This network of direct and indirect suppliers presents us with opportunities to form partnerships based on ethical, social, and environmental principles. We believe collaboration with our suppliers, other consumer goods companies, and industry associations like AIM PROGRESS, the Carbon Disclosure Project (CDP), and the Supplier Ethical Data Exchange (SEDEX), is the most effective means of improving practice in our supply chain and in the industry as a whole. While we engage with suppliers throughout our supply chain, our main focus is on working with those with whom we have the most immediate relationships.
With a network as wide and diverse as ours, work with suppliers inevitably takes many forms. However, we focus on three key impact areas in our supply chain.
- Responsible sourcing: managing the social and ethical risks of our procurement. Read more
- Sustainable agriculture and local sourcing: working with suppliers to ensure that our raw materials are produced sustainably, and, where possible, seeking suppliers local to our operations who can meet our procurement needs. Read more
- Carbon reduction, sustainable packaging, and environmental management: managing the carbon footprint of our supply chain through collaborative initiatives like the Carbon Disclosure Project, setting robust targets for the sustainability of the packaging we use, and promoting environmental management standards in our supply chain are all important in reducing our overall impact.
Conflict Minerals Disclosure
Diageo plc evaluated its current product lines to confirm whether tin, tungsten, tantalum and/or gold (“3TG”) are contained in and necessary to the functionality or production of certain products manufactured or contracted to be manufactured by Diageo plc, and determined that tin and gold are currently applicable (the “Covered Products”). Following a good faith reasonable country of origin inquiry as required by Item 1.01(a) of Form SD (the “RCOI”) regarding the 3TG in the Covered Products, Diageo plc has no reason to believe that the 3TG in the Covered Products may have originated in the Democratic Republic of Congo or an adjoining country (as defined in paragraph (d)(1) of Item 1.01 of Form SD) (the “Covered Countries”). As a result Diageo plc has disclosed below, under a separate heading entitled “Conflicts Minerals Disclosure,” the determination and described the RCOI that Diageo plc undertook in making such determination.
Following a good faith RCOI regarding the 3TG in the Covered Products, Diageo plc has determined that it has no reason to believe that the 3TG in the Covered Products may have originated in the Covered Countries.
Description and results of the RCOI
Diageo plc continued with the governance program that was established last year in relation to conflict minerals (defined as columbite-tantalite (coltan), cassiterite, gold, wolframite, or certain of their derivatives (which are currently limited to tantalum, tin, and tungsten)) (“Conflict Minerals”), including the steering committee with representation from various lines within the business of Diageo plc. At the direction of and under the supervision of the conflicts minerals steering committee, Diageo plc’s RCOI and due diligence process were conducted in three phases, as outlined below.
Phase One: An internal assessment process was implemented with input from across the supply, procurement and legal teams to identify all products manufactured or contracted to be manufactured by Diageo plc that may potentially contain Conflict Minerals and it was determined that 3TG was potentially necessary to the functionality or production of certain products manufactured by Diageo plc or contracted to be manufactured by Diageo plc.
Phase Two: For all products identified in phase one for which 3TG were potentially necessary to the functionality or production, Diageo plc conducted a RCOI by writing to the suppliers of the identified products, requesting that they complete and return the Conflict-Free Sourcing Initiative ‘Conflict Minerals Reporting Template’ or otherwise certify in writing the contents and provenance of the supplied 3TG. Diageo plc received a 100% response rate in relation to products within scope. This phase enabled Diageo plc to obtain reasonably reliable evidence and representations in relation to the use of 3TG in calendar year 2014. Through this process, Diageo plc determined that: (1) gold flakes were used for Smirnoff Gold and Goldschlager; and (2) tin-oxide was used in the glass making process for glass bottles (sold to customers).
Phase Three: Diageo plc conducted further inquiries by contacting suppliers identified in phase two as using 3TG in their products, requesting they conduct an investigation into their supply chain and provide written representations confirming whether the 3TG may have originated in the Covered Countries with a 100% response rate in relation to further inquiries. Diageo plc received reliable evidence and representations in relation to the provenance of such materials. These representations indicate that none of the conflict minerals provided originate in the Covered Countries. In the process of obtaining such representations and its due diligence process more generally, Diageo plc encountered no warning signs or circumstances suggesting otherwise.
Based on the good faith RCOI described above, Diageo plc has concluded that it has no reason to believe that the Conflict Minerals used in products manufactured or contracted to be manufactured by Diageo plc and necessary to their functionality or production may have originated in the Covered Countries.