Considering the value chain
In addition to demanding a high level of performance and competitiveness from its suppliers, the Audi Group expects them to strictly adhere to sustainability standards. These apply to the suppliers for the entire Volkswagen Group, since all Group brands rely on a shared pool of suppliers in order to optimize potential synergies. All suppliers have committed themselves to compliance with the “Volkswagen Group requirements regarding sustainability in its relationships with business partners.” The concept of sustainability is aligned with principles laid down in the UN Global Compact, the OECD Guidelines for Multinational Enterprises and the relevant conventions of the International Labor Organization (ILO).
Requirements placed on suppliers include the use of an environmental management system, avoiding harm to the environment and to health during the production process, and the prohibition of child and forced labor. In addition, Audi requires that working hours and compensation fulfill national legal requirements and minimum standards.
To lend the sustainability requirements even more weight, in 2014 they became an integral part of the contract with suppliers, and elements of a code of conduct for business partners were added. In addition to the environmental and social standards applicable up to now, they include a right to extraordinary notice of cancellation in case of violations and greater consideration of efforts to fight corruption, money laundering, and import and export controls as well as statements regarding free competition.
Together with other companies in the sector and the environmental organization IUCN (International Union for Conservation of Nature), Audi is also active in the Aluminium Stewardship Initiative (ASI). The objective of this initiative is to develop a global standard for sustainable aluminum by late 2014. Environmental and social criteria valid for all stages of raw material extraction, production and processing are to be defined here.
The specific VW Group requirements regarding sustainability in its relationships with suppliers can be found at www.vwgroupsupply.com and are available for download in the right-hand column.
As we see it, the focal point of all measures is positive development of business relationships and dialogue with our suppliers. If we feel that improvements are needed in regard to environmental protection or social standards, we offer our support – if necessary we even involve our Works Council members, company doctors and environmental experts. In addition, a mandatory e-learning training module on the topic of sustainability has been available in nine languages on the central business platform of the Volkswagen Group since early 2012. If a supplier is not able or willing to meet our sustainability requirements despite our support, we will consider terminating our cooperation.
In future too, we will continuously and systematically develop our sustainability concept in our supplier relationships. At present we are developing a concept for more effective monitoring of compliance with standards by our suppliers, who are spread out across the entire globe.