Case study: How Vedanta promotes sustainability across its supply chain
Vedanta is one of the world’s leading Metals and Oil & Gas companies, headquartered in Mumbai, India and operating a diverse portfolio of businesses, including Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Oil & Gas, and Commercial Power. Being one of its key stakeholders, it is extremely important for Vedanta to make sure that its suppliers follow ethical practices and operate in a sustainable manner. Tweet This!
This case study is based on the 2020-21 Sustainable Development Report by Vedanta, 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
Vedanta is committed to, among others, respecting and upholding human rights, and expects the same from its suppliers. In order to promote sustainability across its supply chain Vedanta took action to:
- promote compliance
- assess and audit suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Vedanta has identified;
- How Vedanta proceeded with stakeholder engagement, and
- What actions were taken by Vedanta to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2020-21 Sustainable Development Report Vedanta identified a range of material issues, such as energy and climate change, ethical business practices, talent management, resource efficiency, community development. Among these, promoting sustainability across its supply chain stands out as a key material issue for Vedanta.
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 s 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 Vedanta engages with:
To identify and prioritise material topics Vedanta engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Suppliers & Customers
| · Supplier and vendor meetings · Customer satisfaction surveys · Feedback Mechanism/ Grievance Redressal |
| Employees
| · Various workshops, forums, meetings, and feedback sessions · Performance management sessions · Various committees at the plant level: mentor programme, event management committee and welfare committee, women’s clubs, etc. |
| Civil Society / Business organisations
| · Partnerships and membership · Working relationships with organisations on specific projects · Engagement with local civil society organisations and NGOs |
| Community | · Community group meetings · Panchayats · Public Hearing · Grievance Mechanism · Cultural events |
| Government
| · Participation in government consultation programmes · Collaboration with national, state, and regional government agencies at business operational level |
What actions were taken by Vedanta to promote sustainability across its supply chain?
In its 2020-21 Sustainable Development Report Vedanta reports that it took the following actions for promoting sustainability across its supply chain:
- Promoting compliance
- Vedanta follows the company’s Supplier Code of Conduct, which mandates its suppliers to operate in line with Vedanta’s policies and standards. Vedanta’s Supplier and Contractor Technical Standard is aligned to IFC (International Finance Corporation) performance standards, which allows Vedanta to achieve the primary objective of ensuring high quality of performance and ethical conduct from its suppliers. Through its Supplier and Contractor Sustainability Management Policy, Vedanta encourages its suppliers to assimilate its principles and practices into their ways of working. To make sure that all of its suppliers have well-established sustainability management systems and procedures in place, Vedanta has standard ESG (environmental, social and governance) criteria according to which all its suppliers are screened while onboarding.
- Assessing and auditing suppliers
- If the suppliers fulfil its screening criteria, Vedanta undertakes an assessment of their credentials based on the criticality of procurement. Vedanta also assesses the suppliers through the feedbacks received from the companies/teams to which they have supplied goods/services in the past, for robust due diligence of their commitment towards human rights and ethical practices. To further enhance transparency and make sure that its suppliers are as determined as Vedanta when it comes to imbibing ethical practices within their business, Vedanta deploys cross functional teams to visit the suppliers’ operations and audit their ESG practices. Vedanta has a defined checklist for Modern Slavery Act (MSA) and accordingly, audits its suppliers as per the standard criteria. This enables Vedanta to have a clear line of sight on the on-ground practices of its suppliers.
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 Vedanta, 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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