Responsible Sourcing

At Whirlpool Corporation, we are committed to Winning with Integrity, and we extend this principle to not only our employees, but also to those who we do business with. We hold ourselves to high standards, and we expect our suppliers and third parties acting on behalf of Whirlpool Corporation to do business the right way as well.

Within our Responsible Sourcing program, one of the pillars is focused on driving a strong compliance program to help protect Whirlpool Corporation from any ethical compliance risks:

Where there is no local legal requirement, or if a local legal requirement is not as strict as the requirement included in our SCoC, Whirlpool suppliers are required to follow the requirements outlined in our SCoC policy.

Our Criteria

We use a risk-based criteria to identify suppliers in scope for audits to ensure compliance with our SCoC policy.

• Existing Suppliers: We classify our existing direct material and finished product sourcing suppliers as critical suppliers to conduct SCoC audits based on the following criteria established in 2021:
  • Critical suppliers: All supplier factories that operate in a country with Corruption Perception Index1 (CPI) score of less than 45 and an annual spend of greater than US$100,000, supplying to any of Whirlpool Corporation’s facilities, if unaudited previously.
  • We also reserve the right to conduct audits on any existing supplier, irrespective of whether or not they meet the critical supplier criteria in case of any perceived or observed risks.
• All new suppliers must go through an on-site audit by our third-party auditor prior to being selected for conducting business with Whirlpool Corporation.

Our Approach Audits & Corrective Action Plan

We have retained a third party to conduct, evaluate and remediate all our audits. The main audit types conducted are:

• Onsite Audits: Our preferred method of audits is onsite audits, which accounts for the majority of our audits.
• Equivalent Audits: Equivalent audits are accepted if conducted in the last two years with any of these organizations: RBA, Amfori BSCI, SMETA (4 Pillar), ICTI, and Intertek WCA. For an equivalent audit to be accepted, the report must be validated by our third-party auditor, before it is accepted by Whirlpool Corporation.
• Remote Audits: Only accepted due to site restrictions, travel hazards or other mitigating circumstances.

All suppliers who undergo audits work with our third-party auditors to create and align on a Corrective Action Plan (CAP). Suppliers must provide evidence of resolving the CAP. Our auditors are also assigned to follow up on all audits that were completed to verify that the findings were closed to ensure continuous improvement in our processes. We had 33 remedial re-audits in 2021, out of which 21 suppliers have approved CAPs and are working on closing the action items; others are working on CAP approvals.

Mitigation Actions

We conduct annual training for suppliers in scope to ensure clear understanding of our SCoC and audit actions to ensure compliance.

In 2021, we also conducted global training for all our procurement employees to ensure they were aware of the expectations and requirements of the SCoC and work proactively with suppliers to ensure any risks are identified and mitigated proactively, where possible.

Decision Making

• Any new supplier who doesn’t pass the audit is not awarded the business.
• Any existing supplier who scores poorly on the audit is put on new business hold and must pass the re-audit before business can continue.

Human & Labor Rights

Whirlpool Corporation supports the human rights of everyone we work with, and we expect our global suppliers to do the same. We strive to hold our suppliers accountable with these same principles through our SCoC. The SCoC states, in part, that suppliers must recognize and respect human rights, including any rights of workers to exercise lawful rights of free association, compliance with local and international laws regarding young workers, compliance with laws prohibiting human trafficking in any form (e.g., forced labor, debt bonded slavery), providing safe and healthy work environments, and respecting any legal right of workers to bargain collectively.

