Report on child labor due diligence in the supply chain
This report of SIG Group AG (“SIG” or the “Company”) relates to the due diligence and reporting obligations covering child labor required by Art. 964j-k of the Swiss Code of Obligations and the Swiss Ordinance on Due Diligence and Transparency in Relation to Minerals and Metals from Conflict-Affected Areas and Child Labour. It covers the period January 1, 2024, to December 31, 2024. During the reported period, SIG Group AG, Neuhausen, Switzerland, complied with the due diligence obligations regarding child labor, as further detailed below.
About SIG
SIG is a leading provider of sustainable, innovative, and versatile packaging solutions. We work in partnership with our customers to bring food products to consumers around the world in a safe, sustainable, and affordable way. We are the only system supplier covering carton, pouch, and bag-in-box. Our versatile technology and product innovation capacity enable us to provide our customers with solutions across categories and channels, addressing consumer and market needs with flexibility and speed. Founded in 1853, SIG is headquartered in Neuhausen, Switzerland. The skills and experience of our approximately 9,600 employees worldwide enable us to respond quickly and effectively to the needs of our customers in over 100 countries.
Our commitment to respecting human rights
We are committed to respecting human rights in our operations, supply chain, and with respect to our major business relationships. In doing so, we can contribute to global respect for human rights and support our ambition to have a scalable, systemic net positive impact on society, as well as meeting growing regulatory demand for human rights due diligence. Our approach is guided by the United Nations Guiding Principles on Business and Human Rights, and the relevant Organization for Economic Co-operation and Development (OECD) frameworks. Also, SIG is a signatory to the United Nations Global Compact. We are committed to adhering to the standards encompassed by the International Bill of Human Rights, the International Labor Organization’s (ILO) core labor standards, and the Ethical Trading Initiative (ETI) Base Code.
Governance
In 2023, we established a steering committee to oversee implementation of our human rights due diligence roadmap. Members include our Chief People and Culture Officer (with designated responsibility for human rights) and senior leaders from relevant business functions. Our human rights taskforce, including functions such as Legal & Compliance, Procurement, People & Culture and Corporate Responsibility, undertook extensive activities both in the prior and current year to strengthen our human rights due diligence, including a review and update of our human rights policy in 2024. For more information, see Human rights.
The Board’s Nomination and Governance Committee (NGC) oversees the Company’s strategy and governance on corporate responsibility for ESG matters, and advises the Board of Directors on key issues that may affect the Group’s business and reputation. For more information, see Our sustainability governance.
Our policies on child labor
Ethics and compliance are key factors to achieving our business goals and securing SIG’s long-term business success.
SIG’s Code of Conduct (CoC), publicly available on our website, demonstrates our commitment to act in accordance with nationally and internationally recognized human rights. As stated in the CoC, SIG does not tolerate, engage in or support child and forced labor, including prison labor, slavery and any other form of labor that poses a threat to adults or children. SIG is committed to prevent, mitigate and address the risks of child and forced labor in its global value chains.1 All of our employees regularly complete trainings on the CoC. Our commitment to promoting fair labor practices and upholding labor rights for our employees, is embedded in our Human Rights, Labor and Community Engagement Policy, including the prevention of child labor. This policy was last updated in 2023 and is publicly available on our website. Our approach to human rights due diligence is described in section 5.1.4.
We expect our suppliers to respect all human rights including child labor. Our Supplier Code of Conduct, is publicly available on our website, forms an integral part of any agreements between SIG and its suppliers and sets out our expectations. Our suppliers are provided with up-to-date information in relation to any changes to our Supplier Code of Conduct. In regard to child labor it explicitly states: Suppliers shall neither use nor tolerate child labor. They shall observe the relevant ILO standards, United Nations Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises. Young persons under 18 shall not be employed at night, in hazardous conditions or work overtime.2 In addition, SIG expects suppliers to communicate and apply the principles set out in the Supplier Code of Conduct throughout their supply chain. Significant suppliers3 must formally acknowledge our Supplier Code of Conduct (or have an equivalent in place, such as SMETA audits or EcoVadis ratings).
Should indications of child labor be alleged or found, we strive to address and resolve them within our own operations and aim to prevent or mitigate them in our supply chain. We engage with our suppliers to help them improve through corrective action plans. If a supplier fails to respond to our requests or shows no willingness to improve, we reserve the right to terminate our business relationship with them in accordance with our contracts. Any remedial actions should be consistent with ILO standards and the latest best practice guidance.
Our own operations risk management system
Understanding and managing risks starts at our own operation. We are an active member of SEDEX, one of the world’s leading ethical trade membership organizations that provides independent verification against human rights, labor, health and safety, environmental, and business ethics standards.
We conduct SEDEX SMETA audits at our production sites every two years, which include an assessment of potential child labor and human rights risks and impacts. Our office sites in Australia and Mexico, and SIG legal entities in Germany and Switzerland, are also subject to SMETA audits every two years.
If the SMETA audit findings identify any issues, corrective action plans help us to remediate these and establish mechanisms to prevent similar issues in the future. As of December 31, 2024, 29 out of 30 production sites had completed the four pillar SMETA audit, including SIG’s new production sites4. For one production site, the certification expired in November 2024. The next audit cycle for this production site, along with other sites, starts in 2025.
In 2024, we established a process to bring all our non-production sites into the SEDEX platform to assess their human rights risk as part of a human rights due diligence process. 10 out of these 40 non-production sites were analyzed in 2024 with the remainder to be completed by 2025.
