Case study: How the Wilo Group promotes sustainability among its suppliers
The Wilo Group is one of the world’s leading premium providers of pumps and pump systems for the building services, water management and industry sectors. The Wilo Group takes responsibility for a value chain forged from compliance with international laws and standards, human rights conventions and the highest possible ethical principles.
This case study is based on the 2020 Sustainability Report by the Wilo Group, 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
Responsibility along its entire supply chain is one of the Wilo Group’s biggest priorities and sustainability challenges. Tweet This! In order to promote sustainability among its suppliers the Wilo Group took action to:
- implement a Supplier Code of Conduct
- promote human rights due diligence
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With this case study you will see:
- Which are the most important impacts (material issues) the Wilo Group has identified;
- How the Wilo Group proceeded with stakeholder engagement, and
- What actions were taken by the Wilo Group to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Sustainability Report the Wilo Group identified a range of material issues, such as energy & emissions, digital transformation, water, marketing and labelling. Among these, promoting sustainability among its suppliers stands out as a key material issue for the Wilo Group.
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 the Wilo Group engages with:
To identify and prioritise material topics the Wilo Group engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers | · Dialogue in daily sales and customer service talks · Work in associations · Meetings, congresses, trade fairs · Market research · CUSAT (Customer Satisfaction Analysis) |
| Suppliers | · Early supplier integration · Standardised supplier development · Regular audits and training · Supplier days, theme days |
| Employees | · Employee discussions · Employee surveys · Complaints procedure · Internal corporate communication · Digital collaboration platforms |
| Government organisations | · Contribution of expert knowledge in expert bodies · Participation in standardisation committees |
| Research and development
| · Participation in and initiation of research projects · Cooperation with universities and educational institutions · Support for scientific publications |
| Society
| · Involvement in local initiatives · Support for social programmes |
| Associations
| · Membership in a number of business and professional associations |
What actions were taken by the Wilo Group to promote sustainability among its suppliers?
In its 2020 Sustainability Report the Wilo Group reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing a Supplier Code of Conduct
- Signing the Wilo Group’s Supplier Code of Conduct (SCoC), which contains all core elements of human rights due diligence, is an integral requirement in the onboarding process. This is how the Wilo Group’s suppliers undertake to comply with the ethical standards required of them. The confirmation rate was 93 percent in the reporting period. While this is a good result, the Wilo Group is constantly working to achieve 100 percent. An occupational health and safety and environmental protection self-disclosure was also developed three years ago, in addition to the SCoC. This is sent out when there is no other information on suppliers in the form of certificates or audit results. The results are divided into the categories A, B and C. If classified as a C, the rating is not approved and corresponding measures are agreed. 198 self-disclosures were received in the reporting period, with around 46 percent falling into each of the A and B categories and eight percent in the C category.
- Promoting human rights due diligence
- One of the Wilo Group’s primary goals is to achieve transparency of actual compliance with basic principles of human rights in its supply chain. This is why the Wilo Group has introduced a detailed risk analysis. The main suppliers who account for 80 percent of net sales were looked at first. The first step was a quantitative analysis on the basis of internationally available risk indices and the available supplier information, such as ISO certifications or self-disclosures. A potentially high risk was then identified for 107 suppliers. The second step was to subject the high-risk suppliers to a qualitative analysis. This was based on the audits performed and supplier visits. More than 80 percent of the Wilo Group’s suppliers have been audited within the last one and a half years. This forms the basis for exploring possible suspicions of human rights violations. The findings showed that 99 percent of all primary suppliers satisfied requirements. Just two suppliers were determined to be critical. Business relations were ended with one supplier, while the other is being scrutinised once again in conjunction with a dedicated audit.
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
4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
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: 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 the Wilo Group, 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://cms.media.wilo.com/cdndoc/wilo455378/5626274/wilo455378.pdf
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