocks by identifying
those with the highest potential risk
or challenges to responsible sourcing,coupled with P&G Beauty’s greatest
opportunity to drive positive impact.

Scope
Feedstocks are considered at a landscapelevel such that corn grown in the Midwest
US has a separate profile from corn grown
in northeast China.

Risk

01

Prioritization& due diligence
FEEDSTOCKSOF NATURAL ORIGIN
Prioritization Process
We expect all our EBPs to produce and/or
source feedstocks of natural origin, andtheir derivatives, in alignment with
P&G Beauty’s Expectations for Feedstocks

Tools employed for understanding
feedstock responsible sourcing risk
include, but are not limited to, nationalrisk profiles, geospatial data, internaland external expert input, feedstock
research and profiles, industry developed
assessments, climate risk assessments, and3rd party conservation tools. An example
methodology is outlined in Weisbrod
et. al (2016) “Framework for evaluating
sustainably sourced renewable materials”.

ImpactRisk information is then evaluated in
the context of opportunity for positive
impact in the relevant landscape.
Considerations include: P&G Beauty’s
use of the feedstock vs other industries,
leverage in the supply chain, and short andlong-term business outlook for the related
naturally-derived materials.

P&G BEAUTY RESPONSIBLE SOURCING

Regardless of prioritization status, if webecome aware of a situation causing harmto people or the environment in our supply
chain, we engage to be part of the solution
to address the issue.
An appropriate corrective action plan isdeveloped based on the severity, extent,
and persistence of the issue. We expect
our EBPs to engage and take the necessary
steps to ensure implementation ofcorrection action plans.

Due Diligence
For prioritized feedstocks, additional
steps are taken to understand whether thefeedstock supply in our supply chain is
responsibly sourced.
1.

This is done in partnership with the
EBP(s) supplying the prioritized
feedstock, and third-party experts asappropriate.

2.

We may ask our EBP: for moregranular traceability data (e.g. tracefrom farming community to EBP),
to provide information on whether
they have a responsible sourcing
program that covers the feedstock,
for any auditing or verification they
have conducted, or whether thefeedstock is covered by a third-party
certification.

3.

If the available information fromthe EBP is not sufficient to verify
responsible sourcing, or if outages to
responsible sourcing are identified,an action plan will be developed toensure the responsible sourcing of
the feedstock in our supply chain.
Action plans may include activities
such as: pursuit of an existing
third-party certification (e.g. RSPO,FSC), engagement in a continuous
improvement program, improved
supply chain traceability, or auditing.

4.

We expect our EBPs to support
efforts to ensure the responsible
sourcing of our priority feedstocks,
and to participate in the executionof responsible sourcing action plans
when and where relevant.

P&G BEAUTY RESPONSIBLE SOURCING

P&G BEAUTY BUYERS

P&G Beauty Buyers:

We hold all our employees accountable forsupporting responsible sourcing, but ourBuyers are externally connected, manage
our supplier relationships, and theyown every dollar spent for the business.
Therefore, we outline specific expectations
for our Buyers.

•

Shall operate in accordance with
P&G’s Purpose, Values and Principles•

Shall know how to Speak Up andWhat to Report•

Shall be trained in responsible
sourcing•

Shall include responsible sourcing
criterion for business allocation•

Shall understand if they procure
any materials derived frompriority feedstocks and participate
in their responsible sourcing
programs accordingly

02

Transparency
We will publicly report
our priority materials
and our progress to ensure
responsible sourcingof those materials
beginning in 2021.

P&G BEAUTY RESPONSIBLE SOURCING

03

Responsible
sourcing
expectations forfeedstocks ofnatural origin
The following outlines key expectations,in addition to the P&G Corporate
Responsible Sourcing Guidelines, forfeedstocks of natural origin. It is not acomprehensive statement of all standards
EBPs are expected to follow in working
with P&G. Additional requirements may
apply based on the country or industry inwhich you operate.

01. RESPECTINGPEOPLE AND
COMMUNITIES
1.1 Land Rights
1.2 Indigenous Rights
1.3 Women Producers
1.4 Access and Benefits Sharing

02. VALUING CRITICALECOSYSTEMS
2.1 Natural Forest, Peatland,
Wetland, Grassland, Savanna,
Mangrove, Kelp Forest, Coral Reef
2.2 Conservation of Biodiversity
and Cultural Sites

03. BEST PRACTICES
3.1 Developing a Respecting
Human Rights Program
3.2 Stakeholder Voice
3.3 Good Agricultural Practices

P&G BEAUTY RESPONSIBLE SOURCINGSECTION 01

RESPECTING PEOPLE& COMMUNITIES
1.1 Land Rights

1.2 Indigenous Rights

Land rights, land-use rights, and land
tenure rights are fundamental constructs
for ensuring economic, cultural, andenvironmental benefits are realized forpeople and communities.

