- 74% of strategic suppliers of materials and services have acknowledged the code
- EUR 1.05 billion spent on materials and services
- 51.5% of which to regional suppliers
By integrating our suppliers and service providers into our sustainability management strategy, we aim to take full responsibility for our actions, create transparency and protect our reputation.
In 2015, we introduced concrete sustainability requirements into our supply chain. These are set out in our suppliers’ code, which has already been accepted by 74% of our strategic suppliers in the product groups of materials and services – long-term partners with a high level of relevance for EWE. By 2020, we aim to increase this figure to 95%
Overview: Our supply chain
Our supply chain comprises the purchasing of materials and services, as well as of energy resources such as coal and gas. We maintain supplier relationships on a regional, national and international level with around 10,000 companies from a variety of industries, including systems and mechanical engineering, the metal industry, electrical engineering, marketing, consultancy, and information technology.
In 2015, our expenditure for materials and services amounted to around EUR 1.05 billion. Around half of this – 51.5% – went to companies from the regions in which we are active (2014: approx. 43%). This corresponds to EUR 542.2 million and an increase of 8% over the previous year.
Purchasing energy resources
In the procurement of natural gas, we maintain long-term, medium-term and short-term procurement agreements in order to achieve moderate prices and to secure supply. We obtain natural gas from various national and international upstream suppliers.
For our regions in Germany, we procure two thirds of the natural gas from upstream suppliers in Germany, while we import one third from the Netherlands. Fluctuations in demand can be balanced out by our gas storage facilities and through spot trading.
Our subsidiary swb covers two thirds of its demand for refined coal with imports from Russia and one third from the US. Purchasing is done on the basis of short-term and medium-term procurement agreements.
The commodities of natural gas and coal often take an indirect route from the producer, via several intermediate brokers on the international commodity trading markets. For this reason, the exact origins of the raw materials are hard to trace, along with the conditions under which they were produced. This limits our options in terms of applying sustainability criteria to the procurement of energy resources.
Suppliers’ code establishes principles
The suppliers’ code is targeted at our strategic suppliers for materials and services. The principles and minimum standards it contains comprise the three major categories of human rights and working conditions; health, safety and environment; and business integrity. The first of these involves, for example, ensuring appropriate pay for all employees in line with the relevant legislation, equal treatment of all employees, or the protection of young people in the workplace. The suppliers’ code forms the basis for our business with new and existing suppliers.
Auditing our business partners
Before entering into a business relationship, we audit any potential contractual partners for the product groups of materials and services with an annual purchasing volume of EUR 50,000. The business partner audit comprises two steps:
The ‘quick check’ involves an assessment of corruption prevention, environmental and social standards. If potential risks are determined, the second step involves a detailed audit. This audit primarily involves investigating concrete business practices with regard to our sustainability criteria. If the results indicate risks, we seek out a dialogue with the companies affected – with the proviso that they may still be excluded from partnerships in the future.