TfS Supplier Evaluation

Suppliers are evaluated by two methods:

1. Assessments, based on a questionnaire issued by EcoVadis
2. Audits, carried out by a TfS-certified auditing company

Assessments: The online questionnaires are based on the principles of the UN’s Global Compact and the Responsible Care^® initiative. They are adapted to the size, country of origin and sector of the supplier in question. The assessments examine 21 criteria relating to the environment, social aspects, ethics and the supply chain. EcoVadis specialists analyze the information provided by the suppliers, add their own research findings and summarize the results in a scorecard. The scorecard gives suggestions for a corrective action plan that can be agreed on together with the supplier. The assessments evaluate the sustainability performance of suppliers on a corporate level.

Audits: External auditors visit individual supplier sites and carry out on-site inspections. As a key part of the audits, they ask the employees questions. It can thus be checked whether the information provided by management is acted on by the workforce. The audits cover 33 criteria relating to management, the environment, health & safety, labor and human rights, as well as governance. The auditors summarize their findings in a detailed report, which also contains a corrective action plan.

The results determine how long the assessments and audits are valid for, which can range from one to three years.

In 2015, we concentrated on providing TfS training to our suppliers, encouraging them to join the program. We predominantly selected suppliers from Germany – where many of our suppliers are based – for the assessments and audits. In 2016, we focused on increasing the number of evaluated suppliers so as to ensure that a significant part of our procurement volume is covered.

Like every TfS member, we are committed to arranging 20 sustainability audits per year. We accompany some of the audits to check the quality of both the auditor and the audit. We initiated 225 of the 491 assessments of WACKER suppliers available in the EcoVadis database at the end of 2016.

Our aim is for the sustainability performance of our main suppliers, which cover at least 70 percent of our procurement volume, to have been evaluated by TfS by 2020. By the end of 2016, we had reached around 50 percent.

WACKER participated in setting up the TfS Supplier Academy. Online training for suppliers is complemented by events such as the TfS conferences in São Paulo, Brazil, in 2015 and in Mumbai, India, in 2016.

When we joined TfS, we trained all our purchasers in sustainability topics for the first time. Since then, the training has become an integral part of our orientation program for new purchasers.

The sustainability evaluation determined via audits and assessments feeds into our supplier evaluation and, depending on the results, has different consequences. If audits or assessments indicate that there is room for improvement, we discuss this with the supplier when we provide feedback on the general supplier evaluation. The objective is to define a fast improvement program. We will also conduct re-evaluations to check the program’s effectiveness. Sustainability evaluations that remain poor have an effect on the supplier strategy and can even lead to the discontinuation of the business relationship.

When asked to do so by a customer, WACKER in its capacity as a supplier also completed a TfS assessment. In 2015, we again received a Gold Recognition Level and thus rank among the best in the chemical industry. Our largest site at Burghausen, Germany, underwent a TfS audit in 2016, in which we achieved 100 percent of all evaluation points.