In addition, we perform annual human rights risk assessments, covering also the topic of child labor. The risk of child labor was also incorporated in our 2024 assessment of material topics (see Our material topics).
Our supply chain risk management
SIG expects suppliers to meet our responsibility requirements to help mitigate social and environmental risks in our supply chain. Our Supplier Code of Conduct sets out our expectations on topics such as labor (including no tolerance for child labor), health and safety, and environmental protection. In 2024, we performed a risk screening of our suppliers5 to identify suppliers with an increased risk of using child labor. Our screening evaluates potential adverse impacts (including child labor) based on the UNICEF Children’s Rights in the Workplace Index and the EcoVadis IQ Plus platform risk data. The screening also takes into account the suppliers’ geographic location and industry. Additionally, the analysis considers the supplier’s potential to affect our ability to meet our customer demands and the volumes we purchase from them, and eventually results in a list of suppliers that will undergo further checks.
For the suppliers identified as having an increased risk of using child labor, we conducted a more in-depth assessment using available information from sources such as EcoVadis assessments and SEDEX SMETA audits, which both include aspects on child labor. In addition, we conducted a media screening and searched the internet (by reviewing available live news on the Ecovadis IQ Plus platform) for insights on key ESG risks in the supply chain and controversies in the media including any evidence of child labor.
To date, we have not identified any case of suspected child labor in our supply chain. Based on our human rights risk analysis, we conclude that the risk of child labor in our supply chain is low. For information about risk management measures undertaken on other supply chain sustainability risks, see Our supply chain and our TCFD report.
SIG conducts in-depth assessments through requiring self-assessments, external assessments or SEDEX and EcoVadis assessments. Our SEDEX and EcoVadis assessments both include aspects on child labor. The Company also has a grievance procedure in place (see Reporting mechanism below) where reports on suspected child labor can be made, e.g. via the SIG Integrity & Compliance Hotline.
Should gaps or any indications of child labor be identified, our procurement teams follow-up with the suppliers directly to resolve and monitor any issues. Responsible sourcing for us entails that we must educate our procurement teams. To do so we use our Responsible Sourcing Directives, and accompanying training, providing buyers with detailed guidance to support implementation of our responsible sourcing approach, which also supports human rights due diligence in our supply chain.
Supply chain traceability system
Names and addresses of our suppliers are recorded systematically in our enterprise resource planning (ERP) systems. We also record, where available, product and service categories on the EcoVadis IQ Plus platform. We keep records of our monitoring activities, assessments, and completed EcoVadis assessments and SEDEX audits.
Reporting mechanism
Concerns, including those related to human rights and child labor, may be reported through any available channel, including supervisors and managers, representatives of People & Culture, Legal & Compliance, Internal Audit or the SIG Integrity & Compliance Hotline. Our grievance mechanism is communicated to employees through the Code of Conduct, our Code of Conduct trainings and with posters on site advertising our Integrity & Compliance Hotline.
In addition, there is a separate subsection in our Compliance site within SIG’s employee application about our Integrity & Compliance Hotline. Employees can access information in local language and be informed about local phone numbers and the link to the web-based grievance mechanism.
Reports received through these channels are subsequently investigated. Each case is handled with a systematic approach to address and resolve the reports received and is concluded by a subsequent analysis and evaluation of potential root causes. We seek to find solutions in an individual process tailored to the grievance reported and, as deemed appropriate, together with the affected person.
The Compliance team responsible for the Integrity & Compliance Hotline provides quarterly updates on cases to the Audit & Risk Committee.
In 2023, we updated our grievance procedure and launched a new case management tool. Our case management tool makes it easier for both employees and external parties to speak up. It also makes case management and reporting more efficient and increase oversight of grievances.
During 2024, no allegations were made about child labor in our own operations or our supply chain.
Continuous improvement and additional information
Putting our policies into practice means working continuously to identify human rights impacts, including any that are child labor-related, mitigating and addressing them, continuously monitoring the effectiveness of our measures and periodically reporting on our performance. We seek continuous improvement and regularly review the way we respond in a constantly changing operating environment. One way to do so is our continuous engagement in the Aim Progress Initiative, a forum of leading fast-moving consumer goods manufacturers and common suppliers to promote responsible sourcing practices and sustainable supply chains. We use its established methodology to assess, and identify opportunities to strengthen, human rights due diligence related to our supply chain.
For more information, we encourage you to also refer to other sections in this Annual Report and to our website.
1 SIG Code of Conduct, Human Rights Compliance (section 4), available at https://www.sig.biz/en/investors/governance/code-of-conduct.
2 SIG Supplier Code of Conduct, section “No child labor”, p. 2, available at https://cms.sig.biz/media/zcnhu2qr/sig-supplier-code-of-conduct.pdf.
3 See Our supply chain for our definition of significant suppliers.
4 Excludes our production plant in Voronezh, Russia, due to limitations in respect of data access.
5 Not including suppliers to sales entities. SIG’s main business is where it has production sites, and where SIG’s highest risk, spend and leverage are concentrated. Sales entities’ suppliers are providing office equipment, services, rentals and spare parts. Regarding spare parts, they are mainly provided by SIG’s internal warehouse and covered in our screening described above. We apply a best-effort approach to ensure that all our suppliers are included, achieving a coverage of approximately 99% (by spend).