Risk management system
The risk management system established itself further in 2013 within Swisscom, enabling the continued reduction of environmental and social risks. The implementation and results achieved are shown below.
On the strength of the recent past experience, the risk assessment of product groups conducted in 2012 was not repeated in 2013.Swisscom will check the accuracy and up-to-dateness of the product groups again in spring 2014.
In 2012, Swisscom began reviewing its current supply partners from medium-risk product groups and assessed 223 supply partners in detail. Swisscom critically reviewed and re-evaluated the list of suppliers from medium-risk product groups once again in 2013, and final decisions on 57 suppliers were made.
Swisscom plans to further reassess the requirements applicable to suppliers of medium-risk product groups by the first quarter of 2014 and subsequently formulate concrete objectives. The process already implemented proved successful with potential suppliers and tendering processes in 2013 and has resulted in appropriate measures being introduced where necessary. A supply chain crisis management organisation is currently being set up and will be integrated into the existing Swisscom Group structures in 2014.
Overview and requirements of risk management in the supply chain
Corporate Responsibility Contract Annex
In 2013, 95% of the total order volume came from suppliers that had accepted the CR Contract Annex (CRCA), which meant that the goal set for 2013 was achieved. In 2014, Swisscom will continue to its efforts to identify further suppliers who have not yet signed the CRCA. The CRCA is part of all contracts.
Swisscom carried out two audits in 2013 as part of its collaboration with the Joint Audit Cooperation (JAC). The JAC is a consortium of telecoms companies which checks, assesses and promotes the implementation of social responsibility in the production centres of the major multinational ICT suppliers. In total, more than 38 audits of suppliers were carried out within the JAC network. These audits involved production facilities, most of which were in China, Taiwan, India, Japan, South Korea and South America. The following guidelines apply to the on-site audits:
- Preparation: Information must be obtained on the operations to be audited.
- Qualified auditors: The audits are carried out by international audit companies that have specialist knowledge of the social and environmental conditions particular to the country in question.
- Confidentiality: Confidentiality agreements are concluded with the suppliers to ensure that the results of the audits are only disclosed to JAC members.
- Methodology: The JAC members create a checklist based on the SA 8000 and ISO 14001 standards and the on-site audits with the relevant dialogue partners.
- Report: The report formulates the findings based on objective evidence.
- Collaboration with suppliers: The collaboration is based on the common understanding that the CR risk management system plays a key role in supporting responsible and sustainable development.
- Collaborating with and further developing suppliers: On the basis of the findings from the audit, corrective measures are drawn up with suppliers to correct the shortcomings noted in the audit report. The respective JAC member follows the implementation of these measures until they have been successfully completed.
At weekly teleconferences, the JAC members set the audit agenda, check the audit reports and monitor the progress of the planned corrective measures. These regular conferences help to optimise the Corporate Social Responsibility (CSR) assessments through the exchange of best practices and thus make the JAC initiative more efficient. The JAC steering committee, which is made up of representatives from the senior management level of the respective CSR and sourcing areas, meets twice a year to review the audit campaign findings and decide on how to proceed.
A limited number of instances of nonconformity and various types of non-compliance were noted in the audits carried out. The instances of non-compliance mainly concern working hours, occupational safety and wages. The audits also identified several cases of discrimination and employment of minors. The time period for rectifying the problems depends on the type of non-compliance. Due to the impact on personnel units, a period of several months is required, particularly for rectifying irregularities with respect to working hours (limiting regular working hours and overtime). Swisscom publishes further information on this in the GRI Appendix to the Annual Report.
Swisscom achieved its JAC audit objectives for 2013. It conducted two audits with the JAC, deferred one audit to the first quarter of 2014 for business reasons and cancelled another. Swisscom wants to step up collaboration with the JAC further and plans to carry out four audits in 2014.
