Case study: How ENKA promotes responsible procurement

What are the material issues the company has identified?

In its 2018 Sustainability Report ENKA identified a range of material issues, such as economic performance, product and service quality, employee training and development, ethics and compliance, carbon footprint and energy efficiency, community investment programmes. Among these, promoting responsible procurement stands out as a key material issue for ENKA.

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 ENKA engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics ENKA engaged with a total of 266 stakeholder representatives – including the Sustainability Committee, senior management, ENKA employees, suppliers, non-governmental organisations and professional organisations, subsidiaries, vendors and customers – through face-to-face workshops and online questionnaires.

What actions were taken by ENKA to promote responsible procurement?

In its 2018 Sustainability Report ENKA reports that it took the following actions for promoting responsible procurement:

• Conducting a pre-qualification assessment
• Before coming to an agreement with any firm, ENKA’s procurement units run a pre-qualification assessment. Among the criteria for the pre-qualification assessment are the volume of goods and services to be purchased, risk level, supplier assessment results, time and cost analyses, quality assessment analyses, environmental performance, business experience of the supplier, as well as their performance and attitude to ethics, compliance and sustainability. In 2017, sustainability factors were included in the corporate procurement procedure and the supplier pre-qualification and performance evaluation criteria, and began to be used by all procurement units in 2018. These factors include the following:
  • Health, Safety and Environment Management Systems
  • Measurements for water consumption, carbon footprint and waste management
  • Promises to operate ethically and in compliance with human rights
  • Policies and procedures on preventing child labour and forced labour, bribery and corruption, and on preventing discrimination and harassment
  • Legal compliance with workers’ rights and working hours
  • Social responsibility projects
  • Supplier’s evaluation of its subsuppliers on social and environmental compliance criteria
• Given the business lines ENKA is engaged in, among the most important selection and evaluation criteria are Occupational Health and Safety (OHS) and environmental performance. Suppliers with whom work is carried out or will be carried out as stakeholders have to meet comprehensive and detailed OHS and environmental selection criteria.

• Implementing a Supplier Code of Conduct
• ENKA’s Supplier Code of Conduct was published in 2017 in Turkish, English, Russian and Arabic and was communicated to all new and existing suppliers by various means of communication and ENKA’s website. All contracts signed with suppliers include the terms of ENKA’s Supplier Code of Conduct and suppliers and their employees are asked to conduct their activities in line with the Code. According to article 7 of section 3.2 Human Rights and Fair Working Conditions of ENKA’s Supplier Code of Conduct, all suppliers and service providers that work with ENKA have to respect the right of their employees to establish independent trade unions, become members of such unions and to organise at the workplace. During the reporting period, no violations of employees’ right to organise and collective bargaining were encountered at supplier firms and no reports, complaints or tip-offs about such an issue were received. 

• Monitoring and evaluating suppliers’ performance
• ENKA runs evaluation systems on electronic platforms to measure its suppliers’ performance, schedule, cost, quality, occupational health and safety, environmental, ethical and social performance. In 2017, additional sustainability subjects such as compliance with ethics, human rights and ENKA’s Supplier Code of Conduct, environmental and social compliance and combating bribery and corruption were added to the list of questions for performance evaluation. The evaluations were carried out electronically, using the ENKA Global Vendor Network (EGVN) database. Before any potential supplier is contracted, the former performance of the supplier is checked on EGVN and no contracts are offered to suppliers whose assessment score is under the acceptable limit, and if any human rights violations or cases of bribery and corruption have been detected. In 2018, ENKA assessed 9.82% of the suppliers it works with in terms of ethics, human rights, combating bribery and corruption, OHS, environmental and social issues. No cases of environmental or social non-compliance were identified at the firms as a result of the evaluation. However, ENKA decided not to work with 14 suppliers, as they did not meet the assessment criteria or performed poorly.

• Carrying out sustainability audits of suppliers
• In 2018, ENKA began to carry out sustainability audits of suppliers who are of strategic significance to the company. The audits, carried out by the Corporate Sustainability Department, focused on ethics and compliance, human and workers’ rights, combating bribery and corruption, social compliance, and occupational health, safety and environmental management. The audits are intended to identify issues in need of improvement, leading suppliers to prepare the necessary sustainable improvement action plans and act in accordance with the plans. In the audits that took place during the reporting period, no cases of child labour or forced labour, or cases of corruption, were encountered.

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 408-1 Operations and suppliers at significant risk for incidents of child labor

4) Disclosure 414-1 New suppliers that were screened using social criteria

5) 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 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

• Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
• Business theme: Abolition of child labor
• 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: Abolition of child labor

Disclosure 414-1 New suppliers that were screened using social criteria 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 

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 ENKA, 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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