Case study: How Brenntag promotes sustainability among its suppliers
Brenntag is the global market leader in the distribution of chemicals and ingredients, with a network that comprises more than 670 locations in 77 countries. In selecting new suppliers and evaluating existing supplier relationships, both economic and quality criteria and issues of environmental protection and safety, labour and social standards, as well as compliance and governance are relevant for Brenntag.
This case study is based on the 2020 Sustainability Report by Brenntag, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Already in 2016, Brenntag set itself the goal of monitoring its supply chain more closely with regard to the various sustainability aspects Tweet This!, and gradually making it more sustainable. In order to promote sustainability among its suppliers Brenntag took action to:
- implement a Supplier Code of Conduct
- conduct sustainability assessments
- carry out sustainability audits
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With this case study you will see:
- Which are the most important impacts (material issues) Brenntag has identified;
- How Brenntag proceeded with stakeholder engagement, and
- What actions were taken by Brenntag to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report Brenntag identified a range of material issues, such as safe handling of chemicals, occupational health and safety, compliance and corporate governance, people development and training. Among these, promoting sustainability among its suppliers stands out as a key material issue for Brenntag.
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:
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 Brenntag engages with:
| Stakeholder Group |
| Suppliers and business partners |
| Employees |
| Customers |
| Investors and analysts |
| Journalists |
| Governments and authorities |
| Associations and organisations |
| Neighbours and local residents, local communities |
| Universities and research institutes |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Brenntag surveyed both internal and external stakeholders, including employees, customers, suppliers, association representatives and investors.
What actions were taken by Brenntag to promote sustainability among its suppliers?
In its 2020 Sustainability Report Brenntag reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing a Supplier Code of Conduct
- Brenntag has drawn up a code of conduct specifying what it expects of its suppliers in the areas mentioned. The code is based on the principles of the United Nations Global Compact, the chemical industry’s global Responsible Care programme and Brenntag’s Code of Business Conduct and Ethics. It can be found on Brenntag’s website and is, therefore, available to all suppliers. To encourage greater compliance with the code of conduct in the future, Brenntag wants to directly call on its suppliers to actively recognise the code in the coming years. In order to verify compliance with the code of conduct, Brenntag invites selected suppliers to undergo a sustainability assessment or audit. They are requested to undergo a re-assessment or re-audit after three years – sooner if the results are insufficient. This process, in particular the conducting of re-assessments, is a requirement for making sure that a company can be added to the group of “key suppliers” with which Brenntag cooperates on a regular and long-term basis.
- Conducting sustainability assessments
- Within the scope of its membership of the “Together for Sustainability” (TfS) industry initiative, Brenntag requires a certain number of its suppliers to undergo sustainability assessments every year. Brenntag thereby achieves greater transparency in relation to its suppliers’ sustainability performance and is able to better consider sustainability issues in its purchasing decisions. Brenntag works together with EcoVadis, which is a leading provider of sustainability assessments and is well established in the chemical industry. EcoVadis evaluates companies in terms of four categories: environmental protection, labour practices, fair business practices and sustainable procurement. Based on the responses provided by the companies in a comprehensive online questionnaire and on their accompanying documentation, EcoVadis awards scoring points and creates a detailed profile of strengths and weaknesses. Brenntag evaluates its suppliers’ assessment results and found that suppliers representing some 69% of its total chemical spend scored 45 points or higher. According to the EcoVadis assessment system, these companies have, as a minimum, a structured and proactive sustainability approach, policies and tangible actions in relation to the areas evaluated and a basic reporting system or set of performance indicators. Depending on their performance, Brenntag requests that its suppliers take corrective measures (corrective action plan) or it arranges a supplementary audit. In 2020, Brenntag focused once again on the suppliers that scored less than 45 points and/or whose scorecard was older than three years. The targeted improvements will be evaluated as part of a re-assessment.
- Carrying out sustainability audits
- When a sustainability audit is conducted at a supplier’s location, auditing is based on a catalogue of requirements developed by TfS and covers the areas of sustainability management, environment, health and safety, labour and human rights, and corporate governance. The results of all audits are shared within TfS. Alternatively, Brenntag also accepts sustainability audits in accordance with SQAS (Safety and Quality Assessment System) as well as SMETA (Sedex/Supplier Ethical Data Exchange Members Ethical Trade Audit) and PSCI (Pharmaceutical Supply Chain Initiative). Brenntag reviews its suppliers’ audit results and, if necessary, agrees on corrective measures with the company and the auditor and follows up on their implementation.
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 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria 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
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References:
This case study is based on published information by Brenntag, 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:
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