We ensure that our supply chain complies with legal, ethical and social requirements, while also finding opportunities for environmental improvement and economic efficiency.
We are committed to ensuring that all Third Parties we work with share our values and standards. We work closely to with our suppliers to encourage higher standards, for example through our work on Responsible Sourcing of Palm Oil (RSPO)
- Supplier Code of Conduct
Innospec believes that honest and transparent business conduct is vital and is committed to ethical business practices and actively enforcing compliance with all applicable laws, regulations and rules.
Innospec’s supplier code of conduct (code) covers the key areas of legal compliance, business integrity, human rights and safety, health and the environment. Mandatory compliance by all Innospec’s suppliers, service providers, and other contractors with the Code is included in our standard terms and conditions of purchase. All suppliers are responsible for ensuring that their employees involved with Innospec business are familiar, and comply, with the Code.
- Third Party Due Diligence
All potential customers and suppliers are screened to ensure that they are not currently on any global sanctions or debarred lists. We also undertake due diligence on our agents, distributors and certain consultants (third-party representatives).
The level of due diligence conducted depends on risk factors such as the nature of the relationship with the third-party representative, territory of operation and business division. We routinely put accounts on hold where there are any compliance related questions or concerns and only release them when the issues are resolved and will terminate contracts for compliance related reasons where necessary.
- Third Parties compliance training
All medium and high risk third-party representatives are required to complete our online Anti-Bribery for Business Partners training course and an annual Anti-Corruption and Code of Conduct online compliance certification. If training or certification is not completed within a specified timeframe, we withhold approval for the appointment of that third-party representative or place their account on hold, meaning no sales orders can be processed, or work commissioned. If training or certification is still not undertaken within a reasonable extension period, the relationship is terminated.
- Managing procurement responsibly
We have used EcoVadis, a supplier sustainability evaluation rating platform, to assess our key global suppliers since 2016. The platform enables us to assess the relative risk of suppliers compared to their databases of over 100,000 global companies in over 175 countries. Our supplier evaluation process incorporates EcoVadis assessment scores into our purchasing and procurement systems and procedures and has been a requirement for all our raw material suppliers since 2018.
As EcoVadis is now firmly embedded within our global supplier sustainability evaluation of raw material suppliers, in 2021 we extended the scope of the program to include ‘indirect’ procurement suppliers. This covers additional categories ranging from warehousing and logistics, through to maintenance, marketing and recruitment. In addition, all potential customers and suppliers are also screened to ensure that they are not currently on any global sanctions or debarred lists. We also undertake due diligence on our agents, distributors and certain consultants (third-party representatives). The level of due diligence conducted depends on risk factors such as the nature of the relationship with the third-party representative, territory of operation and business division.
Throughout 2022, we have continued to promote the EcoVadis platform, with 70% of our global spending now made through suppliers who are in scope of the initiative. At the end of 2022, 305 suppliers had either been assessed or were in the process of completing an assessment.
While we continue to bring new suppliers onboard that meet our criteria, we have also continued to focus on targeting our lowest scoring/higher risk suppliers to help them better understand the output of the evaluation. This process involves liaising directly with both the supplier and EcoVadis to understand and address any identified areas of poor performance. Corrective action plans are then put in place to target improvement in their rating across the four pillars of the platform. Of the 19 accounts identified as higher risk at the start of 2022, nine have since renewed their scorecard with an average 33% improvement on their previous rating. As a result, our average supplier score has now increased from 58 in 2021 to 60.5 in 2022, which remains significantly higher than the EcoVadis average of 45.1.
- Conflict Minerals
We are committed to the responsible sourcing of materials, which includes any conflict minerals that are ‘necessary to the functionality or production’ of our products, as defined under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2021, we updated our Conflict Minerals Policy in anticipation of the forthcoming EU Conflict Minerals Regulation (2017/821).
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