Sustainable Development Goals – Goal 1 (logo) Sustainable Development Goals – Goal 5 (logo) Sustainable Development Goals – Goal 8 (logo) Sustainable Development Goals – Goal 16 (logo)

39,400

Suppliers worldwide

76%

Local suppliers

810

Critical suppliers

Management approach

The purchasing and supply chain organization is designed to coordinate the entire network of Purchasing and Supply Chain professionals, who number around 400 and around 2,400 respectively. They are responsible for:

  • creating additional value through simple and clear purchasing processes and excellence programs;
  • and for organizing a sustainable and timely supply of goods and services to all of Solvay’s sites and customers.

The organization must provide not only the required level of service and safety, but also an optimized total cost of ownership. The purchasing strategy is defined by the Purchasing and Supply Chain Excellence Function, jointly with the 12 GBUs. The strategy can be executed and deployed at a global, regional or local level, whichever best leverages the supplier market structure.

The Function implemented a new governance structure, with a Leadership Team focusing on strategy and a newly appointed Management Team focusing on operational execution.

Purchasing CSR Committee

Solvay has also set up a CSR committee in charge of making decisions about any potential exceptions to the rules and any serious breach of the principles inherent to the Solvay Supplier Code of Conduct.

Based on the due diligence performed to date:

  • the Group has terminated its relationship with one transportation supplier whose activities were questionable.
  • Solvay also decided to not commit to a contract with a Japanese supplier that sets out good commercial conditions until he agreed to conduct a CSR assessment. Eventually, this supplier decided to go through a third party CSR assessment.
  • As another example, we have conducted a due diligence of our 25 hauliers located in Belgium in order to ensure that they comply with applicable laws and the Solvay Supplier Code of Conduct. Solvay performed this due diligence in response to incidents of some Belgian hauliers exposing their employees to inhumane treatment and poor working conditions. As these may not be isolated cases, the Group asked all Belgian hauliers to reaffirm their commitment to the Supplier Code of Conduct. Hauliers generally welcomed the initiative, with 18 having responded so far. However, further action is required for seven hauliers that have not yet replied despite reminders.
  • Furthermore, an offer for anthracite from Ukraine was refused because a bid far below market level was received and would have breached fair business practices. Two transport companies were confronted with legal issues; Solvay reviewed the information the suppliers provided and deemed it satisfactory to permit continuation of the relationship. Meanwhile, the outcome of the prosecution is being monitored.

Our suppliers

Solvay purchases raw materials to manufacture its 14,000 distinct finished products, technical goods for its production sites, and various kinds of services such as transport, technical maintenance, and consultancy. Together, these purchases amount to around € 7.5 billion. Solvay has 39,400 suppliers worldwide. Nevertheless, 76% of this spend is sourced locally.

The suppliers work with Solvay throughout the whole value chain, from the delivery of raw materials through production, to logistics services, to transporting the finished products to the Group’s customers.

Among its suppliers, Solvay has identified 810 “critical suppliers”. These suppliers have been selected either because they present a risk to the business, social standards, or the environment, or because Solvay is developing or wishes to develop an innovation in partnership with them.

Solvay requires these critical suppliers to pass a third-party Corporate Social Responsibility (CSR) assessment and implement an action plan to mitigate risk if the supplier does not meet the Group’s standard requirements. By doing so, Solvay expects a significant long-term improvement in its suppliers’ sustainability practices and a positive impact on its supply chain sustainability. The share of critical suppliers represents at least 55% of Solvay’s total spend.

The Group’s ambition is to assess all critical suppliers before the end of 2020. At the end of 2017, half of the 810 critical suppliers had been assessed by a third party, and buyers are following up on improvements to 69 suppliers through a corrective action plan.

2017 Solvay’s critical suppliers

 

 

Raw Materials

 

Technical Goods and Services

 

Logistics and Packaging

 

Energy

 

General Ex­penses IT and Telecom

 

Total

Asia Pacific

 

190

 

76

 

79

 

21

 

8

 

374

Europe, Middle East, Africa

 

78

 

21

 

114

 

20

 

22

 

255

Latin America

 

8

 

1

 

21

 

2

 

2

 

34

North America

 

56

 

4

 

75

 

4

 

8

 

187

Total

 

332

 

102

 

289

 

47

 

40

 

810

Our policies

In 2016, Solvay adopted its Responsible Purchasing and Sustainable Supply Chain Statement. This statement outlines how Solvay conducts business with its suppliers, what it expects from them, and what they can expect from Solvay. It covers, inter alia, Solvay’s contribution to a circular economy and conflict-free minerals. The Statement is published on the Solvay website and helps Solvay to demonstrate to customers its commitment to sustainability. The commitments Solvay makes in this Statement are progressively embedded in its sourcing strategies.

Responsible Purchasing and Sustainable Supply Chain Statement

Solvay’s partnership with the Ellen MacArthur Foundation will boost the incorporation of the circular economy principles into the purchasing activities and develop innovation initiatives in collaboration with our suppliers.

Solvay’s partnership with the Ellen MacArthur Foundation

Moreover, in 2017 Solvay reinforced its commitment to meeting its responsibility to respect human rights and issued a new Solvay Human Rights in Business Policy, which covers all Solvay Business Partners, including suppliers. During this year, the Group has terminated its relationship with one transportation supplier who did not properly respect the principles set up in this policy.

Solvay’s Human Rights in Business Policy

Solvay Way commitments

Solvay Way is fully embedded in the Solvay Purchasing Processes, and progress is evaluated annually.

  • 100% of buyers include CSR prerequisites in supplier’s selection process.
  • More than 55% of Solvay’s spend is covered by a CSR approach that includes questionnaires, assessments, and/or audits.
  • Complying with CSR requirements is part of buyers’ performance as assessed in their Performance Development Career Review (PCDR).

Buyers are also now taking CSR impacts into account when selecting innovation projects with their strategic suppliers. These projects are developed jointly in collaboration with the suppliers. For example, Solvay works closely with a supplier to substitute the us of coal by Refuse Derived Fuel to generate the steam needed for the factory.

Solvay’s supplier code of conduct

Solvay’s Supplier Code of Conduct is aligned with Solvay’s Code of Conduct and the CSR agreement with IndustriALL Global Union. It was inspired by the UN Global Compact principles and Responsible Care® practices.

All written purchase contracts need to make reference to the Solvay Supplier Code of Conduct or a valid alternative. In addition, and notwithstanding the existence or the absence of a written purchase contract, all critical suppliers must subscribe to the principles detailed in the Solvay Supplier Code of Conduct.

Solvay achieved full implementation of the Supplier Code of Conduct in 2017, in accordance with the above principles.

Solvay extended its purchasing contracts over the course of 2017 to include an additional clause by which the supplier commits to a CSR assessment and an improvement plan and, ultimately, Solvay may interrupt the contract in the event of a material breach.

Through its CSR committee, Solvay ensures compliance with its Supplier Code of Conduct. For instance, the issue related to working hours in Asia has been addressed in CSR committee and has been escalated to Together for Sustainability (TfS) to define a joint position of our TfS partners.

CSR Supplier assessment and audits

Together for Sustainability

In 2011, Solvay became a founding member of the Together for Sustainability initiative (TfS), an international non-profit association located in the CEFIC offices in Brussels. TfS aims to develop and implement a global audit program to assess and improve sustainability practices within the supply chains of the chemical industry. TfS welcomed its 20th member, Borealis, in 2017.

Following the principle, “An audit for one is an audit for all”, sustainability assessments and audits are shared between all of its members, resulting in fewer individual requests for multiple standards and a more efficient allocation of resources. Ultimately, collaboration within the initiative could lead to a common standard for benchmarking the sustainability performance of companies within chemical industry supply chains.

Solvay is actively supporting TfS development, CPO Kristian Saksida is member of the TfS Steering Committee, and several employees are directly involved in TfS work streams, as well as in regional teams (United States, Asia and South America).

