Avon modern slavery statement 2021

Introduction

This is Avon’s sixth statement published in accordance with the UK Modern Slavery Act (2015). It relates to the activities of Avon Products, Inc. and its applicable consolidated subsidiaries, including Avon Cosmetics Limited in the UK (collectively, ‘Avon’ or the ‘Company’ for the 12-month financial reporting period beginning 1st January 2021 and ending 31 st December 2021.  Our 2020 Modern Slavery Statement can be found here.

Since becoming part of Natura &Co (the cosmetic group comprising of The Body Shop, Avon, Aesop and Natura) in 2020, we’ve set ambitious targets in line with the Group’s sustainability vision Commitment to Life which sets out to tackle some of the world’s most pressing issues by 2030. One of the three key pillars within Commitment to Life is to defend Human Rights and to be Human-kind. Avon, as well as the wider Natura &Co group, seeks to respect human rights and address human rights violations within our supply chain and our own business operations. In 2021, we made a significant step towards this by finalising a comprehensive group-wide human rights policy framework and creating a new directorship to lead this work.

As a responsible business, we are committed to respecting human rights throughout our own business operations, our supply chains and in the local communities in which we operate. Avon recognises that modern slavery can take many different forms and is a growing global problem. Our initiatives to combat modern slavery and human trafficking practices from global supply chains are increasingly aligned across Natura &Co, strengthening our impact to tackle this complex human rights abuse.

This year the Covid-19 pandemic continued to be a significant challenge, heightening some workers’ vulnerability to labour exploitation and hindering some of our risk assessment and due diligence practices. We recognise that the pandemic is continuing to worsen some drivers of modern slavery, such as poverty and restricted movement, making marginalised people more vulnerable to exploitation.

Our Business, structure and supply chains

Responsible Business – The Beauty of Doing Good

Our purpose is to use the power of beauty to transform women’s lives for the better. For 135 years, Avon has stood for women, providing innovative and high-quality beauty products, which are primarily sold to women, by women. We have proudly stood for women’s empowerment since its founding, long before women’s rights were formally recognised, and we continue to drive this powerful mission in the respect of human rights and combatting Modern Slavery today. We believe in a better world for women, which is a better world for all.

At the heart of Avon’s business is a five million strong network of beauty advisors, our independent Avon Representatives, operating in 54 countries. This inspiring community has been the driving force for women for 135 years, championing women and helping them succeed, making Avon ‘a global force for women.’ Whilst being known as ‘The Company for Women’, we’re proud to say that Avon is a democratic beauty brand. Anyone can sell our products, we are inclusive and open to all in our pricing, brand positioning and marketing.

Our business model is built on opening up opportunities for economic participation for women. We have empowered generations of business owners to earn and learn in their own way, on their own terms, and we now support Representatives across the world to run be successful beauty entrepreneurs – whatever that means for them. 

The Avon culture is based on five core values:

Belief – We believe our people, and our business have the power to beat the odds and succeed

Integrity – We do what’s right by upholding a duty of care to our Representatives, our customers, our associates, the communities we serve and ourselves

Respect – We value differences and appreciate each person for their unique qualities

Trust – We build environments that are safe and open, where people are empowered to share their point of view and make decisions

Humility – We’re not always right but we’re always willing to learn.

Each core value plays a vital role in how we do business, we believe in business should be a force for good. We’re proud of our culture, which holds belief and integrity front and centre of everything we do. Our ethical standards are embedded in the business, with an emphasis on the personal responsibility of every associate to behave ethically and in compliance with the laws and expectations of the communities in which we operate.

Our approach to responsible business is informed by the UN Sustainable Development Goals (SDGs). We continue to support the delivery of the goals, with a particular focus on the eight SDGs where we can make the biggest difference.

We are committed to tackling modern slavery by focusing on the delivery of SDG 8 – to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

Our Business and Structure

Avon is a global manufacturer and retailer operating in 68 countries, serving 5 million active independent Representatives serving 100 million customers. Avon has 9 of its own global manufacturing hubs across Latin America, Europe, Russia and Asia producing over 2 billion units each year. Avon provides innovative, quality products to customers at competitive prices. Our product lines include Avon make-up, Avon fragrance, ANEW skincare, Skin so Soft and Advance Techniques. Avon also sells an extensive range of wellbeing products, jewellery, lingerie, accessories and gifts.

Avon employs approximately 18,000 employees worldwide, of which 66% of our workforce is made up of women, with 62% in managerial positions.

Our Supply Chains

Avon products and components procured for re-sale are sourced from 2071 direct suppliers in 61 countries. As with other brands and retailers, Avon’s supply chain is complex and we face challenges when dealing with changing economic, political and environmental landscapes.

