Clariant selects its suppliers, outsourcing partners and service providers based on a comprehensive set of criteria. The selection is based not only on economic and product-specific performance aspects alone, but also non-financial aspects and sustainability considerations are explicitly taken into account in the selection process as well. Clariant’s sustainability standards are incorporated into its procurement strategies and activities, policies, and general guidelines (such as the Code of Conduct for Suppliers) Therefore sustainability at Clariant does not begin and end with its own manufacturing operations, but extends across its entire supply chain as well. Through its procurement organization Clariant is actively engaged in ensuring that the most sustainable products and services as possible are sourced from its supply base, in order to continuously increase the sustainability profile and performance level of its entire supply chain and product portfolio.

Clariant assesses suppliers through an extensive program based on sustainability factors such as working conditions, respect for human rights, complaint management, safety standards, and creditworthiness. Clariant views the existence of certified management systems and sustainability policies extending to their related deployment and results, as critical supplier evaluation criteria.

Clariant expects all of its material suppliers and service providers to commit to and comply with the same high legal, ethical, and moral standards it applies in its own processes. These standards form the basis for the Code of Conduct for Suppliers. Clariant expects its suppliers to abide by this Code of Conduct and to make every effort to keep the environmental impact and negative social effects arising from business activities to a minimum. If these standards are not followed by its business partners, Clariant retains the right to end its business relationship with these suppliers.

By joining the »Together for Sustainability« (TfS) initiative, Clariant has taken the sustainability monitoring and improvement of its suppliers to a new and much higher level. In fact, the TfS evaluation of suppliers – both with regard to raw materials and services – is based on a standard methodology and approach jointly developed by leading global chemical companies. It is managed through leading external global service providers specialized in sustainability such as EcoVadis for assessments and DSQ Group, ERM, Intertek, and SGS for audits. The approach developed and implemented by TfS leverages synergies amongst the participants and delivers an independent, standardized, and quantitative evaluation of suppliers’ sustainability performance and risk profiles. The outsourcing to third party service providers guarantees process robustness, independence, confidentiality, and conformity with anti-trust and competition law. Clariant prioritizes the assessment and audit of suppliers according to country risks, global category priorities, and purchase volumes

Through the TfS program, Clariant is able to generate quantitative scorecards providing a quantitative evaluation of the sustainability performance of its suppliers. In addition to an overall score, suppliers receive an individual score for the critical dimensions of Environment, Labour Practices, Fair Business Practices, and Sustainable Procurement. Further the scorecards provide a detailed feedback on specific improvement areas and guidance on where and how to address the identified gaps, forming the basis for Clariant to agree with its suppliers ad-hoc corrective action plans and, therefore, mitigate sustainability risks in its supply chain.

Through TfS, already more than 4 500 assessment scorecards – each representing an individual supplier – and almost 500 audit reports have been generated, and are now available to all TfS Members on a sharing platform as basis to drive improvements in the sustainability performance across the respective supply chains.

By matching the scorecards generated by all TfS Members and available on the EcoVadis platform with Clariant’s supply base, we already cover more that 50% of our yearly CHF 2.4 billion Direct Spend with a sustainability evaluation of our suppliers. This evaluation, based on a state-of- the art methodology and global standards such as Global Compact, GRI, and ISO 26000, not only provides a quantitative rating of the overall ESG performance, but also a specific score for each of the relevant dimensions of Environment, Labor Practices, Fair Business Practices, and Procurement. This results is significantly higher than the 20% reported in 2015, as it leverages the rapid growth in TfS membership from 8 to 18 members and, therefore, acceleration in the number of shared scorecards.

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