Sustainability and risk management with our suppliers
We work with our suppliers to create value and continuously improve our sustainability and theirs. As 46% of our carbon emissions come from our upstream activities, this is an area where we can make a big impact through collaboration and innovation with our suppliers.
Together for Sustainability (TfS)
In addition to the joint ideas we’re working on with key suppliers, in 2022 we continued to shape, assess and improve our suppliers’ sustainability practices by using and building on Together for Sustainability (TfS) programs and partnerships. Throughout the year, we increased the number of suppliers in our program from 1,028 to 1,432.
We systematically see that it takes time for suppliers newly brought into the program to operate at the sustainability level we require from them. Therefore, we allocate significant time to support suppliers to reach our minimum requirements and thereafter to continuously improve. Because the number of suppliers in our program increased significantly, we see a drop in the percentage of suppliers meeting our expectations against this (higher) baseline. In absolute numbers, we still see an increase from 582 (2021) to 747 (2022) suppliers meeting our expectations. Our ambition is to have close to a 100% participation rate by 2025 (currently at 77%).
Despite the challenging geopolitical situation and ongoing COVID-19 lockdowns, we’ve been able to deliver on our TfS target of conducting 25 audits in risk regions during 2022. Where needed, we requested corrective action.
Supplier Sustainability Balanced Scorecard
We continue to use our Supplier Sustainability Balanced Scorecard (SSBS) to collect eco-performance KPIs. In 2022, we brought our SSBS in line with our SBTi target by requesting product carbon footprint from our suppliers, in addition to waste, energy and greenhouse gas emissions information, to see if they’re moving in the right direction when it comes to meeting their own sustainability goals. In 2022, we deployed the program to 50 suppliers, and over the next few years we intend to reach 100 participating companies, representing 80% of our upstream carbon emissions. We continue to work together with our suppliers to achieve our SBTi targets and will approach the remaining suppliers through the TfS carbon emission program.
We’re able to play a role in helping smaller suppliers understand the complexity of the sustainability agenda. We invited 170 people representing our suppliers to attend webinars we co-hosted in multiple languages with EcoVadis, and we encourage our suppliers to use the Together for Sustainability (TfS) academy, which opened in early 2022. For our buyers, we provided dedicated training on carbon footprint, which was attended by more than 100 of our product-related buyers.
Risk in our supply chain
To better understand and manage risks around the globe from a complex supply base, we implemented “riskmethods” in 2022. This tool helps us efficiently identify and mitigate risk in our supply chain, for example by using artificial intelligence and automated alerts to manage risks, including climate related risk.
Business Partner Code of Conduct
Started many years ago, our Business Partner Code of Conduct remains a core part of our commercial agreement with our suppliers to do business based on our core values of safety, integrity and sustainability.
Suppliers with an annual spend of more than €1,000 are requested to sign our Code of Conduct as part of our onboarding procedure. This confirms their compliance with environmental, social, human rights and governance requirements. Signatories cover 99% (2021: 99%) of the product related spend and 93% (2021: 89%) of the non-product related spend.
The total amount of greenhouse gas (GHG) emissions caused during a defined period of a product’s lifecycle. It is expressed in terms of the amount of carbon dioxide equivalents CO2(e) emitted. Greenhouse gases include CO2, CO, CH4, N2O and HFCs, which have a global warming impact. We also include the impact of VOCs in our targets.
Explains what we stand for as a company, what we value and how we run our business. It brings our core values of safety, integrity and sustainability to life and shows what they mean in practice.
Defines our core values and how we work. It incorporates fundamental principles on issues such as business integrity, labor relations, human rights, health, safety, environment and security and community involvement.