Case Valmet

Laura PuustjärviHead of SustainabilityValmet

Compliance of supply chain – how to deal with risks

2 May 2023 UN Global Compact Nordic Network: Case Valmet2

Valmet’s sustainability agenda

Sustainable supply chain

Responsible operations (HSE)

People and performance

Corporate citizenship

Cost-effective sustainable solutions

We focus on five core areas

2 May 2023 UN Global Compact Nordic Network: Case Valmet3

Global supplier base

Valmet has an extensive supply chain including around 9000 active suppliers in over 50 countries

Over half of our purchases come from Finland and Sweden when measured by supplier spend

Purchases mainly comprise metals-based products and electronic components and services from suppliers in the pulp, paper and energy industries

2 May 2023 UN Global Compact Nordic Network: Case Valmet4

Sustainable supply chain road map 2014-2016Enhancing supply chain management and transparency of our value chain

1. Sustainable Supply Chain Policy: We expect our suppliers to comply with our Sustainable Supply Chain Policy and it is incorporated in all contracts and purchase orders

2. Supplier risk assessment: We have integrated supplier sustainability risk assessment into procurement processes

3. Supplier sustainability self-assessments and audits: We request supplier self-assessments and make audits

4. Training: We have increased the awareness and competences of sustainable procurement practices in the procurement organization

5. Conflict-free minerals and compliance with chemical legislation: We strive to ensure that the materials and components we use do not include legally restricted chemicals or minerals from conflict areas.

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Requirements for suppliers Target to ensure comprehesive and documented due diligence process

In 2014 Valmet launched Sustainable Supply Chain Policy applicable to all suppliers

Policy is incorporated into all contracts and purchase orders, and communicated to all active suppliers

The policy addresses Valmet´s requirements for its suppliers regarding 1) business ethics, 2) compliance, 3) human rights and labor rights, 4) occupational health and safety, 5) environmental management and 6) product safety

We expect all our suppliers to comply with the principles defined in the policy -it is the starting point for all business relationships with Valmet

The policy acts as a basis for our entire supplier program– Supplier risk evaluations– Self-assessments– Sustainability audits

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Supplier requirements are founded on selected international guidelines and principles

UN Global Compact (UNGC)

UN Universal Declaration of Human Rights

UN Guidelines for Business and Human Rights

OECD Guidelines for Multinational Enterprises

ILO´s Declaration on Fundamental Principles and Rights at Work

ISO 14001: Standard for Environmental Management Systems

OHSAS 18001: Occupational Health and Safety Assessment Series

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Potential sustainability risks in supply chain

Business ethics and compliance – Fair competition, strength of law enforcement, corruption and bribery, intellectual

property rights and company assets, transparency and openness

Human rights and labor rights – Forced labor, child labor, freedom of association, equal opportunities and treatment

Occupational health and safety Environmental management

– Hazardous chemicals and waste management, environmental impacts and risks

Product safety– Radiation risks, restricted materials

Source: Maplecroft risk indices 2014-2015

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Supplier sustainability risk assessment

Supplier assessment by country of purchase and by the purchasing category into five risk categories

Aim is to assess potential negative indirect impacts and risks related to human rights, labor practices, ethical business practices, environmental performance and health and safety

Source: Maplecroft

2 May 2023 UN Global Compact Nordic Network: Case Valmet

Global sustainability pool in procurement

Sustainable supply chain policy is part of Valmet´s General Purchasing Conditions (GPC)

Policy always attached to contracts

Sustainability risk assessment and self-assessment activities integrated into global supplier management tool

Valmet-specific sustainability audit protocol in place

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Sustainable supply chain program integrated into procurement processes

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Sustainable supply chain program in numbers Latest developments in 2015

11 000 Sustainable Supply Chain policies send out to suppliers globally to inform of Valmet´s sustainability requirements

370Valmet procurement professionals received sustainability training in 2015  

100% Of global supplier base assessed based on sustainability risk evaluation tool

41 Supplier sustainability audits executed to top spend & high risk country suppliers Valmet partners with certified third party auditor company.