պֲ Corporate Sustainability Responsible procurement

Responsible procurement

We have around 20,000 suppliers in around 100 countries, and we work closely together with them to support their sustainability practices and processes.
Responsible co-operation ensures a sustainable value chain

Responsible co-operation ensures a sustainable value chain

Suppliers are our valuable partners. We want to be a responsible and trusted partner, so we work closely with our suppliers to ensure a socially, environmentally and economically responsible value chain.

Adherence to safe operational and fair employment practices in our supply chain, continuous supplier due diligence and risk identification, and various climate change actions taken by our suppliers are a priority for պֲ

All new suppliers are assessed on sustainability matters, and we consider sustainability essential part of the evaluation process and in line with economic, financial and quality aspects.

During supplier onboarding, all new suppliers are required to register and complete a supplier profile. This profile includes a sustainability section with about 30 questions. We also ask our suppliers to agree on պֲ Supplier Code of Conduct. If their answers do not meet our minimum requirements (e.g. minimum age, anti-corruption policy, safety practices), we request corrective actions that are then followed up.

Supplier engagement program

We ask our suppliers to demonstrate continuous environmental improvement, e.g., by developing CO2 emission reduction plans and setting their own CO2 reduction targets. We especially encourage our suppliers to commit to the Science Based Targets initiative (SBTi) and climate-related target setting. We target that 30% of our direct procurement spend is with suppliers who have committed to science-based emissions reductions by 2025. Our supplier engagement program started in 2020 and in 2023 25.6% of the direct supplier spend was with those committed to SBTi.

To support our suppliers in their sustainability commitments and goals, we educate, advise and audit our suppliers’ performance on sustainability. We offer several supplier e-learning courses about our supplier sustainability expectations, human rights, safety, as well as the SBTi setting methodology for CO2 emissions reductions and how our suppliers can contribute to reducing CO2 emissions across the supply chain. Some of our suppliers have been highlighting that they are already getting business benefits due to energy consumption reductions and optimization of their operations. Our supplier engagement program is mutually beneficial because some of the engaged suppliers are smaller companies that would not have their own science-based emissions targets programs without պֲ’s support.

 

Supplier engagement program
Supplier Code of Conduct

Supplier Code of Conduct

Our Supplier Code of Conduct sets the standards that we expect our suppliers to follow. It is the starting point for any new or existing business relationship, and it covers areas such as health and safety, child and forced labor, human rights, anti-corruption, compliance with laws and regulations, environment and climate change, and more. We expect our suppliers to make every effort to comply with our Supplier Code of Conduct.

Due to name change the SCOC template has been rebranded. However, all previous commitments using the earlier պֲ Outotec template are considered still valid and binding.

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Supplier audits & development?

Supplier audits & development?

Supplier sustainability audits are a way to ensure supplier compliance and continuous improvement. Our annual auditing program identifies suppliers to be audited based on a supplier sustainability risk assessment. In 2023, we conducted 172 supplier sustainability audits, while 59% of the corrective actions identified had been implemented by year-end.

պֲ’s third-party audits cover many aspects of sustainability, including safety, environment, product safety, labor and other human rights, and risk management. Prior to the audit, the suppliers are asked to complete an audit sustainability self-assessment in an online portal. Based on the audit findings, we agree on corrective action plans together with the supplier after each sustainability audit. We follow up on the implementation of the corrective actions on the agreed time schedule.

In addition to auditing, we use other means to engage with suppliers and support them in improving their sustainability performance. For instance, “Supplier Sustainability Days” are organized to create awareness and train our suppliers. Through active communication, training events and process improvement, we help suppliers in their development towards more sustainable operations.

To provide sustainability training for the whole supply base, we have created "Supplier Sustainability.” This includes various e-learning courses such as պֲ supplier sustainability expectations, պֲ Supplier Code of Conduct, human rights, CO2 emissions reduction and good safety practices.

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Suppliers: Key performance indicator

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