Responsible supply chains

At HUBER+SUHNER, over 50 % of turnover is used for procurement. Based on the resulting material environmental and social impact, we aim to ensure that production materials are sourced only from qualified suppliers, guaranteeing high environmental and social standards. We promote the “regional for regional” approach to strengthen local supplier relationships and ensure short supply chain routes whenever feasible. Actively managing social and environmental risks in our supply chain enables us to meet growing regulatory and market expectations – including from the Swiss Ordinance on Due Diligence and Transparency in Relation to Minerals and Metal from Conflict-Affected Areas and Child Labour (DDTrO) – to conduct supplier due diligence.

Approach

In 2023, HUBER+SUHNER introduced a multi-step supplier sustainability due diligence process for both new and existing suppliers in direct material categories. Going beyond the requirements defined by the DDTrO, suppliers with at least a medium sustainability risk need to show that they uphold relevant sustainability standards in the following areas: human rights and labour practices (including child labour), occupational health and safety, responsible sourcing, environmental protection and climate change mitigation, and fair operating practices. The Supplier code of conduct launched at the end of 2022 lays out the principles and standards we expect our supply chain to follow. Our Global Sourcing team leads the supplier engagement process and has updated our procurement policies accordingly.

New suppliers are required to complete nine different self-assessment questionnaires provided by an established platform as part of the qualification process. They are also required to confirm compliance with the HUBER+SUHNER Supplier Code of Conduct. For our existing suppliers, we conduct risk screenings, where both high-and medium-risk suppliers are asked to complete a self-assessment. Where the self-assessments show non-compliance for eight core sustainability risks, suppliers are required to collaborate to improve their sustainability performance.

Any form of misconduct, including in our supply chain, may be reported through our independent and secure whistleblowing platform, which is available free of cost in several languages.

In our production, HUBER+SUHNER processes the conflict minerals tin and gold. In this regard, the company is mapping its supply chain using the Conflict Minerals Reporting Template (CMRT) of the Responsible Minerals Initiative. The most recent version of the CMRT is publicly available on the HUBER+SUHNER website.

Objectives

The objective was to assess 75 % of our production material spend through our due-diligence platform by the end of 2023. We also aim to procure according to the “regional for regional” model to strengthen local supplier relationships and ensure short supply chain routes whenever possible.

Progress

HUBER+SUHNER purchased more than 22,775 different items from roughly 1,644 active production material suppliers located in 40 sourcing countries in 2023. Between 90 % and 96 % of the suppliers were in the same region as the receiving site of HUBER+SUHNER.

Table 9: Regional supply* by region 2023

In 2023, HUBER+SUHNER updated its global sourcing process to align with applicable sustainability due diligence obligations. This also involved incorporating additional sustainability criteria into our evaluation of new and existing suppliers. We delivered a tailored training to our global sourcing team and provided training on due diligence processes to our staff globally.

Based on our assessments, as outlined in our approach outlined above, there are currently no reasonable grounds to suspect child labour, nor that metals and minerals originate from conflict-affected or high-risk areas.

Table 10: Share of direct spend with suppliers that have registered for the sustainability assessment

Planned actions

We want to continue our efforts to collaborate with our suppliers in promoting responsible supply chains. Key actions in 2024 include:

• Continue to onboard suppliers to onboard critical suppliers, including indirect spend, on our due-diligence platform
• Review and update due-diligence processes, where necessary
• Extend the supplier engagement program to collect primary CO2 data for purchased goods and services
• Continue training the sourcing team on sustainability-related matters