Sustainable supplier management
Sustainable procurement is increasingly on the agenda and this awareness presents both risks and opportunities. One risk is that Nordea is linked to suppliers with questionable business models, potentially generating negative media exposure.
An opportunity, on the other hand, lies in the ability to emphasise to suppliers that a sustainable business model is not only the right thing to do, but also presents a business opportunity, providing them with a competitive advantage in their area.
Nordea’s Supplier Sustainability Policy is mandatory for all large contracted suppliers, i.e. with a contracted value of EUR 250,000 or more. It requires the supplier to adhere to the ten principles in the UN Global Compact which covers human rights, labour standards, environment and anti-corruption. The policy is an integral part of Nordea’s contract templates. Even if the contract with the supplier is not signed on a Nordea contract template, the policy is still mandatory and needs to be part of the agreement. This applies irrespective of the products we are buying. Hence, interaction with large suppliers regarding sustainability is mandatory before contract signing, and when renegotiating.
If, after the contract has been signed, we learn that the supplier is in potential breach of our Supplier Sustainability Policy, initiatives are taken to clarify the issue, potentially preparing a corrective action plan or ultimately terminating the contract. The qualifying questionnaire, to which large suppliers must respond before entering the procurement process, has been updated to ensure early involvement, as well as to capture hidden risks. We have implemented a specific compliance catalyst tool with an extensive database to screen large suppliers before signing contracts.
Furthermore, we have updated our strategic priorities and targets, which has led to updated governance as well as mandate clarification. Part of this has been transferring the Sustainable Sourcing Board into a working group to promote better agility. Standard certification of two Sustainable Procurement Managers has been completed and our engagement with industry peers is still developing, supporting the overall sustainable procurement focus.