We continuously develop our procurement processes and engage our suppliers to develop their sustainability performance. Together with our suppliers, we work for a transparent and sustainable supply chain.
Valmet has over 30,000 active suppliers in around 60 countries and spends over EUR 3 billion in direct and indirect purchases annually. Valmet’s procurement, logistics and warehouse workforce totals 1,200 employees globally, located in five continents in more than 25 countries.
Global supply chains are complex and challenging to monitor. Valmet has systematically developed and integrated sustainability into its supply chain processes. We engage our suppliers to continuously develop their sustainability performance to ensure transparent and sustainable operations.
We also strive to develop the transparency and traceability of our entire value chain from sourcing of raw materials to recycling of our products. It is estimated that Valmet’s supply chain accounts for approximately four percent (4%) of the environmental impact of its value chain.
Valmet’s suppliers have different sustainability risk levels, derived from the supplier’s country of origin or purchasing category. For identifying, assessing, and managing various sustainability risks, Valmet has a global four-step supplier sustainability management process.
Valmet’s supplier sustainability management process is an integral part of the supplier approval process. It includes gates and controls to ensure Valmet cooperates only with suppliers that share the same ethical principles and ideology of responsible business practices. The supplier evaluation process is mandatory in evaluating new suppliers before starting cooperation. To ensure alignment with the Sustainable Supply Chain Policy, suppliers' sustainability practices are reviewed as a part of the contract renewal process. Suppliers are excluded from contracting if they cannot achieve policy requirements within a set timeframe. Valmet's Executive Team is monitoring the implementation of the supplier sustainability process.
Valmet’s Sustainable Supply Chain Policy sets the basic themes and requirements for all steps in the process, covering business ethics and compliance, human and labor rights, occupational health and safety, climate and environmental management, and sustainable products and services. 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 also acts as a basis for supplier evaluations, self-assessments and sustainability audits.
Our Sustainable Supply Chain Policy has been in place since 2014. In 2022, we updated the policy with new legal compliance requirements related to export control, trade sanction laws and regulations. We also strengthened our requirements related to climate, products and services. We expect suppliers to monitor, report, and strive to reduce the CO2 emissions of their operations and their own value chain. In addition, suppliers must continually reduce hazardous substances in their products and ensure conflict-free sourcing.
In its global supplier selection process, Valmet assesses a wide range of topics ranging from management practices, financial and operative performance to ethical business practices, human and labor rights, occupational health and safety, environmental management and product safety.
All suppliers are evaluated through a sustainability risk assessment based on the country of purchase and the purchasing category. The risk assessment is the second step of our supplier sustainability management process, aiming to assess the potential negative impacts and risks. The outcome determines the actions needed in the remaining steps of the process: self-assessment; and sustainability auditing.
To ensure compliance with the requirements of our Sustainable Supply Chain Policy and with related local and international laws, we have a systematic auditing framework in place, based on SMETA. Valmet has conducted around 400 supplier sustainability audits globally since 2015 together with a certified third-party auditor.
In addition to conducting the audits, we focus on ensuring the right timing and good quality of the audit follow-up process and the verification of agreed corrective actions. All of the audited suppliers have agreed corrective action plan in place and Valmet supports suppliers with the implementation of identified corrective actions.
Valmet has identified increased sustainability risks at customers’ sites, where many of our contractors and their subcontractors operate. We have developed a specific auditing process for site works suppliers to mitigate risks at sites, monitor subcontractors’ compliance more efficiently and to further increase the visibility to our supply chain beyond tier 1 suppliers. In 2022, we piloted the process at customer sites in Sweden and Finland.
To strengthen the cooperation with suppliers in the field of sustainability, Valmet has implemented a Sustainability Engagement Program since 2018. The program supports and monitors suppliers’ performance and provides hands-on concrete tools and training for them to take the most critical steps to develop their sustainability practices. The program is based on the principles of Valmet’s Sustainable Supply Chain Policy, and it is an integral part of our Supplier Relationship Management (SRM) program. SRM is used to evaluate, manage and improve suppliers’ sustainability in a globally aligned manner. Read more >>