Case study: How Kemira promotes responsible business practices across its supply chain
Kemira is a global chemicals company that serves customers in water intensive industries, providing expertise, application know-how and chemicals that improve its customers’ product quality, process and resource efficiency. Supplier management and supplier risk and compliance management are cornerstones of Kemira’s sustainable sourcing roadmap Tweet This!, promoting responsibility throughout its supply chain.
This case study is based on the 2017 Annual Report by Kemira 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.
Abstract
Promoting compliance with responsible business practices across its supply chain, initiating approaches with suppliers that are both responsible and innovative, is a top priority for Kemira. In order to promote responsible business practices across its supply chain Kemira took action to:
- implement a Code of Conduct for suppliers, distributors and agents
- carry out supplier sustainability assessments and audits
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With this case study you will see:
- Which are the most important impacts (material issues) Kemira has identified;
- How Kemira proceeded with stakeholder engagement, and
- What actions were taken by Kemira to promote responsible business practices across its supply chain
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What are the material issues the company has identified?
In its 2017 Annual Report Kemira identified a range of material issues, such as economic performance, environmental compliance, labour/management relations, occupational health and safety, effluents and waste. Among these, promoting responsible business practices across its supply chain stands out as a key material issue for Kemira.
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 Kemira engages with:
| Stakeholder Group | Method of engagement |
| Shareholders and lenders | · Regular events like Capital Markets Day, roadshows, conference calls and one-to-one meetings |
| Customers
| · Direct customer contacts · Annual customer survey · Exhibitions · Product testing and plant trials |
| Employees
| · Performance management and development process · Kemira European Forum · Professional competence development for employees facing customers · Town hall meetings · Ethics & compliance hotline |
| Suppliers
| · Working closely with core suppliers to help them meet Kemira’s sustainability performance expectations, and take corrective actions if needed |
| Local communities
| · Dialogue and collaboration with local communities at major sites to ensure Kemira understands and addresses their concerns · Collaboration with schools and universities |
| Regulatory bodies, trade associations, decision-makers and opinion leaders | · Memberships in industrial trade associations · Subject-specific dialogue with regulatory bodies on national and EU level
|
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics, Kemira carried out interviews with representatives of key stakeholder groups.
What actions were taken by Kemira to promote responsible business practices across its supply chain?
In its 2017 Annual Report Kemira reports that it took the following actions for promoting responsible business practices across its supply chain:
- Implementing a Code of Conduct for suppliers, distributors and agents
- All suppliers must follow Kemira’s Code of Conduct for Suppliers, Distributors and Agents (CoC-SDA) in all dealings with Kemira. This Code contains requirements on issues including responsible business conduct, respect for human rights and provision of appropriate working conditions, and environmental responsibility. Supplier adherence to these principles is confirmed in different stages of Kemira’s sourcing processes, starting from the new supplier screening/new vendor creation process to contracting, where the commitment to the CoC-SDA is integrated in the contract templates. If Kemira cannot otherwise confirm that the supplier adheres to acceptable ethical principles, or should a supplier refuse to give such a confirmation, an evaluation is carried out by Kemira’s sourcing personnel to assess whether Kemira needs to cease all purchases from them.
- Carrying out supplier sustainability assessments and audits
- Kemira uses supplier assessments and audits to evaluate how well its suppliers are acting in a way that is consistent with Kemira’s principles and values. Kemira chooses suppliers to be assessed or audited on the basis of the supplier segmentation process and risk-based prioritisation. Kemira’s aim is to have the majority of its strategic, critical and large spend suppliers evaluated via assessment or audit. The assessment platform is provided by an external third party company, specialised in standardised supplier sustainability evaluation based on the principles of the UN Global Compact and the Responsible Care programme. Supplier audits are carried out by an external auditor as an on-site audit. Audits follow the Sedex Members Ethical Trade Audit (SMETA) four-pillars method covering Labour standards, Health & Safety, Environment and Business Ethics criteria. The auditors summarise their findings in a detailed report which also contains a corrective action plan, which is then reviewed and followed-up with the supplier as needed. In 2017, Kemira conducted four SMETA audits in collaboration with an external service provider, with no business stopping results. Additionally, large spend suppliers undergo quality audits, which include workplace health and safety standards, production quality and supply security. In 2017, 19 quality audits were conducted.
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: 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
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References:
1) This case study is based on published information by Kemira, 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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