Case study: How CEMEX promotes sustainability among its suppliers
With over 40,000 employees worldwide, CEMEX is a global building materials company providing high-quality products and reliable services to customers and communities around the world. CEMEX closely cooperates with its suppliers to foster its continuous innovation and implement the most sustainable practices in its day-to-day operations.
This case study is based on the 2019 Integrated Report by CEMEX published on the Global Reporting Initiative Sustainability Disclosure Database 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
CEMEX continually works to engage and align its suppliers with its core values Tweet This!, including its enduring emphasis on health and safety, its innovation-driven culture, its unwavering pursuit of excellence and its steadfast focus on integrity, integrating sustainability into its supplier engagement and procurement processes, while taking account of local and diverse suppliers. In order to promote sustainability among its suppliers CEMEX took action to:
- promote supplier health and safety
- assess suppliers
- implement a Suppliers Code of Conduct
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With this case study you will see:
- Which are the most important impacts (material issues) CEMEX has identified;
- How CEMEX proceeded with stakeholder engagement, and
- What actions were taken by CEMEX to promote sustainability among its suppliers CEMEX
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What are the material issues the company has identified?
In its 2019 Integrated Report CEMEX identified a range of material issues, such as customer experience and satisfaction, health and safety, product quality and innovation, business ethics and transparency, transport and logistics optimisation. Among these, promoting sustainability among its suppliers stands out as a key material issue for CEMEX.
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 CEMEX engages with:
To identify and prioritise material topics CEMEX engaged with its stakeholders through the following channels:
Stakeholder Group | Method of engagement |
Employees
| · ETHOSLine 24/7 · Biannual Ethics and Compliance campaigns · Biannual engagement survey · Monthly global newsletter · Local HR teams on a daily basis and HR process platforms 24/7 · Open dialogues and meetings with leaders |
Customers
| · Ongoing relationship management through sales representatives · Digital platforms · Annual commercial events · Customer satisfaction surveys · Customer service centres and helplines · Net Promoter Score (NPS) |
Analysts, investors, shareholders
| · Regular meetings, webcasts, and conference calls · Quarterly financial updates and guidance · Annual integrated report, annual reports, and mandatory filings · Ongoing website updates and press releases · Annual CEMEX Day investor event |
Academic institutions & NGOs
| · Yearly collaborative research portfolio · Biweekly “Lighthouses” talks · Quarterly whitepapers · Yearly best practices and methodologies playbooks · Annual event to share the project’s outcomes · “Hackathons” co-organised with Universities |
Communities
| · Ongoing dialogues with communities · Quarterly community panels, sessions, and meetings · Annual open house days at operating sites · Ongoing educational programmes and training · Participation in local career events · Development of community infrastructure, volunteering, and social investment initiatives · Co-creation of inclusive business programmes · Development of entrepreneurial capacities for community members · Annual call for CEMEX-Tec Award entries |
Suppliers
| · Daily procurement interactions · Ongoing capacity building programmes · Supplier sustainability guidance |
Governments and policy makers | · Annual integrated report and conservation books · Ongoing public policy discussions · Long-term partnerships · Working groups · Periodic plant visits · Events and conferences |
Business associations
| · Periodic meetings · Annual conferences · Ongoing working groups · Ongoing research studies |
CEMEX closely cooperates with its suppliers to foster its continuous innovation and implement the most sustainable practices in its day-to-day operations.
What actions were taken by CEMEX to promote sustainability among its suppliers?
In its 2019 Integrated Report CEMEX reports that it took the following actions for promoting sustainability among its suppliers:
- Promoting supplier health and safety
- At CEMEX, its commitment to the health and safety of its employees, suppliers, and partners is a top priority. In addition to its Supplier Sustainability Programme, CEMEX’s Contractor Health & Safety Verification Programme is designed to verify the health and safety practices of contractors with access to its facilities. The verification requires liability policies, risk premiums, health & safety manuals and procedures, and accreditations, among other requirements. Valid for one year, this evaluation helps CEMEX to verify that contractor companies know and comply with the health & safety processes and keep safe while working with it. For 2019, CEMEX reached its yearly goal of evaluating at least 80% of procurement contractors’ spend through a third-party organisation that specialises in the evaluation of health and safety practices. To achieve this goal, CEMEX engaged all of its operating countries and worked closely with its Global Health and Safety team to implement this key health and safety initiative. To foster its supplier sustainability engagement, CEMEX provides continuous communication and training to its Procurement teams on sustainability issues, so they can develop suppliers that are more closely aligned with CEMEX’s sustainability principles.
- Assessing suppliers
- Since 2010, CEMEX’s Supplier Sustainability Programme has made an extensive commitment to sustainability across its value chain, communicating and promoting responsible practices. In collaboration with third-party evaluators, CEMEX invites its suppliers to perform a sustainability assessment based on ISO 26000 guidelines and covering social, environmental, health and safety (H&S), business ethics, stakeholder relationships, and financial performance standards. After suppliers are evaluated, a specialised third-party firm analyses the information provided, prepares a consolidated report—including findings and conclusions from the assessment and identified opportunity areas—and proposes an action plan to close gaps, if any. This evaluation is periodically updated, and suppliers are expected to continuously improve their score. This grade is integrated into the supplier’s scorecard to track and reward suppliers that demonstrate advanced sustainability practices. CEMEX’s 2030 goal is to assess at least 80% of the critical suppliers spend under the company’s Procurement scope. By critical, CEMEX refers to those business partners who can have a significant impact on its three core businesses: cement, ready-mix concrete, and aggregates. Specifically, this involves those suppliers who could affect the continuity of CEMEX’s operations, involve health & safety and 80% contractors’ environmental risks, and/or have the highest spend. In 2019, CEMEX worked closely with its business units to evaluate the sustainability practices of critical suppliers with or without access to its facilities. Thanks to its collaborative efforts, CEMEX achieved and exceeded its annual target of 36%, assessing 44% of the company’s critical suppliers’ Procurement spend with sustainability criteria—on a good track to achieve its 2030 goal of 80%. Moreover, during 2019, CEMEX consolidated all European suppliers under one business unit instead of seven separate countries, to facilitate critical suppliers’ sustainability assessment. Also, CEMEX further leveraged its Supplier Sustainability Programme by integrating and engaging the suppliers of the Trinidad Cement Group acquired in 2017, with operations mainly in Jamaica, Barbados, and Trinidad and Tobago.
- Implementing a Suppliers Code of Conduct
- As a member of the GCCA (Global Cement and Concrete Association), CEMEX adopts its principles in its Code of Conduct When Doing Business With Us and expects its suppliers to honour its Suppliers Code of Conduct’s 12 principles:
- PROMOTE health and safety as a top priority
- UPHOLD decent working conditions
- GUARANTEE freedom of association and non-retaliation
- AVOID forced labour
- DENY child labour
- SEEK equality and fairness in supplier relations
- COMPLY with environmental regulations
- MANAGE environmental impacts
- REJECT bribery and corruption—anti-money laundering
- ENCOURAGE transparency and integrity
- MAINTAIN standard business practices related to gifts, services, and other courtesies
- ENHANCE equality and fairness in supplier relations
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
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References:
1) This case study is based on published information by CEMEX, 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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