Environment
Our efforts to create a sustainable supply chain: Suppliers under scrutiny
24. April 2023
Our efforts to create a sustainable supply chain: Suppliers under scrutiny
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Sustainability
Stephanie Dirnbacher-Krug
Als selbstständige Journalistin übermittelt Stephanie Dirnbacher-Krug für voestalpine komplexe Themen einfach und verständlich. Zu ihren thematischen Schwerpunkten zählen Wirtschaft, Recht sowie Gesundheit und Nachhaltigkeit.
The nearly 50,000 voestalpine suppliers are required to adhere to ecological and social standards. Read on to find out what measures the Group is taking.
At voestalpine, sustainable management is not limited to activities within the Group. We also insist that our nearly 50,000 suppliers worldwide comply with social and ecological standards. We use a range of measures to ensure that our suppliers comply with social and ecological standards.
The “Sustainability in the Supply Chain” roadmap ensures transparency and sustainability throughout the entire supply chain. It consists of several measures:
Identify and limit risks
To identify, avoid, or limit negative environmental and social impacts in our supply chain, we subject all companies that supply us with products and services to a typical risk assessment. We take into account risks specific to the supplier’s country, industry, and products.
The majority of our suppliers score well in this risk assessment. Only about 1% are thought to pose social or environmental risks. In these cases, we require additional evidence such as relevant certifications, or further measures such as the joint development of improvement plans. This ensures that we procure our products and services sustainably and in accordance with certified work practices.
"We focus on long-term partnerships and know our business partners well. We see it as our task to raise awareness and to support our suppliers in matters of sustainability."
Code of Conduct for Business Partners
Our Code of Conduct requires transparency from our suppliers with regard to compliance with social and ecological standards and reducing CO₂ emissions.
The Code of Conduct for voestalpine business partners is based on the UN Guiding Principles on Business and Human Rights, the Principles of the UN Global Compact, the International Bill of Human Rights, the United Nations Convention against Corruption, and the ILO Declaration on Fundamental Principles and Rights at Work. It includes, for example, the obligation to comply with laws and environmental protection standards, respect for human rights, and the prohibition of forced and child labor.
Our suppliers reducing their CO₂ emissions is relevant to achieving our target of a 25% reduction in Scope 3 emissions by 2029, especially as around two thirds of our Scope 3 emissions are attributable to raw materials.
Specific targets for reducing CO₂ in the supply chain are still being developed and will depend to a large extent on their feasibility and cost-effectiveness.
Trust is good, control is better
We use checklists, questionnaires, and on-site visits to ensure that the supply chain complies with sustainability criteria. The prerequisite for these measures is ongoing communication with our business partners. This is no easy task for a decentralized organization like ours with almost 50,000 suppliers in more than 70 countries worldwide.
We are also developing key performance indicators and reporting structures. And we are revising our purchasing processes, integrating social and ecological criteria into our procurement process, and training our employees.
"Ensuring sustainability in the supply chain is an incredibly complex undertaking. To accomplish this, in ongoing communications with our nearly 50,000 suppliers we need to include due diligence as a key requirement."
In the interest of the stakeholders
Our commitment to a sustainable supply chain is also a response to the growing number of requests from our stakeholders and customers.
We follow the German Supply Chain Due Diligence Act which came into force in January 2023, where possible taking into account the in part more far-reaching regulations of the proposed EU Directive on Corporate Sustainability Due Diligence. We are therefore well prepared to meet future legal obligations.
Our focus on sustainability
For decades, voestalpine has been the environmental and efficiency benchmark for the industry. We focus on sustainability out of conviction, not because it is the trend. We provide information on which sustainability criteria and standards we follow, on how we are continuously improving our carbon footprint, and about the innovative, sustainable products and solutions we develop for our customers in order to make the world a little better.
Stephanie Dirnbacher-Krug