Our commitment to managing our sustainability impacts extends beyond our direct operations. As a large business we're able to influence the businesses that make up our supply chain. Equally, we know that suppliers play an important role in helping us to meet our sustainability targets.
We have policies and systems in place minimise the adverse impacts and maximise the good ones through our commercial procurement decisions. But we also believe in fair business and strive to ensure that suppliers have a positive ‘PwC experience’, with a collaborative approach to achieving common goals.
Recognising that there’s no ‘one-size fits-all’ solution and building on what we’ve learned to date, we’ve prioritised a number of our key suppliers with which we can have the greatest impact.
At our 2012 supplier sustainability forum we hosted 21 of our principal suppliers in an interactive workshop. We shared insights from our own sustainability programmes and set out our new five year sustainable supply chain plans. We invited participants to debate the opportunities and challenges posed with each other, as well as with our procurement category managers and some of our experts who advise clients on sustainability issues.
Opportunities and risks
We can only be as sustainable as the products that we bring into the firm from our supply base, and the business practices we endorse through choosing to do business with certain suppliers. So in many cases suppliers are the custodians of our reputation. We need to manage this risk through our procurement processes. And, where we find opportunities to work with suppliers to improve efficiency of services and processes these can often deliver both cost savings and environmental improvements.
Responsible procurement policies and measurement
We embed sustainability considerations throughout the procurement lifecycle for key contracts, from requirements specification through to supplier selection and management.
Since 2007 we’ve published our responsible procurement policy. This sets out the minimum standards we expect from all our suppliers, covering their approach to a range of sustainability issues relating to their environmental, social and ethical performance. It helps us to manage risks and promote sustainability across our supply chain.
Strategic contracts go through a formal selection process in which short-listed suppliers must complete a comprehensive questionnaire about their corporate sustainability credentials. Where appropriate, we’re increasingly building sustainability performance criteria in to our contract service level agreements too.
On an ongoing basis, we review our key suppliers' sustainability credentials and policies, asking them to complete our annual corporate sustainability questionnaire. The results allow us to better understand areas we should focus on in the future to further enhance the sustainability performance of our suppliers.
With this in mind, we’ve recently joined the Carbon Disclosure Project’s supply chain programme. From 2013, we’ll be asking our key suppliers to share more detailed information on how they’re addressing climate change and working to reduce their greenhouse gas emissions. We anticipate that this transparency will help us improve our own emissions measurement, and to identify potential opportunities to work with parts of our supply base for mutually beneficial improvements.
The living wage
Fair business is part of our culture and we treat others as we would want to be treated ourselves. This philosophy extends to our suppliers and we collaborate to ensure a positive working experience for their staff in the delivery of services that help run our business.
In 2006, we introduced the London Living Wage for our on-site staff, including our suppliers. Set each year by the Mayor of London, the London Living Wage is a minimum hourly rate of pay, which is currently 38% above the UK minimum wage.
This makes sure that London workers earn enough to provide their family with the essentials of life and has improved the standard of living for our contractors. Our early support for the London Living Wage won us a Living Wage Employers Award from The East London Communities Organisation (TELCO) in 2008.
In that year, we also chose to extend the concept with the introduction of a regional living wage, paying above the government-determined national minimum wage outside of London. We aligned this to The National Living Wage when it was introduced in November 2011 and all staff who work permanently on our regional sites now receive 20% above the UK minimum wage.
We all benefit. Since we adopted the Living Wage in 2006, turnover amongst our contractors has dropped from 4% to 1%, reducing costs for our suppliers and contributing to a more consistent service for our business.
We strive to treat suppliers fairly and - assuming performance meets the terms agreed - seek to pay promptly. Our payment terms are 30 days. In the financial year ending June 2012, the average number of days outstanding between receipt of invoice and date of payment was 28, down from 29 days the year before.