Case study: How Pandox promotes sustainability among its suppliers
Pandox is a leading hotel property company, owning and leasing out hotel properties to leading hotel operators, with a total of 157 hotels with a combined 35,500 rooms in 15 countries. Pandox has a structure for dialogue with its suppliers through its supplier audit process, which allows it to support and develop cooperation and to encourage suppliers to work in a more professional and structured way on sustainability.
This case study is based on the 2021 Annual Report by Pandox, 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
Pandox’s Code of Conduct for business partners describes the expectations that Pandox has of its suppliers Tweet This! regarding human rights, labour rights, the environment and anti-corruption. In order to promote sustainability among its suppliers Pandox took action to:
- implement a Code of Conduct
- verify existing suppliers
- verify new suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Pandox has identified;
- How Pandox proceeded with stakeholder engagement, and
- What actions were taken by Pandox to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2021 Annual Report Pandox identified a range of material issues, such as business ethics and anti-corruption, reduced climate impact through reduced GHG emissions, increased use of sustainable materials, reduced waste and increased recycling/ reuse. Among these, promoting sustainability among its suppliers stands out as a key material issue for Pandox.
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 Pandox engages with:
| Stakeholder Group | Method of engagement |
| Hotel guests | · Survey |
| Tenants | · Survey/interview |
| The community | · Survey/interview |
| Suppliers | · Survey/interview |
| Analysts | · Interview |
| Investors | · Survey/interview |
| Shareholders | · Survey/interview |
| Board of Directors | · Survey/interview |
| Executive management team | · Survey |
| Hotel employees | · Survey |
| General managers | · Survey |
| Employees: head office and Property Management | · Survey |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Pandox engaged with its stakeholders through interviews and surveys.
What actions were taken by Pandox to promote sustainability among its suppliers?
In its 2021 Annual Report Pandox reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing a Code of Conduct
- Pandox’s Code of Conduct for business partners describes Pandox’s expectations from its suppliers concerning human rights, labour, the environment and anti-corruption, and is based on the Ten Principles of the UN Global Compact and the ILO Declaration on Fundamental Principles and Rights at Work.
- Verifying existing suppliers
- Pandox’s existing suppliers fill out a self-assessment form. During 2021, Pandox initiated a dialogue with suppliers whose performance was in the lowest 10 percent of respondents based on the most recent self-assessment form. The purpose is to support them to work more professionally and in a structured way on critical sustainability topics. All suppliers categorised as high-risk in Property Management who participated in a training workshop in 2020 went through the digital self-assessment process again. The result was that 53 percent went from being assessed as high-risk suppliers to low-risk suppliers. They achieved this by strengthening their sustainability policies and processes by, for example, producing a code of conduct or an anti-corruption policy. In autumn 2021 Pandox decided to expand its auditing of existing suppliers to include the 150 largest suppliers at the corporate level as identified in the 2020 spend analysis. A total of 82 suppliers were audited in 2021 based on environmental and social criteria as well as governance. 37 of these were identified as high-risk suppliers. Pandox will take steps to follow up on these and then allow them to repeat the assessment to ensure compliance with Pandox’s Code of Conduct for business partners. The results of the 2021 self-assessment showed that there was a need for several of the suppliers to design and establish formal processes in important areas such as human rights, rights at work and business ethics. None of the suppliers was identified as having a significantly high environmental risk, as no significant real or potentially negative environmental impact was identified as part of the audit.
- Verifying new suppliers
- The construction industry is the industry identified as having the highest risk for Pandox. Accordingly, new suppliers in Property Management that supply goods or services above a certain annual minimum limit are to be audited. The aim is to do this before a contract is signed and to conduct random follow-up audits. With respect to food and beverage suppliers, Pandox has been able to use its position to enable all hotels in Operator Activities – regardless of brand – to use an external supplier’s platform. This is a digital purchasing system and it guarantees that the suppliers have been audited and that any discounts will benefit the users. This minimises situations where bribery might occur.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
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
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References:
This case study is based on published information by Pandox, 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.pandox.se/files/sustainability/Pandox_AR21_EN_Sustainability.pdf
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