Responsibility in the Supply Chain
As a manufacturer of high-quality life science products, Eppendorf sources raw materials, goods and services from all over the world. Our supply chain encompasses procurement, production, distribution and logistics. As a result, the activities along our supply chain entail a wide variety of risks that can impact the stability of our production capability. Identifying and evaluating these risks as early as possible is crucial to our ability to supply our customers with products featuring the high level of quality they require while successfully running our business. Establishing transparent and digitalized processes along the supply chain can minimize disruptions and risks in this regard. To this end, we take process-related, economic and technical criteria, as well as social and environmental factors, into account in our procurement process.
We continuously address growing external demands with regard to our supply chain management, including new statutory requirements on the traceability of specific materials, and we exercise our due diligence obligations under human rights law. Moreover, we pay very close attention to our customers’ requirements and take them into account in our tenders. Our aim is to ensure stability in the value chain while encouraging our suppliers to act more sustainably where required and helping them to implement our requirements.
Our supplier management
A Group-wide corporate standardcorporate standardA specification of a product or process to be repeatedly and consistently used in the company. defines the framework for Eppendorf’s supplier management. It sets out precise specifications on how to identify and select suppliers and ensure that they are qualified. When developing new supplier relationships and screening new suppliers, the purchasing departments overseen by the Chief Technology Officer (CTO) ask candidates to provide them with information pertaining to their social and environmental credentials. For example, each supplier must confirm our Code of Conduct for Suppliers and provide voluntary disclosures on the topic of sustainability. The screening of suppliers that reject or refuse to sign the Code of Conduct for Suppliers or fail to provide adequate answers in the voluntary disclosure will be terminated with immediate effect.
Alongside the initial screening of potential suppliers, we perform audits of our existing suppliers using defined corporate standards that apply at all of our production sites. In addition, we expanded the range of functions in our auditauditAn audit examines whether processes, activities or management systems meet defined or required standards, guidelines, norm regulations or legal requirements. tool in 2020 to include sustainability requirements from the screening questionnaire relating to human rights, the environment and ethics, to enable us to verify compliance with these requirements on site.
The Global Procurement Instruments unit performs all sustainability-related supplier screening activities and is assigned to the new CTO role. In this context, the unit also focuses on the German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz), which will come into effect on January 1, 2023.
Standards & guidelines
In our operating activities, we are committed to complying with generally accepted labor, social and environmental standards and respecting human rights. We also meet the requirements for responsible corporate governance as set out in our Code of Conduct. Furthermore, we are firmly committed to the Ten Principles of the United Nations Global Compact (UNGC), which we have been supporting since becoming a participant on January 31, 2022. The principles focus on human rights, labor standards, the environment and preventing corruption.
We expect all of our suppliers to comply with internationally accepted environmental and social standards. These are set out in our Code of Conduct for Suppliers, which is based in particular on the core labor standards of the International Labour Organization (ILO), the UNGC and the UN Universal Declaration of Human Rights. Our suppliers are also expected to ensure that their own suppliers comply with these standards.
Moreover, Eppendorf expects its suppliers to comply with applicable environmental laws, regulations and standards. Accordingly, we expect suppliers to set up and operate an environmental management system based on accepted standards in order to minimize environmental impacts and hazards and improve environmental protection in their day-to-day business operations. We demand appropriate documentation from suppliers that trade, process, export or mine minerals originating from conflict and high-risk areas on behalf of Eppendorf.
In addition, we expect suppliers to comply with fundamental workers’ rights as stipulated by applicable national laws. Such laws include regulations prohibiting child labor, forced labor and discrimination, as well as those protecting freedom of association, fair pay, lawful working hours and occupational health and safety.
Eppendorf expects suppliers to not tolerate corruption of any kind. They are obliged to ensure that their companies comply with the conventions of the UN and the Organization for Economic Cooperation and Development (OECD) on combating corruption, as well as relevant anti-corruption laws. Any conflicts of interest with personal and business interests or other activities, including those of relatives or individuals and entities otherwise closely associated with the company, are avoided from the very outset.
Voluntary disclosure as initial indicator
In January 2021, we added a sustainability questionnaire featuring exclusion criteria to our screening process for new suppliers. This additional voluntary disclosure will allow us to examine all potential suppliers even more closely in terms of their social and environmental credentials. As with a rejection of the Code of Conduct for Suppliers, a negative answer to the elimination questions will now result in the immediate termination of the screening process.
The questions cover, among other things, an outright ban on child and forced labor, the existence of policies and operating agreements to prevent human rights violations, and the prevention of accidents in the workplace. Over the course of the business relationship, we carry out supplier audits and on-site visits to verify that the information we have received is correct. Based on this information, we also complete annual assessments of our strategic suppliers.
Assessment of strategic suppliers
Once a year, the Global Procurement Instruments unit and the Eppendorf Group’s other Technology Centers assess Eppendorf’s strategic suppliers. We define as strategic all suppliers that exceed a certain revenue threshold (depending on the Technology Center supplied), pose a procurement risk for Eppendorf or have an impact on product quality or the Material Group Strategy. The assessment includes conventional economic factors such as reliable delivery, product quality, capability and customer focus. Since 2021, we have also included information on sustainability, particularly with regard to human rights, child and forced labor and environmental issues. Based on the outcome, we determine action plans for suppliers’ ongoing development. In the event of serious violations, the business relationship may also be terminated with immediate effect.
We assessed 238 suppliers in 2020. One supplier drew our attention. After discussions focusing on mediation and improvements, Eppendorf made the decision to limit its business relations with the supplier. The decision may be reviewed if the supplier makes transparent and comprehensive improvements.
Due to the ongoing COVID-19 pandemic and related travel restrictions, no on-site audits were performed during the reporting period. To enable audits to be performed nonetheless – albeit in a limited form – we added the option of a remote audit to the corporate standard on performing supplier audits.