Case study: How CEMEX promotes sustainability among its suppliers

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:

“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 CEMEX engages with:

To identify and prioritise material topics CEMEX engaged with its stakeholders through the following channels: 

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

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 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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