PANDORA CSR Report 2011 - page 9

Step 1: Screening suppliers
During the first stepof theCSR Supplier Programme, our
purchasers screen and categorise all suppliers delivering
goods above a threshold limit of USD50,000. Each of
these eligible suppliers are investigated for theCSR risks
related to their specific product aswell as theCSR risks
that typically occur in their country of operation. Further,
our purchasersmust assess theCSRmaturity of each sup-
plier by conducting a desktop investigation of any public
evidence regarding theCSR performance of the supplier.
Finally, purchasers are instructed to trust their own instincts
andnever approve a supplier they do not fully believe to
be in compliancewith PANDORA’s Suppliers’ Code of
Conduct. Suppliers falling under theUSD 50,000 threshold
limit – but still fail to convince the responsible purchaser
–will alsobecome eligible for further investigation.
The outcome of this initial CSR screening is integrated
into our “Supplier SegmentationModel”which also catego-
rises suppliers according to their potential business impact
aswell as other supply risks associatedwith the supplier.
The integrationof CSR risks into our suppliermodel allows
us to sort our suppliers into four categories, each eligible to
specific actions.
Step2: Supplier trainings
Dependingon theoutcomeof the initial screening, suppliers
are either directly approved for business or invited tomove
on to step twoof the programmewhich is a one-dayCSR
supplier training course. In2011, more than 50 supplier
representatives participated in such trainings organised in
Bangkok andHong Kong.The key objective of theCSR
training is to enhance suppliers’ awareness of CSR risks,
improve their understanding of PANDORA’s CSR approach
and expectations and ensure that they are aware of relevant
rules and regulations.Whenever working through agents,
we invite both the agent and their suppliers responsible for
the actual production.
During the training, we encourage and seek to inspire
our suppliers tomake use of practical tools andmethods
to raise their standards and to prevent ormitigate non-
compliancewithour Code of Conduct. A vital part of this
exercise is to sharewith our suppliers howwework to
ensure responsible business practices at our own crafting
facilities inThailand, operating under similar conditions as
themajority of our suppliers.This approachhas proved to
be a fruitful means of facilitating difficult discussions on
how seemingly unsolvable issues can be turned intobusi-
ness advantages.
In addition to content deliveredby PANDORA’s CSR
team, supplierswhoparticipate in our training also receive
advice from independent experts on relevant national and
international legislation and common breaches related to
these laws. Finally, staff from our contracted independent
audit company explains in detail how the actual audit
process is structured.
Step3: Supplier audits
The third step is an actual CSR audit conductedby an
independent audit company.The audit process is often initi-
ated by asking the supplier toperform a preliminaryCSR
self-assessment using a template provided by PANDORA.
We do thiswith a dual purpose. Firstly, wewish to allow
our suppliers to identify andmitigate any non-compliance
that theymight not have understood or paid attention to in
the past. Secondly, wewant toobtain sufficient knowledge
about the supplier’sCSRperformancebeforeordering a com-
prehensive supplier audit. If such a self-assessment provides
vital and reliable information, which proves beyond doubt
full compliancewith all relevant regulations, wemight
decide tonot initiate an audit.
Followingour commitment toconstructivedialogueand
long-termpartnerships,wedecided that all 2011auditswould
be announced toour suppliers 2 to 3weeks in advance.
Legal clause/SignCode
of Conduct
Supplier training
(Independent Audit)
(Remedial action plan)
Legal clause/SignCode
of Conduct
Supplier training
Independent Audit
(Remedial action plan)
Code of Conduct
Legal clause/SignCode
of Conduct
Supplier training
(Independent Audit)
(Remedial action plan)
Business importance
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