Supply chain

Pandox’s largest suppliers are companies in the construction industry and property management, and suppliers of goods and services for hotels operated by Pandox. Both construction and hotels are industries where exploitation of labour can occur. Pandox therefore clearly communicates
its zero tolerance for criminal activity, human trafficking, prostitution and sexual exploitation in its codes of conduct for employees and business partners, and in a Modern Slavery Act statement.

No cases of prostitution were reported during the year at hotels operated by Pandox. In dealings with the construction industry, where the risk is considered the highest, Pandox also scrutinises
new and existing suppliers via a digital self-assessment system. 

In 2023 we worked on reinforcing our governing documents and internal processes to ensure a solid due diligence process. This was based on the impact assessment carried out in 2022 by an independent third party to identify, assess and report human rights risks – both in the supply chain and within Pandox itself – and to determine which steps are needed to manage these risks.
The process was limited to the industries and countries relevant to Pandox’s operations and value chain where
the human rights risks are considered higher.

1. Sourcing and procurement
All new suppliers in Sweden with contracts above a certain amount go through a digital
review process via an external tool. This involves first verifying that the company exists and is active, then screening the company against global sanction lists. If any nonconformances
are identified the supplier is no longer part of the procurement. For approved suppliers, risk analysis is carried out in the system based on risk parameters such as industry, country, size of purchases annually and length of contract. Medium and high-risk companies are asked to fill out
a digital self-assessment form to give Pandox better information for a decision in the final stage of the procurement process. In 2024 the supplier evaluation will be expanded in scope to include the whole of Europe.

2. Requirements
Under the terms of their contract, all new suppliers must approve Pandox’s Code of Conduct for business partners regardless of the contract amount. This takes place in the supplier system.

3. Monitoring activities
All suppliers defined as high or medium risk at the procurement stage must complete a longer
self-assessment form within six months. This follow-up process is to ensure that they are meeting the terms of the contract. In addition to these measures, random checks are made of low-risk suppliers, who must also complete the longer selfassessment form.

4. Dialogue with suppliers
When a non-conformance is discovered in a self-assessment form, a dialogue begins with the supplier in which they are asked to propose an action plan. Pandox approves the plan and then follows up to ensure that the actions decided on are carried out within the established
timeframe. Depending on the level of seriousness, suppliers that do not remedy the non-conformances identified may have their contracts terminated. No supplier contracts needed to be terminated in 2023.

5. Site visits
In 2023 none of the suppliers conducting self-assessment identified any serious non conformances. If any serious non-conformance is identified, the supplier receives an on-site
inspection from an independent external party.

Exemption
Suppliers may be granted exemption from the process described above if special circumstances exist, such as if there is only one supplier in the market. Exemption may only be granted by the newly formed purchasing council consisting of representatives from the executive management team. Individual purchasers may submit an inquiry regarding exemption to the council. Each individual case is to be documented and archived. No cases needed to be escalated to the council in 2023.