Sustainable sourcing July 2011. Nov 2011 Sustainable development – Sourcing

Sustainable sourcing July 2011

Nov 2011

Sustainable development – Sourcing

Alstom sustainable development sourcing risk approach

CSR charter CSR assessments and audits of suppliers

SuppliersImprovement

Target : no supplier representing risk

Communication Learning People

Monitoring/reporting

Content

Implementation

Agenda

1st topic Sustainable sourcing : content Page 3

2nd topic Sustainable sourcing : implementation Page 21

3rd topic Page

4th topic Page

5th topic Page


What is sustainable sourcing for Alstom ?

Environment : get suppliers who prove they take care about environment through their products and process

Social : get suppliers who care about social conventions, namely working conditions and human rights, or who are in advance on social conditions

Ethics : get suppliers who respect fair business practises

Find suppliers who hold their own suppliers to these same standards

Alstom aims to have suppliers at least respectful with the international conventions and possibly good or best in class in :

Alstom aims at developing partnerships with suppliers capable to commit on these requirements and has set up objectives and measurement



CSR charter and/or contractual clause

CSR assessments of suppliers

Suppliers AuditsSuppliersDevelopment

Objectives


Charter 80%

Assessments 40%

Internal audits

Audits

Charter for sustainable development

• Principle : compliance with ILO ( International Labour Organisation) and other international conventions in particular with− Labour standards− Ethics− Environmental protection− Occupational health and safety

The acceptation of the charter by the supplier is a pre-requisite to any order from Alstom

The acceptation of the charter by the supplier is an Alstom’s instruction






Objectives


Charter 80%

Assessments 40%

Internal audits

Audits

Sustainable development assessment : Who

• Objective : −Every strategic supplier−Suppliers in main RFQ−Suppliers in risky countries or providing risky

commodities

Target : Suppliers representing 40% of Alstom’s spend should be assessed ( 3 years target).


Sustainable development assessment : constraints

Purchaser view

− High number of suppliers to address− Low awareness of complex and changing regulation.− Difficulty to set up questionnaires adapted to the different commodities− Time dedicated

Suppliers view

− Many different questionnaires to answer− Questionnaires often non adapted to the commodity− Some XL non convivial files− Few feed-back from the assessments. Necessity to industrialise our process

and Decision for cross-

sectors to out-source all suppliers SD

assessments to ECOVADIS


EcoVadis Scientific Committee(Includes members of GRI, WBCSD, INSEAD, HEC, CDAF, …)

Partners

EcoVadis

Technology CSR Research

“Companies should use databases such as EcoVadis that collect supplier audit data and provide buyers with a one-stop tool for evaluating suppliers against a

set of sustainability criteria”

United Nations Environmental Programme– Sept. 2008

Sample Customers


21 CSR indicators

Energy & GHG (CO2)Water

Biodiversity Local Pollutions

Materials, Chemicals, Waste

Product Use Product End of Life

Customer Health & SafetySustainable Consumption

Health & SafetyCSR Promotion

Working Conditions Labor Relations

Training & Career Management

Child & Forced Labor Non Discrimination

Fundamental Human Rights

Corruption & Bribery Anti-competitive practices

Fair & Responsible Marketing

Suppliers Environmental performanceSuppliers Social practices IV. SUPPLY CHAIN

26 000

I. ENVIRONMENT II. SOCIAL III. ETHICS

Policies - Actions - Results

Elements of CSR management systems taken into account

POLICIES

• Mission Statement / Policies• Endorsement of External CSR

Initiatives

ACTIONS

• Measures / Actions• Implementation / Coverage

• Certifications / Labels

RESULTS

• Reporting / KPI’s• 360 : Controversies /

Condemnations / Awards


http://www.ecovadis.com/website/l-en/home.aspx

A specific evaluation questionnaire is generated based on the supplier purchasing category, size and main countries of operations, and sent by email.

EcoVadis evaluation questionnaire C

ou

ntr

ies

Siz

e

Mechanical subcontracting

Casting of Metals

Rolling Stock

Road Freight

Co

mm

od

ity


EcoVadis Scoring and Analysis

ONLINEQUESTIONNAIRE

SUPPLIER SUPPORTING DOCUMENTS

360°(PRESS, NGO, TRADE UNIONS…)

SUPPLIER SCORECARD

ECOVADIS ANALYSIS TEAM

REGULATIONS MONITORING

ECOVADIS CSR ANALYSIS PLATFORM

PUBLICDOCUMENTS


Example on EcoVadis Plateform (fake)






Objectives


Charter 80%

Assessments 40%

Internal audits

Audits

Audits

Two types of audits have been developed as part of sustainable sourcing toolkit

• Light audits (or Internal audits) conducted by Alstom − A sustainable development part was developed with Alstom

qualiticians to complete qualification audits. Already 170 audits have been conducted.

• In-depth audits (or External audits) conducted by a third party : SGS− These physical audits are done by local auditors. These

on-site audits can be ordered • when EcoVadis is not adapted to the supplier ( small supplier in

emerging country), • when Alstom’s buyers or qualiticians fails to realize an action plan

due to lack of info, • when Alstom’s buyers or qualiticians have a suspicion of non

compliance.






Objectives


Charter 80%

Assessments 40%

Internal audits

Audits

Improvement action plans

• Suppliers considered non-compliant will be required to implement action plans or will no longer be able to work with Alstom

• Alstom provides support to our suppliers to improve their sustainable development level− Provide free information to the supplier on its SD

performance and strengths and weaknesses − Advice on the main improvement to undertake− Provide reassessment possibility− Training available on web


Status at March 2011

Criteria IndicatorActual FY10/11

Charter accepted Coverage 4 500

Assessments Number 808

Coverage 34%

Audits Number 170

Non compliant suppliers "closed"

Score suppliers 46


Agenda

1st topic Sustainable sourcing : content Page 1

2nd topic Sustainable sourcing : implementation Page 21

3rd topic

4th topic Page

5th topic Page


Change management

• Communication− Intranet : a dedicated portal our intranet− Web site and adapted presentation

www.alstom.com about us/corporate responsibility/sourcing− Transport supplier’s day; Power newsletter…− Instructions− Newsletter


http://www.alstom.com/

Change management


• www.alstom.com about us/corporate responsibility/sourcing− Transport supplier’s day; Power newsletter…− Instructions− Newsletter

• Trainings :− E-learning (general info), 1500 people already trained, available on Intranet− Training on EcoVadis and action plans, 3 hours learning through Webex : 400 sourcingmanagers trained. − E-learning on ethics



Change management


• www.alstom.com about us/corporate responsibility/sourcing− Transport supplier’s day; Power newsletter…− Instructions− Newsletter

• Trainings :− E-learning (general info), 1500 people already trained, available on Intranet− Training on EcoVadis and action plans, 3 hours learning through Webex : 400

sourcing managers trained. − E-learning on ethics

• People− Roadmaps for evaluation of sourcing people− Highlight on best practices



www.alstom.com

Documents

Sustainable sourcing July 2011. Nov 2011 Sustainable development – Sourcing