Ensure ethical business practices

At Swedish Match, we will take the necessary steps to ensure that ethical business practices are maintained within our own company and in our ­relationships with all outside parties.

Our commitment

Swedish Match is committed to sound business ethics in all our business activities and relations with stakeholders, both within our own operations and with regard to outside parties. We build relationships through honesty and integrity and we respect the laws and regulations in the countries in which we operate. We believe that business relationships, when built on common values, mutual respect and trust, become valuable and dynamic. We perform annual risk assessments in which issues related to ethical business practices are an integral part. We have procedures and processes in place to ensure that the potential risks within this area are properly addressed.

Our Code of Conduct

Our policies on practices regarding employment and labor, ethical business, the environment and workplace are based on the principles of UN Global Compact. Our policies are outlined in our Code of Conduct (the Code) and underpinned by Group principles/procedures and local policies. Our Code represents the commitment of Swedish Match and of all of its employees to conduct business activities in a responsible manner, consistent with applicable laws and regulations. It applies to all employees within the Swedish Match Group, regardless of location or role. Our Code forms the foundation for our sustainability approach and efforts. It is reviewed internally and approved by the Swedish Match Board of Directors on an annual basis.

Our Code covers, among other things, our commitment to and guidance on respect for human rights and internationally proclaimed human rights conventions and guidelines, including non-discrimination and fair treatment, employment terms, freedom of association, the right to collective bargaining, forced or compulsory labor as well as child labor. The Code includes guidance on anti-corruption and anti-bribery practices, as well as gifts, loans and hospitality, and fair competition. It also includes guidance on eco-efficiency and the importance of following a precautionary principle in environmental management, as well as occupational health and safety, competence development, talent management, and supplier due diligence.

Ethical business practices201720162015
Share of employees that have completed training on our Code of Conduct1), %956048
Share of targeted employees that have completed anti-corruption/anti-bribery training2), %78N/A57
Share of significant suppliers of direct material that share the same values as Swedish Match3), %96N/A21

1) Relates to individual training for employees with personal e-mail accounts. In addition, group session training has been performed for employees in factories without personal e-mail accounts.

2) E-learning/training was launched in 2017. 2017 does not include targeted employees in Brazil, who will take the e-learning during 2018.

3) No comparable figures for 2016 can be provided due to changes in methodology.

Communication and training

We keep track of our employees’ awareness of the Code, and whether our employees have reviewed or been informed about the Code, through employee opinion surveys. Mandatory training on the Code is done through e-learning to supplement town hall meetings and similar events. In 2017, 951) percent of the workforce has completed the training. Our target is for all employees to have participated in the training on an ongoing basis. Matters addressed in the Code are continuously communicated to employees through, for example, the Company’s intranet.

Corruption and bribery

At Swedish Match we have zero tolerance towards corruption and bribery. Swedish Match shall not participate in, or through third parties, endorse any corrupt practices. This is clearly stated in our Code. During 2017, we have developed and implemented a specific training on anti-corruption and anti-bribery. In 2017, 782) percent of targeted employees have completed the training and activities will continue in 2018.

Fair competition

It is our belief that healthy competition contributes to increased business opportunities, improvement of economic performance and the reduction of cost for products and services. Competition between competitors shall be conducted in a fair manner and in compliance with competition laws. Our legal departments support the heads of the operating units on compliance with the relevant legislation when entering into agreements with our counterparties and performing market activities. All employees within sales and marketing as well as management teams throughout the Group are continuously trained within fair competition through face-to-face training. E-learning programs and tailor-made compliance manuals are also used to educate personnel within this area and will continue to be used targeting employees within e.g. sales and marketing, procurement as well as research and development. During 2017, additional specific training on fair competition has been developed which will be launched to targeted employees during 2018.

Raising concerns and the whistleblower function

To further secure sound business ethics within the Company, we encourage all employees to speak up if they become aware of behavior that is not in line with the Code. When raising a concern, employees can always contact their managers, the heads of the operating units, the HR or legal departments. Swedish Match also has a whistleblower function that provides every employee with the opportunity to report suspicion of non-compliance with the Code to the Chairman of the Audit Committee. A concern can be raised anonymously. All raised concerns are treated seriously and investigated, taking into account the integrity of the reporting person. Suitable actions are taken in cases of misconduct. All raised concerns and actions are reported to the Audit Committee. External auditors are also present at the time of these reports.

During 2017, 23 issues have been raised and evaluated. Some of these issues required actions and new routines put in place, while others were found unsubstantiated and required no further actions. None of the issues have resulted in the Company bringing criminal charges against any employee.

Our Supplier Code of Conduct

Our Supplier Code of Conduct reflects Swedish Match’s Code of Conduct and specifies what we expect and require from our suppliers in terms of employment and labor practices, workplace practices, ethical business practices and environmental management practices. Requirements are based on and are in compliance with international conventions and guidelines3). The Supplier Code of Conduct forms the basis for our relationship with suppliers and is an integral part of most of our significant business agreements.

Swedish Match strives to work with suppliers who have a healthy long term financial position and chooses suppliers who also support Swedish Match’s requirements regarding ethical business practices and other sustainability aspects. Swedish Match has about 118 significant suppliers of direct material, accounting for about 1.5 billion SEK in annual spend. During 2017, we have assured confirmation that 96 percent of our significant suppliers of direct material share the same values as Swedish Match by signing our Supplier Code of Conduct or through their own Codes of Conduct and mechanisms to monitor e.g. business integrity and human rights impacts in their supply chain.

We are in increasingly frequent and recurring dialogue with our suppliers on our fundamental values. Activities include communication of requirements in the Supplier Code of Conduct, follow-up on adherence through supplier assessments and audits as well as further dialogue on priority issues to assure continued improvement. The overall aim is to increase proactivity in our further dialogue on sustainability. During 2017, we have continued our work to systemize common approaches on supply chain management for purchased direct materials, for more information, see the page Eliminate child labor.

1) Relates to individual training for employees with personal e-mail accounts. In addition, group session training has been performed for employees in factories without personal e-mail accounts.
2) Excluding targeted employees in Brazil, that will take the e-learning in Portuguese during 2018.
3) The international conventions and guidelines referred to here are the UN Universal Declaration of Human Rights, the UN Convention on the Rights of the Child, the ILO Conventions (No’s. 001, 014, 029, 030, 087, 098, 100, 105, 106, 111, 138 and 182), and the OECD Guidelines for Multinational Corporations.