RESPONSIBLE SUPPLY CHAINS

SUPPLY CHAIN PROVIDERS are important Novolex business partners and maintaining their understanding of and compliance with human rights as well as other ESG practices is essential. Our expectations of suppliers is embodied in the Novolex Supplier Code of Conduct , which was updated in 2022 with additional provisions related to human rights and the environment, among other topics. All Novolex suppliers are required to acknowledge the code when they are engaged via the company’s new Coupa supplier management platform. Launched in 2022, the platform requires suppliers to upload a range information including their human rights practices, carbon measurement capabilities and diversity status. Novolex contractual terms and conditions also include an obligation for suppliers to adhere to the code. If we suspect that suppliers are not adhering to the code, we will remedy the situation through the use of corrective actions, third-party audits, and other measures including contract termination if necessary. We extend access to the Novolex Ethics Helpline to employees of suppliers to provide them with a confidential way to report potential concerns they may encounter in their workplace.

To further support supplier understanding and adherence to the code, 67 Novolex Procurement staff were trained on the code when it was reissued, and new Procurement staff are required to complete the training online as part of their orientation program.

Supply Chain Diligence

NOVOLEX HAS A ZERO-TOLERANCE POLICY regarding the use of illegal, forced, or involuntary labor, human trafficking, child labor or other unfair or discriminatory labor practices. The Novolex Policy on Human Rights explains our commitments and procedures to protect human rights, which align with globally recognized declarations and covenants including The International Bill of Human Rights and the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. The code also recognizes the importance of human rights in our supply chains with particular reference to the U.K. Modern Slavery Act 2015, the California Transparency in Supply Chains Act and the U.S. Uyghur Forced Labor Protection Act, among others. The policy incorporates the views of our customers who want assurance that Novolex is committed to protecting human rights. We recognize that if not managed effectively, human rights issues could negatively impact our employees, contractors, suppliers, as well as customers and others.

To manage potential risks within our supply chain, we use the Intertek Inlight end-to-end Supplier Qualification Operating System to assess various risk factors among suppliers domiciled in high inherent risk countries. High inherent countries are determined based on country risk scores from the World Bank Governance Indicators, the U.N. Human Development Index, the Transparency International Corruption Index, and the U.S. State Department Trafficking in Persons Report. In 2022, suppliers domiciled in high-risk countries completed the Intertek Self-Assessment Questionnaire covering their human rights and other ESG practices. Suppliers that score poorly are required to prepare and complete a corrective action plan.