Case study: How Covestro promotes sustainability throughout its supply chain
As one of the world’s largest manufacturers of high-tech polymer materials for key industries, with innovation and sustainability as the driving forces behind the constant development of its products, processes and facilities, Covestro seeks to promote adherence to sustainability standards and principles along its entire supply chain. Tweet This!
This case study is based on the 2017 GRI Supplementary Report by Covestro 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/ 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
Abstract
Setting sustainability standards for its suppliers through a number of channels, such as the Supplier Code of Conduct, is a key priority for Covestro. In order to promote sustainability throughout its supply chain Covestro took action to:
- implement a Supplier Code of Conduct
- conduct supplier audits and online assessments
- carry out sustainability training and dialogue
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With this case study you will see:
- Which are the most important impacts (material issues) Covestro has identified;
- How Covestro proceeded with stakeholder engagement, and
- What actions were taken by Covestro to promote sustainability throughout its supply chain
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What are the material issues the company has identified?
In its 2017 GRI Supplementary Report Covestro identified a range of material issues, such as innovative solutions for climate change mitigation, product stewardship, occupational health and safety in operations, innovative solutions that contribute to the UN Sustainable Development Goals. Among these, promoting sustainability throughout its supply chain stands out as a key material issue for Covestro.
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 s 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 Covestro engages with:
Stakeholder Group | Method of engagement |
Partners
| · Customer surveys, specialist forums and conferences · Dialog with employees and labor representatives · Supplier days · Research projects |
Social interest groups
| · Exchange via various media · Press conferences and releases · Issue-related dialog, e.g. via community offices |
Regulators | · Expert dialog, e.g. regarding energy and environmental policy · Exchange at specialist workshops and conferences · Site visits |
Financial market participants | · Financial reporting · Annual General Meeting · Investor events and telephone conferences |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Covestro carried out interviews with external stakeholders from associations, NGOs, scientific institutions and investors.
In its 2017 GRI Supplementary Report Covestro reports that it took the following actions for promoting sustainability throughout its supply chain:
- Implementing a Supplier Code of Conduct
- Covestro’s Supplier Code of Conduct lays down key social, ecological and ethical standards that Covestro expects its suppliers to respect and apply. It aims to strengthen a joint understanding between Covestro and its suppliers of how sustainability has to be practiced in everyday business. The Code’s principles play an important role in supplier selection and evaluation, and Covestro also expects suppliers to replicate them further down the supply chain.
- Conducting supplier audits and online assessments
- Covestro regularly assesses the sustainability practices of its suppliers, according to the “Together for Sustainability” (TfS) program. Covestro selects suppliers to be assessed on the basis of a combination of country and material risk, as well as their strategic importance regarding its corporate goals. Covestro also aims to reassess suppliers at least every three years, or earlier if needed. In 2017, Covestro carried out reassessments at 284 suppliers, approximately 66% of whom significantly improved their sustainability performance.
- Carrying out sustainability training and dialogue
- To make sure its procurement employees have a comprehensive understanding of the importance of sustainability in the supply chain, Covestro conducts company-wide sustainability training, plus region- and country-specific training on the issue of sustainability audits. In addition, to enable suppliers to successfully comply with its sustainability requirements, Covestro provides a range of training and dialogue opportunities for them.
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: Achieve gender equality and empower all women and girls
- Business theme: Workplace violence and harassment
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Labor practices in the supply chain
- Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Business theme: Workplace violence and harassment
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 Covestro, 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) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page
3) https://g4.globalreporting.org/Pages/default.aspx
4) https://www.globalreporting.org/standards/gri-standards-download-center/
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