Case study: Kerry Group plc

Following Diageo and Tesco, Kerry Group was ranked third (58%) in the 2020 TCD benchmarking assessment of large companies operating in Ireland and achieved a score of 15 out of 26 in the 2020 Corporate Human Rights Benchmark (CHRB).

Kerry Group describes itself as “a leading player in the global food and beverage industry. Kerry Taste & Nutrition is the global leader in the development of taste and nutrition solutions for the food, beverage and pharmaceutical markets, while Kerry Foods is the Group’s Consumer Foods division and is a leader in its categories in the chilled cabinet. Kerry employees over 26,000 people and has 149 manufacturing locations worldwide, selling over 18,000 products and reaching over 1 billion consumers.”

Kerry Group kindly provided the following responses to a series of questions on its approach to the UN Guiding Principles on Business and Human Rights:

Please outline Kerry Group’s commitment to respect Human Rights

"Kerry Group understands that companies have a duty to respect human rights and to ensure their activities do not infringe on the rights of others. At Kerry, we are committed to upholding internationally recognised human rights and our approach reflects a number of guidance documents, treaties and the work of relevant organisations, including the UN Guiding Principles on Business and Human Rights and the recommendations within the OECD Guidelines for Multinational Enterprises.

The Group’s human rights policy and supporting policy documents clearly set out our expectations and are informed by the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work, the Children’s Rights and Business Principles, the UN Women’s Empowerment Principles and the approach laid out within the UN Global Compact.

Our human rights policy forms an integral part of the Group’s Code of Conduct, and both documents reinforce our position that we will not tolerate or condone any abuse of human rights within our business or supply chains. Individual policies throughout our Group Code of Conduct are explicit on our commitments in critical areas like health and safety, child and forced labour, harassment and freedom of association and collective bargaining, helping to set clear parameters around acceptable behaviour and guide decision making across the organisation.

Within our supply chain, we translate these requirements to business partners and all those who seek to do business with Kerry through our Supplier Code of Conduct. This document establishes minimum social and environmental criteria for suppliers and their counterparts and applies right across our business.

Top Tip: While this can be a daunting area for businesses, it is one that is hugely important, so simply getting started is crucial. Talk to other businesses, agencies, expert bodies and look at frameworks or best practice guidance that can help to define the best approach for your organisation."

What does the governance of human rights look like in Kerry Group?

"We have established clear roles and responsibilities for human rights within our business.

Kerry Group’s Board of Directors are fully engaged in efforts to progress the organisation’s human rights commitments. The Governance, Nomination and Sustainability Committee of the Board have responsibility for guidance and oversight of the implementation of the Group’s sustainability strategy and are supported in this work by the Global Sustainability Council.

Our CEO, Edmond Scanlon, chairs the Group’s Sustainability Council. Operating under delegation from the Board, the Sustainability Council is made up of executive directors and senior management and is tasked with addressing the broader social and environmental impacts of Kerry, including those relating to human rights.

To support the work of the Global Sustainability Council, we have established a dedicated Social Sustainability Council and human rights working group, made up of key cross-functional personnel. Established in 2020, as part of the Group’s revised sustainability commitments, this working group includes senior personnel from the Human Resource, Procurement, Supply Quality and Sustainability functions who have day-to-day responsibility for delivering on the Group’s human rights commitments across our operations and broader value chain.

The role of the working group is to continually develop, articulate and integrate our overall approach to human rights, building on the work to date and driving greater awareness and engagement with key stakeholders to ensure our commitments are upheld."

How have you embedded your commitment to human rights into Kerry Group’s DNA?

"Through the newly established human rights working group, we are focused on engaging key parts of our business to further strengthen the integration of human rights considerations into our policy and governance frameworks. Building on strong oversight and due diligence foundations in place at local level, this group is responsible for establishing and maintaining a globally connected approach and ensuring that best practice and potential learnings are shared across the organisation.

Our policies in respect of human rights form a key part of the requirements within the Group’s Code of Conduct. All of our colleagues are made aware of these requirements on commencement of their role with Kerry and regular mandatory training is scheduled that helps to reinforce their importance for how we conduct our business. This training details specific elements related to human rights risks and we continue to develop more targeted programmes for colleagues in specific functions where potential risks may be greater, for example within procurement.

On a day-to-day basis, the Group’s Chief Human Resource Officer and our Human Resource function has a key role in ensuring rights are upheld internally and all functions and management have a part to play. Policies are available to colleagues via our intranet platform ‘mykerry’, through our HR teams or alternatively through employees’ direct line managers. These policies are reviewed and updated annually, a process that allows for stakeholder input into their design and integration of any feedback that may be required.

