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Supplier management

In addition to demanding high standards in terms of quality, technological expertise, performance and competitiveness from its suppliers, the Audi Group also expects them to adhere to strict sustainability requirements. The suppliers have committed to complying with the “Volkswagen Group requirements regarding sustainability in its relationships with business partners.” This concept is aligned with principles laid down in the UN Global Compact, the International Chamber of Commerce Business Charter for Sustainable Development, and the relevant conventions of the International Labour Organization.

Requirements that the suppliers must comply with and enforce include: implementing an environmental management system, avoiding damage to the environment and harm to human health and safety during production, guaranteeing their employees’ right to freedom of association, and banning child labor and forced labor. Furthermore, Audi requires that working hours and compensation meet at least the specifications and minimum standards required by law in the country in which a business partner operates. Respect for and observance of human rights serve as the basis of all our business relationships. Respecting these and exercising our duty of care are enshrined in the Audi policy declaration on the respect for and observance of human rights. Employees and third parties can use the Group-wide notification system at compliance@audi.de to communicate any perceived violation of human rights or valid laws. The responsible departments will consistently follow up on such notifications.

At the Group level, the "Volkswagen Group requirements regarding sustainability in its relationships with business partners" (commonly referred to as the “sustainability requirements”) have been in effect since 2006. New text was added in 2016 concerning the handling of conflict minerals. The Volkswagen Group expects its suppliers to avoid use of materials made from the smelted ores of conflict minerals. Minerals are considered conflict minerals if non-state armed groups are supported directly or indirectly through their extraction, transport, trade, handling or export. Information regarding the origins of minerals used by suppliers or sub-suppliers must be disclosed to the Volkswagen Group upon request. The “Volkswagen Group requirements regarding sustainability in its relationships with business partners” places even stronger emphasis on topics including measures for combating corruption, money laundering, import and export controls, and statements concerning free competition.

The Volkswagen Group reserves the right to inspect the business premises of its partners to confirm compliance with the sustainability requirements. Our “ad hoc teams” will pursue every substantiated tip or indication concerning possible violations of our sustainability requirements, will evaluate the answers they gather, and, if necessary, will work with the supplier to prepare measures to remedy any possible abuses. At Audi we believe the measures are primarily aimed at the positive development of business relationships and partnership-based dialogue with the suppliers. Should Audi determine that improvements are needed in terms of environmental or social standards, the company offers its suppliers training and instruction to help them gain further qualifications in the area of sustainability. Since early 2012 the Volkswagen Group has provided a compulsory eLearning qualification module on sustainability. Also provided are training courses and specific formats for selected suppliers, such as stakeholder dialogues and sustainability roundtables.

And at Audi, regularly scheduled training courses addressing sustainability issues are held for procurement personnel. These events are organized by the internal Procurement Academy (Beschaffungsakademie).

The VW Group sustainability requirements pertaining to relationships with suppliers are available for downloading from the website www.vwgroupsupply.com.

 

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