Although professional services firms purchase fewer direct materials than businesses in many other sectors, our commitment to managing our sustainability impacts extends beyond our direct operations. It’s an important element of our commitment to ‘doing the right thing’, and it’s aligned with our responsibilities as a signatory to the United Nations Global Compact, and the BITC Mayday commitments. What’s more, suppliers play an important role in helping us to meet our sustainability targets.
Our responsible procurement policy helps us to promote sustainability with suppliers. It sets out a number of operating principles - for both our suppliers and ourselves - to address a range of issues relating to suppliers’ environmental, social and ethical performance. It’s written in business English and also forms part of our key supplier contractual terms and conditions.
This year we’ve refreshed our responsible procurement strategy and supplier engagement model to support our 2017 environmental targets. We use a ‘pyramid’ approach, which focuses on our top 100 or so key suppliers, accounting for majority of our contracted spend.
This means that we’ll look for opportunities to proactively collaborate with our key suppliers who together provide the core services necessary to operate effectively. Additionally, we’ll actively manage relationships with the rest of our ‘top 100’ suppliers to make sure that sustainability criteria have been considered either in the service requirement, the contractual arrangements or the governance processes, as appropriate. Other suppliers will continue to be asked to meet minimum requirements as part of the standard selection process, and through the responsible procurement policy in the supplier contractual terms and conditions
Our business can only be as sustainable as the products we purchase from our suppliers, because by choosing to do business with them we’re tacitly supporting their business practices. So our suppliers’ performance can impact our ability to build and sustain trust with key stakeholders. To that extent, suppliers are custodians of our reputation, and 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 often deliver financial benefits as well as sustainability improvements.
We ask suppliers going through our selection and contracting process about their sustainability risks, policies, targets and performance via a full corporate sustainability questionnaire. We also use an annual sustainability survey to monitor and review the sustainability performance of our key suppliers.
Carbon Disclosure Project (CDP)
Our TIMM analysis confirmed that much of our total environmental impact is generated in our supply chain. The model shows that greenhouse gases and other air emissions typically associated with burning fossil fuels account for the majority this impact. So, this year we joined the Carbon Disclosure Project’s supply chain programme as ‘lead members’ and asked our ‘top100’ suppliers to share more detailed information on how they’re working to reduce their greenhouse gas emissions and mitigate climate change.
We’re pleased to say that the response has been strong, even in our first year. We’ll analyse the results in 2014 and use them to further refine our approach.
We regularly host a forum for our suppliers focused on sustainability issues relevant to the scope of services they provide to PwC. At our 2013 supplier sustainability forum we offered attendees the opportunity to learn more about the CDP, and how to respond, at a workshop also supported by staff from the CDP itself, and some of our own CDP experts. The feedback from suppliers was very positive.
Supplier relationship management
We're working across the global network of PwC firms on an integrated Supplier Relationship Management programme. This focuses on increasing the value from our relationships with suppliers through collaboration, and a key activity is aligning the way we address supplier sustainability obligations across the network, focusing on continual improvement and innovation.
A living wage employer
“Doing the right thing” is part of our culture. We try to avoid asking our suppliers to realise standards more onerous than our own, and work with them to achieve a positive 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 26% above the UK minimum wage. In 2008 we 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 working permanently at our regional sites now receive 15% above the UK minimum wage.