As a producer of specialty chemicals, Clariant needs raw materials, packaging, capital goods, services, and other inputs such as energy which are sourced from suppliers from around the world. To accomplish this, Clariant selects its suppliers, outsourcing partners and service providers based on extensive criteria. The selection is based on economic and product-specific performance aspects on one hand, and explicitly based on non-financial and sustainability aspects on the other.

Sustainability standards are incorporated into procurement strategies and in general and specific guidelines (such as the Supplier Code of Conduct). For Clariant, sustainability does not begin with the production, but in the selection of suppliers. In the process, the sustainability standard should also be continuously increased along the supply chain at the product level and in relation with the customer.

Clariant assesses suppliers in a comprehensive program based on sustainability factors such as employment conditions, respect for human rights, complaint management, environmental aspects, safety standards and creditworthiness. The criteria also include fundamental aspects such as the presence of certified management systems. Clariant expects all material suppliers and service providers to be committed to these high legal, ethical and moral standards for their own processes and to comply with them. The standards form the basis of the Supplier Code of Conduct. Compliance with this code should minimize the environmental and negative social impact that may arise from business operations. If these standards are not followed by business partners, Clariant reserves the right to terminate its business relationship with these suppliers.

Joint supplier review for more efficiency and consistency across the entire chemical industry

Clariant cannot undertake these screenings by itself with the necessary scope and timeliness for the great number of suppliers. For this reason, Clariant joined the »Together for Sustainability« (TfS) initiative and thus elevated the supplier sustainability monitoring to a significantly higher level. TfS was founded in 2011 as an initiative of six chemical companies to comprehensively and reliably assess and improve the chemical industry’s supply chain in terms of sustainability through a global assessment and audit program. This collaborative approach is based on state-of-the-art sustainability methodologies and an efficient exchange of data from assessment and audit results and scores. By strictly adhering to confidentiality, the initiative is always compliant with anti-trust regulations.

As part of the TfS initiative, the sustainability performance of a supplier is assessed according to a predefined set of assessment and audit criteria that are tailored to the requirements of the chemical industry. The criteria are based on the principles of the UN Global Compact, the principles of Responsible Care®, the standards of the International Labour Organisation (ILO) and national laws. The scope of a TfS audit or a TfS assessment includes all critical aspects – from administration and corporate management, including ethics and corruption, environment, health and safety, to labor and human rights, which includes working conditions and freedom of association. Thanks to TfS, Clariant has access to assessments of almost 4 500 suppliers in more than 100 countries and to the results of almost 500 audits carried out by third party auditors on behalf of TfS. By matching the scorecards generated by all TfS Members and available on the EcoVadis platform with Clariant’s supply base, more than 50% of the yearly direct spend is covered with a sustainability evaluation of our suppliers.

However, the cooperation with suppliers is not just about monitoring. Clariant always considers suppliers as partners. To strengthen this approach, Clariant hosts various events such as the so-called Supplier Days. As part of this, Clariant presents its sustainability program and its objectives, and strives to introduce measures to implement the program together with its partners. The reaction to these supplier events in China or India, for example, has been extremely positive. In addition and most importantly, as of 2016 Clariant is going to engage with its supplying partners in Consequence Management, a joint risk management program to leverage the learning of the assessment results in order to further improve the sustainability performance across its entire supply chain.