Responsible supply chain
Billerud procures raw materials, wood, chemicals, transport, products, energy, and services from its global supplier base. Working towards a sustainable supply chain means that all purchasing decisions must be made in line with principles of business ethics and comply with the sustainability criteria.
Billerud sets high demands on indirect and direct material and fiber suppliers. The fundamental requirements that apply to our suppliers are outlined in Billerud’s Supplier Code of Conduct together with international standards, current legislation, and regulations. The Supplier Code of Conduct clearly sets out our expectations and minimum requirements and includes areas such as statutory compliance, business ethics, human rights and labor law, health and safety and the environment. Goals and activities to achieve a sustainable supply chain are an integral part of the business plan of Billerud Procurement & Wood supply function, with the ambition to improve the sustainability performance of both Billerud and our suppliers. Purchasers undergo training in Supplier Code of Conduct and the processes we have for evaluating suppliers. Supplier evaluations and Supplier Code of conduct are followed up regularly and reported to the Procurement & Wood supply management team and to the Group management team.
We have a continuous dialogue with our suppliers to increase their knowledge of the content of our Supplier Code of Conduct, and to strengthen their performance within sustainability and ability to meet our requirements. We continuously encourage our suppliers to develop and improve sustainability in their end-to-end supply chains. We have routines in place to identify suppliers that are critical to the business, such as suppliers of direct materials, suppliers with a purchase value over or certain threshold, or who are deemed to have a sustainability risk. Risks are considered when onboarding new suppliers and are monitored during ongoing business. This includes environmental risks as well as screening against Billerud’s list of excluded and high-risk markets (defined as jurisdictions perceived as having high risk related to responsible business, e.g. human rights, labour rights and/or and corruption.)
Billerud implemented a collaboration with EcoVadis, a third-part solution for supplier assessments, during 2019. EcoVadis provides an evaluation that is based on the supplier’s size, industry, and location. The evaluation consists of four main categories:
- Labor and Human Rights
- Sustainable Procurement
After submitting documentation for evaluation to EcoVadis, suppliers receive a rating and a scorecard. Billerud has set rating levels for approval, approval with conditions or non-approval. Suppliers that are approved with conditions shall commit to improve their performance and carry out improvement activities. In these cases, the supplier needs to implement a Corrective Action Plan (CAP). When deviations are identified, we provide guidance and support to help the supplier to implement systematic improvements. Suppliers that are not approved may pose a risk to Billerud, and in those cases, Billerud has the right to terminate contracts with the supplier and will not source from that supplier. A high evaluation score is an advantage in supplier selections.
More information about our Procurement processes can be found in our sustainability report.
Sustainability and compliance are important parts of the supplier evaluations. Not least in order to achieve our climate goals. Read more about how we target our supplier evaluations and carbon dioxide emissions within the supply chain on the Sustainability targets page.
Implementation of supplier Assessments in North America
In connection with acquisition of our North American business, we are in the integration process to apply and secure a common approach to the implementation of Supplier Code of Conduct, and supplier assessments across our business. We have set a Billerud level target for Supplier Code of Conduct implementation until 2025.
The transition to a fossil-free fleet is the way forward
For outbound transport, Billerud has great opportunities to steer towards fossil-free alternatives as transports from our mills to our customers are well suited for rail. Billerud’s long-term goal is zero greenhouse gas emissions from outgoing transport by 2050. An important step in this direction is our target to increase the proportion of outbound land transports conducted by rail to 75% by 2030.
In 2022, 70% (67%) of the outgoing land transports from our European mills travelled by rail. Together with carriers, we are pushing for the transition to a fossil-free fleet and will continue to actively choose the mode of transport and monitor developments in technology and fuel, railway expansion and the electrification of roads. The majority of wood raw material consumed by Billerud is transported inbound to our mills by road.