Our supply chain is an important part of our business and our reputation, and despite its complexity and depth we work hard to try to ensure it is transparent, and ethically, socially and environmentally managed well. Working with our key suppliers is an important aspect of ensuring we manage responsibility issues in our supply chain. This requires robust procedures, processes, policies and programs, constant vigilance, and excellent housekeeping.
In 2019 we have seen a growing need to work with others in the industry to improve transparency throughout the value chain and share best practices. In 2019, we had business with around 14 000 suppliers, and 80% of our total supplier spend was spent with around 450 key suppliers. Our suppliers fall into 3 broad categories:
Hardware suppliers who cover the materials that go into our products;
Services suppliers for services that we offer to customers such as network planning, installation and maintenance and construction of the networks we supply
Indirect suppliers who provide the everyday goods and services we buy to conduct our business, (IT, logistics, consulting, financial, legal, marketing and so on).
Our manufacturing suppliers are mainly based in Asia and services suppliers are based around the world. Our final assembly includes our own factories in Finland, India and Poland as well as our key supplier sites in Brazil, China, Hungary, Italy, Mexico, Romania, Thailand, Ukraine, USA and Vietnam.
Below is an overview of our process for supplier sourcing and management.
Audits and assessments
Our Supplier Requirements are communicated to our suppliers as part of our supplier contracts, and we expect our suppliers to commit to these as part of their contractual obligations. An overview of those requirements can be found on our public website here.
In 2019 we also thoroughly reviewed our Supplier Requirements and in 2020 intend to adopt the RBA guidelines as the basis of our requirements going forward. Read more here.
We carry out assessments and audits with our supplier network regularly to help them meet our ethical standards and improve on their performance where needed. We monitor our suppliers through a variety of methods, of which the most important are:
Our general supplier requirement audits -our general audit which includes corporate responsibility as a subset
Corporate responsibility in-depth audits on our existing suppliers, align with SA8000 methodology, includes Human & labour rights, health and safety, and environment issues
Supplier Health & Safety Maturity assessments which target high-risk service suppliers.
Conflict Minerals Audits which cover Conflict minerals scoping, due diligence and risk management.
We also use a variety of assessment tools such as EcoVadis and CDP. In 2019, the below types of suppliers were addressed through our CR programs:
- Over 98% of relevant supplier base was covered bySupplier Health and Safety Maturity Assessment.• Over 59% of supplier spend is covered by CDP supplychain climate change program.
- 98% of relevant supplier spend was covered by theResponbsible Minerals program.
- 56% of supplier spend is covered by EcoVadissustainability assessments.
- 100% of supplier spend is covered by the Request forInformation (RFI process, related to anti-corruption duediligence, health and safety, and overall sustainability.
We work with Verisk Maplecroft on risk mapping in our supply chain. The map below shows a Corporate responsibility risk map of our suppliers (including modern slavery, labor, health and safety and environmental risks) The map is an aggregate of a selection of Verisk Maplecroft indices. The map covers countries where we have business with suppliers (exceeding a set minimum € threshold), but may not cover all countrieswhere our suppliers operate.
Materials traceability and conflict minerals
There remain a number of potential risks associated with the mining, extraction and trade of metals industry that provide key minerals in electronic components. These risks include but are not limited to military conflict, potential human and labor rights abuses, and environmental damage. Our Responsible Minerals Policy revised in 2019 outlines our commitment and our requirements towards socially and environmentally responsible sourcing of minerals for our products.
To ensure the traceability and responsible sourcing of the minerals used in our products we continued our work with our industry peers through the Responsible Minerals Initiative (RMI). Our due-diligence approach is aligned with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals.
In 2019, we achieved a 96% rate of suppliers establishing a full traceability of 3TG (Tungsten, Tin, Tantalum and Gold) smelters. Our target remains 100%. Under the Responsible Minerals Assurance Process (RMAP) we achieved an 82% validation level for the smelters and refineries in our supply chain that are conflict-free or active in the validation process. A further 5% of smelters were identified where our due diligence efforts have demonstrated that the smelters can be reasonably considered as conflict-free.