Case study: How Frigoglass promotes responsible procurement

What are the material issues the company has identified?

In its 2017 Sustainability Report Frigoglass identified a range of material issues, such as product responsibility and quality, business ethics, customer satisfaction, economic performance and impact, product environmental stewardship. Among these, promoting responsible procurement stands out as a key material issue for Frigoglass.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Frigoglass engages with:

To identify and prioritise material topics Frigoglass engaged with its stakeholders through the following channels: 

What actions were taken by Frigoglass to promote responsible procurement?

In its 2017 Sustainability Report Frigoglass reports that it took the following actions for promoting responsible procurement:

• Carrying out supplier audits
• An audit process has been put in place for Frigoglass’s largest and most important suppliers, as well as for all new suppliers. Frigoglass’s ultimate objective is to progressively include a wider range of criteria into its supplier assessment processes and audit forms. This refers not only to operational issues, such as the mitigation of supply chain constraints, but also to sustainability aspects, including:
  • The impact of suppliers on ethics, labour and human rights
  • Health and safety performance amongst suppliers
  • The environmental impact of suppliers, with regard to both the materials used in manufacturing and their products
  • Specific Request for Quotation (RFQ) forms targeted at examining sustainability aspects of suppliers’ operations

• Implementing the Frigoglass Supplier Code
• Frigoglass’s business relationships with suppliers are underpinned by the Supplier Code which Frigoglass has put forward. In this code, Frigoglass lays out the standards and principles to which it expects its suppliers to adhere. Ethics, labour and human rights, health & safety but also the environment are integral parts of Frigoglass’s Supplier Code. Every new party, defined by Frigoglass as Supplier or Business Partner, is required to sign the Supplier Code, thus committing themselves to complying with its defined principles. Compliance covers all activities throughout all Suppliers’ premises and operations, including their own supply chain, whilst contracts may also contain specific provisions addressing these issues. By requiring its suppliers to comply with the requirements as outlined in the Supplier Code, Frigoglass helps “cascade” good practice throughout its supplier base and minimise its indirect negative impacts. By doing so, it is not only protecting its own reputation, but also the reputation of its suppliers – some of whom might be vulnerable to consumer activism. Suppliers are achieving a level of performance that is in line with Frigoglass customers’ own requirements (for example, requirements about supplier environmental performance). As part of Frigoglass’s risk management strategy, compliance with the Frigoglass Supplier Code is subject to audit by Frigoglass or an independent third party. Additionally, Frigoglass revised its supplier auditing to give more weight to sustainability-related factors. In cases where Suppliers fail to comply with the requirements addressed in this Code, Frigoglass reserves the right to renegotiate and/or terminate an agreement.

• Assessing suppliers and providing training
• Frigoglass assesses a wide range of suppliers, representing annual purchases of over 90% of its total group spent. Out of those, over 35% each year are audited on-site. As part of its responsible procurement strategy, Frigoglass has initiated a training programme on the sustainability criteria it places on suppliers. As per target set the year before, in 2017 all Frigoglass’s buyers completed the Sustainable Procurement training. This is an obligatory training that every new buyer of Frigoglass receives, as part of the standard employment process. In addition, Frigoglass regularly conducts risk analysis on key purchasing categories to ensure security of supply. When Frigoglass identifies suppliers with high probability of non-compliance with its Supplier Code of Conduct, it manages supply chain risk by proactively finding potential suppliers with higher probability to comply.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

References:

1) This case study is based on published information by Frigoglass, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Frigoglass: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.