Page 114 - Vaculug Sustainable Report 2022

13.ESG AND OUR VALUE CHAIN
13.1 Our business does not operate in isolation; almost no company does. Value is createdthrough collaboration and partnerships. Similarly, risks can come from not anticipating problems,gatekeeping, and hiding critical information. Traditional risks in supply chains were generallyabout quality, cost effectiveness and reliability. But seen through an ESG lens, the holistic natureof the third parties, from how they source raw materials to how they treat workers and complywith accepted standards are just as vital.
13.2 A workforce health and safety incident, labour dispute or allegation of corruption can have serious impacts on stakeholders up and down the value chain. The value chain matters, and it is connected. Customers are increasingly voting with their feet and putting pressure on companies to act with ethical decisions in mind.
13.3 Ethical procurement gets to the heart of the value chain. When we consider the entire value chain, from raw material supplier to end use customer, we can better understand the needs and impacts of
our business`s decisions within those relationships. Ethical procurement within the context of ESG means paying attention to the carbon impacts of a supplier, and the labour practises of an end-user.
13.4 Considering these impacts doesn`t always mean refusing to work with someone in the value chain where ractises, we can ensure clauses are inserted into contracts to maintain an adequate standard
of employment for those working for the supplier. This can help actively change labour practises, as opposed to simply refusing to work with a supplier. Or when working with a logistics provider, we might ask for emissions reporting so we can then offset the carbon used.
14.HOW TO PROCURE ETHICALLY
14.1 Risk assessments: Undertake risk assessment of the value chain to identify key vulnerabilities based on supplier and customer needs.
14.2 Real-time tracking: Real-time tracking and traceability over suppliers and movements of goods and services.
14.3 Screening, risk-ranking & monitoring: ESG due diligence on suppliers to evaluate
and rank them based on their ESG profile and track record, and monitoring for ESG breaches.
14.4 Investigations: Investigate ESG incidents that take place in the value chain, have remediation plans ready and manage financial and reputational damage.
14.5 Incident response management: Build robust internal governance frameworks to respond to ESG issues in the value chain.
15.OUR ESG GUARDIANS
15.1 Our ESG guardians sit directly beneath our board in terms of seniority. The purpose of the Guardians are to gather and review data from broad parts of the business, then filter and summarise it upwards to the board.
The ESG guardians are responsible for writing the ESG pages inside the annual report, and producing all information regarding ESG disclosures.
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