Our Modern Slavery Policy Frameworks

Avon does not have a standalone modern slavery policy. Instead, several policies and frameworks guide our efforts to provide decent work, and prevent and mitigate any form of labour exploitation, in our operations and supply chains. These mainstream modern slavery concerns in our employment, purchasing and sourcing practices are increasingly aligned across Natura &Co.

Commitment to Life

This is Natura &Co’s 2030 Sustainability Vision, which guides operations and value chains throughout our group. One of its three pillars is to defend human rights and be human-kind, reflecting the UN Guiding Principles on Business and Human Rights, the International Bill of Human Rights, the International Labour Organization (ILO) Declaration on Fundamental Rights at Work and the ILO Declaration on Multinational Enterprises.

This commits Avon and our sister brands to:

• Adopt a robust group-wide human rights policy by 2023
• Have fully traced and/or certified supply chains for six high-risk raw materials (palm, mica, soy, cocoa, ethanol and cotton) by 2025.

It also incorporates specific, measurable targets in how we treat our employees and our wider networks. These include pay equity and paying all employees globally at least a living wage by 2023, increasing senior-level representation of under-represented groups by 2025, and zero tolerance of any human rights infringements in our supply chains.

The Natura &Co Global Supplier Code of Conduct

All new Avon suppliers must commit to this code of conduct before we start a commercial relationship with them. This group-wide policy is based on the same internationally recognised standards and frameworks as Commitment to Life, as well as the UN Universal Declaration of Human Rights, the UN Global Compact, and the Ethical Trading Initiative (ETI) Base Code.

The code outlines the high, global standards we expect of all direct suppliers and their own supply chains in relation to human rights and employment practices, prohibiting any form of modern slavery. It goes beyond legal compliance by committing our suppliers to positive actions such as responsible recruitment and paying living wages, not just avoiding poor practices. We immediately work with our suppliers to resolve any non-compliance. When necessary, we terminate relationships in a responsible way.

From May 2022, a clearer and more robust version of this code of conduct will come into effect, with broader human rights expectations and reference to grievance mechanisms.

The Natura &Co Responsible Procurement Programme
This group-wide programme enables us to identify issues, manage risks and improve working conditions in our supply chains by collaborating with key subject matter stakeholders including BSR, and SEDEX, the responsible sourcing data sharing platform.

Through this programme, we embed human rights and environmental sustainability across all group operations, implementing responsible sourcing policies and supplier guidance. See Our Due Diligence Approach section for more information.

Natura &Co Critical Materials Policies

Linked to internationally recognised certification standards, six supply chains were identified by Natura &Co as high risk for potential labour and environmental exploitation (palm oil, cotton, mica, soy, paper and ethanol). In 2021 we started to develop group-wide procurement policies and to work towards full traceability and/or certification for these six materials.

Avon employment policies and employee resources

We aim to be a fair and decent employer. Our policies on fair recruitment, employment of young people, hours of work, diversity and inclusion, and working with suppliers, include robust provisions to tackle issues relating to modern slavery. All of our employees around the world have access to a wellbeing resources that includes mental health support.

As a responsible business we have the following formal polices and employee engagement and grievance mechanisms in place:

• Workplace Violence policy
• Global anti-corruption policy
• Employment of young workers policy
• Code of Business Conduct & Ethics

We strive to make sure our employees are aware of specific local risks relating to modern slavery as well as more general risks. The Natura &Co Ethics Line enables anyone working in our operations or supply chains to anonymously report any suspected breach of our codes of conduct, policies or standards, online or via a 24/7 telephone service available in 23 languages.

In addition to the policies listed above, there are also established processes and procedures to allow associates to give feedback on the company’s operations and raise any concerns or grievances they may have:

• Country and market-specific employee engagement forums; for example, the Have Your Say forum in the UK
• Regular employee ‘pulse’ surveys in key markets, building on a company-wide survey (Glint)
• New associate ‘lifecycle’ surveys and check-ins – conducted with new associates after 30 days, 90 days and 12 months of joining Avon.
• Natura &Co Ethics Line for employees.

Natura &Co Human Rights Statement

At Group level, for the first time we conducted a light-touch Group wide risk assessment of our global operations and supply chains, externally conducted by ELEVATE limited based on information we submitted regarding our operations and supply chains and ELEVATE’s own risk data. We discussed internally at a widely attended Groupwide workshop held in September 2021. Following this we updated our Human Rights Statement with risks identified during the workshop. The Statement and list of identified risks is publicly available and is included below.

