Case study: How AMATA promotes sustainability across its supply chain

What are the material issues the company has identified?

In its 2019 Sustainability Report AMATA identified a range of material issues, such as good economic performance, solid waste and industrial waste management, climate change, good corporate governance & compliance, wastewater management. Among these, promoting sustainability across its supply chain stands out as a key material issue for AMATA.

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 AMATA engages with: 

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics AMATA engaged with its stakeholders through various channels and methods such as meetings, formal and informal interviews, questionnaires, and an engagement survey.

What actions were taken by AMATA to promote sustainability across its supply chain?

In its 2019 Sustainability Report AMATA reports that it took the following actions for promoting sustainability across its supply chain:

• Implementing the AMATA Supplier Code of Conduct
• In 2019, AMATA established the AMATA Supplier Code of Conduct, which is in line with the business ethics of the AMATA Group in compliance with the regulations, laws and international practices regarding the environment, society and corporate governance. AMATA held a meeting with its critical suppliers on 25 November 2019 to introduce and explain details about the AMATA Supplier Code of Conduct, which is divided into 5 categories:
  • Business ethics
  • Human rights
  • Safety and occupational health
  • Social Responsibility
  • Environmental responsibility
• In addition, AMATA prepared a Self-Assessment Questionnaire (SAQ) based on the AMATA Supplier Code of Conduct for suppliers and contractors, to self-evaluate and provide information regarding their business operations and started applying the self-assessment to the critical supplier group as the first group in 2019. 20 out of 77 critical suppliers have completed the self-assessment questionnaire, representing 26%. AMATA aimed to have all critical suppliers (100%) officially accept the AMATA Supplier Code of Conduct and pass the sustainability risk assessment by 2020.

• Carrying out supplier sustainability risk assessments
• AMATA improved the supplier sustainability risk assessment process by identifying critical suppliers and assessing potential risks and their effects for AMATA on economic, social and environmental aspects, also managing risks by arranging site visits and ESG (Environmental, Social, and Governance) audits by the procurement department and those who use products or services. For suppliers who have risks at severe and high level, AMATA will give advice on how to improve and prepare a development plan, resulting in good relationships with suppliers. AMATA has developed risk management measures for each critical supplier and contractor, and also arranges supplier development initiatives for them in order to mitigate and reduce the impact of risks.

• Auditing suppliers
• AMATA has designated the guidelines for checking and assessing future suppliers and contractors and whether their qualifications meet the standards set, while existing suppliers and contractors obtain additional assessments such as the sustainability risk assessment, past performance assessment and workplace audit, including assessment of the relationship between the sellers of products/services and AMATA, in accordance with the requirements and checklist defined by AMATA and the environmental management system (ISO14001). In 2019, AMATA audited and assessed 19 critical suppliers and contractors (24.68% of total critical suppliers), more than the 2019 target of 15 critical suppliers or 20%. AMATA aims to assess and audit 50% of all critical suppliers and contractors by 2020, and 100% by 2021. In addition, AMATA will start screening and assessing new suppliers and contractors by using ESG criteria, including the performance evaluation of suppliers and contractors from 2020 onwards. As for new suppliers/contractors, registration by using newly revised criteria and guidelines covering economic, social and environmental aspects will be implemented in 2020.

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

The GRI Standards addressed in this case are:

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

2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken

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

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:

1) This case study is based on published information by AMATA, 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/

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