Supply chain standards

Increasing Influence

We’ve reviewed the scope of our key suppliers to now include LGIM (Legal & General Investment Management). We also risk reviewed the categorisation to ensure that we are appropriately identifying and managing those suppliers whose social and environmental impact had increased and as a result we raised our key suppliers to 286. Our governance framework also continues to include the requirement for suppliers to report their environmental, social and governance performance improvements.

We have policies, processes and controls which reflect our commitment to:

  1. Protecting the environment
  2. Protecting the employee
  3. A safe and healthy workplace
  4. Equality, Diversity, Inclusion and Ethics
  5. Community Involvement
  6. Meeting our Customers’ needs

We extend these policies, processes and controls to our suppliers and how we do business with them.

Improvements in governance and policy – enhanced Supplier Code of Conduct

The purpose of our Supplier Code of Conduct (PDF, 115KB) is to safeguard the relationships between us and our suppliers, to establish standards that ensure our suppliers operate ethically, are environmentally responsible and that workers are treated with respect and dignity. We expect all our suppliers to adhere to our code of conduct, have clear processes to maintain these standards and provide evidence of compliance when required.

In 2015, we made further improvements to our Supplier Code of Conduct and incorporated the requirement to adhere to the Modern Slavery Act 2015. We also began the implementation of a new process which aligns with our finance processes and ensures that all new suppliers agree to adhere to our code of conduct prior to being set up.

In 2015, we also made enhancements to our online compliance assessment which is issued to all key suppliers using an online portal. Suppliers are now able to load, review and amend their submissions via the portal making it even easier for them to independently evidence compliance with our policy.

We delayed the issuing of our Supplier Code of Conduct in 2015 to 2016 to enable the incorporation of the Modern Slavery Act 2015 requirements, the alignment with our finance processes and the completion of the developments to online compliance tool.

Benchmarking performance

In 2015 we were successfully recertified for ISO14001 accreditation for Procurement and Supplier Management activities relating to our supply chain operations. This recertification requires the group to be externally audited against the standard.

We continue to validate and improve our approach to supplier management with external organisations.

2015 achievements and continuous improvement

In 2015, we continued to raise the profile of our sustainable supply chain committee whose remit includes ensuring compliance to existing processes and policies and seeking continuous improvement.

The sustainable supply chain committee agreed for the following initiatives to be explored in 2015, and good progress was made:

  • Sustainable fish and Red Tractor certified meat. We explored the implementation of a policy that mandates all fish and meat used on our premises is from sustainable sources. In 2015, we implemented agreements with our suppliers to first measure the use of sustainable fish with the objective of mandating its use. We will continue this work in 2016
  • ‘Drying out’ rather than replacing goods. A project specific to our general insurance business, we explored the feasibility of using drying techniques where appropriate on wood and plaster, for damage caused by water on household claims. In 2015, we commenced tender processes which continue into 2016.

Our commitment to raising CSR awareness continued in 2015 with our Group Procurement and Supplier Management function being awarded with a corporate CIPS (Chartered Institute of Procurement & Supply) accreditation for Ethical Procurement and Supply.

The future

We’re planning to deliver a number of things in 2016, we will:

  • Continue to proactively implement tools, processes and methods to monitor our supply chain for Modern Slavery, in line with Modern Slavery Act 2015.
  • Continue to make developments with the initiatives agreed by our sustainable supply chain committee
  • Code of conduct Ensure all key and new suppliers are compliant with our supplier’s code which was updated in Q4 2015 to incorporate compliance with the Modern Slavery Act 2015.
  • Review opportunities for introducing a reduced C02 supply chain

Supply chain targets

  • All key and new suppliers remain compliant with our supplier’s code which comprises the minimum standards we expect in terms of environmental, labour, equality, ethical conduct, community involvement and payment standards. – In progress, delayed by the incorporation of the Modern Slavery Act 2015.
  • Implement a global procurement code by 2016 for all subsidiaries – on track to achieve

Target

Status

New suppliers are compliant with our supplier code which comprises the minimum standards we expect in terms of environmental, labour, equality, ethical conduct, community involvement, payment standards and the Modern Slavery Act.

Achieved

Existing key suppliers remain compliant with our supplier code which comprises the minimum standards we expect in terms of environmental, labour, equality, ethical conduct, community involvement, payment standards and the Modern Slavery Act.

On track

Implement a Global Supplier code by 2016.

On track