Driving Sustainability into the Supply Chain
Sustainability within our supply chain is a reciprocal relationship. Our suppliers help us achieve our sustainability goals, and we help them drive sustainability into their processes and practices.
As a global company, we enter into relationships and conduct business with thousands of suppliers who are required to behave in a responsible and sustainable manner. Our interactions with them are based on the highest standards of integrity and compliance with all relevant laws and regulations.
In 2014, we spent US$18.6 billion to procure services and materials, taking into consideration their environmental, social, and economic impacts.
2014 Spend and Suppliers by Region
Billions of U.S. dollars
Percent of total supply base
Global Supplier Sustainability Program
We continued our Global Supplier Sustainability Program in 2014 to increase the sustainability of our key suppliers. These include companies that contribute the most to our carbon footprint, possess preferred status, are sole sources of supply, are located in emerging or high-risk countries, or provide regulated commodities.
The program consists of four components:
- Communicate expectations: We clearly define our sustainability expectations and communicate them through discussions and our Supplier Standards.
- Assess supplier: We formally assess the performance of our key suppliers to evaluate the maturity of their sustainability programs and determine where improvements are needed. In 2014, 83% were rated as either leading or active, with the remaining 17% in the emerging and lagging categories.
- Develop and educate: For suppliers that fall into the emerging and lagging categories, we provide education and tools to develop and improve their programs. We also require action plans and demonstrated improvements in the development of their sustainability programs.
- Monitor: We reassess suppliers in the emerging and lagging categories annually. Those that do not demonstrate annual improvements face the risk of losing our business.
Supplier Assessment Criteria
Supplier Sustainability Focus Areas
|Suppliers develop and implement a sustainability program that includes environmental, social, economic, and ethical aspects; such programs publicly published; suppliers cascade same to their supply base.
- Labor practices
- Health and safety programs
- Business ethics policies
- Community commitment programs
- Risk management
- Financial management
- Security of supply
- Publicly disclosed policies and procedures
- Cascade principles and policies to supply base
|Suppliers integrate sustainability into their business strategy and support it through their values and culture.
- Value systems
- Participation in sustainability indexes or reporting frameworks
- Incorporation of sustainability into market strategy
- Life cycle advantages/disadvantages of key products
|Suppliers measure performance and establish quantifiable environmental goals; progress on environmental goals publicly disclosed.
- Environmental goals and metrics
- Recycling programs
- Measurement systems
- Public disclosure/third-party assurance
Supplier Assessment Results
Percent of key suppliers
In late 2014, we began implementing a third-party supplier due-diligence program with our supplier base. This program will help us manage risk in our supply chain related to the areas of anti-bribery and corruption, trade compliance, child labor, human trafficking, and conflict minerals.
We anticipate changes will be made to our Global Supplier Sustainability Program in 2015 to incorporate elements of the supplier due-diligence program to ensure all aspects of sustainability continue to be advanced within our supply chain.
Regional Supplier Sustainability Programs
Building upon and aligned with the Global Supplier Sustainability Program are specific supplier sustainability and development initiatives in several regions. These programs are designed to drive sustainability awareness and education into our local supply bases where specific sustainability risks can exist.
In Brazil, for example, we evaluate all new and existing suppliers that provide at least one of 16 commodities deemed critical to sustainability. In 2014, we performed 84 evaluations, conducted 20 onsite audits to assess site conditions, and continued to register new suppliers in the online system that evaluates supplier compliance against a range of social and environmental dimensions.
We also partnered with the São Luís Suppliers Association, an organization supported by officials in the Brazilian state of Maranhão, to help redefine and improve its local supplier development program.
Ethics and Compliance Program
Conflict Minerals Disclosure and Report