Otto Kosgalwies, Executive Vice President Company Infrastructures and Services
" Sustainability has become a new challenge of supply chain competitiveness. Customers and suppliers relationship and business opportunities with customers form the most important cornerstone of sustainability activities.
In this respect, the recent creation of a structured Business Continuity Plan at company level, will reinforce sustainability and strengthen our supply chain."
Supply Chain Responsibility
ST suppliers and subcontractors are required to comply with ST and EICC policies and standards, local legislation and customer requirements on health, safety and the environment, as well as social and ethical criteria. We work in partnership with our suppliers to play our part in continuously improving the electronic industry's corporate responsibility performance.
ST believes that the social, environmental and ethical aspects of suppliers’ and subcontractors’ performance are key contributors to their overall commercial success.
When we commit to new environmental, health, safety, social and ethical standards, we request our suppliers and subcontractors to sign up to the same requirements. This helps suppliers meet regulations and strengthen their management systems whilst also enabling ST to anticipate and manage risks that could otherwise affect continuity of supply.
We have been a member of the Electronic Industry Citizenship Coalition (EICC) since 2005 which has provided a solid framework for managing these aspects of our supply chain. However, ST has frequently progressed beyond compliance with the EICC’s Corporate Responsibility standards to create our own systems and processes that complement the EICC tools to help us manage supply chain sustainability.
Supply chain management and programs
ST procures materials, goods and services from thousands of sources around the world, a process which is managed by both central departments and local sites. At corporate level, a supply chain team promotes sustainable sourcing and develops long-term relationships by choosing suppliers and subcontractors with robust social and environmental standards and practices. As part of the sourcing process they also assess sustainability risks and apply ST’s social and environmental criteria.
There are four main elements to our supply chain program:
1. Social responsibility
As a member of the EICC, ST is committed to implementing the EICC Corporate Responsibility model throughout its supply chain. Our main suppliers and subcontractors are required to sign the EICC engagement letter. Thereafter, suppliers and subcontractors are asked to complete the EICC online Self-Assessment Questionnaire (SAQ) and share their results with us, so that their Ethical, Labor, Environment, Health and Safety management systems and practices can be evaluated.
ST compiles detailed analysis of these assessments and requires suppliers and subcontractors to address major non-conformities through improvement plans.
The next step of the EICC program is validated supplier assessment through third party audits. ST prioritizes suppliers and subcontractors for audit based on purchase volume, localization and EICC SAQ results.
Conflict free minerals is critical area of supply chain responsibility. ST manages this aspect by adopting and implementing the industry-wide EICC-GeSI initiative in areas of ST’s supply chain that are affected.
2. Environment, health and safety
ST requires all its suppliers and subcontractors to comply with our banned, exempted and declarable substances list. This specification is based on REACH, RoHS, standards and customer requirements and is updated on an annual basis. We perform detailed checks on each of our suppliers and request they formally certify their compliance with our requirements. For further information, please view the Chemical Management section of our website.
We encourage suppliers and subcontractors to gain best practice certifications such as ISO 14001, EMAS and OHSAS 18001 to maintain performance and to provide evidence of effective environmental, health and safety management systems.
3. Risk management
ST has an integrated approach to risk identification, assessment and mitigation that not only includes risks relating to sustainability but also the business performance of suppliers and subcontractors. We want to be sure that our supply chain is able to grow sustainably and also support sustainable growth for ST and our customers.
We request all suppliers and subcontractors to provide evidence of business continuity planning, including disaster recovery and contingency plans, multi-sourcing and geographical diversification of production. In addition, ST monitors suppliers’ and subcontractors’ financial risks on a monthly basis.
4. Sustainable purchasing
In 2011, ST launched a Sustainable Procurement Policy which outlined our ambitions to promote environmentally-responsible suppliers for non-manufacturing procurement. The Policy also reinforces EHS requirements for facilities and energy suppliers and introduces green guidelines to promote eco-labels and green certifications. These are built into our sourcing activities via our Responsible Purchasing Charter with SMEs.
The Responsible Purchasing Charter is an initiative from the French Ministry of Economy, Industry and Employment which has been endorsed by many large French companies. The Charter incorporates and supports many aspects of ST’s Sustainable Procurement Policy such as indicators for CO2 emissions, energy and water consumption, waste generation and safety results. Signatories pledge to improve their relations with suppliers, especially with small and medium-sized companies.
For more information on the Responsible Purchasing Charter
Global Purchasing Organisation
Tel.: +33 4 38 92 33 67
Our management approach and performance are available in our Sustainability report.