In 2010 the amount of spending overseen by our Procurement business was some £1.4 billion. We recognise that how we spend our money and who we spend it with can add value and create business benefits beyond simply financial ones. We look to optimise our expenditure through responsible procurement to increase environmental and social benefits.
In 2010, we continued to embed our Responsible Procurement policy further so that it’s now business as usual by being included for all new contracts we sign. This was the final part of a larger initiative to engage our existing suppliers to sign up to our Responsible Procurement policy which started in 2007. We believe our responsibility extends to those who work for our suppliers. We commissioned an independent third party to conduct five factory Social and Ethical Supply Chain audits in China and Ukraine . As a result, we’ve identified a number of working practices that gave cause for concern and we have been supporting our suppliers in making improvements.
We are a corporate member of Business in the Community (BITC) whose patron is HRH the Prince of Wales, and fully support its Mayday Network, set up by BITC to unite businesses with a passion for tackling climate change.
We’ve been providing our suppliers with sustainability information, and inviting them to workshops where they can exchange knowledge on supply chain carbon. As a result, more of our key suppliers have now signed up to the Mayday Network, and pledged to publicly disclose their carbon footprint and future reduction plans.
We were delighted that BITC asked us to submit a case study on supply chain carbon. It also appears in the Mayday Network’s partner resources. We have committed to updating the case study on an annual basis to demonstrate our progress over the longer term. We’re also encouraging our suppliers to consider submitting case studies of their own. Although carbon is still an emerging area in supply chain responsibility, we hope that our collaborative approach will inspire other companies to follow our lead.
Through our involvement with CEMARS (Certified Emissions Measurement and Reduction Scheme), we work with other utility companies to set up regular webinars about supply chain carbon.
We have also supported events hosted by Action Sustainability, such as “Sustainable solutions meet the buyers”. Action Sustainability is a social enterprise that creates opportunities for buyers and suppliers to meet and find out more about innovative sustainability services and products.
E.ON UK participated at “meet the buyer” events hosted by Minority Supplier Development (MSD-UK), a not-for-profit organisation that sets up business relationships between large corporations and their extended supply chains, with ethnic minority businesses.
We’ve been looking at ways we could work with socially-led, not for profit organisations like Recycling Lives in Preston, Greenworks and Remploy who provide work and training opportunities for vulnerable people. We have also established links with a national but locally based waste exchange charity, GivingWorldOnline in Leicester to look at how redundant goods can be reused appropriately.
Our Responsible Procurement activities have featured in several professional journals and we’ve been asked to provide responsible procurement guidance to the Chartered Institute of Purchasing and Supply. The guide was co-authored by Traidcraft, one of the founders of the Responsible Purchasing Initiative and focuses on procurement in the developing world. Closer to home, we are also looking at the potential to engage further with the third sector and SMEs.
In 2010, 70 of our most strategic suppliers were invited to meet our UK Board, to gain greater insight into how they could support our plans for a lower carbon future. We asked them to consider how they could reduce their carbon footprint to help us reduce ours. All of the suppliers responded to this challenge with their future goals and current action plans.
We decided to pick 15 of these 70 key suppliers to accompany us on our carbon reduction journey. This pilot programme complements existing work done in 2008 and 2009 on supply chain carbon. The supplier experience of carbon reduction varied, from those who have been successfully working on reduction for several years to those with relatively little experience in this emerging area. At the end of 2010, we hosted a workshop to share the lessons we’d learned.
In 2010, we trained half of the procurement category managers in developing a greater degree of supply chain carbon awareness. The remainder will be trained in 2011.