Through our supplier engagement strategy and newly implemented sustainability assessments, we aim to deepen our influence in the supply chain and to strengthen relationships with our suppliers. Partnerships and cooperation with suppliers on sustainability-related challenges will enable significant risk mitigation, long-term cost reductions and increased profitability. Vattenfall purchases a wide range of goods, services and fuels, with varying risk profiles and legal and sustainability requirements. Purchasing and sourcing are conducted primarily in four streams: goods and services, commodity fuels (coal, biomass, gas and oil), directly sourced heat fuels and nuclear fuel.
Part of Vattenfall's procurement strategy going forward will be to seek and establish business relationships in new supplier markets. This represents an opportunity to significantly reduce costs and share knowledge, but requires greater attention to supplier sustainability performance.
Status and activities 2016
Particular focus has been on continued improvements to Vattenfall's methodology, stimulating internal awareness and updating tools and documents. Vattenfall is continuously seeking new ways of improving its methodology to gain more knowledge of risks and impacts further along in its supply chain.
New types of reviews for different categories of suppliers in the supplier base were developed and implemented, leading to a better understanding of and knowledge about our strategic and main suppliers.
In 2016 a shift took place in our supplier management strategy, as we moved beyond auditing to more direct engagement with our suppliers to ensure compliance and performance. In coal sourcing, for example, we developed engagement strategies on a supplier-by-supplier basis in which we engage directly with the companies in our due diligence procedure, inform them of the outcomes and cooperate with them in our work on driving continuous improvement.
Developments within the four purchasing streams
- Reduce and optimise the supplier base in order to manage our suppliers in the best way possible.
- Increase the share of suppliers that have undergone sustainability assessments.
- Increase audits and engagement around targeted, specific risk issues.
- Conduct pilot projects to extend existing EHS audits to include more sustainability criteria such as human rights, labour and anti-corruption aspects,
- Continue to develop internal systems and reporting tools to ensure higher quality of data and facilitate monitoring of suppliers.
- Continue training for the sourcing and procurement organisation, and increase transparency of our sourcing and procurement activities.
- Increase the scope of our human rights assessments.
- Fact-finding and stakeholder engagement visit to Colombia.