Supplier relations

Pursuing sustainable development in supplier relations management policies

Purchasing is a key issue for the Group, impacting its international development and its integration in the industrial fabric of the countries in which it operates.

PSA is making compliance with social and environmental requirements a core component of its purchasing policy, alongside, quality, time and cost. One of the main criteria in the supplier selection process is the enforcement of the principles set out by the International Labour Organisation (ILO). Any suppliers failing to respect human rights will be required to take immediate remedial action. Penalties will be applied for failing to implement these actions, and suppliers may even be removed from the base.

The “social and environmental responsibility requirements of PSA: supplier guidelines” are available on the Group’s B2B portal.

PSA Group’s requirements in the field of social and environmental responsibility are:

  • based on a personal commitment from corporate management: since 2010, the Group’s Code of Ethics has made it a specific requirement to integrate ethical and environmental criteria into supplier relations management guidelines. The document has already been signed by Group executives and senior managers and is now being distributed for signature by the other employees. At end-2012, it had been signed by more than 20,000 Group employees;
  • set out in special guidelines for suppliers: requirements make specific reference to the Global Compact, the Universal Declaration of Human Rights, the Declaration of Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention against Corruption;
  • sent out to the Group’s main suppliers, or those whose work involves high-risk countries or purchasing families. These suppliers are required to either make a formal commitment to respecting these guidelines or to show that they have an equivalent standard in place. At end-2013, a commitment had been made by almost 900 suppliers, accounting for more than 92% of the purchasing turnover monitored by the Purchasing Division;
  • included in the fundamental principles of supplier relation, in contractual documents, such as supplier approval letters or the general terms and conditions of purchasing, and in the Group’s purchasing processes;
  • are now completed by self-assessment. After being validated these results are integrated to the provider’s database.

The sustainable development policy to the supplier relation management backed up by training and awareness-raising initiatives, as well as by field audits

  • Buyers are made aware of sustainable development issues as part of training at PSA Group purchasing skills school. Since 2008, more than 360 people have been formed in Europe and just over a hundred in Latin America. Further, the Purchasing Division’s sustainable development entity coordinates regular information meetings with the management of operational purchasing departments.
  • Targeted awareness-raising initiatives are organised with suppliers in sectors considered to be “high-risk”, using self-assessment questionnaires.
  • Social and environmental audits are conducted on the premises of suppliers selected in accordance with risk criteria linked to their country, products or process. Since 2010, around forty social and environmental audits have been carried out with tier 1, tier 2 and tier 3 suppliers, with around a dozen follow-up audits.

Figures

Local content is a core component of PSA Group’s purchasing policy

  • At Porto Real in Brazil, an average 75% of parts are sourced in Latin America.
  • At Buenos Aires in Argentina, some 65% of parts are sourced in Latin America.
  • A full 93% of the production parts used by Group plants in France are sourced in Europe.

Note: the percentage of parts sourced locally (Central and Eastern European countries) by the Trnava plant in Slovakia rose from 5% to 53% between 2005 and the end of 2012.