Minimum requirements for suppliers

Supplier Code of Conduct as basis

Part of GNFK Start The group’s aim is to develop socially and environmentally responsible supply chains. Therefore, its Supplier Code of Conduct (SCoC) contains minimum requirements for direct suppliers that go beyond national laws and internationally recognized guidelines. These minimum requirements are based on the principles of the United Nations Global Compact (UNGC) and the core labor standards of the International Labour Organization (ILO). The Schaeffler Group is working towards preventing human rights violations in the form of child and forced labor as well as discrimination based on racial/ethnic origin, color, or gender for all business contacts.Part of GNFK End

More information can be found in the Human rights chapter.

Part of GNFK StartAll existing direct suppliers of production materials (tier 1) that have neither implemented a certified environmental or occupational safety management system nor accept the SCoC are rated down by Purchasing during supplier evaluation. This reduces their chances of consideration for new projects or larger procurement volumes. In addition, suppliers with insufficient overall performance or assessments – e.g., in terms of quality, logistics, sustainability – cannot achieve “strategic supplier” status. This is a benefit limited to exceptional suppliers, which are the Schaeffler Group’s preferred development business partners in selected projects and workshops.

In 2020, 64¹⁾ (prior year: 86) new suppliers of production materials were evaluated for the supplier portfolio by way of an “initial assessment” and thus incorporated into the Schaeffler supplier pool. All new suppliers of production materials are obliged to accept the SCoC in writing during the approval process. SCoC compliance is also referenced in orders. If suppliers refuse, or if the supplier’s code of conduct (CoC) does not have the same commitment to values and a comparable level of protection, the approval process is terminated.

In the reporting year, “initial assessments” were also conducted as virtual “remote assessments” due to coronavirus restrictions. One integral part of this assessment is production tours, during which questions are asked not only about quality issues, but also about production-related aspects of occupational safety and environmental protection. Elements of the questionnaire were sourced from the VDA Sustainability working group. Suppliers that do not adequately meet questionnaire requirements during the assessment will need to take suitable remedial action to resolve the fundamental problem responsible for deviation following root cause analysis. If suppliers are unwilling to cooperate – e.g., by taking immediate action to address critical issues directly – the approval process will be terminated.

No serious negative environmental or social impacts in the supply chain were identified in the reporting period.Part of GNFK End

The Schaeffler Group Supplier Code of Conduct is available at: Schaeffler Group Supplier Code of Conduct

Further development through self-assessments

Part of GNFK StartThe Schaeffler Group systematically promotes sustainability in its supply chains with the aim of sourcing 90 % of its purchasing volume from suppliers of production materials with self-assessments by 2022. Standardized self-assessment questionnaires (SAQs) have been sent to selected suppliers via the platform NQC Ltd. since 2020. Four campaigns were carried out in 2020 that increased coverage of the purchasing volume of production materials to 30.9 %.

The Schaeffler Group is also involved in working groups, industry initiatives, and industry dialogues in its efforts to incorporate expertise and actively help shaping development in this area. Additional risk-oriented measures are planned for the supply chain, including sustainability audits based on a VDA questionnaire codeveloped by the Sustainability working group.

Sustainable Suppliers

90 % of purchasing volume of production material from suppliers with sustainability self-assessments by 2022

SDG 8 Decent Work and Economic Growth SDG 17 Partnerships for the Goals

Part of GNFK End

1) Completed in 2020.