California Transparency in Supply Chains Act
On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) went into effect in the State of California. This law requires retail sellers and manufacturers doing business in the State to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale.
Schneider Electric’s approach
As a Global Compact signatory, Schneider Electric has been involved in an ambitious approach to include sustainable development challenges in the supplier selection and working processes. This approach is all the more important as Schneider Electric’s purchases volume represents nearly EUR 11,5 billion.
Our Principles of responsibility
In 2002, we published a set of guidelines entitled Our Principles of Responsibility. The document outlines the Group’s commitments to each of its stakeholder groups: the Company’s employees, its economic partners (mainly clients and suppliers), shareholders, the community and the planet. Our Principles of Responsibility have been elaborated taking into account and respecting the following contents:
- Universal Declaration of Human Rights (http://www.un.org/Overview/rights.html)
- International Labour Organisation (http://www.ilo.org)
- Global Compact (http://www.unglobalcompact.org)
- Guiding Principles of the Organisation for Economic Cooperation and Development (http://www.oecd.org)
In 2010, the Responsibility & Ethics Dynamics programme started to set up an organisation, procedures and tools for the Group, so that its employees could:
- provide team members with effective support in their daily actions and decision-making, primarily through access to the necessary resources (policies, procedures, tools & best practices)
- help team members identify the appropriate individuals to guide them in their responsible approach and in each of the areas covered by the principles
- know how to notify the authorities of breaches of ethics, with respect for current laws and regulations
Supplier Guide book
Schneider Electric has published a charter for its suppliers, called the Supplier Guide Book, which includes a large section on expectations with regard to sustainable development in the following four areas: health and safety, human rights, ethics and the environment. In particular, this charter includes a section on the expected commitments from suppliers towards human rights:
- Schneider Electric
Schneider Electric promotes the Global Compact initiative and appeals to suppliers to register to the Global Compact initiative. Schneider Electric would take immediate steps to rectify the situation if we were to find ourselves inadvertently implicated in human rights and labour standard abuses.
Human Rights: The supplier shall support compliance with ethical standards and human rights. The supplier also agrees that it is responsible for controlling its own supply chain and that it shall encourage compliance with ethical standards and human rights by any subsequent supplier of goods and services, used by the supplier when performing its obligations under agreements with Schneider Electric. Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence, and make sure that they are not complicit in human rights abuses.
Labor Standards: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Elimination of all forms of forced and compulsory labour. Effective abolition of child labour. Elimination of discrimination in respect of employment and occupation.
Schneider Electric engaged in the Global Compact in 2002 and encourage its suppliers to commit and report every year on their progress regarding the 10 principles of the Global Compact. The first 2 of these principles refer to human rights:
- Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights
- Principle 2: make sure that they are not complicit in human rights abuses
Since 2004, the Group has been supporting its suppliers so that they can publically commit and directly adhere to the Global Compact. This initiative is part of the foundation of Schneider Electric’s approach. A key performance indicator was defined in the Planet & Society Barometer regarding the duration of the 2009-2011 One programme: at the end of 2011, more than 50% of Schneider Electric purchases were from suppliers who had signed the 10 Principles of the Global Compact or the EICC.
Schneider Electric’s approach to its suppliers, in the area of sustainable development in general and human rights in particular, centres around two main action plans.
Integration of the sustainable purchases approach into the selection of new suppliers
Schneider Electric uses a qualification process called Schneider Supplier Quality Management to select new suppliers. It is based on an evaluation questionnaire combined with on-site audits by Schneider Electric quality specialists.
This process includes a specific section on the environment and sustainable development and aims to assess supplier suitability with regard to the Group’s aims in 3 areas:
- social responsibility linked to the Global Compact principles
- environment: ISO 14001, ISO 14062 on eco-design, REACH and RoHS
- safety: health, safety standards, accidents and severity rate
Sustainable development criteria account for nearly 30% of supplier evaluation. In addition, all these criteria have a minimum level, below which a supplier will not be retained to work with Schneider Electric. Schneider Electric carried out more than 536 audits of this type in 2016.
This qualification process applies to all new suppliers and to existing suppliers in certain cases. It is strengthened by the General Purchasing Conditions to which all suppliers must conform: OECD directives on sustainable development, ten principles of the United Nations Global Compact and regulations defined in the ISO 14001 standard. Suppliers also commit to respect all national legislation and regulations, the REACH regulation and the RoHS directives, and, more generally, the laws and regulations relating to prohibition or restriction of use of certain products or substances.
A global Supplier day was organized in September 2016, where Schneider recognized its most performing Suppliers. For Planet and Society, the Supplier Eurostar Engineering Plastics was recognized and won the award.
Schneider Electric is also a committed to employing people with disabilities. The company was presented an award by the French Paralysis Association in 2010 and went on to sponsor their 2011 award ceremony. Schneider Electric continues to place great emphasis on its commitment in this area through its purchasing and subcontracting with sheltered-employment workshops or Centres for Adaptation to Work (CAT) for industrial work, landscaping services, catering and seminars. In Europe, the amount subcontracted to the protected employment sector represents EUR 43 million in 2011, including: EUR 18 million in France, EUR 12 million in Spain, EUR 4 million in other Western Europe countries and EUR 9 million in Eastern Europe (Czech Republic and Hungary).