It is becoming increasingly important for the Group’s stakeholders that the Volvo Group conducts responsible business operations. In dialog with investors, representatives of affiliated organizations, financiers, customers, employees, etc., expectations of Volvo are expressed. Several requested that the Group must assume responsibility not only for its own operations but also for issues pertaining to suppliers’ efforts concerning social, environmental and business ethics. The Volvo Group endeavors to assume responsibility by placing demands on its suppliers.
The Volvo Group’s CSR program (Corporate Social Responsibility) for suppliers aims at developing working conditions and environmental performance with suppliers that do not already comply with the Group’s demands, by monitoring, communicating and training them. Since 1996, Volvo has placed demands on suppliers’ environmental performance and in 2006, social and business ethics requirements were introduced. In 2008, the Volvo Group introduced a paragraph in agreements with new suppliers, which pledges them to comply with the policies in the Group’s Code of Conduct. In October 2009, the new Groupwide CSR program for suppliers was launched. This means that there is now a joint process for the evaluation of potential suppliers, as well as to monitor current suppliers. During 2010, Volvo worked on evaluating the processes’ efficiency and this will be used as the basis for the way in which the CSR program will develop in the future.
Approximately 35,000 companies deliver products and services to the Volvo Group. Of these, about 6,000 deliver direct material, i.e. material that is used in the products. Currently, the control group for responsible purchasing is focusing on existing suppliers in countries that have challenges in terms of non-compliance with legislation within work environment, human rights and business ethics.
We monitor suppliers’ CSR performance by evaluation. During the 15 months of the program, approximately 1,500 suppliers of direct material were audited and of these, 59% complied with the requirements. The absolutely most common reason for non-compliance with the requirements is that the suppliers did not pass on the requirements of the Volvo Group to their own suppliers.