Risk mapping of suppliers
To support our sustainability goals and to seize the opportunities sustainability presents, we need close interaction with our suppliers. Therefore, we focus on strengthening the collaboration with our key suppliers and encouraging them to improve their sustainability performance.
Metso’s Code of Conduct and sustainable development criteria for suppliers set the standards that we expect our suppliers to follow, and they are the starting point to any new or existing business relationships.
Building a more transparent supply chain started in 2014 when we carried out a risk mapping of sustainability-related risks within our existing suppliers. By defining the risk levels, we were able to focus on suppliers with the highest potential risks in their operations. For the risk mapping, we utilize Maplecroft’s Human Rights Dataset to identify the risk countries related to the categories Human Security, Labor Rights and Protection, Civil and Political Rights, Access to Remedy and Development. In addition, we also take into account the supplier type and spend. Based on these assessments, we decide if there is a need for third-party audits. We conduct a minimum of 15 third-party sustainability audits yearly.
Also take a look at: Sustainability Criteria for Suppliers and Sustainability Handbook
In 2015 we started conducting comprehensive third-party audits concentrating completely on sustainability issues with Metso’s potential high-risk suppliers. We continued auditing our high-risks suppliers in China and India in 2016 and conducted, in total, 15 third-party audits. Metso’s third-party audits are conducted very thoroughly and cover many sustainability aspects, including HSE, product safety, labor and other human rights, and risk management.
Audit outcomes are analyzed by sustainability experts, and, if necessary, suppliers are required to implement corrective action in a given timeline. Suppliers are required to provide Metso with evidence of the implemented corrective actions and are subjected to a re-audit, if needed. The focus is to increase the sustainability knowledge of our Procurement function so that it has the ability to control the potential correctiveactions comprehensively.
Screening new suppliers is included in Procurement’s ongoing processes, and our target is to evaluate the majority of our new suppliers in higher risk countries against our sustainability criteria.
Based on the sustainability risk assessment of the new supplier, Procurement decides on the need for an in-depth audit and further actions. If the supplier is not able to fulfill our sustainability criteria and the cooperation in developing the supplier’s shortcomings is impossible, the supplier will be declined.