Supplier Sustainability Assessment | 5 factors | Solutions and sample survey

 

Supplier Sustainability Assessment | 5 factors | Solutions and sample survey

 

Today, consumers, societies, and governments around the world are taking an unprecedented interest in companies that respect the environment and care for the health and safety of people. Environmental protection has become a global social phenomenon in the modern world. It has become a buzz-topic in global events and social media. The current generation, influenced by green ideas, has every chance to improve the state of the environment in the next 50 years, consciously choosing environmentally friendly goods and services; companies are also paying attention to this issue. We undoubtedly need to raise our environmental awareness to protect the planet.

The procurement process is a key step in the supply chain of any company. The term “green procurement” means that an organization pays special attention to finding, identifying, selecting, and purchasing goods and services that have a minimum impact on the environment. Whereas in the past the regulators forced companies to behave in an environmentally responsible manner, now it is required by the market.

Rising energy and commodity costs are pushing companies to seek alternatives and ways to reduce costs. Green Sourcing provides a variety of products and solutions that reduce waste, reduce energy and water consumption, and achieve multiple efficiencies.

 

Supplier Code of Conduct

 

A Supplier Code of Conduct, also called a code of ethics or code of conduct, is a guide that describes acceptable and undesirable practices for suppliers. The Supplier Code of Conduct is intended to ensure that suppliers treat their employees with due diligence and respect for the environment. Typically, the supplier code of conduct consists of the following topics.

  • Labor and workplace safety - This includes guarantees against child labor, non-discrimination, health and safety, working conditions, working hours, compensation, the right to association, freely chosen work
  • Environmental policy - consists of provisions and requirements to ensure that the supplier does not harm the environment
  • Ethical standards - adherence to good business practices, anti-corruption regulations, and legal relationships with managing partners
  • Quality and Management - suppliers must provide high quality, safe and efficient products and services, fully complying with applicable laws and regulations

 

The codes of conduct standards are derived from the following international environmental and health standards. A company can use this standard as a guide in its supplier code of conduct or enforce these specific standards in supplier factories.

 

Labor standards:

 

Environmental and social standards:

  • ISO 14000- environmental management
  • SA 8000- decent working conditions
  • ISO 45001 (occupational health and safety)
  • CE EMAS (environment)
  • ILS (International Labor Standard)
  • BSCI (Business Social Compliance Initiative)

 

Let's take a closer look at the key aspects of a supplier's code of conduct that will help assess its sustainability.

 

Aspect

Solution

Treatment of workers. Suppliers must respect the rights of their employees and treat them with respect and dignity, and provide the right environment to maintain health and safety. This requirement includes the following aspects:

  • Abandoning child labor
  • Freedom of employment, the use of forced, bonded, or involuntary labor is not allowed
  • Supplier employees' working hours must not exceed the maximum limit set by applicable national laws and ILO standards. Compensation must be paid to employees regularly, on time, and in full following applicable laws and applicable national wage laws.
  • Non-discrimination, equal treatment of all employees should be a fundamental principle of the corporate policy of each supplier
  • Suppliers must use applicable safety programs to regulate and maintain all manufacturing processes following applicable safety standards.
  • Suppliers must ensure that their employees are adequately protected from chemical, biological, and physical hazards.

 

Adherence to national and international labor standards, application of standards such as SA 8000 and BS 8800, ISO 45001 regulating decent working conditions and safety.

Climate and environment.  Suppliers must take reasonable steps to protect the health and safety of their workers, customers, visitors, contractors, and anyone who may be harmed as a result of their activities. They must conduct their business in an environmentally responsible and resourceful manner. This requirement includes the following aspects:

  • Suppliers must comply with product safety regulations, properly label and communicate requirements for product transportation.
  • Resource conservation and climate protection. Suppliers should use natural resources (e.g., water, energy sources, raw materials) economically and conserve them. To ensure that renewable natural resources are respected, suppliers must promote the application of widely recognized sustainability standards and certification requirements developed by various stakeholders.

Waste and emissions.  Waste, air emissions, and wastewater discharges must all be handled safely and legally. This includes storage, transportation, disposal, recycling, reuse, and disposal.

Setting minimum recyclable materials, using environmentally friendly materials such as plant products, certified sources of materials such as lumber, fair-trade products. Use of standards ISO 14000 - environmental management, CE EMAS, BS 8855, and so on.

 

Quality. Recognized or legally agreed standards and quality requirements must be applied to provide goods and services that meet the performance specifications stated in the warranty and are safe when used for their intended purpose.

 

Implementation of a quality management system and its certification in accordance with ISO 9001

 

Packaging. Consumer demand for sustainable packaging options is growing, and brand owners are opting for materials and packaging methods that are less environmentally friendly.

 

  • Use of renewable / recyclable / recyclable raw materials
  • Unification of packaging design 
  • Using reusable packaging 
  • Using single-layer packaging
  • Optimization of packaging design (size, weight, quantity, and material of coatings and labels, as well as other elements, should not complicate the collection and recycling of packaging)

 

Disposal of the product. It is the process by which goods and waste produced by a company are destroyed or disposed of. It is very important that if a company has to dispose of its products, it does so through a certified product disposal process. This ensures that they will not be resold or misused.

 

Compliance with national requirements related to the disposal of certain types of waste, for example, for IT equipment, the supplier may require the return of this equipment and the disposal of its property at the end of use. 

 

Sample Supplier Questionnaire

 

Based on the supplier's code, here are examples of strategic goals that can be translated into performance indicators and for their further use as supplier assessment tools

As a result, the use of supplier surveys and codes contributes to the following outcomes:

  • Demonstration of the organization's capabilities and actions to improve environmental and social performance (e.g., waste reduction)
  • Helps to protect the company's brand image in the event of an incident at the supplier's facility
  • Helps to achieve compliance in the countries where environmental and labor laws are lacking or underdeveloped
  • Compliance with laws and regulations
  • Compliance of the organization with other requirements to which it has subscribed
  • Cost savings or other financial results

 

Sourcing.eco follows the recommended survey format in their assessment and investigates each supplier’s capacities and ability to meet the indicated standards.


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