Suppliers

ESG KPI „Sustainable Procurement“

The Sustainable Procurement ESG  KPI  indicates a considerable year-on-year increase at 72 percent, because we audited more suppliers than originally anticipated for their compliance with our social and environmental standards. We expect to achieve our target of 75 percent in 2015.

We measure the degree to which our procurement volume is covered by sustainable activities with the Sustainable Procurement ESG  KPI . It measures the share of procurement volume we obtain from suppliers where one or several companies of the corporate group have been assessed for compliance with our social and environmental standards by way of self-assessments and/or audits. This also includes audits carried out with upstream suppliers.

In 2015 we expect to reach the forecast target of 75 percent for the Sustainable Procurement ESG  KPI . In subsequent years, we assume that the ESG  KPI  will only rise slightly since audits focus on strategic suppliers and those with an increased CR risk.

The Sustainable Procurement ESG  KPI  together with information about our strategic approach fully covers the G4-HR9 (Audit ) and G4-HR10 (Suppliers and human rights) GRI indicators. By providing this information, we cover the V28-04 EFFAS indicators (Supply Chain). It is also relevant for criteria 1 (Opportunities and Risks), 3 (Sustainability Goals), 4 (Value Added Chain), 6 (Rules and Processes), 7 (Performance Indicators) and 17 (Human Rights) of the German Sustainability Code. It is also used for reporting in accordance with the Global Compact  Principles 1 (Supporting and respecting human rights), 2 (No complicity in human rights abuses) and 5 (Effective Abolition of Child Labor).

The percentage of procurement volume generated with companies registered in the industry information tool E-TASC  (Electronics Tool for Accountable Supply Chains) increased significantly from 34 percent in the previous year to 43 percent in 2014. At the same time, the percentage of procurement volume generated with audited companies increased from 21 percent to around 39 percent. A supplier prequalification process took place for 37 percent of the procurement volume in 2014 via the Supplier Management Portal (SMP), compared with 23 percent the previous year. Prequalification is mandatory for all suppliers with which we anticipate an order volume of more than 100,000 euros. The share of procurement volume obtained from developing countries remains steady at 1.0 percent.

The Sustainable Procurement ESG  KPI  together with information about our strategic approach fully covers the G4-HR10 (Suppliers and human rights) GRI indicators. We also comply with criterion 17 (Human Rights) of the German Sustainability Code. The KPI  is also relevant for the EFFAS indicator (V28-04) and for criteria 1 (Opportunities and Risks), 3 (Sustainability Goals), 4 (Value Added Chain) and 6 (Rules and Processes) of the German Sustainability Code. It is also used for reporting in accordance with the Global Compact  Principles 1 (Supporting and respecting human rights), 2 (No complicity in human rights abuses) and 5 (Effective Abolition of Child Labor).