VW Group has introduced a worldwide sustainability rating for suppliers. They will be excluded from contracts if they breach the code.
The system will enable the German OEM to assess the conduct of supply chain partners for risks relating to human rights, environmental protection, corruption and compliance with occupational health and safety.
“We are convinced that a sustainable supplier network is a guarantee of long-term corporate success,” said Stefan Sommer, board member for components and procurement. “Sustainability is becoming a decisive business factor.”
In the sustainability rating process, suppliers first provide a self-assessment of their sustainability conduct by answering a questionnaire and supplying supporting documentation. The data and documents are checked by qualified third parties, and in case of doubt, on-site checks will be carried out.
“If misconduct occurs in the areas of environmental affairs, social affairs or corruption, it will lead to exclusion from the award of contracts,” the company said.
Hiltrud Werner, board member for integrity and legal affairs, said: “We are aware of our responsibility on further steps along the supply chain. However, the demand for sustainability standards and integrity is actually only possible with our direct contractual partners.
“We use this lever as a matter of priority in the supply chain by requiring our contractual partners to pass on our requirements to their partners.”
Full sustainability requirements are described in the group’s new Code of Conduct for Business Partners, which is binding on all companies in VW’s supply chain.
The Wolfsburg-headquartered group has been preparing business partners for the system for nearly a year with information, events and workshops. It is now being gradually introduced into brands and regions.
In the future, it is planned to extend sustainability ratings to CO2 emissions in the supply chain, and to include them in the awarding process as part of the group’s decarbonisation process.