Case study: How GFCL promotes sustainable procurement

What are the material issues the company has identified?

In its 2019-20 Sustainability and UNGC Communication on Progress Report GFCL identified a range of material issues, such as economic performance, process safety and emergency preparedness, environmental compliance, product safety and stewardship, anti-corruption, climate change. Among these, promoting sustainable procurement stands out as a key material issue for GFCL.

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 GFCL engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics GFCL conducted a survey, with a questionnaire rolled out to approximately 230 individuals across the different stakeholder groups. Out of these, a total of 128 individuals responded by giving a rating against each sustainability topic, based on their view on its importance.

What actions were taken by GFCL to promote sustainable procurement?

In its 2019-20 Sustainability and UNGC Communication on Progress Report GFCL reports that it took the following actions for promoting sustainable procurement:

• Implementing a Sustainable Procurement Policy and Code of Conduct for suppliers
• GFCL’s Sustainable Procurement Policy and Code of Conduct for suppliers, vendors and third parties, which applies to all purchases of goods and services, sets out how it will conduct business with them and describes its expectations regarding the way they conduct their business. GFCL’s aim is to make sure that the way business is conducted throughout its supply chain conforms to its own standards and is legally compliant at all times. It outlines GFCL’s expectations with regard to ethics, business integrity, human rights, health and safety, environment, the local community and quality of product and operations and a formal commitment (in writing) is sought from suppliers, vendors and service providers to ensure compliance to GFCL’s GFCL expects all its suppliers, vendors and service providers to support the principles set out within the UN Universal Declaration of Human Rights, the International Labour Organization Declaration on Fundamental Principles and Rights at Work, the UNGC and the UN Guiding Principles on Business and Human Rights. All group companies are required to identify, prevent and manage risks pertaining to Health and Safety, Social Responsibility and Environment in their supply chain. This will help GFCL and all its suppliers, vendors and service providers to:
  • Meet the demands of customers and other stakeholders to assume responsibility for its supply chain
  • Identify legal, financial and moral risks associated with sustainability in the supply chain
  • Monitor and improve the sustainability performance of suppliers
  • Build supplier relationships that create long-term, sustainable value
• GFCL expects its vendors and service providers / contractor and their contractors to abide by this policy and code and help GFCL reduce environmental and social impacts by establishing and operating state of the art standards for a sustainable supply chain. Nonadherence to this code may lead to discontinuation of business relationship.

• Building capabilities
• The implementation of the Sustainable Procurement Policy at GFCL was initiated through a structured programme of communication and capability building of the in-house team and the suppliers and vendors. The policy was circulated amongst suppliers and a declaration to adhere with the policy was sought. Moreover, GFCL extended a supporting hand to its vendors for creating awareness on sustainable procurement by conducting multiple webinars. The policy was also circulated among GFCL’s procurement and a declaration of adherence was sought. This team too was taken through an awareness programme on Sustainable Procurement.

• Assessing suppliers
• To ensure conformity to ISO20400 standards, GFCL underwent a third-party audit and launched a digital supplier audit tool with the help of DQS-AUDIT ORGANISER 4.0 (Enterprise Audit Management). GFCL partnered with DQS to implement the DQS-NEXT Supplier Audit Management Platform for its business partners. This will help GFCL manage a wide range of audit-related activities, data and processes in a single, centralised application. This platform will be progressively used to cover all existing and new suppliers, in evaluating and reviewing their performance on all sustainability criteria. The platform covers various sustainability dimensions and requests the respondent to answer questions on those dimensions and upload confirmatory documents and do self-rating. Based on the response, GFCL conducts audit and gives ratings. The platform covers all aspects of GFCL’s Sustainable Procurement strategy.

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:

• 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

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

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References:

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