The case for CSR/ Sustainability Reporting Done Responsibly


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Home / case studies / Case study: How TMG Automotive promotes sustainable sourcing

Case study: How TMG Automotive promotes sustainable sourcing

TMG Automotive, a manufacturer of interiors for the automotive industry, is a family owned industrial group specialised in textiles, including knitting, weaving, dyeing and finishing, garment manufacturing and distribution. In the last couple of years, TMG Automotive has been integrating sustainability practices in its supply chain, emphasising the alignment between suppliers’ practices and TMG Automotive’s sustainability agenda.

This case study is based on the 2018 Sustainability Report by TMG Automotive 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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TMG Automotive makes sure all potential suppliers are screened using both social and environmental criteria  Tweet This!, prior to becoming actual suppliers. In order to promote sustainable sourcing TMG Automotive took action to:
  • promote ethical principles among suppliers
  • carry out supplier assessments

What are the material issues the company has identified?

In its 2018 Sustainability Report TMG Automotive identified a range of material issues, such as efficient use of resources in value creation, innovation, compliance, climate protection and air, waste management. Among these, promoting sustainable sourcing stands out as a key material issue for TMG Automotive.

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 TMG Automotive engages with:

Stakeholder Group                Method of engagement
Shareholders

 

·      General meetings

·      Council meetings

·      Financial report

·      Activity reports

·      Executive boards operational meetings

·      Sustainability report

Customers

 

·      Customer Satisfaction surveys

·      Audits

·      Complaints

·      Open days

·      Fairs and conferences

·      Development and follow-up meetings

Community

 

·      Fairs and conferences

·      Factory visits

·      Cooperation protocols

Partners

 

 

·      Fairs and conferences

·      Development and follow-up meetings

·      Cooperation protocols

Employees

 

·      Intranet

·      Performance evaluation

·      Periodic employee meetings

Suppliers

 

 

·      Supplier qualification

·      Supplier evaluation

·      Supplier visits

·      Open days

Official Entities

 

·      Environmental licensing (RAA)

·      Inspections and audits

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics TMG Automotive interviewed a wide range of stakeholders, asking about a variety of topics related to a social, environmental and economic context.

What actions were taken by TMG Automotive to promote sustainable sourcing?

In its 2018 Sustainability Report TMG Automotive reports that it took the following actions for promoting sustainable sourcing:

  • Promoting ethical principles among suppliers
  • In its contact with suppliers, each element of TMG Automotive’s Purchasing Department represents the TMG Group and acts accordingly, using standards of conduct and ethical principles that assure a long-term professional relation, based on the search for better and more affordable solutions and on the grounds that TMG Automotive is a responsible and fair company. As regards conflict of interests, any form of acquisition that can benefit directly any collaborator is forbidden, unless the purchasing process is completely transparent and obtains full approval from three elements of the Purchasing Group – with the Purchasing Department Director necessarily one of the intervenients.
  • Carrying out supplier assessments
  • Supplier evaluation and selection are done differently by TMG Automotive, according to the service/product type offered. There are two critical moments involved:
    • Initial Supplier Evaluation (Qualification): It determines the inclusion – or exclusion – from TMG Automotive’s supplier list. It is based on a questionnaire sent to the potential supplier that covers quality, social and environment issues. According to the questionnaire answers, the supplier is placed in one of the following groups: approved, provisional/under surveillance, and disapproved.
    • Continuous Supplier Assessment: Evaluation conducted for the approved suppliers, over time. Evaluates suppliers’ performance and their maintenance in the supplier list. An analysis is carried out regarding the suppliers’ quality, deadlines and supplied quantities, organisational level, quality management, environment, social, documentation and competitiveness. This evaluation is done by three different departments: Research & Development, Logistics, and Purchasing Departments, being the last responsible for all the evaluation process and with four criteria in mind: a) Day to day performance (logistic performance regarding deadline and quality deviations), b)technical Information (raw material composition and approval standards compliance), c) Management System (quality and environmental certifications) and d) organisational performance (claims, competitiveness, delivery quality and technical support).
  • Along with what has been described TMG Automotive also performs audits, where environmental and social criteria are used to evaluate suppliers. Additionally, whenever possible, TMG Automotive opts for national suppliers, seeking to boost and develop the Portuguese economy. Also, since TMG Automotive is located in Portugal, Portuguese suppliers will be characterised by a lower carbon footprint, regarding product transportation.

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 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 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 and IEMA approved 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 TMG Automotive, 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 TMG Automotive: 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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