In 2021, Natura &Co planned, developed and agreed a Human Rights Statement (policy framework) as part of our commitment to be a human rights leader. From 2022, this framework will underpin operational policies that govern Avon and other Natura &Co brands’ operations and supply chains – including but not limited to our work to prevent and remedy modern slavery.

This policy framework will apply to all group and brand employees, workers, contractors, consultants, franchisees, suppliers and supply chain workers, sourcing communities and other business partners.

In line with the UN Guiding Principles on Business and Human Rights, it promotes decent work and addresses the links between the human rights and environmental issues. It recognises the equal rights of all people but specifically focuses on supporting the rights of people who are disadvantaged.

We developed this statement and implementation plan by following the process recommended by the UN Guiding Principles. Working with the human rights consultancy Elevate, we benchmarked each group company’s human rights policies and actions against best practice, including the UN Guiding Principles, the Corporate Human Rights Benchmark, the Women’s Empowerment principles, best practice among other companies, and recommendations from trade unions and NGOs.

We also consulted external stakeholders and held an in-depth workshop with 27 internal stakeholders from across the group and its business areas.

The Natura &Co board and Group CEO approved the Human Rights Statement and will ultimately be responsible for leadership and governance. Our new Director of Human Rights, will lead its implementation, including embedding human rights due diligence processes throughout our business activities.

This director will report to the Group Chief HR Officer, a member of our Group Operating Committee. In turn, this officer will regularly report to the Audit, Risk Management and Finance Committee, which has specific responsibility to review human rights risks. A new Human Rights Steering Committee will handle strategic planning and decision-making. 

Our statement strengthens, deepens and clarifies Natura &Co’s commitments to human rights, and will make our approach consistent throughout our group. This will make people throughout our businesses and supply chains aware of how to proactively support human rights.

Aligned with global best practice, this framework is more comprehensive and proactive than our previous approach and has a scope beyond our employees and suppliers. It has clearer governance and accountability, and will integrate human rights management into all standard business activities.

Our Due Diligence Approach

Rather than just resolving any labour exploitation identified in Avon operations and supply chains, we aim to prevent all forms of exploitation and ensure that all workers enjoy decent working conditions.

Avon is committed to supporting suppliers and their factories to improve working conditions in their production sites and supply chains. The Responsible Procurement team works directly with suppliers and factories to ensure that they build capacity and demonstrate compliance with the requirements of Responsible Procurement Programme .

We expect all Suppliers to act responsibly and to ensure that no abusive, exploitative or illegal conditions exist in their workplaces. These expectations also apply to our suppliers’ supply chains and we ask our suppliers to ensure that our Code of Conduct and the requirements of our Responsible Procurement programme are cascaded and communicated to our suppliers’ supply chains.

The first step in this process is carefully selecting new suppliers and committing them to our high employment and trading standards. With existing suppliers, we strengthen their understanding, capacity and systems to prevent, uncover and resolve any issues relating to modern slavery.

If we identify any areas of concern through our supplier audits, we immediately work with our suppliers and sometimes also independent specialists to address them. Where necessary, we support suppliers to develop and implement a corrective Action Plan to do this. These issues can span multiple indirect suppliers so addressing them can be a complex, years-long process involving considerable time and resources.

If a supplier fails to remedy any non-compliance despite our intervention and support, we terminate that supplier relationship in a responsible way.

Anyone working in our operations or supply chains can anonymously report any labour concerns to the free Natura &Co Ethics Line. Professionals from the Ethics & Compliance investigations team independently investigate any reported breaches.

Our minimum expectations apply for all suppliers of goods or services in the Natura &Co Supplier Code of Conduct. The terms of the Natura &Co Supplier Code of Conduct prohibit:

• The use of any form of forced labour – including prison, bonded and indentured labour
• Any engagement in, or support for human trafficking.

The Supplier Code of Conduct forms part of our contractual agreements with all suppliers and acceptance of these terms are a pre-requisite of working with Avon and our sister brands.

Avon requires regular ethical audits on factories that are in scope of our Responsible Procurement Programme. Factories that are in-scope include:

• Avon branded or non-branded finished products for re-sale
• Avon branded Beauty product components
• Selected Avon branded goods not for re-sale

The Avon ethical standards that all in-scope factories are audited against are as follows:

• Laws and Regulations
• Child Labour
• Forced Labour
• Harassment
• Wages and Benefits
• Hours of work
• Health and Safety
• Discrimination
• Women’s Rights

· Freedom of Association and Collective Bargaining

• Environment
• Subcontracting
• Monitoring and Compliance

As part of our ongoing commitment to working with suppliers and factories that share the Avon values of honesty and integrity, and respect workers’ rights, we aim to ensure full audits are conducted at all in-scope factories every two years. Our auditing process is a vital due diligence tool as it helps our suppliers and their factories understand their responsibility to comply with our ethical standards. Where there have been local lockdowns, or other disruptions caused by the Covid-19 pandemic, we have accepted virtual audit assessments in lieu of full on-site audits.

