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. One of the stated goals of the procurement policy of AUDI AG is to fulfill the brand promise “Vorsprung durch Technik” through its selection of suitable suppliers. In order to make optimum use of synergy potential, we choose suitable business partners in cooperation with the Volkswagen Group. The Volkswagen Group’s procurement management has been based on the concept of “sustainability in supplier relationships” since 2006.
The concept is aligned with principles laid down in the UN Global Compact, the OECD Guidelines for Multinational Enterprises as well as the relevant conventions of the International Labour Organisation (ILO). In this way, the Volkswagen Group has firmly established the importance of environmental and social standards in business relationships with suppliers. The concept has been continuously and systematically further developed since its introduction.
Like all of the Group brands, Audi draws from a joint supplier pool. The main contact for the respective supplier is the unit of the Group that does the most business with that supplier. Before potential suppliers can even submit a bid, they must confirm in writing the “Volkswagen Group requirements regarding sustainability in its relationships with business partners.”
Potential suppliers are required to actively confirm the Group sustainability requirements on the supplier platform before submitting a tender. In order to give the sustainability requirements even greater weighting, they have been incorporated into contracts with suppliers since 2014 and have been supplemented by elements of a Code of Conduct for business partners. In addition to the previously valid environmental and social standards, they now also include an auditing right, a right to extraordinary termination in the event of violation and greater importance is attached to anti-corruption measures, money laundering, import and export controls and statements regarding free competition.
The specific VW Group requirements regarding sustainability in supplier relations 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.
Overall, AUDI AG continued to solidify its relationships with suppliers in 2012, strengthening the basis for long-term, stable and fair partnership. During the reporting period, there were no complaints in regard to suppliers for which Audi is the main customer within the Volkswagen Group.
In future too, we will continuously and systematically develop our sustainability concept in our supplier relationships. At present we are devising a concept for more effective monitoring of compliance with standards by our suppliers, who are spread out across the entire globe.