In FY2014 we continued our screening program with over 2,450 additional suppliers screened and 343 entering a deeper screening process. Fifty-two suppliers were identified as being potentially high risk. Suppliers identified as being high risk are asked to conduct a self-assessment of compliance to our SCOP.
Suppliers who complete this self-assessment may be monitored to track any changes to their level of compliance and will be managed through our existing Operational Contract Management framework to ensure they do not pose significant risk to our brand and operations.
During 2013, an independent consultancy reviewed 2,079 suppliers from our technology, people and travel categories and applied risk criteria to identify those suppliers of highest risk of non-compliance with ANZ’s Supplier Code of Practice (SCOP). As a consequence, more than 300 suppliers were studied using more than 600 public databases across 50 countries to identify whether any represented high risk associated with alleged or actual incidences of legal, reputational or governance misconduct.
This screening process identified 41 suppliers requiring further investigation.These suppliers have been asked to self-assess their compliance with our Supplier Code of Practice. Results of the self-assessments will be reviewed and supplier discussions scheduled to understand the full scope of risk and, where necessary, develop remediation activities to minimise risks in our supply chain.
This risk-based approach to supplier sector scans will result in our most material suppliers – as identified by the top 10 categories and spend - being screened over three years.
Other initiatives in 2013 included:
Our commitment to responsible practices across our business means we require our suppliers to comply with all local legal frameworks and to be considerate of the ethical, social and environmental impacts on the communities where they operate. Our requirements are published in our Supplier Code of Practice and integrated into our standard contract terms.
In 2012 we worked with an NGO partner to conduct supplier forums in China and Indonesia, to help build supplier capacity, understanding and support for our Supplier Code of Practice. Suppliers worked in groups to examine the relevance and value of ANZ’s approach to CR. Session outputs are being used to inform our compliance standards, development of strategies and partnerships to minimise environmental impact and to optimise social benefits across our supply chain.
We promoted internal support for Responsible Sourcing by conducting staff workshops, increasing awareness and building actions into the everyday work of our sourcing teams. Over 70 ANZ staff attended the workshops which we held in Australia, New Zealand, Singapore and Taiwan.
Other initiatives in 2012 included:
Our 2013 program aims to:
ANZ’s top 10 most significant impact categories are: Fleet; Air Travel, Accommodation; Print Services, IT Infrastructure; Logistics; Security Services; End User Computing; Events; People and Professional Services.
We have responded to feedback from stakeholders, including investors and NGOs, by strengthening and expanding our Global Sourcing Framework over time to embed responsible practices in all of our sourcing decision-making.
Changes to our Global Sourcing Framework include the development of a new Global Sourcing policy and Supplier Code of Practice (SCOP) for our global business.
Our new Supplier Code of Practice (SCOP) outlines the standards we expect our suppliers to meet as a condition of doing business with us. The SCOP expands on previous commitments and includes new, explicit requirements related to business ethics and human rights such as: adherence to international standards and domestic regulations relating to the employment of children; and the prohibition of unethical business practices such as inappropriate gifts. We are also actively encouraging our suppliers to influence their own supply chains to meet these same standards.
The SCOP is in keeping with our support of the OECD Guidelines for Multinational Enterprises and the UN Global Compact.
To assist the implementation of our new policy and code of practice, we maintain an education program for global sourcing and operational contract managers to help them build understanding and awareness of social and environmental issues, including human rights, and to take greater account of local conditions, cultures and legal requirements when making sourcing decisions.
In 2011, we conducted nine independent audits of suppliers to high spend supply agreements. This process confirmed there were no significant non-compliances to our SCOP.
The audits also revealed opportunities to delve further into our supply chain to discover the levels of compliance of suppliers to lower spend agreements and within our regional operations. We aim to explore this opportunity during 2012.
Our 2012 program aims to:
* ANZ’s top 10 most significant impact categories are: Fleet; Air Travel, Accommodation; Print Services, IT Infrastructure; Logistics; Security Services; End User Computing; Events; People and Professional Services.
In 2010, we reviewed and updated our policies and practices to assist in reducing the impact of our procurement; by improving internal training and education; and improving how we assess and monitor supplier performance against our sustainability requirements. Specifically, this included:
We also undertook independent on-site audits of four suppliers of ‘high-risk’ supply agreements. These identified two minor non-compliances, where suppliers did not have systems in place to monitor and manage the impacts of their own suppliers. Both suppliers have since commenced their own programs to build and/or improve management systems. Progress is being monitored. We have found that the auditing process has also assisted in building deeper relationships with our suppliers, not only helping to identify opportunities where we can work together to monitor and reduce social and environmental impacts but also in identifying opportunities to streamline and strengthen our verification and auditing process.
We plan to release our Supplier Code of Practice (incorporating the current Supplier Sustainability Code of Practice) in 2011. As part of this process, we will work with key stakeholders to develop a robust and pragmatic approach to implementation, verification and compliance, focusing on the most material issues (such as human rights), and our most significant categories and markets.
We also plan to continue our engagement and discussion with suppliers about the social and environmental impacts of our procurement, and use this dialogue to inform the development of our category strategies. This will in turn assist us in identifying and leveraging new opportunities with suppliers, and minimising any risks as we pursue our super regional strategy.