Case study: How Fortuna promotes sustainability among its contractors and suppliers
Fortuna Silver Mines Inc. (Fortuna) is a Canadian mining company established in 2005, dedicated to the production of precious metals. Fortuna is committed to conducting its business in an ethical, legal and responsible way, and expects the same commitment from its contractors and suppliers.
This case study is based on the 2020 Sustainability Report by Fortuna, prepared in accordance with the GRI Standards, 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.
Abstract
Fortuna seeks out contractors and suppliers who share its corporate values Tweet This!, follow high standards, and are committed to following its policies. In order to promote sustainability among its contractors and suppliers Fortuna took action to:
- implement a Supplier Code of Business Ethics and Conduct
- assess contractors and suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Fortuna has identified;
- How Fortuna proceeded with stakeholder engagement, and
- What actions were taken by Fortuna to promote sustainability among its contractors and suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report Fortuna identified a range of material issues, such as waste and hazardous materials management, business ethics and transparency, climate change and greenhouse gas emissions, workforce health and safety. Among these, promoting sustainability among its contractors and suppliers stands out as a key material issue for Fortuna.
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 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 Fortuna engages with:
| Stakeholder Group | Method of engagement |
| Employees | · Individual and group meetings · Employment contract |
| Communities
| · Independent and group meetings · Guided visits · Radio programmes broadcast by Fortuna Silver Mines · Social media networks |
| Investors | · Reports · Meetings, telephone, and video conference |
| Customers | · Meetings, telephone, email |
| Contractors | · Individual and group meetings, telephone, email |
| Suppliers | · Individual and group meetings, telephone, email |
| Government | · Email, telephone, meetings, formal letters, audits, field inspections |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Fortuna engaged with its stakeholders through on-line surveys, focus groups and interviews. Stakeholders engaged included employees, contractors, customers, shareholders and investors, and communities.
What actions were taken by Fortuna to promote sustainability among its contractors and suppliers?
In its 2020 Sustainability Report Fortuna reports that it took the following actions for promoting sustainability among its contractors and suppliers:
- Implementing a Supplier Code of Business Ethics and Conduct
- Fortuna’s Supplier Code of Business Ethics and Conduct, which is approved by its Board, sets out its expectations for the behaviour of suppliers and other parties with whom Fortuna maintains business relationships. Fortuna provides a copy of the Supplier Code of Business Ethics and Conduct to all suppliers, who must sign an acknowledgement that they have read it and will comply with its provisions. The Code also requires contractors and suppliers to comply with or exceed local legislation, as well as Fortuna’s corporate policies and guidelines:
- Code of Business Ethics and Conduct
- Anti-Corruption Policy
- Health and Safety Policy
- Human Rights Policy
- Environmental Policy
- Complaints about any non-compliance with the Code may be submitted through Fortuna’s whistleblower channel.
- Assessing contractors and suppliers
- Fortuna’s subsidiary Procurement departments work with HSSE (Health, Safety, Security and Environment) departments to evaluate the performance of its contractors and verify compliance with Fortuna’s In the event of non-compliance, the local Procurement department is notified and will evaluate whether to suspend the business relationship. Fortuna’s Procurement departments are trained in all aspects of its requirements for contractors. Fortuna’s annual supplier audit is an internal assessment process performed by an external third party. It focuses primarily on Fortuna’s critical Type A contractors. Every year, Fortuna recognises the contractor with the highest assessment under the audit criteria. Fortuna’s subsidiaries are responsible for implementing its corporate expectations. For example, in 2020, Bateas established a Procurement Committee and introduced a supplier certification process, in which an external third-party assesses potential suppliers on criteria including a range of sustainability issues. Potential suppliers passing the evaluation receive a one-year certification qualifying them as a supplier. In 2020, all current suppliers of key services were assessed, and from 2021 the certification process is a requirement for new suppliers. In addition to the certification process, the Procurement Committee may set contractual expectations for suppliers on additional criteria, such as certification to international standards or local employment.
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 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria 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
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References:
This case study is based on published information by Fortuna, 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://fortunasilver.com/site/assets/files/7760/2020-sustainability-report-12apr21-fvl.pdf
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