Supplier sustainability risk assessment
Integrity and sustainability are key elements of Siegfried’s corporate values and they are integrated into our daily work. Just as we hold ourselves to the highest standards, we expect the same commitment from all parties in our supply chain (Suppliers).
In order to assess the Supplier sustainability risk with a focus on human rights, including all relevant issues related to child labor and conflict minerals (Sustainability Risk), Siegfried has established a dedicated Supplier Sustainability Risk Assessment Regulation (Regulation).
According to the Regulation, Siegfried assesses all Suppliers in terms of (i) operational Sustainability Risk (product class) and (ii) geographical Sustainability Risk (geographical location of the goods/services rendered to Siegfried). Both dimensions are assigned to a specific Sustainability Risk level (low, medium or high) and visualized in a dedicated Supplier Sustainability Risk heat map from which Siegfried derives the recommended depth of Sustainability Supplier due diligence (Due Diligence). In addition to the operational and geographical Sustainability Risk, Siegfried takes into account the financial impact of a business relationship with a Supplier. In contrast to the operational and geographical Sustainability Risk, the financial impact of the business relationship with the Supplier is not used to assign a specific Sustainability Risk Profile to a Supplier. Rather, when faced with similar Supplier Sustainability Risk Profiles, the financial impact helps Siegfried to prioritize Due Diligence activities on those Suppliers where Siegfried has the greatest leverage due to the commercial significance of the underlying business relationship.
Supplier Sustainability Due Diligence
As a general rule, Siegfried endeavors to include the Supplier Integrity Commitment in all contractual agreements with Suppliers, whenever possible. With regard to the depth and scope of the Due Diligence, the Sustainability Risk will determine the required actions as detailed below.
All Supplier responses are subject to a joint expert review by the Siegfried Sustainability Board work stream leaders (SMEs). The SMEs confirm whether (i) the collaboration with a Supplier can be initiated without further remediation action, (ii) additional Risk assessment or mitigation and correction activities will be required or (iii) the collaboration must be rejected or terminated. If Siegfried believes or has reason to believe that the information provided by a Supplier or a third party (i) does not accurately reflect the Sustainability Risk, (ii) the Sustainability Risk has materially changed since the last assessment, or (iii) a Supplier may be in violation of applicable laws or regulations, Siegfried will trigger additional appropriate Sustainability Due Diligence activities and reserves the right to terminate a business relationship with a Supplier at any time.