Tiffany & Co. facilities—including diamond cutting and polishing, jewelry crafting and distribution—operate at the highest standards. Rigorous standards are also used to evaluate Tiffany & Co. vendors. Tiffany & Co. established a multidimensional Social Accountability Program that includes comprehensive guidelines for the manufacturing processes of materials we procure, designed to ensure that our vendors are held to the exacting standards that Tiffany & Co. is proud to uphold.
For example, the Tiffany & Co. Social Accountability Program helps to ensure that our suppliers protect basic human rights. This program reviews our suppliers’ performance in relation to: hours of work, wages and benefits, health and safety, freedom of association and collective bargaining, transparency, child labor, forced labor, harassment or abuse, disciplinary practices, discrimination and environmental protection.
Our suppliers are expected, at a minimum, to conduct business in an ethical manner and to comply with all applicable laws and regulations. Our Vendor Code of Conduct communicates our values and expectations for our business partners. In 2010, we modified our supplier requirements so that suppliers review the Vendor Code of Conduct on an annual basis. Of our direct vendors in the Social Accountability Program, 94%* signed the Vendor Code of Conduct at the conclusion of Fiscal Year 2011. The remaining vendors were either in the process of signing the Code of Conduct, were covered under other agreements or did not have business with the Company during the audit cycle.
Figure 1: Tiffany & Co. Social Accountability Program, Vendor Code of Conduct Signatures, Fiscal Year 2011: This graph represents the percentage of direct vendors who have signed the Tiffany & Co. Vendor Code of Conduct at the conclusion of Fiscal Year 2011.
To ensure that our suppliers meet Tiffany & Co. standards, we have implemented a multiphase assessment process of our supply chain:
- Vendors are required, when applicable, to complete a self-assessment of their performance against our Vendor Code of Conduct.
- Tiffany & Co. performs internal audits of our vendors.
- Tiffany & Co. contracts with a third-party social responsibility auditing firm to perform audits on our suppliers.
Tiffany & Co. audits are conducted over a two-year cycle. The percentage of high-risk suppliers decreased from 23% in 2010 to 13% in 2011 due to performance enhancements in the supply chain. The risk classification is determined by a vendor self-assessment, industry and geographic location. All high-risk vendors were audited during the 2010–2011 audit cycle, except for those that were phased out during the audit cycle and new vendors that are scheduled for audits in 2012.
When suppliers are found to be in noncompliance with Tiffany & Co. requirements, every effort is made to work with the vendors to correct their noncompliance. If the vendor continues to fail to meet our requirements, the relationship is terminated.
This three-tier system ensures that suppliers meet the rigorous demands of Tiffany & Co.’s Vendor Code of Conduct including applicable laws and regulations.
CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT (SB657)
As referenced above, Tiffany has a comprehensive supply chain auditing program which addresses the risks of human trafficking and slavery. Our audits are conducted both internally and by a third party. Third-party verification is required of all of our high-risk suppliers, determined by a vendor self-assessment, industry and geographic location.
Audits are conducted to evaluate compliance with the Tiffany Vendor Code of Conduct as well as local and international labor laws and regulations.
If a nonconformance is found, we have a corrective actions process to resolve the nonconformance. If nonconformances persist, Tiffany ceases to do business with the supplier.
Tiffany supply chain management have received training on our Social Accountability Program, which includes mitigating risks of human trafficking and slavery within our supply chain.
*Metric included in the Report of Independent Accountants