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Home / case studies / Case study: How SCL promotes sustainability among its suppliers

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.

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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

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:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

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 

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



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By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

 

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/

Note to SCL: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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