With a procurement spend of almost €4 billion, we have a significant opportunity to positively impact on the communities from which we source. We make an important contribution through the provision of employment and support for economic activity, but we know that there can be challenges with the protection of human rights and labour standards associated with certain commodities and geographies. To help ensure our procurement activities create a positive impact, we have set out minimum ethical and environmental standards, to which we expect our suppliers to adhere. These standards are contained within the Supplier Code of Conduct and apply across our entire business.

Kerry’s Supplier Code of Conduct is informed by the ILO’s core conventions and a number of other guidance documents and clearly sets out what is required of our direct suppliers to ensure they meet the standards we deem acceptable. This code has been updated in 2016 and again in 2020, to reflect the evolution of our efforts on human rights and the protection of workers within our supply chain.

Our Chief Procurement Officer, the procurement function and supply quality team have the key day-today responsibility for ensuring that appropriate processes and controls are in place to ensure our human rights requirements are observed by suppliers."

Has Kerry Group identified its salient human rights issues (i.e. the most severe human rights issues connected to your company)? What are those issues?

"As part of our risk based approach, we have initiated an assessment of salient human rights issues across our business. These are issues that stand out because of their significant potential impact through our activities across our operations and supply chain. Through a preliminary assessment we have identified the following salient issues for our business:

• health and safety
• freedom of association and collective bargaining
• discrimination
• working hours
• forced labour
• child labour
• fair wages

As we continue to refine and explore this approach, we anticipate that through increased stakeholder input additional issues may be included in this list."

What actions is Kerry Group taking to manage these issues?

"Across our operations we have strong oversight and due diligence foundations in place at local level and with the support of the human rights working group, we maintain a globally connected approach, ensuring that best practice and potential learnings are shared across the organisation.

All of our manufacturing sites are members of Supplier Data Ethical Exchange and we use both self assessment and independent audits across our sites to support our own internal management systems.

In our supply chain we map our suppliers based on the risks associated with the geography and /or commodity which we are sourcing. In this way we can focus our efforts and prioritise areas where there is a greater chance of human rights infringement. Again, we use the SEDEX platform to help us assess those suppliers identified as higher risk through a process of registration, sharing data with Kerry, review and potentially audit. In some categories we are more directly involved at farm level, for example in Madagascar (Vanilla) and Malaysia (Palm Oil), we have implemented improvement programmes with farmers and communities to help address the underlying cause of some key risks.

Can you share any examples of progress against the issues?

One area where we have made significant progress is with our education programme in Madagascar. Child labour can be associated with the cultivation of vanilla, even though education is mandatory up to the minimum age of for legal employment (14 years).

One obvious barrier to education is cost. Financial pressure can make it difficult for farmers to meet the expense of their children’s school fees. This is a relatively simple problem to overcome and Kerry pays the school fees for all children of farmers who have met the programme criteria.

When looking at the other challenges faced by children in the project region, we noted that historically 80% dropped out of school before the age of 12. The difficulty here was not a financial one, instead it is caused by the fact that pupils had failed the national test. The Certificat d’Études Primaires Élémentaires (CEPE) examination that children undertake at age 12, certifies completion of primary education and is a mandatory requirement for students wishing to stay within the school system. Without access to continuing education, children are forced to go back to work in the fields perpetuating a cycle of poverty and subsistence farming.

In partnership with relevant stakeholders, we agreed the introduction of new performance measures to help establish a different way of working in schools. These measures were designed to promote greater structure and assure optimal use of class and study time. To reward teachers we introduced a programme of incentives that helped to encourage best practice.

Our objective is to increase the number of children who pass the final exam at 12 years of age, enabling them to continue their education. In this way we aim to help move more children away from working on farms, keeping them in school and providing them with greater long term opportunities. Early results showed a marked increase in the attainment rates for children attending the selected schools. In 2019, the pass rate increased to 85% from just 40% in the previous twelve months. Encouraged by this success, we took the decision to broaden the scope of the programme to other schools within the sourcing region."

Has Kerry Group engaged any directly affected stakeholders on these issues? If yes, which stakeholders and how?

"The scale and complexity involved in addressing many human rights issues is such that no one entity can make sufficient progress acting alone. We understand that it takes a concerted and collaborative effort involving business, Government, NGO’s and civil society to make the kind of impact that is required. We know the importance of engaging with these stakeholders to inform our own approach and we use a variety of channels to support the engagement process.

Internally, this includes one-to-one review processes with colleagues, engagement with workers’ representatives, Works Councils, town-hall style meetings and our Group-wide employee engagement survey. Through these and other channels we engage directly with our employees on a range of issues, including those salient ones outlined above.

