Case study: How First Solar promotes responsible sourcing

What are the material issues the company has identified? 

In its 2021 Sustainability Report First Solar identified a range of material issues, such as ethics and compliance, energy and emissions, circular economy, sustainable products and innovation. Among these, promoting responsible sourcing stands out as a key material issue for First Solar.

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 First Solar engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics First Solar engaged with its stakeholders through internal and external interviews with associates, management, customers and investors.

What actions were taken by First Solar to promote responsible sourcing?

In its 2021 Sustainability Report First Solar reports that it took the following actions for promoting responsible sourcing:

• Screening suppliers
• All new First Solar suppliers undergo a rigorous qualification process using a balanced scorecard which focuses on Quality, Cost, Flexibility, Service, Technology and Sustainability. First Solar regularly maps its supply base and conducts an assessment to identify potential high-risk suppliers based on industry and geography by using third-party indexes on global slavery, forced labour and other ESG (environmental, social and governance) aspects.

• Promoting compliance
• Under the terms of First Solar’s master supplier contracts, suppliers must represent and warrant that they will not use child, slave, prisoner or any other form of forced or involuntary labour, or engage in abusive employment in the supply of goods or provisions of services. Suppliers are also required to comply with all fair labour standard laws, First Solar’s Code of Conduct and Corporate Policies, as well as the RBA (Responsible Business Alliance) Code of Conduct.

• Auditing suppliers
• First Solar audits new and high-risk suppliers on environmental management, health and safety, labour, human rights, and ethics by leveraging the RBA Code of Conduct as a framework. In 2021, First Solar became a member of the Responsible Business Alliance, which gives it access to their advanced due diligence tools and programmes, and will enable First Solar to conduct third-party audits of potential high-risk suppliers by leveraging their Validated Assessment Programme (VAP) — a leading standard for onsite compliance verification and effective, shareable audits. First Solar also publicly reports on the environmental and social performance of the suppliers it audits in its sustainability report.

• Providing training
• First Solar provides Transparency across Supply Chain training to all associates involved in procurement. The training includes the following objectives: recognising and communicating awareness of human trafficking risks relevant to First Solar’s business; ensuring compliance with the California Transparency in Supply Chains Act (SB 657) and global human rights regulations; and identifying and avoiding trafficked labour in each specific business unit at First Solar.

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:

• ustainable 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

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.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, IEMA, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.
References:

This case study is based on published information by First Solar, 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 following link:

https://www.firstsolar.com/es-CSA/-/media/First-Solar/Sustainability-Documents/FirstSolar_Sustainability-Report_2021.ashx

Note to First Solar: 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.