Responsible sourcing is about promoting responsible behavior, managing risk and building long-term relationships with suppliers to improve social, environmental and business ethics in the supply chain. The Volvo Group strives to ensure that unethical values are not built into its products and services.
Responsible sourcing is about deploying the same requirements on our suppliers when it comes to environmental standards, business ethics and social performance as we place on our own operations. Ensuring high standards in the supply chain is important to the Volvo Group and our stakeholders to ensure that unethical values are not built into our products and services. Responsible supply chain management enables us to meet growing customer expectations, reduce risk of incidents that may damage the Volvo Group brand or interrupt the supply flow.
Since 1996, the Volvo Group has gradually increased its requirements on suppliers regarding environmental issues, business ethics and social responsibility aspects. The requirements are based on the principles contained in our Code of Conduct and international norms of behavior such as the United Nations' Global Compact.
Development in close cooperation
We build close and long-term relationships with our suppliers, based on an understanding of each other’s processes and product requirements, as well as the exchange of knowledge. Joint development sometimes acts as an incentive for a supplier to choose to work with us.
As a rule of thumb, our aim is that sales to the Volvo Group should account for less than 30% of a supplier’s turnover. This decreases a supplier’s vulnerability.
Sourcing and risk assessments
We generally source close to our production sites to ensure efficient flow into the production. This means that most of our suppliers are located in Europe and North America. At the same time, our expansion in Asia has led to that most of our new suppliers are located in Asia. The Volvo Group has approximately 6,000 suppliers on the automotive side, i.e. components that are embedded in our products.
Some 8% of these suppliers are located in countries assessed as "high risk". The risk assessments are based on analyses conducted by internationally recognized institutions and include such factors as human rights, labor standards and corruption.