In most parts of our raw material supply chain, we do not source directly from farms and so are often removed from the point of agricultural production. For high risk commodities, this is often the area where negative human rights impacts can occur and so we must work with others to address any issues. This can prove challenging, particularly where there are multiple tiers in the supply chain and so we must work with mutli-stakeholder platforms and through our suppliers to implement our requirements and understand how these are cascaded beyond their direct operations."

Through what means can Kerry Group receive complaints or concerns related to human rights impacts?

"We provide both internal and external channels to support anybody wishing to raise a concern and have a clear process around the handling and investigation of such matters. Where possible and appropriate we use existing processes and channels as outlined below.

1. Employee Grievance Approach

• Level 1: Concerns can be raised in the first instance with local management (verbally/in writing)
• Level 2: Where a person feels unable to raise the matter with someone in their immediate management they can inform relevant Human Resource Partner and/or next level Manager
• Level 3: If a person feels unable to raise the matter with someone in their business area for whatever reason, they can bring the issue to the attention of the Head of Internal Audit.
• Level 4: Express a Concern Ethics Hotline: Where a person feels unable to raise the matter through any of these routes, they can use the Express a Concern Ethics Hotline, which is a confidential reporting system.

Once we receive a concern, we will assess what action should be taken, initiating the appropriate enquiries. An initial assessment on how to proceed will be undertaken as quickly as possible, usually within five working days. This may lead to a formal investigation which, depending on its findings, will determine the action to be taken and timescales involved.

Investigations to establish all relevant facts will be conducted as sensitively and quickly as possible. Wherever possible, investigations will not be carried out by any person who has had previous involvement in the matter concerned.

The complainant will be kept up-to-date on the outcome of any enquiries and investigations carried out and any actions taken, at all times respecting Kerry's duty of confidentiality to others.

Where colleagues wish to appeal response received, employees can raise their concerns to other levels within a defined process. Kerry is committed to ensuring all such issues are handled fairly and properly.

2. Whistleblowing

The Express a Concern Ethics Hotline can be accessed in more than 100 languages and is available 24 hours a day, 7 days a week. Users can report a concern anonymously, and their report will be logged with a unique ID, which they can use to check on the status of the concern raised without providing personal contact information.

All concerns raised in this manner will be assessed, fully investigated and appropriate action taken. All whistleblowing incidents are reviewed by the Head of Internal Audit and formally investigated by the relevant functional heads depending on the nature of the concern raised.

3. Suppliers

All our suppliers are covered by Kerry’s Supplier Code of Conduct within the Supplier Requirements Manual. This code requires them to have their own grievance mechanisms in place and to prohibit retaliation against workers or others who may raise a concern.

While we also make our Express a Concern Ethics Hotline mechanism available to suppliers and draw their attention to this facility within the Supplier Code of Conduct, the number of reports from suppliers to date has been low. This may be due, in part, to worker awareness around the facility and we are exploring how we can do more to raise the visibility of this mechanism with suppliers.

Through these and other channels, we encourage individuals or communities to raise a concern with us directly. Should they feel unable to do so, we will not impede access to state-based judicial or non-judicial mechanisms for these individuals or communities who believe their human rights have been impacted.

We continue to focus on improving our approach to receipt of, and response to, grievances throughout our extended supply chain. We have structured channels in place and are committed to continuing to promote and highlight these channels through which individuals and communities can raise complaints or bring any matters of concern to our attention for review and resolution."

Would you like to offer any words of encouragement or wisdom to companies that have yet to embark on the Business and Human Rights journey?

"Business has a key role to play in supporting internationally recognised human rights. At Kerry, we have a very clear commitment in this area and continue to work across our impact areas to implement it. Our values, policies, codes and processes support this, albeit our work has not always been viewed in the light of action on human rights, often it has been more about living our Purpose and doing business in the right way.

As part of our approach, we look at the areas where Kerry has the greatest potential impact and the actions that are already underway to address these. From here we look to build on areas of good practice or identify potential gaps where we can take further action. We also continue to engage with expert agencies and others working in this area, learning from their feedback and from others businesses who are implementing best practice."

Can you share key actions taken to strengthen your management of human rights issues that may have also resulted in improvements in the CHRB 2020 ranking?

"There are a number of ongoing programmes that help to improve our management of human rights risks, and as a result, our CHRB ranking.

Crucially, we published a human rights statement, which outlines how we approach this topic and the actions that are already underway within Kerry, to make this activity more visible to external stakeholders.

As outlined above, we have also put in place additional governance mechanisms around human rights and a cross functional team structure to support our work in this area."