Our supply chain
We have about 1,200 suppliers, with whom we spend about Euros 2.3 billion a year. They are mainly in the IT (both software and hardware), facility management, furniture and marketing industries. While many are based in the Nordic region, we also source from the US, EU and India.
Checking CSR credentials is part of the sourcing process
Initiating a sourcing process begins with defining the scope. We then research and identify potential suppliers, and invite selected ones to reply to a ‘Request for Proposal’. These suppliers have to complete a 12-question CSR questionnaire and, since 2014, we have used the information provided to organise the suppliers in our CSR segmentation matrix.
Assessing the risks
The purpose of the segmentation model is to capture potential risks in Nordea’s supplier base. It comprises a two-dimensional matrix outlining the likelihood of a CSR-related supplier breach and the impact on Nordea in the case of such a breach.
‘Risk likelihood’ is determined by country risk, sector risk and the potential supplier’s compliance with the United Nations Global Compact. ‘Risk impact’ is established by Nordea’s spend with the supplier, how critical they are to our business, and the media risk associated with the supplier.
The outcome of this process determines the appropriate level of engagement with the supplier as well as a governance structure outlining roles and responsibilities.
Engaging with medium or high-risk suppliers
Suppliers who are evaluated as medium or high CSR risk – and whom we want to invite for negotiations – have to complete an extended CSR questionnaire and elaborate their processes and procedures in the four areas of the UN Global Compact.
This aims to provide us with a better understanding of the supplier’s risk profile. A supplier evaluated as medium or high risk is not automatically disqualified from the process but, if they are appointed, we will engage with them more extensively on CSR issues.
Following negotiations we sign a contract, which includes the CSR Supplier Policy. Finally, we establish governance structures and follow up on CSR activities.