Case study: How Anglo American promotes sustainability among its suppliers

What are the material issues the company has identified?

In its 2020 Sustainability Report Anglo American identified a range of material issues, such as driving business performance, tackling climate change, helping its people thrive, protecting the natural environment. Among these, promoting sustainability among its suppliers stands out as a key material issue for Anglo American.

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 Anglo American engages with:   

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Anglo American engaged with its stakeholders through in-depth interviews with a range of internal and external stakeholders.

What actions were taken by Anglo American to promote sustainability among its suppliers?

In its 2020 Sustainability Report Anglo American reports that it took the following actions for promoting sustainability among its suppliers:

• Implementing a Responsible Sourcing Standard
• As a condition of working with Anglo American, suppliers must comply at a minimum with all relevant laws, industry regulations, and Anglo American expects them to meet the Anglo American policies, site requirements and other supply conditions, including its Responsible Sourcing Standard (‘Standard’). The Standard summarises these requirements across five pillars:
  • Protecting the health and safety of workers.
  • Protecting the environment, aiming to minimise and ultimately eliminate adverse impact.
  • Respecting labour and human rights throughout the value chain.
  • Contributing to Thriving Communities as good corporate citizens in the regions where they operate.
  • Conducting business with the utmost integrity, always acting properly, fairly and lawfully.

• In 2020, Anglo American launched an updated version of the Standard to reflect possible consequences of Covid-19 on human rights, calling for increased visibility of value chains and improved management of infectious diseases. Anglo American also built on the role that suppliers can play in the circular economy. Published in three languages, the Standard is available via Anglo American’s website, along with a six-minute introduction video. Anglo American also updated its Frequently Asked Questions (FAQs) document and its supplier ‘self-assessment questionnaire’ tool. In parallel, Anglo American is updating the requirements of its internal responsible sourcing processes, to strengthen, embed and further integrate responsible sourcing across the Group.

• Managing sustainability risks
• Anglo American’s responsible sourcing programme enables it to identify sustainability risks and help its suppliers make ethical decisions when purchasing goods and services. Continuing to implement its approach to managing sustainability risk in its supply chain, Anglo American requires centrally procured suppliers to comply with its responsible sourcing requirements. Suppliers must:
  • Commit during registration to complying with relevant laws, including working towards the UN Guiding Principles on Business and Human Rights, and meeting Anglo American’s requirements concerning responsible sourcing.
  • Confirm that they will work towards combating modern slavery.
  • Agree to a series of external checks, such as sanctions, anti-money laundering, legal compliance and criminal records.
  • Complete and regularly update an online self-assessment questionnaire, to help them better understand Anglo American’s sustainability requirements and their own practices.
  • If requested, provide evidence of previous on-site responsible sourcing assessments, or undergo a new, third-party on-site assessment.
  • Manage all risks that these processes identify, and develop plans for full compliance with legal requirements and Anglo American’s Standard, in a reasonable and realistic timeframe.

• Prioritising higher-risk suppliers
• In terms of identifying suppliers that have an increased potential for sustainability risk, Anglo American uses a heat map that considers potential risks to people, the environment and society resulting from the type of goods or services supplied. This includes unwanted safety events, specific risks – mapped across 122 procurement categories, country risks that emanate from the supplier’s location, Anglo American’s transaction volume and expenditure profile. In cases where Anglo American identifies or suspects a risk, it engages with suppliers, expressing its concern and requiring them to develop a plan of corrective action. This gives them a fair opportunity to manage the risk and limit unintended consequences. If a supplier refuses the remediation, or is not able to demonstrate progress towards resolution, the matter is then escalated and may result in review of the supply relationship by Anglo American’s Supply Chain leadership team.

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 Anglo American, 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.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/sustainability/aa-sustainability-report-2020.pdf

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