We systematically assess and classify suppliers based on their potential environmental impact and their strategic importance to our operations. This includes evaluating suppliers’ contribution to our Scope 3 emissions, their industry-specific risks, and their level of climate maturity. Through targeted data collection in the form of supplier questionnaires on emissions, targets, and governance, we build a detailed understanding of our supply chain and identify key areas for improvement. 

Based on this assessment, we prioritize suppliers for engagement using a risk- and impact-based approach. Priority is given to suppliers that: 

• Contribute significantly to our Scope 3 emissions 

• Represent a large share of procurement spend 

• Show opportunities for meaningful emissions reductions or collaboration 

This approach ensures that our efforts focus on the areas where we can create the greatest environmental impact. 

Our supplier engagement program is designed to drive transparency, capability-building, and alignment with global climate goals. Key elements include: 

• Climate maturity assessments through structured questionnaires covering governance, emissions measurement, reduction targets, and future plans 

• Alignment with leading frameworks, including the GHG Protocol and SBTi 

• Encouragement of science-based targets, with a goal of having 85% of our suppliers adopt such targets by 2029 

• Ongoing dialogue and collaboration to identify emissions reduction opportunities 

We recognize that suppliers are at different stages in their sustainability journeys and promote transparency and continuous improvement regardless of their starting point. 

Beyond direct suppliers, we actively engage with a broader range of stakeholders across our value chain, including: 

• Industry initiatives and partnerships focused on decarbonization and sustainable sourcing 

• Customers and downstream partners to improve product-related emissions transparency 

• External frameworks and standards organizations to ensure alignment with best practices 

This collaborative approach enables us to drive systemic change and support the transition to a low-carbon economy. 

Siegfried integrates environmental, social, and governance (ESG) criteria into its supplier management processes. Suppliers are expected to meet defined minimum ESG standards as part of doing business with us. While our approach emphasizes engagement and improvement, a supplier’s performance and willingness to progress on ESG topics are increasingly important factors in sourcing decisions and ongoing partnerships. In cases of persistent non-compliance or lack of improvement, this may impact future contracting decisions. 

We are committed to supporting our suppliers in strengthening their sustainability performance through structured development programs, including: 

• Supplier training and guidance on ESG topics, climate strategies, and emissions accounting 

• Individual feedback and benchmarking based on assessment results 

• Support in implementing corrective actions, including recommendations and follow-up 

• Access to resources and expertise to help suppliers build internal capabilities 

Our goal is to foster long-term partnerships that enable continuous improvement and shared progress toward our climate ambitions. 

As part of our supplier audit and qualification process, suppliers are regularly assessed against quality, environmental, and social responsibility criteria, including sustainability and environmental performance. Where gaps are identified, we require suppliers to establish a Corrective and Preventive Action (CAPA) plan to address root causes and prevent recurrence of issues.  

Key elements of our CAPA and supplier development process include: 

• Formal CAPA plans: Suppliers must provide structured action plans based on root cause analysis following audits or assessments, within defined timelines  

• Review and approval: All CAPAs are reviewed and approved by Siegfried auditors, ensuring that proposed actions are appropriate and effective  

• Implementation follow-up: For major or critical findings, suppliers must provide documented evidence of implementation, which is rigorously assessed before closure  

• Continuous monitoring: Progress on CAPAs is tracked, and follow-up audits or reviews may be conducted to verify effectiveness  

• Integration into supplier qualification: Supplier qualification and ongoing approval are directly linked to successful CAPA implementation and overall performance  

This process ensures that identified issues are not only corrected but systematically prevented in the future, supporting continuous improvement across our supply chain.