Copyright

© 2024, Hyp Group Ltd, London, UK

Introduction

Preamble

Sourcing with care is a fundamental pillar of Hyp Group's mission, which is to create sustainable and ethical business practices. Our aim is to ensure that our responsible sourcing core requirements are systematically put into effect throughout our supply chain, thereby helping to transform production practices in a way that will positively impact people, nature, and climate. This approach is helping us build the foundations necessary to advance regenerative systems at scale.

Purpose

The Hyp Group Responsible Sourcing Standards (the “Standards”) contribute to the implementation in our supply chain of our commitment towards the UN Guiding Principles on Business and Human Rights (UNGPs), the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises on Responsible Business Conduct, the International Bill of Human Rights, and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.

These Standards complement other Hyp Group commitments, strategies, and frameworks, such as our Human Rights Framework and Roadmap and associated salient issue action plans, our Net Zero Roadmap, our Agriculture Framework, and our Forest Positive Strategy.

This 2024 version replaces and supersedes the previous Hyp Group Responsible Sourcing Standard adopted in 2018.

Applicability

The Standards apply to Direct Suppliers and Origins, as relevant.

• Direct Suppliers are entities or individuals having a direct business relationship with Hyp Group (e.g., through a contract or because they invoice Hyp Group), including their employees, agents, and subcontractors. Co-manufacturers are considered Direct Suppliers.
• Origins are entities or individuals responsible for the harvest or primary production of the materials and ingredients we source for the manufacturing of our products (e.g., farms, plantations, fishing vessels), including packaging materials.

These Standards need to be complied with by all actors forming, directly or indirectly, part of our supply chain. They constitute an integral part of our contracts with our Direct Suppliers.

Hyp Group recognizes that some social and environmental issues require long-term, tailored interventions to tackle their root causes. To help address the complex factors that contribute to those issues, we implement complementary frameworks and strategies, as referred to in Appendix 1 (e.g., Human Rights Salient Issue Action Plans, Agriculture Framework), and work on two different levels:

1. Taking action in our supply chain to assess the risks, address them, and monitor and report on activities and their outcomes.
2. Using leverage and collaboration to actively support collective engagement to help address widespread, systemic environmental and social issues.

Verification Mechanisms and Reporting

Verification Mechanisms

We verify alignment to and compliance with these Standards using different methods at different tiers of the supply chain. These include self-declaration, desk-based assessments, and second or third-party site audits or assessments. The tools used to assess compliance depend, at Hyp Group’s discretion, on the supply chain tier and the level of risk. Risk is assessed considering different criteria, such as the country(ies) of operation and of origin (for materials and ingredients), the level of spending, and the type of goods or service supplied to Hyp Group.

We have also identified priority materials and ingredients that present a higher risk of environmental and/or social issues. In those cases, we work closely with our Direct Suppliers and other partners to conduct supply chain mapping and carry out assessments in the upstream supply chain.

Addressing Non-Compliance

Non-compliances identified through the verification mechanisms outlined above, or in any other manner, must be addressed by the relevant entity through a time-bound action plan agreed with Hyp Group, which will include prevention, mitigation, and remediation actions, as appropriate. Hyp Group may decide, at its discretion and without any responsibility, to suspend the relationship with the Direct Supplier or require suspension of the Direct Supplier’s non-compliant site(s), subcontractor(s) or sub-tier supplier(s) until an action plan is agreed upon, or during the execution of the action plan, should the timelines or actions be delayed or not executed as agreed. In case of suspension, the Direct Supplier, site(s), subcontractor(s) or sub-tier supplier(s) may be allowed to re-enter Hyp Group’s supply chain if there is clear evidence, as required by Hyp Group, that practices have improved to the required level.

Hyp Group reserves the right to terminate the commercial relationship with the Direct Supplier in accordance with the relevant contract or to exercise any other remedy as set out in the relevant contract or under applicable law, in case (i) the action plan appears unsuitable for the purposes of improving practices to the required level, (ii) the Direct Supplier does not agree to develop and implement an action plan, (iii) the agreed action plan was not executed or executed in a satisfactory manner, or (iv) the Direct Supplier does not provide evidence of improved practices within a reasonable period of time.

The process of setting up action plans to address non-compliances shall not represent or be understood as a waiver of Hyp Group’s other rights and remedies, as set out in the relevant contract with the Direct Supplier or under applicable law. For clarity, if there is any conflict between the referred process and the contract between Hyp Group and the supplier, the contract shall prevail.

Reporting Non-Compliance

Direct Suppliers must notify Hyp Group of any actual or potential severe adverse impact on human rights or the environment, keeping Hyp Group informed of the progress of any investigation and shall, if requested, consult Hyp Group regarding all material steps in the process until remediation. Severe adverse impacts must be notified to the following e-mail address: notifications@hypgroup.co.uk.

