Our approach

We seek to influence our suppliers and sub-contractors by sharing our own standards and expectations with them. These are set out in our Supplier Code of Conduct and, to a large degree, in the RJC’s Code of Practices. Maisons collaborate internally and make use of tools to share information and identify common suppliers.

Compliance with the Richemont Code is incorporated into our procurement decisions and all regular or significant suppliers are expected to acknowledge the Code. Suppliers of gold and diamond-related products are encouraged to become certified members of the RJC.

Business partners are treated fairly and in line with our code of business ethics; see Working in Partnership section.

 

Supplier Code of Conduct

Richemont’s Supplier Code of Conduct forms part of the Group’s CSR Guidelines. The Code covers labour relationships, employment practices, human rights and ethical business principles. The Code is based on internationally-recognised principles such as the International Labour Organisation Conventions and the Universal Declaration of Human Rights. It also addresses specific industry-related issues such as the responsible sourcing of gold and diamonds, animal testing, and the preservation of endangered and protected species.

The Code of Conduct includes an Acknowledgment of Terms that requires suppliers to: accept and agree to the Code’s principles; to report on the individual responsible for the supplier’s compliance; the procedures in place to fulfil the Code’s requirements; discrepancies between the supplier’s operations and the Code; and any similar policy used by the supplier.

 

Compliance

Each Maison and operating company is responsible for working with its own suppliers and to formally share the Code content with them. Using a risk-based approach, our Maisons are responsible for defining an appropriate due diligence process, including encouraging suppliers to be certified under the relevant scheme, in particular with RJC for gold and diamond suppliers, conducting third-party audits of suppliers or conducting verifications as part of supplier visits or regular reviews. Where audits identify areas for improvement, Maisons follow up with remedial action plans as part of the on-going supplier relationship. Neither supplier audit findings nor the remedial action plans arising from them are publicly disclosed.

To facilitate, the Maisons individual efforts, the Group has established a number of tools, including risk analysis for some common supply chains, pre-selected auditors, an Audit Referential and the organisation of audits for common suppliers.

Many suppliers to the Group’s businesses at Tier 1, Tier 2 and beyond are also members of the RJC. At Tier 1, 95% of the diamonds and 97% of the gold entering our jewellery, watch and writing instrument manufacturing processes are supplied by RJC members. Tier 2 and other indirect suppliers in the precious metals and diamonds industry are encouraged to join the RJC and have their own responsible business practices independently certified. Given the strength of the RJC’s certification process, members of the RJC which supply to Richemont, e.g. diamonds and small gold parts, are not audited. RJC members are independently recertified at least once every three years.

In order to assess compliance risks in general, we are mapping the supply of other goods and services regarding certifications. That information will be used to complement our RJC –certified suppliers in particular and our Supplier Code of Conduct signatories in general.

 

Performance data

Since its revision in 2015, the Group has been tracking the progress of Codes signed by Suppliers. The scope subject to the following consolidated data is 90% of Group operations. The remaining 10% are also tracking progress, albeit on un-consolidated systems. All figures relate either to our Code, or to equivalent principles including RJC-certification.

In value terms, implementation is at 55% (2017: 45%) of suppliers. We expect the figure to progress year-on-year for two reasons: (i) better data capture; and (ii) our long-term targets.

135 supplier audits, including some Tier 2 suppliers, were performed across the Group during the year (prior year: 198). The decision to audit a given supplier is based on a risk-based assessment. The lower number of audits reflects operational developments at certain Maisons as well as the growing number of RJC-certified suppliers. Moreover, the Group’s businesses have strengthened their procedures with regard to the Supplier Code validation in general, through training of procurement employees and, in certain cases, incorporating the Code in their terms and conditions of business. The increased coordination of supplier audits within the Group has benefited all stakeholders by building confidence and eliminating duplicated effort.