The case for CSR/ Sustainability Reporting Done Responsibly


IDENTIFY - MEASURE - MANAGE - CHANGE

Insights on how you can protect the environment, maintain and increase the value of your company, through a structured process.

Insights on how you can protect the environment, maintain and increase the value of your company, through a structured process.

Home / case studies / Case study: How Epiroc promotes responsible sourcing

Case study: How Epiroc promotes responsible sourcing

Epiroc is a leading global productivity partner for the mining and infrastructure industries, developing and producing innovative, safe and sustainable drill rigs, rock excavation and construction equipment, and tools. Epiroc is committed to upholding the highest ethical standards and to acting with integrity in every market where it has a presence and, most importantly, across its value chain.  Tweet This!

This case study is based on the 2019 Annual and Sustainability Report by Epiroc 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.

Layout 1Abstract

The implementation of Epiroc’s responsible sourcing and sales programmes is rooted in the Epiroc Code of Conduct, the UN Global Compact and the United Nations Guiding Principles on Business and Human Rights (UNGP) and is an ongoing process that includes awareness-raising, development of processes, implementation and follow-up across Epiroc’s value chain. In order to promote responsible sourcing Epiroc took action to:

  • implement a Code of Conduct
  • conduct supplier audits
  • implement the supply-chain improvement programme
  • conduct human rights due diligence

What are the material issues the company has identified?

In its 2019 Annual and Sustainability Report Epiroc identified a range of material issues, such as product safety, crisis management, employee care and empowerment, product eco efficiency. Among these, promoting responsible sourcing stands out as a key material issue for Epiroc.

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 Epiroc engages with:

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

Stakeholder Group                Method of engagement
Customers ·      Meetings

·      Interaction via customer centres as well as joint projects

·      Exhibitions

·      Customer surveys

·      Materiality assessment

Employees ·      Workplace meetings

·      Management meetings

·      Internal councils

·      Employee surveys

·      Performance review

·      Trade unions and other cooperation councils

·      Employee engagements

·      Materiality assessment

Shareholders ·      Investors and analysts’ meetings

·      Capital Market Days

·      Website

·      Annual and sustainability report

·      Questionnaires and surveys

·      Materiality assessment

Business partners

 

·      Business partners evaluations and audits

·      Procurements

·      Meetings

·      Materiality assessment

·      Joint projects

·      Development projects

Society

 

·      Meetings

·      Stakeholder dialogues

·      Participation in industry groups

·      Research projects

·      Materiality assessment

·      Collaboration with academia and governments

·      Interaction with industry peers

What actions were taken by Epiroc to promote responsible sourcing?

In its 2019 Annual and Sustainability Report Epiroc reports that it took the following actions for promoting responsible sourcing:

  • Implementing a Code of Conduct
  • Suppliers, agents, resellers and distributors are required to comply with Epiroc’s Code of Conduct (CoC), international standards and applicable regulations. Based on the CoC, the Epiroc Business Partner Criteria summarises ten criteria that clarify expectations for actors Epiroc chooses to do business with. All significant suppliers, agents, resellers and distributors must confirm their commitment to the CoC and Business Partner Criteria Letter. Epiroc monitors and follows up on their compliance on a regular basis, through surveys and audits.
  • Conducting supplier audits
  • Epiroc focuses its efforts on suppliers that represent the main spending and suppliers with operations in markets with the highest risk of corruption and human rights violations. These suppliers are defined as “Significant Suppliers”. Epiroc has about 1,406 significant suppliers, of which approximately 200 are located in geographical locations deemed as high risk. Although self-assessments are the primary compliance tool for suppliers, Epiroc conducts on-site audits of selected suppliers every fifth year and, in 2019, performed 159 of these audits. Of suppliers audited for safety, health, environment, business ethics and human rights, 95% were approved. Epiroc also reviews its business relationships when detecting violations. In these cases, business partners are immediately requested to adapt or change to meet Epiroc’s criteria and establish an action plan for complying with the criteria. Another condition for doing business with Epiroc is that its business partners must allow Epiroc to perform audits.
  • Implementing the supply-chain improvement programme
  • With its supply-chain improvement programme Epiroc seeks to source more from suppliers located closer to its markets, thereby better serving customers and adding value locally, while reducing its CO2 footprint. To this end, Epiroc is also increasing use of sea freight. Epiroc is also building its internal audit capability by introducing a single enterprise resource-planning system. This will improve information sharing on how Epiroc’s suppliers meet its expectations across the company.
  • Conducting human rights due diligence
  • During 2019, Epiroc launched its Responsible Sales Assessment process, which includes a human rights due diligence. Its purpose is to better understand potential risks with regards to human rights, corruption and environment in markets and industries where Epiroc is present, and to find mitigating measures. An important part of the assessment is to identify criteria for determining when a responsible business assessment is required. The identified criteria are:
    • Country – a third-party risk analytics firm is used to rank countries according to risks, such as different labour standards, impacts on land rights and indigenous people and corruption
    • Customer – type of customer and project
  • The tool was developed during 2018 and was tested in 2019 in four pilot countries. During 2019, a policy, a tool, and e-learning training on Responsible Sales Assessments were launched.

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 412-1 Operations that have been subject to human rights reviews or impact assessments

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 412-1 Operations that have been subject to human rights reviews or impact assessments does not correspond to any SDG.

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

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by Epiroc, 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/

Note to Epiroc: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.