Case study: How RWE promotes sustainability across its supply chain
RWE is a multinational energy company, represented at business locations in 23 countries worldwide. RWE is aware of its responsibility in relation to the procurement of goods, services, plant components and energy sources, and asks its suppliers about criteria such as compliance with statutory regulations and RWE’s internal rules for minimum wage, as well as for environmentally relevant criteria within the scope of prequalification.
This case study is based on the 2020 Sustainability Report by RWE, 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
RWE seeks to make sure that its suppliers act in conformity with social and ethical principles Tweet This! and in accordance with the law and has, accordingly, developed a range of different measures. In order to promote sustainability across its supply chain RWE took action to:
- audit suppliers
- promote the principles of the United Nations Global Compact
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With this case study you will see:
- Which are the most important impacts (material issues) RWE has identified;
- How RWE proceeded with stakeholder engagement, and
- What actions were taken by RWE to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2020 Sustainability Report RWE identified a range of material issues, such as CO2 emissions in power plants, avoidance of discrimination, safety of employees and subcontractors, protection of infrastructure against cyberattacks. Among these, promoting sustainability across its supply chain stands out as a key material issue for RWE.
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 RWE engages with:
Stakeholder Group |
Investors |
Analysts |
Customers |
Academics |
Policymakers |
Representatives of environmental organisations |
Local government agencies |
Neighbours around locations and other citizens |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics RWE held a survey of selected stakeholders in October 2020.
What actions were taken by RWE to promote sustainability across its supply chain?
In its 2020 Sustainability Report RWE reports that it took the following actions for promoting sustainability across its supply chain:
- Auditing suppliers
- In order to safeguard human rights and social standards in its hard-coal supply chain, RWE works together with other companies in the Bettercoal organisation, which carries out audits with suppliers. A regular review is carried out of suppliers who have been audited as a result of the Know Your Customer Process, in order to establish whether there are indications of illegal activities such as money laundering or terrorism, or human-rights violations. This process is managed by the Compliance Department of RWE Supply & Trading. RWE has also adopted a variety of different measures to make sure that its suppliers act in accordance with its Code of Conduct, the national legal systems and internationally recognised standards for compliance with social and ethical principles. A separate work instruction and a checklist are used by the Procurement Department for commissioning disposal services in order to establish the suitability of the supplier. In such cases, compliance with the defined criteria can be reviewed in supplier appraisals and used for future tender processes in the framework of the internal appraisal system.
- Promoting the principles of the United Nations Global Compact
- The principles of the United Nations Global Compact are a constituent element of RWE’s contractual relationships for all new and existing direct suppliers. The Procurement Department at RWE does not maintain any business relationships with suppliers if there is information in the public domain indicating that they breach the principles underlying the Global Compact. Information “in the public domain” relates to all generally accessible sources from which information can be obtained. Press reports containing merely the suspicion of a breach are not sufficient in this case. Rather, RWE bases its approach on legally admissible or officially confirmed facts. Furthermore, RWE uses published negative lists (World Bank Listing of Ineligible Firms and Non-Responsible Vendors) drawn up by the World Bank based in Washington / USA. The background check for inclusion of potential suppliers on RWE’s list of suppliers is carried out by the relevant purchaser before any orders are awarded. In the case of existing suppliers, the review is performed centrally in the vendor accounts section. In serious cases of suspicion, research is also carried out by the CR Team of RWE AG.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 414-1 New suppliers that were screened using social criteria
2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
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
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References:
This case study is based on published information by RWE, 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:
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