Responsible supply chain
Elopak spends more than EUR 840m per year and works with more than 5000 suppliers globally, delivering goods and services needed to produce our products and to run our business effectively. Key raw materials related to our cartons account for approximately 60% of the total purchase spend, including boards, polymers, aluminium and inks & solvents.
Making sure that we work with responsible and sustainable suppliers who share our values and commitment in regard to responsible business conduct is crucial to reducing risk and avoiding negative impact on people, environment, and society, throughout our supply chain. It also allows us to better meet the demands and expectations from customers, end-consumers and other stakeholders.
Approach
Elopak’s Responsible Supply Chain work follows a risk-based approach and is based on UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct. We are committed to working with suppliers that meet our requirements and monitor their performance and compliance to assess and mitigate social and environmental impact in our supply chain.
Our Global Supplier Code of Conduct outlines our expectations and requirements towards suppliers related to anti-corruption and business ethics, human and labor rights, health and safety and the environment. We expect all our suppliers to respect and comply with the code and have an equivalent code and practice in place towards their suppliers and sub-suppliers. Supplier Code of Conduct engagement is an integral part in our supplier onboarding process and in our supplier contracts.
As part of the supplier qualification and onboarding process all new suppliers undergo a prequalification review including SCoC engagement. In addition, Elopak conducts risk-based integrity due diligence processes for all our suppliers to ensure that their reputation, background and abilities meet our standards as outlined in the SCoC. Significant and/or critical suppliers undergo a more in-depth assessment at least every two years through self-assessments, third-party assessments such as Ecovadis, follow up meetings and on-site audits for high-risk suppliers.
Fact box
Key suppliers are defined based on their business criticality and spend level. These are currently direct suppliers providing raw materials to our cartons and secondary packaging, as well as indirect suppliers mainly related to logistics & transport as well as plant Investments. Supplier selection for the in-depth assessments considers both suppliers’ business criticality and country of origin, as well as activity/industry.
Where suppliers do not meet our standards, we work with them on corrective actions to better understand potential gaps and improvement areas.
Re-assessments are conducted minimum every two years depending on results of the initial assessments. If Elopak identifies or becomes aware of any non-compliance, we actively engage with suppliers to agree on mitigating activities and a clear timeline for following these up. If the non-compliance is material or if a supplier after several requests does not show willingness or ability to improve or remediate the non-compliance, we reserve the right to terminate the business relationship.
Performance
Targets
Ensure all key suppliers accept our Supplier Code of Conduct and are assessed for social responsibility and environmental criteria by 2025.
KPIs | KPI reference | Status 2022 |
a) % of raw material suppliers (by spend) signed, accepted or demontrated confomrance to Elopak Global Supplier Code of Conduct b) % of all suppliers (by spend) signed, accepted or demontrated conformance to Elopak Global Supplier Code of Conduct c) % of suppliers (by spend) assessed for environmental and social impact | Self-defined Self-defined GRI 308-2a GRI 414-2a | a) 95% b) 80% c) 75% |
In 2022 we updated our Global Supplier Code of Conduct to better reflect our requirements and expectations regarding responsible business conduct in the areas of anti-corruption and business ethics; human and labor rights; health and safety; and the environment. We also updated and implemented our Supplier Qualification and Due Diligence framework, including clear thresholds and minimum requirements for qualification, background screenings and compliance to our SCoC principles. Our Global Procurement Network received further training on our Responsible Supply Chain framework, including the Supplier Qualification and Integrity Due Diligence process for new and existing suppliers. We started integrating these policies and carrying out training at our new operations and sites located in Morocco and Saudi Arabia, as well as at our new joint venture in India. As we are still in the integration process, the below does not include our new operations.
Main accomplishments during 2022 include:
• By 2022, 85 key suppliers accounting for approximately 75 % of total purchase spend had been assessed by Ecovadis and/or via our internal Supplier Integrity due diligence questionnaire and process covering social and environmental criteria.
• Approximately 95 % of our raw material suppliers and 80% of all suppliers (by purchase spend) have signed, accepted or demonstrated conformance with our Supplier Code of Conduct.
• No suppliers were identified with significant risks or with major negative social or environmental impact in the supply chain based on supplier engagements, risk assessments and due diligence activities conducted during 2022. Read more here.
• Our Global Procurement Network (excl our new sites) conducted a nano-learning on human rights to better understand the objective and impact of existing and coming regulation, including the Norwegian Transparency Act.
Moving forward
We will continue to integrate and train the teams of our new operations and sites located in Morocco, Saudi Arabia as well as our new joint venture in India, into our procurement governing framework, including the Supplier Qualification and Due Diligence process. Our focus and priority in 2023 is to better map and assess potential human rights violations in the supply chains of these operations to mitigate and manage these more effectively.
We are also working to further improve our supplier qualification and due diligence framework by better integrating human rights considerations into existing audit framework. This will be further emphasized during 2023.
In addition, focus will be on implementing and engaging with suppliers on our updated Global Supplier Code of Conduct.