Ensuring a sustainable supply chain
As we have developed our sustainability integration and reporting over seven years, we have continued to explore further ways to encourage best practices through our supply chain. Birla Carbon’s procurement process is generally decentralized and is managed at the local and regional levels. This promotes local sourcing of materials and services to meet our business needs, but it can also present a challenge in terms of risk management. Developing a robust global approach to procurement is key.
That is why we elected to increasingly engage with key suppliers (based on spend, criticality as per our IATF 16949 certification, reputation risk and other considerations) and encourage them to improve on their own environmental and societal impacts. We have partnered with EcoVadis to facilitate sharing of sustainability best practices and to assess the sustainability profile of our key suppliers as part of our Sustainable Procurement program.
In FY2020, all 278 of our critical suppliers were invited to participate in our EcoVadis screening program. EcoVadis screening is a voluntary program for our suppliers, and many have already shared their scores, which are split into four categories (Environment, Ethics, Labor & Human Rights and Sustainable Procurement). Our average supplier sustainability score is 50.3, significantly higher than the average of 42.6 throughout the EcoVadis database, which comprises over 55,000 companies worldwide. This suggests that, globally, our key suppliers are already performing above average in the four criteria. For instance, over 70% of our critical suppliers report on energy consumption and CO2 emissions; over 60% report on health and safety issues, have a policy on corruption and are ISO 14001 certified.
However, fewer than half are disclosing their carbon footprint through the CDP platform or have a certified safety management program. We expect these figures to improve over the coming years through best practice sharing. By continuing to roll this process out to more of our suppliers, we will be able to better recognize, and better select, sustainable and ethical suppliers to work with.