Our commitment to responsible practices across our business means we require our suppliers to comply with all local legal frameworks and to be considerate of the ethical, social and environmental impacts on the communities where they operate. Our requirements are published in our Supplier Code of Practice and integrated into our standard contract terms.
In 2012 we worked with an NGO partner to conduct supplier forums in China and Indonesia, to help build supplier capacity, understanding and support for our Supplier Code of Practice. Suppliers worked in groups to examine the relevance and value of ANZ’s approach to CR. Session outputs are being used to inform our compliance standards, development of strategies and partnerships to minimise environmental impact and to optimise social benefits across our supply chain.
We promoted internal support for Responsible Sourcing by conducting staff workshops, increasing awareness and building actions into the everyday work of our sourcing teams. Over 70 ANZ staff attended the workshops which we held in Australia, New Zealand, Singapore and Taiwan.
Other initiatives in 2012 included:
- Holding a supplier forum to review ANZ's plans to manage carbon in the supply chain referencing how we have partnered with our print partner to modify management information systems to capture estimated carbon data for print jobs.
- Embedding carbon, environmental, social and governance reporting into our Travel Management Company tender with the aim of selecting a partner capable of building processes to incorporate carbon as a hotel selection criteria.
- Trialling an enhanced process with a third party supplier to screen and score providers in our Asian supply chain. If successful this enhanced third-party process will allow us to develop a three year cycle of supplier sector scans, and will substantially improve the scale of our Supplier Code of Practice compliance screening.
- Launching a new global sourcing management system which will give a full view of all suppliers for all countries at the conclusion of the installation, scheduled for completion in 2013. The system was launched in Australia in early 2012 and is being rolled out across all regions.
Our 2013 program aims to:
- Integrate an external process to screen a significant number of suppliers over 3 years and report supplier compliance to ANZ's Supplier Code of Practice
- Build and integrate a process to remediate significant supplier risks, identified through our Supplier Code of Practice screening process
- Develop and report supplier partnerships which have been formed to reduce risks in our supply chain, while also supporting ANZ's corporate responsibility framework.
ANZ’s top 10 most significant impact categories are: Fleet; Air Travel, Accommodation; Print Services, IT Infrastructure; Logistics; Security Services; End User Computing; Events; People and Professional Services.
We have responded to feedback from stakeholders, including investors and NGOs, by strengthening and expanding our Global Sourcing Framework over time to embed responsible practices in all of our sourcing decision-making.
Changes to our Global Sourcing Framework include the development of a new Global Sourcing policy and Supplier Code of Practice (SCOP) for our global business. Find out more.
Our new Supplier Code of Practice (SCOP) outlines the standards we expect our suppliers to meet as a condition of doing business with us. The SCOP expands on previous commitments and includes new, explicit requirements related to business ethics and human rights such as: adherence to international standards and domestic regulations relating to the employment of children; and the prohibition of unethical business practices such as inappropriate gifts. We are also actively encouraging our suppliers to influence their own supply chains to meet these same standards.
The SCOP is in keeping with our support of the OECD Guidelines for Multinational Enterprises and the UN Global Compact.
To assist the implementation of our new policy and code of practice, we maintain an education program for global sourcing and operational contract managers to help them build understanding and awareness of social and environmental issues, including human rights, and to take greater account of local conditions, cultures and legal requirements when making sourcing decisions.
In 2011, we conducted nine independent audits of suppliers to high spend supply agreements. This process confirmed there were no significant non-compliances to our SCOP.
The audits also revealed opportunities to delve further into our supply chain to discover the levels of compliance of suppliers to lower spend agreements and within our regional operations. We aim to explore this opportunity during 2012.
Our 2012 program aims to:
- Build consistency of understanding for our Supplier Code of Practice by:
- Providing support for Small and Medium Enterprises (SMEs) in regions and sectors most affected by our compliance requirements
- Delivering an education program for our Operational Contract Managers and Global Sourcing Category Managers
- Provide evidence of our Responsible Sourcing Program in action by:
- Introducing a CSR category strategies into our top 10* most significant impact categories
- Piloting an enhanced supplier auditing process which scans a wider range of suppliers across individual supply chain sectors
* ANZ’s top 10 most significant impact categories are: Fleet; Air Travel, Accommodation; Print Services, IT Infrastructure; Logistics; Security Services; End User Computing; Events; People and Professional Services.
In 2010, we reviewed and updated our policies and practices to assist in reducing the impact of our procurement; by improving internal training and education; and improving how we assess and monitor supplier performance against our sustainability requirements. Specifically, this included:
- conducting online and instructor-led training for all Global Category Managers to improve their understanding of ANZ’s Sustainable Sourcing Framework, its policies, tools and templates, and to help further embed sustainability into all sourcing decisions and category strategies;
- conducting a review of our Supplier Sustainability Code of Practice to ensure that it continues to address and respond to the most relevant social, environmental and governance issues in the supply chain; and
- continuing to include sustainability compliance clauses in our supplier agreements, compliance to which is a mandatory requirement for suppliers of 'high-risk' supply agreements.
We also undertook independent on-site audits of four suppliers of ‘high-risk’ supply agreements. These identified two minor non-compliances, where suppliers did not have systems in place to monitor and manage the impacts of their own suppliers. Both suppliers have since commenced their own programs to build and/or improve management systems. Progress is being monitored. We have found that the auditing process has also assisted in building deeper relationships with our suppliers, not only helping to identify opportunities where we can work together to monitor and reduce social and environmental impacts but also in identifying opportunities to streamline and strengthen our verification and auditing process.
We plan to release our Supplier Code of Practice (incorporating the current Supplier Sustainability Code of Practice) in 2011. As part of this process, we will work with key stakeholders to develop a robust and pragmatic approach to implementation, verification and compliance, focusing on the most material issues (such as human rights), and our most significant categories and markets.
We also plan to continue our engagement and discussion with suppliers about the social and environmental impacts of our procurement, and use this dialogue to inform the development of our category strategies. This will in turn assist us in identifying and leveraging new opportunities with suppliers, and minimising any risks as we pursue our super regional strategy.
- An online training program on ANZ's approach to sustainable sourcing was launched in April 2009, compulsory for all ANZ sourcing staff.
- Instructor-led workshops on sustainable sourcing were delivered to over 70% of all supply category managers in Australia, New Zealand and India.
- New processes to verify suppliers' compliance with ANZ's sustainability standards were piloted this year. One 'high risk' supplier's performance against the Sustainability Code of Practice was verified through an on-site audit. Three medium-risk suppliers were screened for social and environmental performance using their responses to the Sustainability Self-Assessment Tool, which were verified by an external expert.