Responsible Sourcing

We strive to maintain a supply chain that is reliable, resilient, flexible and most importantly, responsible. For Element Solutions, being responsible means managing potential risks related to legal non-compliance, human rights violations, climate change disruptions, and novel interruptions, such as the current COVID-19 pandemic.

Supply Chain Risk Management

Element Solutions follows a formalized set of responsible sourcing practices which are designed to be compliant with local laws and regulations. Both our Sourcing and Compliance teams support responsible sourcing and sustainable manufacturing practices, develop goals and guide our facilities and suppliers in the implementation of responsible sourcing measures.

Responsible Sourcing Policies

We have established robust supply chain risk management policies, guidelines and systems to guide our responsible supply chain practice, including the materials and minerals we purchase for use in our products and the suppliers with whom we choose to partner. We strive to diversify our suppliers and source our materials locally as needed and where possible. These guidelines, policies and practices are outlined in our Supplier Code of Conduct and Anti-Slavery and Human Trafficking Policy.

Our Anti-Slavery and Human Trafficking Policy strictly prohibits the use of slavery and human trafficking in our operations or our supply-chain and we are committed to implementing systems and controls aimed at ensuring this. We expect our suppliers to hold themselves and their own suppliers to these same high ethical standards. To that end, our Supplier Code of Conduct establishes minimum standards of conduct required for all our suppliers.

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Working with our Supply Chain

As part of our comprehensive responsible sourcing program, we also conduct supplier audits which serve as a starting point to understand suppliers’ compliance infrastructure. Issues such as human trafficking, slavery, forced/prison labor and child labor are zero tolerance violations.

We require all suppliers review and acknowledge our Supplier Code of Conduct before entering into business with us. Our supply chain team also receives training on conflict minerals, responsible sourcing and human rights to raise and maintain their awareness and diligence of ESG-related risks.

As part of our effort to manage potential ESG-related risks in our supply chain, we maintain a process and systems to preemptively screen potential counterparties, including suppliers, vendors, customers, distributors, agents, consultants and other business partners of the company, prior to any transactions. This screening process was implemented on a global basis in the context of our Foreign Corrupt Practices Act (FCPA) / Anti-Corruption Policy and related internal “Third Party Due Diligence and Contracting Guidelines” as well as our Business Conduct and Ethics Policy. We also screen certain third parties against a worldwide database, including the Specially Designated Nationals and Blocked Person List of the Department of the Treasury’s Office of Foreign Asset Control (OFAC). We review all third parties with potentially high- or medium-level of ethical and compliance risks factors against this database. In 2021, of the 700 suppliers we screened through this process, 3% were deemed high risk, and the rest were either low or medium risk.