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Strategy
Global supply chains – global responsibility
Fairness and environmental protection throughout the global supply chain: the idea behind the Supply Chain Act is correct and important. As the name of the law suggests, the path to this is long and complicated. Especially for medium-sized companies like the BLANC & FISCHER-Group, implementation of the law is a feat of strength. At the same time, careful consideration of the supply chain makes the company more resilient.

The BLANC & FISCHER-Group had already turned its attentions to the supply chain at an early stage and established an appropriate framework for it. For example, with a Code of Conduct for suppliers or the “supplier onboarding” process, which, in addition to sustainability, also considers aspects such as certifications, quality, logistics, and costs.

The Supply Chain Act, which came into force on January 1, 2023, created further momentum. This obliges German companies with more than 3,000 employees to observe special due diligence and reporting obligations. These specifically relate to compliance with human and labor rights as well as environmental standards in the supply chain—for example, protection against child labor or the right to fair wages.

The introduction of the Supply Chain Compliance Management System was an exciting process. The Supply Chain Act (Lieferkettensorgfalts­pflichtengesetz, or Lieferkettengesetz for short) initially left many questions unanswered. Nevertheless, we started early and with an interdisciplinary approach. And it paid off!

Klaus Ackermann Head of Corporate Compliance, BLANC & FISCHER Corporate Services

From theory to practice

Global value-added chains and supply relationships are complex by nature; the transparency task set for the management holding company and the associated business groups was therefore substantial. An interdisciplinary team of experts joined forces to drive the topic of supply chains forward with a clear headstart over the introduction of the law. The team included colleagues from the Compliance Organization and Purchasing.

In addition to content-related preparations, such as the adoption of a “Declaration of Principles for Social Responsibility and Human Rights in the Supply Chain” by the management board, the establishment of the “Supply Chain Compliance Management System” was a core task. In this context, the team used a comprehensive risk analysis to look both internally and externally. On the test bench: the sites, sales, and all direct suppliers. In addition to supplier-specific risks, product- and country-related risks were also considered. “That was a tremendous feat,” says Marvin Zimbelmann, Compliance Coordinator of the E.G.O.-Group, looking back. “But it was the only way we could establish transparency and initiate the appropriate prevention and remedial actions based on this. Depending on the risk assessment, these may include extensive reporting obligations, on-site audits, or qualified self-assessments by the suppliers.” In the case of the latter, for example, the details of industrial safety, CO footprint, or the company’s own supply chain responsibility are examined.

So far, the evaluations show that the majority of suppliers have a low risk level. For the few suppliers with higher risk assessments, this is usually due to the fact that the countries in which the companies are based have different standards in terms of social responsibility and human rights.

Other changes include the further development of the whistleblower system. This system, which was initially set up for compliance cases, now also makes it possible to confidentially and anonymously point out human rights and environmental risks as well as any breaches of duty in the supply chain of the BLANC & FISCHER Family Holding or in the business groups.

The course has been set— what happens next?

The team responsible for the Supply Chain Compliance Management System will carry out ongoing risk analyses. Self-reporting must be checked and its quality monitored. Audits must also be initiated. The intensified dialog with suppliers on sustainability shows that there are promising thoughts and approaches on both sides that can be pursued in close cooperation.

Sustainability in the supply chain is an important aspect for the BLANC & FISCHER Family Holding and its business groups. In accordance with GRI guidelines 308 and 414, it therefore checks and assesses its suppliers based on environmental and social criteria.

The checking and evaluation process for existing suppliers began in 2021 and was extended to new suppliers in the reporting year. One relevant selection criterion for supplier checking is the amount of purchasing volume, applying the Pareto principle, which states that 80 % of the result can be achieved with 20 % of the total effort. All supplier data and documents requested are gathered and evaluated on a platform. GRI 308 “Supplier environmental assessment” shows key figures relating to suppliers and their environmental behavior. The link between suppliers and their social behavior is presented under GRI 414 “Supplier social assessment”.

The following diagram shows the purchasing volumes for 2021 and 2022.

Purchasing volume assessed according to environmental and social aspects

in EUR million
In 2022, the BLANC & FISCHER Family Holding business groups had 173 new suppliers, 16 of which were screened. Following the defined process, the specialist department screened A and B suppliers to cover as much of the purchasing volume as possible. The purchasing volume of the screened new suppliers in 2022 is over EUR 3.0 million. Integration into the onboarding process of the systematic screening according to environmental criteria (via questionnaires) is planned for 2023. All new suppliers should then provide further information on how they approach human rights and environmental protection before a business relationship commences.
>> SEE GRI 308-1-a, GRI 414-1-a
Suppliers must submit a self-assessment to check for negative environmental impacts in the supply chain. This covers a range of topics, such as company training, environmental policies, management system, polluting activities, use of problematic substances and hazardous waste, and much more. The questionnaires on social criteria and human rights contain questions on equality, discrimination, mistreatment, forced labor, freedom of association, slavery, child labor, working hours and wages, as well as occupational safety aspects. Suppliers are classified accordingly on the basis of their answers and an underlying weighting of the questions. In addition, media screening of suppliers takes place on the internet. Furthermore, the risk analysis for the Supply Chain Act, for example, assesses the potential environmental impact of a supplier based on its country of origin and industry.
>> SEE GRI 308-2, GRI 414-2

GRI 308

Environmental assessment of suppliers

Screening of suppliers according to environmental criteria

GRI 308-1 a

New suppliers Screened according to environmental criteria

The reporting organization must disclose the following information: Percentage of new suppliers assessed according to environmental criteria.

Figures for 2022

In 2022, 9 % of new suppliers were screened according to environmental criteria.

GRI 308-2

Negative environmental impacts in the supply chain and action taken

The organization must disclose the following information:

a. Number of suppliers screened for environmental impact.

b. Number of suppliers identified as having significant actual and potential negative environmental impacts.

Figures for 2022

A total of 435 suppliers were screened for negative environmental impacts.

GRI 414

Supplier evaluation according to social criteria

Überprüfung der Lieferanten nach Menschenrechten und weiteren sozialen Kriterien

GRI 414-1 a

New suppliers screened according to social criteria

The reporting organization must disclose the following information:

a. Percentage of new suppliers assessed according to social criteria.

Figures for 2022

In 2022, 9 % of new suppliers were screened according to social criteria

GRI 414-2

Negative social impacts in the supply chain and action taken

The reporting organization must disclose the following information:

a. Number of suppliers assessed for social impact.

b. Number of suppliers identified as having significant actual and potential negative social impacts.

Figures for 2022

A total of 423 suppliers were screened according to social criteria.

Sustainability Report 2023
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