Case study: How RAK Ceramics promotes sustainability among its suppliers
RAK Ceramics is one of the largest ceramics brands in the world, specialising in ceramic and gres porcelain wall and floor tiles, tableware, sanitaryware and faucets, with the capacity to produce 123 million square metres of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 1 million pieces of faucets per year at its 22 state-of-the-art plants across the United Arab Emirates, India, Bangladesh and China. RAK Ceramics places a high importance on dealing with suppliers who follow ethical business practices, making sure that at a minimum its suppliers have adequate health and safety standards in place and do not partake in child labour.
This case study is based on the 2019 Sustainability Report by RAK Ceramics 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
RAK Ceramics seeks to cooperate with suppliers who share its values, including, most importantly, its firm commitment to sustainability. Tweet This! In order to promote sustainability among its suppliers RAK Ceramics took action to:
- assess suppliers
- implement Supplier Guiding Principles
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With this case study you will see:
- Which are the most important impacts (material issues) RAK Ceramics has identified;
- How RAK Ceramics proceeded with stakeholder engagement, and
- What actions were taken by RAK Ceramics to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2019 Sustainability Report RAK Ceramics identified a range of material issues, such as financial performance, corporate governance and compliance, anti-corruption, workforce wellbeing, sustainable production and innovation. Among these, promoting sustainability among its suppliers stands out as a key material issue for RAK Ceramics.
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 RAK Ceramics engages with:
To identify and prioritise material topics RAK Ceramics engaged with its stakeholders through the following channels:
Stakeholder Group | Method of engagement |
Investors | · Formal reporting · Updates · Quarterly meetings · Annual general board meeting |
Employees
| · Everyday interactions · Engagement surveys · Newsletters · Annual performance appraisals |
Customers
| · Key account managers · Trade exhibitions · Social media platforms · Newsletters |
Suppliers | · Procurement process · Meetings · Workshops |
Government and regulatory bodies
| · Meetings · Conferences · Collaborations |
Community
| · Partnerships · Sponsorships · Volunteering |
What actions were taken by RAK Ceramics to promote sustainability among its suppliers?
In its 2019 Sustainability Report RAK Ceramics reports that it took the following actions for promoting sustainability among its suppliers:
- Assessing suppliers
- Prior to becoming a supplier for RAK Ceramics, it is mandatory for all key suppliers to complete a supplier assessment questionnaire, which outlines the minimum requirements for quality, environmental practices, health and safety and ethical standards. Going forward, RAK Ceramics wishes to implement a more sustainable procurement process that will include several sustainability markers which RAK Ceramics will use to assess all future suppliers.
- Implementing Supplier Guiding Principles
- In FY20, RAK Ceramics is looking at implementing Supplier Guiding Principles for all key suppliers, which will focus on additional sustainability requirements that RAK Ceramics expects the suppliers to meet. RAK Ceramics will continue to work on its supply chain strategy, so it continues to meet the demands of the business and be in line with RAK Ceramics’ stakeholder values. Additionally, RAK Ceramics is committed to using local suppliers where possible in order to support the local community. In 2019, RAK Ceramics spent approximately 678 million AED with 1143 direct suppliers (with 64% of those being local suppliers in the UAE – figures include RAK Ceramics, Elegance Ceramics and RAK Porcelain vendors).
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 204-1 Proportion of spending on local suppliers
2) Disclosure 308-1 New suppliers that were screened using environmental criteria
3) Disclosure 414-1 New suppliers that were screened using social criteria
Disclosure 204-1 Proportion of spending on local suppliers corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.3
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
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 RAK Ceramics, 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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