In the transition to the new e-tasc self-declaration tool from EcoVadis, Swisscom successfully transferred 13 suppliers to the new tool in 2013. In two further campaigns, Swisscom also registered and assessed 57 suppliers in the new tool. A total of 70 registrations and assessments were carried out, with none of the suppliers being classified as “high risk”. In 2014, Swisscom intends to register further key and strategic suppliers and high- and medium-risk suppliers in e-tasc. With the suppliers already registered in e-tasc, Swisscom has fully met its objectives for 2013 with respect to self-declarations.
Carbon Disclosure Project – Supply Chain Program (CDP)
In the year under review, Swisscom concluded a further cooperation agreement with the Carbon Disclosure Project (CDP) – a nonprofit organisation founded in 2000. The organisation wants companies and local authorities to publish their environmental data, including data on harmful greenhouse gas emissions and water consumption. Once a year, the CDP, on the behalf of investors, provides companies with standardised questionnaires which they can use to voluntarily provide information and data on CO2 emissions, climate risks and reduction goals and strategies. The CDP now maintains the world’s largest database of this kind. As part of its cooperation with the CDP, Swisscom contacted and surveyed 37 of its key suppliers who are important owing to high order volume or a high degree of environmental relevance. The response rate was 73%, allowing the survey to be brought to a successful completion (in the previous year, the response rate from all suppliers was 51%). In the fourth quarter of 2013, the CDP analysed the responses from the survey and applied a scoring system to rate the Swisscom suppliers who took part. This scoring is to be incorporated into the EcoVadis database in 2014 and serve as a further basis on which to comprehensively assess Swisscom’s key suppliers.
Main risk factors in the supply chain
Swisscom attaches great importance to the observance of human rights in the areas specified by the Social Accountability SA 8000 standard, which include child labour, forced labour, health and safety, freedom of association and the right to collective bargaining, discrimination, discipline, working hours and remuneration.
Climate risks from CO2 emissions
Climate change poses risks for Swisscom in the form of increasing levels of precipitation as well as higher average temperatures and extreme meteorological events. These risks could compromise the manufacture of telecommunication products and network equipment and its transport into Switzerland and have a negative effect on the company’s market chances and operations.
The raw materials used in Swisscom’s many different products stem from a wide range of countries and regions. Questions on the origin of the raw materials and the associated ecological and sociological risks are increasingly being asked. Swisscom has been addressing the issue of raw materials since 2011 and over the last two years has implemented the following measures in this regard:
- January 2012:Swisscom became a member of the World Resources Forum Association (WRFA) through its membership in the Global e-Sustainability Initiative (GeSI).
- March 2012: Inaugural meeting of the WRF Association, at the meetings of which Swisscom represents GeSI.
- March/October 2013: Participation at the WRFA Annual General Meeting in St. Gallen and the World Resources Forum in Davos.
- October 2013: Dialogue with the NGO “Bread for All” and participation at the “High Tech No Rights” symposium in Berne.
- October 2013: Preliminary enquiry into involvement with Fairphone.
In 2014, Swisscom plans to revise its purchasing policy and the CR Contract Annex and, where necessary, add a corresponding passage on raw materials.
Swisscom Supplier Award
Maintaining a constant dialogue with suppliers, building a common future together and taking responsibility for the present and future all play a key role at Swisscom. Internal procurement is also guided by these principles. From among its more than 6,500 suppliers, Swisscom recognised those with the most impressive success stories in spring 2012. The Supplier Award is awarded in three categories – Innovation, Cooperation and Sustainability – every two years. The next will be awarded in 2014.
Purchasing circle – embedding corporate responsibility in the organisation
A conference on “Challenges for a sustainable supply chain” was held for the very first time in 2013 as part of a series of events for Swisscom purchasing staff (50 participants). The programme featured wide range of keynote presentations from external guests and internal CR managers, a podium discussion and a tour of the Umweltarena, an exhibition platform in Spreitenbach (canton of Aargau) for sustainable solutions.