We continue to strengthen our global governance systems by preparing systematic sustainable procurement practices group-wide. Our focus on environmentally sound buildings and related energy and greenhouse gas emissions reductions, resulted in the development of a green office plan outlining key targets and actions to reduce waste and the use of energy and water.
The sustainability and ethical standards to which we commit also extend to our suppliers. Our current ambition is to fully implement a consistent sustainable procurement programme which will enable us to effectively engage with our suppliers worldwide and monitor their performance.
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Targets
- Implementation of procurement software
Implement procurement software which enables supplier data to be tracked and the introduction of sustainable procurement processes to be monitored. The tool will initially cover indirect suppliers. - Supplier risk assessments
Initiate systematic sustainability risk assessments of selected supplier categories. - Performance reporting
Based on the implementation of the procurement software, we aim to report on indirect-procurement supply chain performance in 2018.
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Results
- Implementation of procurement software
Procurement software has been implemented and all supplier information, contracts and other related documents are to be uploaded to this system. This enables us to track and monitor suppliers globally. - Supplier risk assessments
All contracts entered into with new suppliers in 2017 included the Supplier Code of Conduct. At times, we need to accept the supplier’s code, in which case this code overlaps with ours. All Group procurement procedures were updated and aligned with the Supplier Code of Conduct. All procurement staff were trained in new and updated policies and procedures for procurement and all new staff attended a 2-day training programme on procurement governance. - Performance reporting
The procurement software will enable us to report on supplier performance. An assessment of supplier performance is a functionality of the system and will be implemented in 2018. Guidelines and a template for a supplier risk review were prepared during 2017 and a short list of suppliers to be audited will be prepared in early 2018.
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Plans
- Implementation of procurement software
Upload all indirect suppliers to our procurement database to enable supplier data to be tracked and the implementation of sustainability procurement requirements to be monitored. - Supplier audits
- Carry out audits based on systematic sustainability risk assessments of selected supplier categories.
- Performance reporting
Based on the implementation of the procurement software, we aim to report on indirect procurement supply chain performance for 2018.
Our Supplier Code of Conduct outlines our expectations for suppliers and is aligned with the UN Global Compact’s ten principles on human rights, labour standards, environmental performance and anti-corruption work. We procure most services and products locally. The responsibility for governing documents, strategies, processes, tools and global procurement projects is organized centrally in our Global Shared Services unit.
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Characteristics of our supply chain
We divide our suppliers into two main groups:
Direct suppliers that provide services which are part of our deliveries to customers. These suppliers are, for example, subcontractors that provide technical expertise or conduct management system certifications on our behalf.
Indirect suppliers that provide goods and services related to our overall business activities, such as the facility management of our office buildings, travel, ICT hardware and software, financial services, insurance and office supplies.
The largest categories by expenditure are Subcontractors; Office and real estate expenses; ICT; and Travel.
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All suppliers shall accept our Supplier Code of Conduct
We shall use suppliers which accept our Supplier Code of Conduct. Suppliers are required to sign the Supplier Code of Conduct or accept it as a mandatory appendix to the contract. In addition, subcontractors must comply with HSE requirements that are equivalent to our own requirements. Further, checklists are in place to ensure an appropriate ethical standard of hired subcontractors in line with our Supplier Code of Conduct. New indirect suppliers shall be screened for inherent sustainability risks. Where needed, suppliers are requested to conduct self-assessments.
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Global governance, local purchasing
We procure most services and products locally. However, the responsibility for policies, processes and tools as well as global procurement projects is centralized. The business areas are responsible for direct procurement which is part of our deliveries to customers. Indirect procurement is managed by Global Shared Services.
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Risk management
New suppliers need to complete a standard risk assessment questionnaire, and we assess the risk relating to suppliers before contractual engagements. The risk assessment is a continuous process, and is carried out if and when required. We believe that our supplier portfolio, which is basically service-related, has a low risk of non-compliance. To manage risk and ensure cost savings and transparency, we are working to consolidate suppliers globally and select trustworthy suppliers whose values and service quality are as required.
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Competence development
We train new employees involved in procurement centrally every year. General governance and the Supplier Code of Conduct are on the agenda. Regional procurement managers attend global alignment meetings twice a year, at which the latest information on governance is communicated. The regional managers then communicate this to their teams. In addition to these face-to-face meetings, bi-weekly Skype meetings of regional procurement managers and the central team also help to ensure that the whole team is updated and aligned.
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High sustainability standards
Our commitment to corporate sustainability extends to our relationships with suppliers, subcontractors, contractors and intermediaries. Our Supplier Code of Conduct outlines our expectations for suppliers and is aligned with the UN Global Compact’s ten principles on human rights, labour standards, environmental performance and anti-corruption work. Further instructions that inter alia support sustainability principles are given in management-system documents, such as the instructions for procurement, instructions for contracting subcontractors and intermediaries, real-estate management policy and real-estate leasing guidelines.
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High environmental standards for office buildings
DNV GL has an overall goal to do its utmost to minimize its impact on the environment. Renting green offices and reducing the office area per employee helps to reduce the impact on people and the environment. Our Global Real Estate Leasing Guidelines state that “We will use office premises and other properties which are in compliance with our environmental policies, e.g. increased energy efficiency of buildings, sustainable energy sources, and reduced energy consumption and atmospheric emissions”.
In 2017, we continued to implement sustainable procurement practices. The review of all relevant governance documents was completed and software to enable the tracking, monitoring and reporting of supplier data was selected and started to be implemented. The consolidation of travel agencies from 200 to 2 enables the transparent reporting of greenhouse gases. Moreover, a green office plan was developed. Our first near-zero emission building in Shanghai was officially opened with the attendance of the Norwegian Prime Minister and senior Chinese officials.
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Implementation of the Supplier Code of Conduct
All contracts entered into with new suppliers included the DNV GL Supplier Code of Conduct. This code covers social, environmental and ethical criteria. We now have in place a system which enables consolidated reporting on the percentage of new suppliers that were screened on these criteria. However, these data will not be available until a complete upload has been carried out in 2018. A system which enables risk assessment was created in 2017 and will be fully implemented in 2018.
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New procurement database ready for implementation
The work of establishing a more systematic approach to sustainable procurement management continued in 2017. The review of all procurement instructions was completed. Further, we selected integrated procurement software which will enable supplier data to be tracked and the implementation of sustainable procurement processes to be monitored.
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Green offices
Based on our ambition of reducing our carbon footprint, we have prepared a green office plan that covers the following: a reduction in our carbon emissions through renting green offices, the development and implementation of a green office guide as well as the strict application of the space requirements outlined in our global office design manual. Furthermore, we purchase green energy where available.
Green buildings are estimated to consume 30 to 50% less energy than ‘non-green’, use 40 per cent less water, emit 30 to 40% less CO2 and produce about 70% less solid waste. The green building performance is documented by Green building certifications. Today, DNV GL rents 19 offices with a green label. This includes all our larger offices and accounts for 20% of our total rented area. As an example, the new Group headquarters is rated as BREEAM Excellent. By reducing the average square metres per employee to 12 globally in a few years’ time, we will reduce our energy consumption and environmental footprint in addition to saving costs.
A green office guideline is being developed to promote sustainable performance for all offices. The guideline will provide practical suggestions to all employees for their daily environmental protection actions, such as saving energy through heating, cooling and lighting; saving water; avoiding waste and reducing greenhouse gas emissions.
