A company’s supply chain is a highly important resource – collaboration between companies at every step in the chain can open up powerful opportunities to minimize the overall environmental impact and maximize the overall positive social impact. At Henkel, our global supply chain includes suppliers and business partners from 115 countries. Together, we want to drive progress toward 100 percent responsible sourcing.
Our Foundation: Risk Management & Compliance
Our strategy is based on our comprehensive risk management and compliance approach. The aim here is to gather and provide transparent key figures on the sustainability performance and risks of our suppliers as a basis for fact-based decision-making in sourcing processes and the awarding of contracts. The transparency gained in this area also benefits dialogue and cooperation with our suppliers.
Our strategic approach
Our 100% Responsible Sourcing Strategy puts Henkel’s dimensions of the 2030+ sustainability ambition framework – regenerative planet, thriving communities and trusted partner – at the core of its sourcing agenda. To this end, we focus on the following areas:
Together we enable a climate-neutral future by driving reduction of supply chain greenhouse gas emissions, implementing circular sourcing solutions and protecting nature and biodiversity.
Together we commit to drive sustainable practices by supporting equity, education and wellbeing of people in our supply chains while respecting human rights in all our activities.
Together we secure a high-performing, transparent and sustainable supply chain and collaborate with our suppliers and partners to drive transformation and create sustainable business value.
Key enablers for implementation
In order to implement our 100% Responsible Sourcing Strategy, the following factors are key enablers – collaboration, transformation, innovation, and empowerment. We accelerate our efforts by intensifying our internal and external collaboration with business partners and key stakeholders. Our global purchasing structure allows us to drive transformation by fully integrating the respective sustainability strategies of the business units and functions in our responsible sourcing agenda. Furthermore, we will focus on sustainable innovations, boosting innovation of digital solutions and on driving the change to a 100 percent responsible sourcing mindset by empowering internal and external stakeholders through capability building opportunities.
Together for a sustainable supply chain
In 2011, Henkel and five other companies in the chemical industry co-founded the initiative “Together for Sustainability – Chemical Supply Chains for a Better World” (TfS). It is based on the principles of the United Nations Global Compact and the Responsible Care Initiative of the International Council of Chemical Associations (ICCA). TfS aims to harmonize increasingly complex supply chain management processes with regard to sustainability and to optimize dialog among worldwide business partners. Above all, synergies are to be created so that resources can be used more efficiently and with a minimum of administrative effort, not only among the member companies but also with all of our shared suppliers.
At the heart of the audits and online assessments of the TfS initiative is the core idea: “An audit for one is an audit for all!”. Suppliers then only have to undergo one assessment or one audit. The audits are carried out by a number of selected, independent audit companies. For the online assessments, TfS works with EcoVadis, a sustainability performance assessment specialist. Performance is assessed in the areas of management, environment, health and safety, labor and human rights, and issues of ethical corporate governance. In 2022, TfS had a pool of around 14,270 active TfS assessments and audits. In the same year, around 2,800 Henkel suppliers underwent a TfS assessment or audit. The TfS initiative has grown strongly in recent years and consists of members that are internationally operating chemical companies.
In 2022, the original core elements of the TfS initiative, TfS audits and online assessments, were expanded with the addition of two key elements: A Scope 3 Product Carbon Footprint (PCF) Guideline for the Chemical Industry was released. The new guideline consolidates existing PCF calculation approaches with regard to the specifics of the chemical industry and enables business and industrial customers as well as consumers to establish direct comparability and an assessment of the climate impact of products in the future. The TfS initiative also launched a free, central learning platform, the TfS Academy, for all member companies and their affiliated suppliers. The Academy is a customized learning and development platform focused on sustainability issues in the supply chain. It is designed to provide employees of TfS member companies and their suppliers with continuing education on key sustainability topics.
In September 2020, TfS launched its new strategic framework “TfS Grow&Deliver.” This new strategy builds on the initiative’s past achievements and will pivot TfS from an initiative focused on measurement to a community that delivers tangible impact. TfS members will continue their commitment to promoting higher standards, as well as improving the insights and data gathered from assessments and audits. This will enable TfS to train suppliers in topics and areas that offer the largest potential sustainability impact. TfS has also decided to expand its work in emerging markets such as China and India. Taking collaborative action is another building block for the new strategy. In this way, TfS aims to further extend its contribution to sustainability. On top of this, fostering the TfS community is another key factor that will enable TfS to achieve its aims.