Since the start of the TfS initiative, almost 10,000 supplier sustainability evaluations have been conducted under the TfS program. The sustainability performance of 8,692 suppliers has been rated within the TfS initiative based on EcoVadis assessments, and 1,187 TfS audits have been conducted by means of the TfS Audit Program.

In the year 2017, 1,794 new supplier assessments were done via EcoVadis, and 441 TfS audits were conducted through the TfS Audit Program. In the framework of the TfS initiative, 857 of Solvay’s suppliers have meanwhile been assessed by EcoVadis. 4,057 suppliers have already gone through a re-assessment process, and 60% of these suppliers improved their score.

In 2017, Solvay strengthened its efforts to initiate sustainability audits based on the TfS methodology. More than 30 conducted audits revealed 120 major findings. These findings are subject to Corrective Action Plans followed up by the buyers to ensure improvement.

Solvay also likes to award its top performing supplier in CSR. It has recognized Mondi Industrial Bags as Solvay’s best supplier in terms of corporate social responsibility (CSR). The award was based on 2017 rankings by EcoVadis, a company that monitors sustainability in global supply chains. Mondi achieved a score of 83 out of 100, the highest score of all Solvay (score 77/100) suppliers in the EcoVadis ranking. Mondi scored above average in all categories, scoring in the top 1 percent of all EcoVadis suppliers. The scoring takes into account factors related to the environment (100/100), labour practices (90/100), fair business practices (70/100), and sustainable procurement (60/100). On sustainable procurement, Solvay shared its approach with Mondi to help the company to improve further.

Solvay supports CSR supplier training in Shanghai

On September 19, 2017, CPCIF (China Petrochemical Industry Federation) and TfS (Together for Sustainability) jointly organized the Supplier Training in Shanghai. About 300 participants from Chinese suppliers and TfS member companies joined the training taught by TfS member company representatives from BASF, Covestro and Solvay. The training was conducted in Mandarin so that the content could be communicated more effectively to the Chinese-speaking community.

Supplier Relationship Management

Last year we completed the full roll-out of our Supplier Relationship Management tool, Convergence. This tool supports our work with suppliers.

Our “Every Buyer Every Visit” (EBEV) approach, which requires each buyer to write a report on the CSR topics they discussed with the supplier, is now fully integrated into Convergence. In the visit minutes section, specific fields have been added to register discussions about CSR aspects such as the Supplier Code of Conduct, Health, Safety and Environment, and Innovation. The Group recorded 2,771 EBEV reports in 2017. “Success stories” are a special feature integrated into the EBEV report. If a buyer is able to suggest that a supplier realize certain improvement actions during a visit and observes that the suggestions are translated into successful action, a success story is registered. Success stories not only provide evidence of concrete improvements realized in collaboration with the supplier, they can also inspire other buyers to realize similar actions.

If the performance of a third-party assessment is not feasible for the supplier, for instance in cases of small spends or urgent purchases, Solvay uses its Standardized CSR Questionnaire.

The full integration of the CSR Questionnaire into Convergence lets us send a link to the supplier giving access to the online questionnaire rather than asking them to fill in an Excel file. Once a supplier has completed the questionnaire, it is recorded in Convergence and every Solvay buyer can consult the result, so the supplier won’t be asked to complete the questionnaire multiple times. All results are stored in a shared repository, which also allows us to better monitor underperforming suppliers.

Purchasing and Supply Chain Academies

Solvay launched a Purchasing Academy and a Supply Chain Academy to further develop the Group’s talents, improve their skill sets, and increase their ability to deliver on more challenging personal objectives, all while building world-class capabilities.

The Purchasing Academy has designed three learning programs for different aspects of the purchasing experience, with 20 modules. The modules mirror various aspects of the purchasing process to develop and improve the professional skills and expertise of our purchasing job family.

685 supply chain employees people from over 14 countries have been trained in the Supply chain Academy. To date, the Academy has developed and deployed four modules for Supply Chain professionals. The modules focus on actions and experience, and they include sustainable topics, e.g. optimizing the use of alternative non-polluting transportation or taking CO2 emissions into account.