Under the SCoC, all suppliers are also prohibited from using any type of involuntary or forced labor. Our auditors check for activities related to forced labor per our SCoC audit manual, including, but not limited to:

• Supplier must have a written policy against forced labor that complies and implements the code, applicable laws and regulations.
• All workers in the facility must be voluntarily employed.
• Workers must be able to voluntarily end their employment without any restriction, provided that they give reasonable notice to their organization.
• No prisoners should be working in a facility.
• No supplier may hold a worker’s original government-issued identification or travel documents.
• A supplier may obtain and retain copies of workers’ government-issued identification and travel documents.
• Under no circumstances may a supplier allow a private employment or labor agency to hold a worker’s original government-issued identification or travel documents.
• Supplier shall not confine or restrict workers’ freedom of movement inside the place of production or supplier-provided facilities, including access to drinking water, restrooms and the worker’s dormitory room, except where necessary for worker safety and permitted by applicable laws and regulations.
• A supplier must ensure workers have not been charged, directly or indirectly, any fees or commission related to the recruitment and/or employment process, whether in a worker’s home country or in the country where the work is performed. If the recruitment agent has requested any such fee, supplier must ensure the worker has been reimbursed.
• Supplier must respect the right of a worker to remove themself from a work situation based on a reasonable justification that the situation presents an imminent and serious danger to their life or health.
• Supplier shall not retaliate or discipline any worker for exercising this right.

Where there is no local legal requirement or if a local legal requirement is not as strict as the requirement included in the SCoC, suppliers are required to follow the requirements in the SCoC. Our SCoC also prohibits harsh or inhumane treatment, including corporal punishment or the threat of corporal punishment, or forced labor.

No instances of child labor or young workers exposed to hazardous work were found in any of the audited supplier facilities. We audit our suppliers to check for any child labor instances per our policy, which determines the minimum age for workers must be greater than: (a) 15 years of age or 14 years of age where local law allows such an employment age consistent with International Labour Organization guidelines; or (b) the age for completing mandatory (compulsorily) education; or (c) the minimum age established by law in the country of manufacture.

In addition, suppliers must comply with all legal requirements for the work of authorized young workers, particularly those pertaining to hours of work, wages, safety, working conditions and the handling of certain materials. In addition, suppliers must ensure that on a regularly scheduled basis, except in extraordinary business circumstances, workers are not required to work more than (a) 60 hours a week, including overtime, or (b) the limits on regular and overtime hours allowed by the laws of the country of manufacture. In addition, except in extraordinary business circumstances, all workers are entitled to at least one day off in every seven-day period.

Pursuant to our SCoC, our suppliers must meet these requirements and be compliant with the law, codes and policies. Whirlpool also utilizes a cross-functional team led by Global Strategic Sourcing (procurement) and consisting of Legal, Ethics and Compliance, and Government Affairs to help identify, review, analyze and respond to any issues of forced or compulsory labor, including, but not limited to, monitoring multiple public websites, periodicals and reports that may identify forced labor violations or issues. Additionally, Whirlpool utilizes a Global Third-party Due Diligence Program that identifies forced or compulsory labor violations, claims or past conduct against new and current suppliers. Based on due diligence findings, Whirlpool can respond appropriately to forced or compulsory labor issues and risks. Material failures to comply with our SCoC may result in the termination of our relationship with a supplier. In order to ensure our suppliers are meeting our standard of integrity, we will continue to conduct independent audits of a representative sampling of our suppliers’ practices.

In 2021, as a result of our SCoC audits, eight minor incidents of labor risk were identified. Four of these suppliers have corrected the findings by updating procedures and one new supplier was not awarded business. At the time of publishing the report, three of the eight have been put on new business hold until the findings are remediated.

Third-Party Due Diligence Program

While we previously had third-party due diligence checks in place, in 2021 we launched an online centralized system “319 Anti-Corruption Screening Process” (the 319 TPDD Process) to continue driving global anti-corruption due diligence. The 319 TPDD Process is facilitated by Refinitiv Services—World Check program and review and analysis by Whirlpool Corporation’s global 319 TPDD compliance team.

The program aims at lowering the risk exposure of working with high-risk third parties by running independent background checks to ensure the suppliers we do business with are reputable.

The main information collected from third parties to conduct the screening includes their legal entity demographic information, primary contact and owner information, their interaction level details with the government in countries where they operate and ownership structure.

