Global responsible sourcing programme
In line with Gränges’ Responsible Sourcing Policy, all sites are to operate a local responsible sourcing programme covering its significant suppliers. The policy applies to all Gränges’ employees and mainly concerns individuals who are in contact with suppliers. The responsible sourcing programme is used as a platform to enforce sustainable practices, ensure continuous improvement, develop collaboration, and build lasting relationships with suppliers. The programme was launched in 2020, and next steps include to further harmonize the processes of the desktop sustainability assessments with the on-site audits conducted.
Global supplier sustainability requirements
Significant suppliers1) are requested to sign Gränges’ Supplier Code of Conduct which includes basic sustainability requirements on suppliers. By signing, suppliers declare to observe all applicable laws and regulations, including the ten principles of the UN Global Compact, and to promote the implementation of these principles in their own supply chains. In 2021, Gränges continued to roll-out its Supplier Code of Conduct as part of new or renegotiated supplier contracts, and Gränges Konin successfully implemented the the Supplier Code of Conduct among its supplier base for the first time.
Gränges' Supplier Code of Conduct
Sustainability risk screening
Significant suppliers are annually screened in a desktop tool for potential environmental, social and corruption risks depending on the purchasing category and country of origin. The aim is to identify and mitigate sustainability risks in the supply chain, as well as ensure compliance with Gränges’ Supplier Code of Conduct. Each supplier is categorized as having a high, medium or low potential risk based on a weighted average risk score.
Sustainability desktop assessments
Significant suppliers categorized as medium or high potential sustainability risk are required to complete an evidence-based desktop sustainability assessment, currently managed by EcoVadis, an external provider of sustainability analyses and ratings. EcoVadis sends out customized sustainability questionnaires to suppliers, analyses the data collected, and provides verified sustainability ratings, scorecards, and benchmarks. High scoring suppliers are to be assessed every three years, medium scoring suppliers every second year and low scoring suppliers annually.
In 2021, 33 significant suppliers (25) had a valid third-party verified sustainability assessment available.
Follow-up and engagement
Results from the desktop assessments are integrated into local supplier review procedures, e.g. supplier scorecards as well as supplier discussions and on-site visits, as applicable locally. Gränges also conducts on-site supplier audits depending on suppliers’ strategic importance and performance. Such audits mainly focus on ensuring compliance with Gränges’ quality and delivery requirements, but sustainability criteria are also often included.
In 2021, Gränges conducted 24 on-site supplier audits in total or 17 (5) excluding Gränges Konin.
Gränges uses an internal escalation process to decide on appropriate actions in cases where a supplier declines to sign the Supplier Code of Conduct, declines to complete the sustainability desktop assessment, or after a supplier has received a low sustainability re-assessment score. All sites have a local escalation team and routine in place. Deviations can lead up to blocked purchase orders and business termination.
In 2021, Gränges established local escalation teams for all regions, which were activated in cases where suppliers declined to participate in the sustainability assessments.
1) All metal suppliers and other suppliers with a purchase value above SEK 5 million or equivalent in local currency.