APC 2014 Annual Report Download - page 63

SUSTAINABLE DEVELOPMENT
GREEN AND RESPONSIBLE GROWTH DRIVING ECONOMIC PERFORMANCE
Relations with subcontractors and suppliers 2.3
Approach
safety: health, safety standards, accidents and severity rate.
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Sustainable development criteria account for nearly 15% of
As a Global Compact signatory, Schneider Electric has been supplier evaluation. In addition, all these criteria have a minimum
involved in an ambitious approach to include sustainable level, below which a supplier will not be retained to work with
development challenges in the supplier selection and working Schneider Electric. Schneider Electric carried out 349 audits of this
processes. This approach is all the more important as Schneider type in2014. This year, the supplier qualification process has been
Electric’s purchases volume represents close to EUR12billion. revised to strengthen the environmental criteria involving REACH
Schneider Electric has published a charter for its suppliers, called and RoHS regulations and directives. The Group has also
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the Supplier Guide Book, which includes a large section on designed and made available an e-learning module to the entities.
expectations with regards to sustainable development in the This module addresses expectations in these areas and discusses
following four areas: health and safety, human rights, ethics and the documents and evidence to be obtained from audited
the environment. suppliers.
Since 2004, the Group has been encouraging its suppliers to This qualification process applies to all new suppliers and to
commit to a sustainable development process. A key performance existing suppliers in certain cases. All assessed suppliers have an
indicator was defined in the Planet&Society Barometer for the action plan, registered in our central database. These are tracked
duration of the 2009-2011 One program: at the end of2011, more by our supplier leaders with the suppliers on a monthly or
than 50% of Schneider Electric purchases were from suppliers pluri-annual basis depending on the severity of the action plan.
who had signed the 10 principles of the Global Compact or the
Promotion of a continuous improvement process
EICC (Electronic Industry Citizenship Coalition). With the Connect
program, Schneider Electric wanted to place itself in a continuous
based on the ISO26000 standard
improvement process as well as follow-up with its suppliers by A statement on the importance of sustainable development is
encouraging them to make progress according to the ISO26000 made to each major supplier of Schneider Electric by its Group
guidelines. purchasing pilot after the latter has been trained in the approach.
This approach is strengthened by the General Purchasing Terms For these suppliers, in2012 Schneider Electric began an initiative
and Conditions to which all suppliers must conform: each supplier that is based on an evaluation carried out by a third party.
undertakes to adhere to and to apply the principles and guidelines The sustainable development goals have become one of the
of the ISO26000 international standard, the rules defined in the sevenpillars used to measure supplier performance since2011;
ISO14001 standard, and is informed that energy performance of this has the particular advantage of allowing the highest-performing
its supply has been considered as part of the selection criteria. suppliers to become «recommended», or for the best suppliers,
Suppliers also commit to respect all national legislation and «preferred» by the Group. The performance resulting from the
regulations, the REACH regulation and the RoHS directives, and, third party evaluation is one of the key points of the sustainable
more generally, the laws and regulations relating to prohibition or development pillar. In 2012-2014, the Group aimed to engage
restriction of use of certain products or substances. Lastly, 90% of its recommended suppliers in a process of continuous
suppliers are expected to report the presence and country of origin improvement on this pillar. Recommended suppliers represent
of any and all conflict minerals in the supplies in accordance with 48% of Schneider Electric’s purchases volume. At the
the requirements of the US Dodd-Frank Act of 2010 known as the endof2014, 63% of the recommended suppliers had passed the
«Conflict Minerals» law. In this context, Schneider Electric has a third-party evaluation process. This indicator of the Planet &
«conflict-free» objective. Society Barometer is integrated into the performance incentive of
Action plans
the Purchasing employees receiving a bonus. For the period
2015-2017, the target has been extended to 100%.
This assessment process requires that the suppliers put in place a
Integration of the sustainable purchases approach in
corrective action plan. The elements of the assessment are now an
the selection of new suppliers
integral part of the business reviews scheduled between buyers
and suppliers, on a quarterly to yearly basis, depending on the
Schneider Electric uses a qualification process called Schneider suppliers. This monitoring supposes an improvement from the
Supplier Quality Management to select new suppliers. It is based supplier.
on an evaluation questionnaire combined with on-site audits by In 2014, the assessment process detected 32 suppliers with low
Schneider Electric quality specialists. performance on the sustainable development axis and, for all of
It includes a specific section on the environment and sustainable them, action plans were engaged. Half of these action plans were
development and aims to assess supplier suitability with regard to closed before the year end, five suppliers were demoted and all
the Group’s expectations in three areas: others are closely monitored. Note that three suppliers who had
social responsibility: ISO26000 guidelines and, in particular, the
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poor performance mid-year quickly established corrective action
Conflict Minerals regulation; for the critical issues identified by the assessment and were then
asked to be reassessed. This reassessment confirmed that the
environment: ISO14001, ISO14062 on eco-design, REACH
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improvements had been implemented. This work with the suppliers
and RoHS; has been accompanied by increased awareness among buyers.
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2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC