Responsible Supply Chain Promote Global Best Practices within Our Supply Chain
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We expanded and increased ESG training for our procurement organization.
Our ESG focus encompasses the entire supply chain, including our many suppliers and the Company as a supplier to our customers. With diligent oversight and operation of our compliance program, we successfully manage each of our businesses with consistent global best practices, including in the areas of labor practices, human rights, business ethics, and more.
For the past several years we have received Gold or Silver medal ratings from EcoVadis, most recently placing us in the top seven percent of rated companies. Our consistently high rating is an important recognition of our sustainability efforts as a supplier.
GreenMT Goal
Leverage Responsible Sourcing Framework
Targets and KPIs
Engage with key suppliers representing 70% or more of direct spend to enhance their sustainability performance
30% strategic preferred suppliers subjected to an annual ESG assessment
Status
69%
Achieved
Responsible Sourcing Framework
As the Company works with thousands of suppliers globally, we recognize this scope represents a unique avenue where we can make a significant impact. Our Responsible Sourcing Framework integrates both social and environmental considerations into our sourcing decisions and supplier management processes.
In 2023, we re-engaged with more than 500 direct material suppliers, representing approximately 70 percent of our global direct spend, to prioritize our social and environmental initiatives. We targeted key suppliers for engagement based on strategic relevance, contribution to our Scope 3 emissions, and human rights risk. This engagement built upon our expanded global effort that began in 2022, encompassing communication, education, target setting, data collection, and audit elements.
ESG Expectations Communicated to Our Suppliers in 2022 and 2023
The supplier base of our supply chain is globally diversified and complex, represented by approximately 3,300 direct materials suppliers, with most of them located close to our major production facilities. Among these, we classify 157 as preferred suppliers and 54 as strategic. We partner most closely with our strategic preferred suppliers, who represent 44 percent of direct materials spend. We therefore believe we can have the biggest impact by focusing our engagement efforts on these groups.
