Case study: How SCL promotes sustainability among its suppliers
Headquartered in Kolkata, SCL (Shree Cement Ltd) is one of the top three cement producers in India, with its operations spreading across six Indian states. With its supply chain becoming more complex day by day, it has become imperative for SCL to establish internal values, strategies and a code of conduct with suppliers to promote social and environmental responsibility.
This case study is based on the 2017-18 Corporate Sustainability Report by SCL 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
SCL works to make sure that its suppliers follow practices in line with SCL’s sustainability policies Tweet This!, integrating the policies in all its supplier agreements. In order to promote sustainability among its suppliers SCL took action to:
- implement a Green Procurement Policy and Vendor Code of Conduct
- improve supplier performance through supplier assessments
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With this case study you will see:
- Which are the most important impacts (material issues) SCL has identified;
- How SCL proceeded with stakeholder engagement, and
- What actions were taken by SCL to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2017-18 Corporate Sustainability Report SCL identified a range of material issues, such as customer satisfaction, employee relations, regulatory compliance, community development, biodiversity. Among these, promoting sustainability among its suppliers stands out as a key material issue for SCL.
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 SCL engages with:
| Stakeholder Group | Method of engagement |
| Employees
| · Safety and Environment meetings · Employee feedback surveys · Employee grievance mechanism · Training and workshops |
| Customers
| · Customer satisfaction survey · Meetings with customer representatives · Online communication |
| Media | · Meetings with media representatives |
| Government | · Regulatory filings · Facility inspections |
| Shareholders
| · Meetings · Corporate website · Investor relations |
| Local Communities
| · Meetings with the community representatives · Executing CSR interventions in collaboration with NGOs |
| Suppliers | · Supplier inspection audits |
| Trade Associations | · Meetings with trade association representatives |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics SCL developed a detailed questionnaire which was circulated among internal stakeholders, to obtain their views on previously identified material topics and to identify new topics, if any.
What actions were taken by SCL to promote sustainability among its suppliers?
In its 2017-18 Corporate Sustainability Report SCL reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing a Green Procurement Policy and Vendor Code of Conduct
- SCL’s ‘Green Procurement Policy’ and ‘Vendor Code of Conduct’ outline the principles of ethical business practices to be adopted by its suppliers in order to sustain long-term collaboration with SCL. Coverage of the policies extends to 100% of SCL’s suppliers. SCL’s determination is to apply the policies to all of its purchases, and require procurement staff not only to incorporate sustainable criteria in evaluating product and service options, but also to support suppliers in their sustainable development. The Green Procurement Policy provides a guidance and framework for evaluating and screening products, to make sure that they have a minimal impact on the environment. The Vendor Code of Conduct defines minimum standards of ethical and responsible behaviour on the following aspects of sustainability and social accountability:
- Human rights
- Maintaining value and integrity
- Forced labour
- Safe and hygienic work conditions
- Child labour
- Fair competition and anti-corruption
- Compliance with laws
- Corporate social responsibility
- Improving supplier performance through supplier assessments
- SCL has a systematic approach for supplier screenings called ‘Supplier Categorization Procedure’, which applies to all the suppliers with whom SCL has an established agreement and to suppliers who are in the process of entering an agreement with SCL. The procedure supports SCL in assessing its business partners’ performance across economic, environmental and social parameters, and also helps in understanding the potential risks facing SCL’s supply side operations. During the reporting year FY 2017- 18, SCL screened and assessed 18 suppliers based on its social and environmental assessment criteria, including SA 8000. The environmental criteria assessed included monitoring and management of environmental issues, sustainable packaging and shipping materials, environmental policy statement, and resource efficiency (energy conservation, water conservation, fuel savings). The social criteria assessed comprised child and forced labour, health & safety, freedom of association and collective bargaining, discrimination, working hours and remuneration. Additionally, all contracts and request-for-proposals included a Terms of Reference on sustainability aspects, to be covered by the firm.
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
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: 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 SCL, 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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