We support the UN Declaration on Rights
of Indigenous Peoples, which declares thatindigenous peoples have the right to fullenjoyment, as a collective or as individuals,of all human rights and fundamental
freedoms.

•

We respect the rights of individuals
and communities to access, own,
inherit, and farm the land.

•

We respect land tenure rights
including rights of indigenous andlocal communities to give or withhold
their free, prior, and informed consent
for development of land they own
legally, communally, or by custom.

•

We do not tolerate forced evictions,forced displacement, or any illegal
form of land acquisition.

1.3 Women Producers
Gender equality is critical for achieving
better health, education, and economic
outcomes for local communities. We
support the equal rights of women,
including women producers.

P&G BEAUTY RESPONSIBLE SOURCING

1.4 Fair and Equitable Sharingof Benefits from the use of, andAccess to, Genetic Resources andTraditional Knowledge•

We expect compliance with allapplicable national access andbenefit-sharing (ABS) laws, rules,
and regulations.

As laid out in the Convention on
Biological Diversity, and detailed throughthe Nagoya Protocol, fair and equitable
sharing of benefits from the use of genetic
resources and traditional knowledge
aims to incentivize the conservation of
biological diversity, and the sustainable
use of its components, by contributing
to the sustainable development andlivelihoods of indigenous and local
communities.

•

We expect EBP to notify P&G Beautyof ABS obligations associated withanything supplied to P&G Beauty.

•

We expect evidence of compliancewith relevant ABS laws, rules,
and regulations.

P&G BEAUTY RESPONSIBLE SOURCINGSECTION 02

VALUING CRITICALECOSYSTEMS
2.1 Natural Forest, Peatland,
Wetland, Grassland, Savanna,
Mangrove, Kelp Forest, Coral Reef
These natural ecosystems can be critical for
carbon sequestration, supporting biodiversity,and ensuring the long-term livelihood of local
communities and global health.
•••

We expect no deforestation, conversion,or severe and sustained degradation ofthese natural ecosystems.
In circumstances where the approachof no deforestation or no conversion ofthese natural ecosystems may conflictwith the self-determined land-use plans,
or intentions of indigenous peoples andlocal communities with rights over suchlands, the principles of 1.1 and 1.2 areupheld.
We expect compliance with P&G’s
Paper-Based Packaging Sourcing Policy•

We expect compliance with P&G’s
Palm Responsible Sourcing Policy•

We expect compliance with P&G’s
Wood Pulp Procurement Policy

P&G BEAUTY RESPONSIBLE SOURCING

2.2 Conservation of Biodiversity
and Cultural Sites
High Conservation Value
Landscapes:
High Conservation Value (HCV)
landscapes are natural habitats andlocations that possess biological,
ecological, social, or cultural value ofoutstanding significance at the local,
national, regional, or global level.
•

We expect no production in protectedareas including:»International Union forConservation of Nature (IUCN)
protected areas categories I-IV•

In circumstances where the approachof no production in these areas may
conflict with the self-determined
land-use plans, or intentions ofindigenous peoples and local
communities with rights over suchlands, the principles of 1.1 and 1.2 areupheld.

Rare, Threatened, and Endangered
Species
Plant and animal species diversity isimportant for the current and future
health of our ecosystems and to themaintenance of the many services they
provide including pollination, air andwater purification, medicinal resources,
and pest control.

»

United Nations Educational,
Scientific, and Cultural
Organization (UNESCO) World
Heritage Sites»

Biosphere Reserves designatedunder the UNESCO Man and the
Biosphere Programme•»

Wetlands on Ramsar
Convention’s List of Wetlandsof International Importance(Ramsar List)

We expect compliance with theConvention on International Tradein Endangered Species of Wild Fauna
and Flora (CITES)•

We expect evidence of compliancefor any CITES listed species. In the
instance of plant species, information
required includes where the species
is grown or collected and how it iscultivated (e.g. artificially propagatedor naturalized). If the species isshipped internationally, export andimport certificates are provided.

»

Other legally protected areas

P&G BEAUTY RESPONSIBLE SOURCINGSECTION 03

BEST PRACTICES

3.1 Developing a Respecting
Human Rights Program
Respect for human rights means avoiding
possible negative impacts on humanrights and addressing such impacts if
the company is involved or linked withthem. A best practices framework to do
the right thing to respect human rights is:1) publicly committing and embedding
respect for human rights, 2) having a due
diligence process to identify, prevent, and/or mitigate adverse human rights impacts,and 3) enabling processes that will
effectively remediate adverse impacts.

