Sustainable sourcing July 2011 Sustainable development Sourcing Nov
Sustainable sourcing July 2011
Sustainable development – Sourcing Nov 2011
Alstom sustainable development sourcing risk approach Target : no supplier representing risk Content CSR charter CSR assessments and audits of suppliers Suppliers Improvement Implementation Communication Learning Monitoring/reporting People
Agenda 1 st topic Sustainable sourcing : content Page 3 2 nd topic Sustainable sourcing : implementation Page 21 3 rd topic Page 4 th topic Page 5 th topic Page Sustainable sourcing July 2011
What is sustainable sourcing for Alstom ? Alstom aims to have suppliers at least respectful with the international conventions and possibly good or best in class in : § Environment : get suppliers who prove they take care about environment through their products and process § Social : get suppliers who care about social conventions, namely working conditions and human rights, or who are in advance on social conditions § Ethics : get suppliers who respect fair business practises § Find suppliers who hold their own suppliers to these same standards Alstom aims at developing partnerships with suppliers capable to commit on these requirements and has set up objectives and measurement Sustainable sourcing July 2011
Alstom sustainable development sourcing risk approach Target : no supplier representing risk CSR charter and/or contractual clause CSR assessments of suppliers Suppliers Audits Internal audits Objectives Audits Assessments 40% Charter 80% Suppliers Development
Charter for sustainable development • Principle : compliance with ILO ( International Labour Organisation) and other international conventions in particular with − − Labour standards Ethics Environmental protection Occupational health and safety The acceptation of the charter by the supplier is a prerequisite to any order from Alstom The acceptation of the charter by the supplier is an Alstom’s instruction Sustainable sourcing July 2011
Alstom sustainable development sourcing risk approach Target : no supplier representing risk CSR charter and/or contractual clause CSR assessments of suppliers Suppliers Audits Internal audits Objectives Audits Assessments 40% Charter 80% Suppliers Development
Sustainable development assessment : Who • Objective : − Every strategic supplier − Suppliers in main RFQ − Suppliers in risky countries or providing risky commodities Target : Suppliers representing 40% of Alstom’s spend should be assessed ( 3 years target). Sustainable sourcing July 2011
Sustainable development assessment : constraints Purchaser view Suppliers view − High number of suppliers to address − Low awareness of complex and changing regulation. − Difficulty to set up questionnaires adapted to the different commodities − Time dedicated − Many different questionnaires to answer − Questionnaires often non adapted to the commodity − Some XL non convivial files − Few feed-back from the assessments. Sustainable sourcing July 2011 Necessity to industrialise our process and Decision for cross-sectors to out-source all suppliers SD assessments to ECOVADIS
Eco. Vadis “Companies should use databases such as Eco. Vadis that collect supplier audit data and provide buyers with a one-stop tool for evaluating suppliers against a set of sustainability criteria” United Nations Environmental Programme– Sept. 2008 Eco. Vadis Scientific Committee (Includes members of GRI, WBCSD, INSEAD, HEC, CDAF, …) Partners Technology CSR Research Sample Customers Sustainable sourcing July 2011
21 CSR indicators I. ENVIRONMENT Policies - Actions - Results Energy & GHG (CO 2) Water Biodiversity Local Pollutions Materials, Chemicals, Waste Product Use Product End of Life Customer Health & Safety Sustainable Consumption II. SOCIAL Health & Safety CSR Promotion Working Conditions Labor Relations Training & Career Management III. ETHICS Corruption & Bribery Anti-competitive practices Fair & Responsible Marketing Child & Forced Labor Non Discrimination Fundamental Human Rights Suppliers Environmental performance Suppliers Social practices IV. SUPPLY CHAIN 26 000
Elements of CSR management systems taken into account POLICIES • Mission Statement / Policies • Endorsement of External CSR Initiatives RESULTS • Reporting / KPI’s • 360 : Controversies / Condemnations / Awards ACTIONS • Measures / Actions • Implementation / Coverage • Certifications / Labels Sustainable sourcing July 2011
Commodity Eco. Vadis evaluation questionnaire Road Freight Rolling Stock Mechanical subcontracting Countries Size Casting of Metals Sustainable sourcing July 2011 A specific evaluation questionnaire is generated based on the supplier purchasing category, size and main countries of operations, and sent by email.
