Supply chain responsibility with partners
We achieve a considerable part of our CSR performance by working with partners, conscientiously managing the value chain and product supply chain where we have impact as a result of our financial expenditure or the existence of specific risks. We aim to make a net positive contribution to SDG 12 (Responsible Production and Consumption) so that we can contribute to the positive social and environmental effects in our supply chains. Our procurement policy contributes directly to Alliander’s sustainability pillars: access to clean and affordable energy, climate, raw materials, and being an inclusive employer.
A sustainable relationship with our suppliers
With an annual procurement volume of about €1 billion, we are a major purchaser of products and services in the Netherlands. Together with our suppliers, we can make a major contribution to sustainability. Sustainable procurement is an integral part of our tender invitation/evaluation criteria. Our outsourcing policy incorporates provisions relating to human rights, working conditions, use of raw materials, recycling, and carbon emissions. Alliander requires work to be performed in line with safety protocols and standards for working with the gas and electricity infrastructure, such as VIAG and BEI. Suppliers’ staff must comply with these protocols and standards as well.
All contracted suppliers of Alliander have committed to the ‘Alliander Supplier Code of Conduct’. This code is based on OECD guidelines and requires suppliers as well as their suppliers and manufacturers to adhere to ethical and fair business practices. Infringements of the code can lead to the imposition on our part of sanctions such as termination of the contract or temporary suspension of work with or without notice of default.
Eleven supplier audits carried out
In 2019, a total of 11 audits at suppliers were carried out into the quality of the products and services supplied. No critical deficiencies in these aspects have been reported. During the audits, compliance with the Code of Conduct and with the supply chain responsibility aspects are discussed, as well as the actions taken or to be taken in relation to any issues discussed. On top of the customary quality and product checks, we look at elements of CSR such as compliance with universal human rights, working conditions, health and safety, and their environment management system. Outsourcing, investments and production in other countries sometimes lead to an increased risk regarding these aspects and for the recognition and observance of fundamental human rights. An organisation can involuntarily become involved in dubious practices such as child labour. As well as advance checks, we also carry out on-site audits at contract parties. Findings are shared with the supplier. We did not take any measures with regard to suppliers in 2019.
CO2 measurement in the supply chain
Alliander has a lot of suppliers. Procurement has worked with an outside agency to develop a model enabling carbon emissions in the supply chain and on the part of suppliers to be measured as objectively as possible. The insight that this information provides allows us to segment procurement categories on the basis of carbon emissions and the potential for Alliander to influence the suppliers. We will be launching a pilot involving suppliers to check the validity of the model outputs.
As a network operator, we use large quantities of materials and, indirectly, of raw materials. We have a responsibility to do the best we can when it comes to the sourcing and use of our materials. For a few years now we have been integrating circular procurement into our purchasing processes. Each quarter we report on the percentage of circular procurement and recycling. Our aim is to source 60% of our primary assets via circular procurement in 2025. This means that all raw materials we use are recycled and nothing is wasted. To do this, our management focus is along four lines:
We make the best possible use of the materials we have.
Where possible we make circular purchases of our main materials.
We avoid wasting materials in our operations.
We recycle 100% of the remaining waste using high-grade recycling methods.
In 2019, circular procurement and recycling accounted for 30% of our materials (2018: 16.5%), mainly attributable to ‘raw material passports’ for our cables, meters, and power transformers; these passports show that these items include recycled materials and can be recycled. The existence of raw materials passports gives us a good idea of the origins of 62% of our procurement. Within the Green Networks coalition, the coalition members (regional network operators, TenneT, GTS, ProRail, Rijkswaterstaat, and KPN) share their experiences with raw materials passports. The intention is to make the raw materials passport a standard part of every RFT/RFP from 2020 onwards.
Circular procurement demands intensive co-operation with our suppliers. To assure this, for years we have been using the guidance of the Circular Procurement Green Deal, the aim of which is to learn from each other’s experiences when starting up circular procurement processes and accelerate circular purchasing. The more than sixty participants have a great deal of knowledge and experience. Alliander makes a major contribution to the Green Deal, involving such things as protective clothing, transformers, redeveloping office space, coffee cups, furniture and fair meters.
‘Circular’ cables and workwear
RFPs for low-voltage and medium-voltage cables have placed extra emphasis on the development of a ‘circular’ cable, and the suppliers have responded to that in their designs. We continue to consult with our suppliers on the further development of a circular cable. In addition, in 2019 we completed the tender process for circular safety workwear, company clothing and PPE, and we awarded the contract. With this, we are making a visible contribution to circularity both at product and process level. The first step is to use the workwear and clothing for as long as possible and to ensure that all raw materials we use for the workwear and clothing come back into the cycle and nothing is lost.
Making the best use of what already exists: reuse
The efficient use of material is in keeping with a circular economy approach and supports the principles of excellent network management. Reuse of network components limits the use of new raw materials and reduces carbon emissions. In 2019 we successfully continued our Reuse programme. We optimise reuse by embedding it in our logistics systems and processes: reuse of components is seen as the first procurement channel. Thanks to our increasing reuse of components (such as 10kV/50kV transformers, legacy and smart meters, magnefix installations, and cables), we achieved a cost saving of €3.5 million in 2019, besides this making a substantial contribution to a sustainable Alliander.