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Supplier relations

Choosing responsible business partners is becoming increasingly important and SCA works together with its suppliers to make mutually beneficial improvements with respect to social and environmental performance.

Supply chain management tools

When it comes to supplier requirements and follow-up, SCA works with and assigns priority to three distinct steps:

  1. Global Supplier Standard: All global suppliers to the hygiene and forest products operations undertake to comply with SCA’s policies by signing the Group’s Global Supplier Standard (GSS).
  2. Sedex database: SCA’s strategically important suppliers, from which substantial purchases are made and/or which are located in high-risk countries, are registered in Sedex.
  3. Audits: Suppliers located in high-risk countries are audited and all major suppliers undergo quality audits, which also include verifying workplace health and safety.

Global Supplier Standard

SCA has applied a Global Supplier Standard (GSS) for many years. The hygiene and forest products operations have previously applied individual versions of the GSS. In January 2016, the two versions were consolidated into one single version valid for the entire SCA business and, in addition, the GSS was updated to reinforce sustainability criteria and to secure global coverage. The standard includes requirements governing responsible business operations, quality, product safety, the environment, energy and chemicals. The GSS is complemented by a supplier code of conduct named “Responsible Business Operations”. It includes SCA’s expectations on suppliers with regard to human rights, business practices, employee relations and health and safety.

Approximately 57% of the hygiene operations’ global suppliers are located in Europe, 29% in the Americas and 14% in Asia/Middle East. Many of the production facilities located in Asia and Latin America belong to large multinational corporations based in Europe and the US; a conscious choice by SCA to reduce ethical risks within our supply chain.

Of the wood raw materials purchased by SCA, 88% is from Sweden (of which half from the company’s own forests), 9% from central Europe and 3% from the Baltic countries and Finland. SCA strives to further integrate procurement practices with the requirements of the SCA Global Supplier Standard.

Reporting in Sedex

SCA’s strategically important suppliers, from which substantial purchases are made and/or which are located in high-risk countries, are registered in Sedex. This is where the Group takes into account geopolitical, social, ethical and sustainability-related risks.

At the end of 2015, 85% of the approximately 470 global suppliers to the hygiene operations that were relevant for Sedex registration had reported their details in the database. In the forest products operations, 27 out of 43 suppliers were identified as relevant.

Supplier audits

Suppliers located in high-risk countries correspond to 12% of SCA’s procurement spend and they undergo CSR audits with a focus on health and safety, human rights, employee relations and corruption. SCA uses Sedex and Maplecroft’s risk classification to identify these suppliers. The goal is for all suppliers located in highrisk areas to be audited. To achieve this goal, SCA has engaged a Swiss-based external partner, SGS, to perform audits. The method used to evaluate suppliers is the same as that used to monitor SCA’s own units. At the end of 2015, 130 CSR audits had been conducted.

The Group evaluates potential suppliers prior to contracting and continues to review suppliers at regular intervals. Social and environmental aspects account for more than 20% of SCA’s quality assurance prior to new partnerships and all new suppliers must sign the GSS and register in Sedex prior to any business activities. SCA also conducts quality audits and chain of custody audits of fiber suppliers.

Some of SCA’s customers with high ethical standards require SCA’s suppliers (their sub suppliers) to register in Sedex or conduct CSR on-site audits. SCA supports these customers in their ambitions.