As a beauty company, there are issues that are fundamental to our business if we are to operate safely and effectively. Ensuring products are made according to the highest safety standards is our number one priority so that consumers can use our products with confidence.
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Product safety
Safeguarding consumers and professionals is of highest importance to Coty. Without this, we would not have a business. As we build sustainability into our product development, we will continue to follow our robust product safety processes to ensure our products retain their quality that our consumers know and love.
Human safety assessments are integral to our product development process, ensuring all products are safe for their intended use. Our qualified safety experts assess all products before marketing, and all products are developed manufactured and packaged in compliance with human safety guidelines and regulations for the country in which they are sold.
Our R&D function is responsible for maintaining internal guidance on ingredient use and formulations. We draw from government sources, association recommendations, scientific literature and consultants, as well as data from our Cosmetovigilance, Consumer Affairs, and Consumer Insights and trends processes.
Once on the market, we monitor the human safety of our products through consumer feedback. In the event of health-related complaints or concerns, our global Cosmetovigilence group products expert medical case assessment, trend analysis and feedback for product development as well as reporting to competent authorities. In FY19, we audited our Cosmetovigilance process to assess its robustness and ensure it is delivering on its purpose. Our review of 22 KPIs indicated an improvement of 15% from the previous year.
In addition, we continuously monitor High Profile Ingredients (HPI). These are ingredients that may be perceived as controversial by our consumers. We identify these ingredients in each market according to consumer concerns, regulatory decisions, or as a result of environmental or health research. Once a HPI is identified, we review whether alternative ingredients exist that do not compromise on quality of our products where possible.
Employee wellbeing, health & safety
We know that protecting the wellbeing of our workforce is essential to building a better, more sustainable business. We are constantly reviewing our policies and processes, with the goal of ultimately achieving zero health and safety incidents.
All of our employees have the right to carry out their activities in safe environments. In FY19, we launched our group-wide Health & Safety Policy which extends across our supply chain. Our employee safety principles encourage everyone to take responsibility for health and safety and we aim to build a culture of preventing and learning from incidents to avoid harm to others in the future.
In FY19, our Total Incident Rate (TIR) in our factories and distribution centres was 0.23✓, which we have successfully reduced year on year since 2017. We also implemented TIR reporting and tracking for our offices, studios and R&D facilities. Our overall Coty TIR for FY19 was 0.33✓.
To build a culture of safety in our offices as well as our supply chain, in FY19, we implemented new procedures across 13 head office locations, covering 50% of corporate employees. We also updated our site audits program and recommendations with clear implementation guidelines and scorecards that are reviewed by our safety leaders on a monthly basis. Across our supply chain, we implemented a consistent approach to reporting and investigations to analyse root causes of incidents. Moving forward, we will focus on actions plans and further developing guidelines to support our ambitions of zero incidents in the workplace.
To support the wellbeing of our employees, we have an Employee Assistance Program (EAP) across 28 countries, designed to support employees with their general wellbeing and provide access to counselling where necessary for mental health issues. We also offer subscriptions to wellbeing apps, including 3,000 subscriptions to mindfulness app, Headspace. Over 2,000 employees are now active Headspace users.
[1] Total number of Recordable Incidents multiplied by (200,000/total number working hours on a 12-month rolling average)
Responsible sourcing and Supplier engagement
As part of our standard Our Code of Conduct for Business Partners sets out our expectations for suppliers. By the end of June 2019, 289✓ of these suppliers had signed in adherence to the Code.
To better understand the risks in our supply chain, we mapped all in-scope direct spend suppliers according to risk of non-compliance to the Code of Conduct for Business Partners based on the material or ingredient being purchased, the geographical region and the level of spend with that supplier. For those deemed higher risk, we have engaged them using the Suppliers’ Ethical Data Exchange (SEDEX), an online tool for scoring suppliers’ self-assessment and third-party audits, for verification. In FY19, 82 sites were successfully verified.
We continue to use the EcoVadis 360o ESG assessments for suppliers within indirect spend categories. Coty and the supplier receive a report based on data and references from governments, NGOs, trade associations and stakeholder feedback. If areas of high risk are identified, a timebound corrective action plan is put in place.
Sustainability governance
We recognise that sustainability needs to be integrated across our business in order to achieve our targets. We have built in regular communication opportunities with key stakeholders and leaders to make sure we achieve our sustainability ambitions.
Our Chief Operating Officer oversees the Sustainability team that works closely with functions, divisions, and brands across the globe as well as external partners. The Sustainability Steering Committee, which includes members of our Executive Committee (EC), receives quarterly updates on progress and takes the operational decisions required to support the delivery of initiatives. Progress is reported to the EC twice a year and chaired by the CEO. The EC have the responsibility of setting the strategy and ensuring resources are allocated to achieve our goals. Our Board will review this progress on an annual basis at the very least.
✓ Limited assurance provided by KPMG