“I hadn’t realised before how important these topics are, and it has been very interesting for me to understand Stora Enso’s approach to sustainability,” Xiong says today.
About half of Stora Enso’s total variable spend goes to ensuring we have enough of our renewable raw material – wood – while the other half goes towards things like chemicals, tools, and outsourced services to make the best out of that wood. Ensuring that all our over 20 000 suppliers are committed to sustainability is a challenge like no other, but by supporting them in this process we can help bring about powerful change. Every day this ambitious task is driven by our employees in charge of purchasing.
“It’s vital that you know the product or service you’re buying,” says Markus Koskinen, Procurement Manager in charge of domestic land transports from our mills in northern Finland. “Not only is it important to understand things like pricing and product quality, but a purchaser must also know what can be expected of the supplier – regarding human rights, for example.”
Following regulations for driving times and rest periods is a common labour rights challenge in the land transportation industry globally, and monitoring working hours is a priority also in Finland.
“The people driving the trucks that carry our cargo, and the people on the roads with them, must stay safe,” Koskinen says. “Our suppliers know this and they tell us what they can do to meet our needs without jeopardising anyone’s safety. A safe working environment is a top priority also at our mills and our customers’ sites where truck drivers deliver and pick up various loads.”
Needed: proven efforts in sustainability
The Stora Enso Supplier Code of Conduct (SCoC) is the cornerstone of our approach to responsible sourcing. It is a legally binding document that imposes various sustainability requirements on our suppliers. All potential suppliers must commit to our SCoC, and since early 2018 they have also been required to provide data on their carbon dioxide emissions and safety performance when responding to our requests for pricing and other information.
“In China, international companies are familiar with these types of requirements,” says Eric Xiong. “But smaller local companies are often not and while they want to be better, we still need to push them to make the right improvements. Then there are some companies that don’t want to improve their operations – we cannot and do not do business with them.”
In his work, Xiong works with suppliers of chemicals, pulp, and coal. He visits their sites to discuss sustainability topics and sometimes to attend third-party audits.
“One challenge we encounter on a regular basis is the lack of complete records on human resources,” Xiong says. “We check supplier records for things like working hours, accident statistics, and labour policies. But the most important part of supplier visits is to see and hear for ourselves what’s going on. If the records are not complete or we find a violation, we discuss it with the supplier, set corrective action plans, and follow up within an agreed timeframe.”
“When our team was visiting a potential supplier this spring, we found a warehouse for dangerous chemicals located on the first floor of their staff dormitory – in the immediate presence of people,” Xiong describes. “This is absolutely unacceptable from a safety perspective. We told the supplier that they must move the warehouse if they want to do business with us. They did that, so now we are moving forward with the negotiations.”
If an existing Stora Enso supplier is not willing to make improvements to findings, we terminate the contract. Luckily, no contracts needed to be terminated in 2017.
It’s a team effortA good purchaser has excellent negotiation skills, can read people and situations, knows the products and services they are buying, and is familiar with market developments and sustainability requirements – just to name a few! But no purchaser is an island. While Stora Enso’s long-term goal is to make sustainability an integrated part of buyers’ day-to-day work, our sustainability experts across the company are a valuable source of support during that journey.
“It helps to know that I don’t have to know everything,” says Carita Grönlund, Category Manager for chemical sourcing. “My team negotiates and closes large business deals on a regular basis, and we often go to the company’s sustainability experts for advice if there is a sustainability concern.”
“While we’re not sustainability professionals, we are always learning more from our team members,” Eric Xiong adds. “And more importantly, we take that knowledge into our everyday work and sometimes change the way other companies – our suppliers – see sustainability. That’s at least as rewarding as closing a good deal.”