Overall in 2021, 458 audits were completed in approximately 33 countries. This includes Avon social audits, carried out by our appointed third-party auditing agency – Bureau Veritas, (66 audits), as well as other robust third-party audits that we accepted in lieu of Avon social audits, such as those conducted by SMETA (392 audits) or BSCI (which can be shared with other selling companies).

This year we have onboarded 300 more factories to Sedex, a responsible sourcing online platform that helps us achieve better supply chain transparency in real time, to be able to manage and improve working conditions in our supply chain, making a total of 872 suppliers and 1,045 factories onboarded in total. We will continue to work with our suppliers and factories to improve supply chain transparency in 2022.

As Natura &Co, we became a sponsor of the Responsible Recruitment Toolkit (RRT) in November 2021 to support businesses in our supply chain to embed ethical and professional recruitment and labour supply practices. Through the RRT, suppliers can access a wide range of responsible recruitment guidance, resources, training and a self-assessment tool. We have joined this initiative as a sponsor in recognition of the identified risks of modern slavery and labour exploitation particularly in relation to recruitment and the supply of temporary, contract and seasonal labour. We ran two introductory webinars to the toolkit in February 2022, starting with the first pilot phase with labour providers supplying directly to our distribution centres in Europe, Middle East and Africa (EMEA) for Avon and The Body Shop.  

Modern Slavery Risk Assessment and Management

In 2021 we found no new direct evidence of modern slavery in our operations or supply chains. However, modern slavery is often hidden and some of our supply chains are complex and not fully transparent beyond tier 2 so we are not complacent to expect that global supply chains are modern slavery-free.

We know that several commodities, sectors and regions pose relatively high risks of potential labour exploitation in our operations and supply chains. In 2022 we will continue to map our key risk areas as a group and to develop due diligence processes to mitigate against modern slavery risks further down our supply chains. .

In our last Modern Slavery statement we reported that we had identified that foreign migrant workers had paid recruitment fees to agencies in order to ensure work in their factories producing for Avon in Taiwan. Workers from the Philippines, Indonesia, Vietnam and Thailand were employed by the three suppliers through multiple Taiwanese labour agencies, which were then connected with labour agencies in the migrant workers’ home countries. Taiwanese employers often have no oversight or knowledge of the recruitment practices of agents based in the sending/home countries and local agents’ practices in Taiwan. Some workers indicated that they had borrowed money from lending agents in their home country and worked with informal sub-agents to obtain the jobs. We also identified that one supplier held custody of workers’ passports and savings passbooks.

We recognise that the risks of modern slavery for workers are not well known and not well- communicated in Taiwan, and we have enlisted the help of a specialist consultant in-country to work with our local suppliers to better understand the modern slavery risks specific to the region. We have compiled a list of common issues and risks linked to Modern Slavery in the region and will be providing training on responsible recruitment practices and a Roadmap to prevention and remediation for our Taiwanese suppliers throughout 2022.

Training

We have provided ongoing training on our Social Responsibility requirements to associates across Sourcing, Buying and Product Development. We provide ongoing training to our associates on how they can use Sedex to understand risks and more specifically modern slavery risks, within their supply chain as we continued to onboard more suppliers and factories throughout 2021.

While we conducted less new internal and external training in 2021 than in previous years, this will be a focus area for 2022. In 2022, we will cascade the Natura &Co Human Rights Statement, and related knowledge, policies and processes, throughout our business and external partnerships. Natura &Co becoming a sponsor of the Responsible Recruitment Toolkit in late 2021 also means that our suppliers will have access to significant amounts of free training and guidance in this area from 2022.

Future steps

Natura &Co, including Avon, will finalise our management and operational structures to implement our Human Rights Statement. We will form a steering committee and identify eight priority human rights areas, set up an external advisory group, train all employees on the statement, and disseminate its requirements to external stakeholders.

We will embed new group-wide policies and Human Rights Due Diligence processes into our procurement decision-making. We will develop a smart due diligence monitoring system that flags risks to enable us to target resources effectively. And we will prioritise action to maximise our positive impact, such as sectors or areas with a high number of vulnerable workers.

Avon will continue to seek opportunities to collaborate and participate with other brands, retailers and stakeholders on tackling common modern slavery and human rights risks.

Angela Cretu, Chief Executive Officer, Avon 

Approval of Statement

This statement has been approved by the Board of Directors of Avon Products, Inc. approved and signed by our CEO Ms Angela Cretu on 22nd June 2022.