Sustainability is an integral part of Fortum’s supplier selection. Fortum wants to conduct business with viable companies that act responsibly and comply with Fortum’s Supplier Code of Conduct. Fortum’s Supplier Code of Conduct provides the basic sustainability guidance on what is expected from suppliers of services and goods. It is based on the ten principles of the United Nations Global Compact and is divided into four sections: business practices, human rights, labour standards and the environment.
Procurement management at Fortum applies the so-called 50,000-euro rule, which calls for supplier screening and the attachment of the Supplier Code of Conduct to any procurement agreements exceeding 50,000 euros. Screening includes a supplier questionnaire and verification of credit. The supplier questionnaire is used to gather general and sustainability information about suppliers, and it helps suppliers to understand Fortum’s expectations for conformance with the Supplier Code of Conduct. On the other hand, the supplier questionnaire helps Fortum to identify potential risk suppliers and thus the need for further actions.
The questionnaire contains the following sub-areas:
General information about the business, including the scope of the Code of Conduct, compliance with laws, anti-corruption policies
Occupational norms, including terms of employment, freedom of association, child labour, forced labour, non-discrimination
Occupational health and safety, including training, protective equipment and gear, risk assessments, monitoring systems, instructions for subcontractors
Environment, including management systems, impact assessments, monitoring systems
Quality, including management systems, subcontractor quality control
Fortum revised its monitoring methods for suppliers of services and goods in 2011 to supplement the questionnaire-based screening mentioned above. Auditing will be a part of the procurement function’s normal work practices and will be implemented primarily by Fortum’s own professionals and, if needed, by an independent, i.e. third party. Implementation of these revised methods is a key action item for 2012.
Sustainable Bioenergy Procurement
The sustainable production and use of bioenergy is an increasingly topical issue worldwide. Bioenergy is an important energy source for Fortum. In 2011, Fortum compiled position and actions for the sustainable use of bioenergy in electricity and heat production. The position and actions contribute to improved traceability of biomass fuels and responsible management of fuel purchases.