Eco. Vadis Scoring and Analysis REGULATIONS MONITORING ONLINE QUESTIONNAIRE SUPPLIER SUPPORTING DOCUMENTS ECOVADIS CSR ANALYSIS PLATFORM ECOVADIS ANALYSIS TEAM Sustainable sourcing July 2011 PUBLIC DOCUMENTS 360°(PRESS, NGO, TRADE UNIONS…) SUPPLIER SCORECARD
Example on Eco. Vadis Plateform (fake) Sustainable sourcing July 2011
Alstom sustainable development sourcing risk approach Target : no supplier representing risk CSR charter and/or contractual clause CSR assessments of suppliers Suppliers Audits Internal audits Objectives Audits Assessments 40% Charter 80% Suppliers Development
Audits Two types of audits have been developed as part of sustainable sourcing toolkit • Light audits (or Internal audits) conducted by Alstom − A sustainable development part was developed with Alstom qualiticians to complete qualification audits. Already 170 audits have been conducted. • In-depth audits (or External audits) conducted by a third party : SGS − These physical audits are done by local auditors. These on-site audits can be ordered • when Eco. Vadis is not adapted to the supplier ( small supplier in emerging country), • when Alstom’s buyers or qualiticians fails to realize an action plan due to lack Sustainable sourcing July 2011 of info,
Alstom sustainable development sourcing risk approach Target : no supplier representing risk CSR charter and/or contractual clause CSR assessments of suppliers Suppliers Audits Internal audits Objectives Audits Assessments 40% Charter 80% Suppliers Development
Improvement action plans • Suppliers considered non-compliant will be required to implement action plans or will no longer be able to work with Alstom • Alstom provides support to our suppliers to improve their sustainable development level − Provide free information to the supplier on its SD performance and strengths and weaknesses − Advice on the main improvement to undertake − Provide reassessment possibility − Training available on web Sustainable sourcing July 2011
Status at March 2011 Sustainable sourcing July 2011 Actual FY 10/11 Criteria Indicator Charter accepted Coverage Assessments Number Coverage Audits Number 170 Non compliant suppliers "closed" Score suppliers 46 4 500 808 34%
Agenda 1 st topic Sustainable sourcing : content Page 1 2 nd topic Sustainable sourcing : implementation Page 21 3 rd topic 4 th topic Page 5 th topic Page Sustainable sourcing July 2011
Change management • Communication − Intranet : a dedicated portal our intranet − Web site and adapted presentation www. alstom. com about us/corporate responsibility/sourcing − Transport supplier’s day; Power newsletter… − Instructions − Newsletter Sustainable sourcing July 2011
Change management • Communication − Intranet : a dedicated portal our intranet − Web site and adapted presentation • www. alstom. com about us/corporate responsibility/sourcing − Transport supplier’s day; Power newsletter… − Instructions − Newsletter • Trainings : − E-learning (general info), 1500 people already trained, available on Intranet − Training on Eco. Vadis and action plans, 3 hours learning through Webex : 400 sourcing managers trained. − E-learning on ethics Sustainable sourcing July 2011
Change management • Communication − Intranet : a dedicated portal our intranet − Web site and adapted presentation • www. alstom. com about us/corporate responsibility/sourcing − Transport supplier’s day; Power newsletter… − Instructions − Newsletter • Trainings : − E-learning (general info), 1500 people already trained, available on Intranet − Training on Eco. Vadis and action plans, 3 hours learning through Webex : 400 sourcing managers trained. − E-learning on ethics • People − Roadmaps for evaluation of sourcing people − Highlight on best practices Sustainable sourcing July 2011
www. alstom. com
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