Conflict Minerals Program

Whirlpool Corporation has developed a conflict mineral due diligence framework that conforms with the internationally recognized due diligence framework developed by the Organisation for Economic Co-operation and Development (OECD). Per U.S. Securities and Exchange Commission (SEC) guidelines, in May 2021 we filed the Whirlpool Corporation Conflict Minerals Report for the year ended 2020, which included reporting requirements on issuers if their products contain metals derived from minerals defined as “conflict minerals,” which currently include cassiterite (the metal ore from which tin is extracted), columbite-tantalite (the metal ore from which tantalum is extracted), wolframite (the metal ore used to produce tungsten) and gold. These minerals—tin, tantalum, tungsten and gold—are referred to collectively as “3TG” or “3TG minerals”.

Our Criteria & Approach

For calendar year 2020, we identified 782 suppliers from across the globe which used smelters and refiners in producing parts and components sold to Whirlpool Corporation.

These suppliers are in commodity groups that are known to have metal components in their parts, thereby higher chances of using smelters and refiners in their process.

61% (478 of 782) of our in-scope suppliers surveyed responded with Conflict Minerals Reporting Template (CMRT) declarations. The majority of our responding in-scope suppliers provided data at a company or divisional level, or otherwise were unable to fully identify specific entities that had processed the 3TG minerals contained in the products or components supplied to us. As a result, we were unable to definitively determine whether our products contain 3TG minerals that may have directly or indirectly financed or benefited armed groups.

Since we are unable to verify the full source and chain of custody for all of the 3TG in our supply chain, we have elected not to present the smelter and refiner names provided by our supply chain in our conflict minerals 2020 report to the SEC. Of the smelters or refiners reported by our supply chain, 77% were classified as not from conflict affected or covered countries, and had statuses of “compliant” or “active” by the Responsible Minerals Assurance Process (RMAP) guidelines. The remaining smelters or refiners had other RMAP classifications.

Measures to Improve Due Diligence and Mitigate Risk

We continue to improve our program with the actions outlined below:

• We invested in conflict minerals diligence tools by launching our conflict minerals survey through our Global Material Compliance Platform in 2020, enabling us to centralize our material compliance declarations into one database.
• We increased the response rate of our in-scope suppliers by 8% in 2020 through improved escalation and follow-up procedures.
• We developed further organizational and supplier awareness by conducting four compliance training (inclusive of conflict minerals training) with all our procurement employees, and sharing details of our conflict minerals compliance program in a global call with our entire supply base.

We continue to undertake the following actions to improve due diligence and further mitigate the risk that 3TG minerals in our products benefit armed groups:

• Enhance escalation and follow-up procedures to increase the response rate of our suppliers to the CMRT, and to enhance due diligence measures to obtain detailed information from suppliers that responded that they may be sourcing 3TG minerals from the covered countries.
• Participate in our Raw Materials Initiative (RMI) with other industry groups to support an increase in the number of smelters and refiners participating in the RMAP and other solutions aimed at improving supply chain transparency.
• Make additional investments in conflict minerals due diligence tools.
• Monitor leading practices of peer companies to enhance our own conflict minerals program.
• Follow processes to identify newly added direct suppliers to Whirlpool Corporation and acquired entities and incorporate them into our Reasonable Country of Original Inquiry (RCOI) efforts.
• Develop further awareness within the organization and supply base regarding conflict minerals compliance through outreach and training.
• Institutionalize our conflict minerals compliance program by improving our standard operating procedures, rolling out the procedure to identified business units, and identifying and prioritizing improvement opportunities.
• In the event that any of our suppliers are found to be providing us with components or materials containing 3TG from sources that support conflict in the covered countries, work with them to establish alternative sources of 3TG.

Responsible Sourcing Program: Continuous Improvement Actions

We strive to continuously strengthen and enhance our compliance programs to ensure we mitigate risk, minimize negative impacts and make a positive contribution to the businesses, people and communities we support through ethical purchasing practices.

While we expect our Tier 1 suppliers to extend our SCoC to their entire supply chain, the audit program is only extended to our Tier 1 suppliers, and we look forward to expanding it for Tier 2 suppliers with directed spend in the near future.