Case study: How Axis promotes sustainability among its suppliers

What are the material issues the company has identified?

In its 2020 Annual Review & Sustainability Report Axis identified a range of material issues, such as anti-corruption, customer privacy, diversity and inclusion, use of water. Among these, promoting sustainability among its suppliers stands out as a key material issue for Axis.

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 Axis engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Axis engaged with its stakeholders through a web survey with selected stakeholder groups, which was supplemented by in-depth interviews.

What actions were taken by Axis to promote sustainability among its supplier?

In its 2020 Annual Review & Sustainability Report Axis reports that it took the following actions for promoting sustainability among its suppliers:

• Implementing a Supplier code of conduct
• All Axis suppliers must sign and comply with its supplier code of conduct, which is based on the Axis code of conduct and the ten principles of the UN Global Compact on human rights, labour, the environment, and anti-corruption. The Responsible Business Alliance’s code of conduct was used as the model for requirements on working hours. The supplier code of conduct covers a variety of topics, such as a ban on all forms of child and forced labour, requirements on providing decent working conditions, and the necessity of counteracting all forms of corruption. Suppliers must also have controls in place for their environmental impact, energy and water consumption, emissions, and how both chemicals and waste are managed. Responsible purchasing of minerals is another requirement. Furthermore, suppliers must have ISO 14001 certification or an environmental management system that is in accordance with ISO 14001. Some suppliers have not signed Axis’ code of conduct for suppliers, referencing instead their own code of conduct. In such cases, Axis reviews the supplier’s code of conduct to make sure that the content corresponds to what is stated in Axis’ code of conduct for suppliers. All new suppliers during 2020 signed the supplier code of conduct, which is reviewed each year.

• Evaluating suppliers
• Prior to the start of collaboration, all new Axis suppliers are evaluated using a self-evaluation form. The form is based on the ILO (International Labour Organization) conventions and the ten principles of the UN Global Compact. It covers a wide variety of topics, including the company’s environmental impact (e.g., chemicals management and emissions) and social responsibility (e.g., working conditions, working hours, employee health and safety, ethical issues).

• Auditing suppliers
• Axis’ supplier audits are carried out in both the first tier (contract manufacturers) and second tier (component suppliers). Suppliers are classified according to the level of risk, where consideration is given to the country where they are located, credibility and prior evaluations. During the audit, Axis investigates the entire production process, through to end delivery, looking at such things as the factory’s environmental impact and working conditions for employees. Axis also checks that only conflict-free minerals are being used and that there are processes and systems in place for ensuring that operations are run in an ethical way and that there is no corruption. If it should be revealed that a supplier is not meeting Axis’ requirements, the supplier will be given three months to implement remedial measures. Axis then follows up that the problems have been corrected, by conducting one or more additional audits. If remedial action is not taken, Axis will not award the supplier any new business. The next step would be to phase out that supplier. Audits are conducted on suppliers that are critical from a sustainability perspective. On average, audits are carried out every three years (provided that no problems requiring remedial action have been identified). Recurring challenges with suppliers include deficiencies in how they manage both chemicals and waste, identify environmental aspects and set environmental goals. In all cases where problems were identified, the suppliers have taken action to remedy the errors. Regular audits on the majority of Axis suppliers have led to improvements in their sustainability efforts.

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

3) Disclosure 414-1 New suppliers that were screened using social criteria

4) Disclosure 414-2 Negative social 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.

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.2
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.8
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.1

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

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References:

This case study is based on published information by Axis, 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 following link:

https://www.axis.com/files/brochure/axis_annual_review_and_sustainability_report_2020.pdf.pdf

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