Direct Suppliers must retain all supporting documents and evidence in order to maintain an adequate record of all due diligence processes, grievances submitted by affected stakeholders, including records related to investigations undertaken, and grant access to Hyp Group to review such records upon demand. Upon Hyp Group’s first demand, the supplier must send a report to Hyp Group with detailed information on what has been achieved, a detailed progress plan, and, if requested, undergo a verification process of compliance.

We also encourage the reporting of any suspicion of non-compliance with our Standards by Direct Suppliers or any other part of our supply chain through our Speak Up system, an independently operated reporting system. Reports can be submitted confidentially via a web form or call a toll-free number.

Requirements

Requirements Structure

The Standards are divided into Substantive Requirements and Management Systems Requirements.

• Substantive Requirements: These are requirements on specific practices or topics.
• Management Systems Requirements: These are processes related to ensuring the effective implementation of the Substantive Requirements and Human Rights and Environmental Due Diligence (HREDD) systems.

Requirements for Direct Suppliers

1. Human Rights and Environmental Due Diligence (HREDD) Management System Requirements
   • Embedding HREDD into policy and management systems
     • Direct Suppliers have policies or commitments covering all requirements laid out in these Standards.
     • Direct Suppliers have management systems and processes, in line with the UNGPs, to implement those policies and commitments.
   • Traceability systems
     • Direct Suppliers have traceability systems for materials and ingredients that enable assessment of human rights and environmental risks.
   • Identify and assess adverse impacts in own operations, supply chains, and business relationships
     • Direct Suppliers assess actual and potential adverse impacts on people and the environment and use this information to prioritize issues.
   • Address adverse impacts
     • Based on the results of their risk assessment, Direct Suppliers have action plans to prevent, mitigate, and remedy potential and actual adverse impacts.
   • Grievance management and remediation
     • Direct Suppliers implement or ensure the existence of an effective grievance mechanism accessible to all affected stakeholders.
   • Monitoring and verification
     • Direct Suppliers track the progress and effectiveness of their action plans through monitoring and impact measurement.
     • Direct Suppliers conduct an annual review of their HREDD management systems.
   • Reporting
     • Direct Suppliers publicly report on the actual and potential risks in their own operations, suppliers, and sourcing regions.
2. Business Ethics, Compliance, and Transparency
   • Compliance with all applicable laws and regulations.
   • Prohibition of improper payments for or from government officials.
   • Transparency in the origin of materials and ingredients and their movement within the supply chain.
3. Human Rights
   • Equal treatment and non-discrimination.
   • Work conducted on a voluntary basis.
   • Fair and transparent terms of employment.
   • Respect for the minimum age of employment and protection of young workers.
   • Freedom to form and/or join a trade union and to bargain collectively.
   • Provision of a healthy and safe workplace environment.
   • Legal and decent working hours.
   • Fair compensation.
   • Respect for the land and resources of indigenous peoples and local communities.
   • Access to effective grievance mechanisms.
4. Environment
   • Conservation of forests, ecosystems, and biodiversity.
   • Sustainable management of water and natural resources.
   • Responsible use of packaging materials.
   • Actions to mitigate and decrease greenhouse gas emissions.
   • Sustainable biomass production.
5. Animal-Based Production
   • Compliance with local laws on farm animal welfare.
   • Provision of veterinary care.
   • Minimization of non-therapeutic use of antimicrobials.
6. Aquaculture and Fisheries
   • Prohibition of sourcing from endangered species and IUU fishing.
   • Sustainable aquaculture practices.

Requirements for Origins

1. Business Ethics, Compliance, and Transparency
   • Compliance with all applicable laws and regulations.
   • Prohibition of improper payments for or from government officials.
2. Human Rights
   • Equal treatment and non-discrimination.
   • Work conducted on a voluntary basis.
   • Fair and transparent terms of employment.
   • Respect for the minimum age of employment and protection of young workers.
   • Freedom to form and/or join a trade union and to bargain collectively.
   • Provision of a healthy and safe workplace environment.
   • Legal and decent working hours.
   • Fair compensation.
   • Respect for the land and resources of indigenous peoples and local communities.
   • Access to effective grievance mechanisms.
3. Environment
   • Conservation of forests, natural ecosystems, and biodiversity.
   • Sustainable management of water and natural resources.
   • Responsible use of agrochemicals.
4. Animal-Based Production
   • Compliance with local laws on farm animal welfare.
   • Provision of veterinary care.
   • Minimization of non-therapeutic use of antimicrobials.
5. Aquaculture and Fisheries
   • Prohibition of sourcing from endangered species and IUU fishing.
   • Sustainable aquaculture practices.

Appendices

1. Related Hyp Group Frameworks and Strategies
   • Sustainability Policy
   • Human Rights Policy
   • Environmental Management System
   • Circular Economy and Waste Management Strategy
2. Definitions Applicable to the Requirements
3. References
4. List of Pesticides Referred Under “Use of Agrochemicals”