Supplier management

Birla Carbon’s broad geographical base means we have a complex supply chain. Maintaining close ties with local, regional and global suppliers is crucial for managing our supply chain risks; our suppliers’ behavior reflects on our own and our customers’ reputation. We work together with our suppliers to meet our high ethical standards and drive improvements in our industry.

Code of Ethics

At the most basic level, our supply chain must be reliable and ethical. We have established robust internal standards and principles to guide our employees, business partners and our suppliers to meet our expectations. Our diverse business partners include vendors, service providers, consultants, contractors, distributors and agents.

We consolidated and rolled out our Global Code of Business Ethics and Compliance Standards (Code of Ethics) in 2014. It is a comprehensive document that each employee must read and sign annually. We share our Code of Ethics with our major suppliers (those identified as above a certain spend threshold) and ensure they are aware of the need to adhere to it. In addition, we have updated our Terms and Conditions to include a clause establishing the ethical principles with which we expect our business partners to comply.

In FY2017, we worked with legal advisors in various regions to customize our Terms and Conditions (T&Cs) of Purchase to address the different local legal requirements. In FY2018, we began a similar process with our T&Cs of Sale.

Our Supply Chain and Procurement Policy (pdf, 0.5 MB), published in FY2018, guides our sites to ensure supply chain compliance with the relevant legislation and the Birla Carbon Code of Conduct. Standards we expect include promoting resource conservation, use of alternative materials and renewable energy, water stewardship, safety, health, respect for human rights and elimination of child and forced labor across the supply chain.

Assessing sustainability: our suppliers and us

As we have matured through five years of sustainability integration and reporting, we have begun to explore further ways we can stimulate best practices through our supply chain. Birla Carbon’s procurement process is decentralized, and managed locally or regionally. 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 supplier risk management is key.

In FY2018, through our Sustainability Steering Committee, we commenced the implementation of a new third-party due diligence system, designed to assess the profile of our suppliers and ensure we only work with those with a good track record in terms of business practices, governance and reputation. In FY2018, we used the system to screen over 90 distributors and sales agents and plan to begin screening critical suppliers in the next year. We are now assessing further improvements to our due diligence approach and systems.

We are exploring a risk-based approach to supplier engagement that will target key suppliers (based on spend, criticality, reputation risk and other considerations) and encourage them to improve on their own environmental and societal impacts. We also encourage our suppliers to audit our own operations.

Response planning and preparedness

We strive to ensure that our sites and suppliers have inventories available at all times. Challenging and unexpected global circumstances can impact inventory approaches both for ourselves and our suppliers. Our Business Continuity Plans and Crisis Management Response Guidelines provide solutions for sourcing raw materials and critical spare parts with minimal risk through our contract supplier agreements. We maintain an updated list of approved, assured and certified alternative suppliers for emergencies.

Responsible consumption and production

We support responsible consumption and production by ensuring that our feedstock comes from suppliers close to our facilities, who we have started to screen for risk management.

Partnerships for the goals

We encourage our suppliers to respect human rights through the Terms and Conditions on our contracts.

Over 90 distributors and sales agents screened through our new due diligence system.