1. Commitment to Respecting
Human Rights
For example, P&G has publicly committed
to human rights by releasing a Human
Rights Policy Statement.

2. Human Rights Due Diligence
Human rights due diligence consistsof the processes that businesses use to
become aware of and manage its actualand potential impacts on individuals’
human rights while engaging stakeholders
throughout the process.

The U.N. Guiding Principles (UNGPs)
identify four due diligence steps:
Assess: Identify actual and potential
impacts on people that might happen asa result of business activities or throughbusiness relationships;
Integrate and act: Take steps to preventthese impacts from occurring, to mitigate
their likelihood and severity, to use
leverage within business relationships,
and to provide remedy where impacts
nevertheless occur;
Track: Monitor the effectiveness of thebusiness’ processes for assessing andaddressing these impacts;
Communicate: Share information
externally with stakeholders about how
the business addresses impacts and risks,
including, where appropriate, throughpublic reporting.

3. Remediation of Adverse Human
Rights Impacts
When you become aware of an adverse
impact, engage to be part of the solution
to address the issue or dilemma, including
seeking to prevent or mitigate theadverse impact.

P&G BEAUTY RESPONSIBLE SOURCING

3.2 Stakeholder Voice
Consultation and Engagement

Grievance Mechanism

Listening to and understanding the needs
and concerns of those impacted by the
production of a feedstock is important
to ensuring the acceptability and longterm success of the production system.
Relevant considerations for stakeholder
consultation and engagement include:

Grievance mechanisms are important toolsthat allow all workers, including migrant
workers, to voice concerns associatedwith their employment without fear ofpunishment or retribution. Relevant
considerations include:•

Stakeholders are identified and aprocess is in place to communicate
information to them regarding
activities associated with the
production of the feedstock that
may impact them.

•

Stakeholders are consulted andhave the opportunity for meaningful
participation in decision making
regarding production activities
having significant impact to them.

•

EBP has a public grievance policy•

EBP has a public grievancemechanism

P&G BEAUTY RESPONSIBLE SOURCING

3.3 Good Agricultural Practices

Water Resources:

Agriculture provides the nutrition, fiber,
fuel, and products relied on by many
people and animals, globally. Tracking andcontinuously improving on key outcomes
like crop productivity, environmental
quality, and human health is fundamental
to ensuring the resiliency of an agricultural
system. Relevant considerations forcontinuous improvement of agricultural
practices include:•

Existing water rights of local
and indigenous communities
are respected•

Water use does not prevent the needsof other water users in the local
water basin being met, including
communities, flora, and fauna•

Water quality of local waterways
and groundwater is not negatively
impacted by the feedstock production

Healthy Soils:••

Feedstock is produced using
practices that protect soil quality andprevent erosion
Soil disturbances are minimized,with an emphasis on reducing tillage
or compaction from heavy machinery•

Soil cover is maximized by keeping aliving crop, crop residues, or biomass
mulches covering the soil year around•

The presence of living roots
is maximized to increase soilorganic matter and maintain otherbeneficial functions

Nutrient and Pest Management:•

Agrochemicals are minimized
and use is in accordance with the
4Rs of nutrient stewardship•

Agrochemicals prohibited byapplicable law are not used at all•

Potential impacts to biodiversity
and pollinators are assessed before
application and steps are taken to
reduce negative impacts

P&G BEAUTY RESPONSIBLE SOURCING

Energ y Use and Greenhouse Gas(GHG) Emissions:•

Energy use is monitored, and steps
are taken to reduce energy use andimprove energy efficiency•

Renewable energy sources with alower environmental footprint vs.
nonrenewable are prioritized•

Steps are taken to reduce GHG
emissions

Air Quality:•

Air pollution emissions are identified
and minimized•

Any open-air burning of leaves,straw, and other agriculturalresidues is minimized, and where
possible eliminatedWaste:•

Waste management practices follow
the 3R’s: Reduce, Reuse, Recycle•

Waste is properly and safely disposed

Land Use:•

Biodiversity is maximized byincreasing the diversity of crops andanimals on the land•

Existing large native and shade covertrees are maintained•

Wildlife habitat fragmentation is
avoided by maintaining or creating
ecological corridors•

Impacts to nearby waterways orconservation areas are reduced bymaintaining or creating buffer zones•

Invasive species found or used in
the production area are minimized
and do not invade areas outside theproduction area

RESPONSIBLE
SOU RC I N G