4 minute read

Sustainable procurement at AGL

Richard Clifton-Smith
13 October 2017

At AGL, sustainability means thinking about the long-term responsibilities we have to all our stakeholders (our employees, customers, community, and the environment) who may be impacted by our business decisions and activities.  Our future success and reputation as a business is shaped and measured by more than just our economic performance; it is also influenced by the social and environmental consequences of our decisions and actions. As we do business with more than 4,500 suppliers, we recognise that the performance and conduct of our suppliers can have a strong influence on our sustainability performance.

We are working to improve our procurement framework and adopting a consistent approach to supply chain management. For example, in FY17 we implemented a new company-wide ‘Procure to Pay’ Policy, which sets out principles to guide our procurement activities. One of our guiding principles is to ‘maximise sustainable procurement activities’ to reduce the social and environmental impacts of activities along our supply chain. Specifically, this requires all our people to seek opportunities to meet our sustainability targets by:

  • implementing our sustainability principles and values
  • selecting suppliers with similar sustainability values and commitments
  • influencing suppliers to reduce the social and environmental impact of the products and services provided to us
  • contributing to the development of local communities affected by our operations, through the creation of employment opportunities and the development of skills at a local level, and
  • investing in long-term collaborations with suppliers to support the implementation of initiatives aimed at reducing the social and environmental impacts of their products/services.

Supporting this Policy is our Supplier Code of Conduct, which sets out minimum standards of conduct that we require of our suppliers, covering corporate governance, ethics, risk management, labour policies, human rights and discrimination, occupational health and safety, environmental management, community and supply chain.

All new suppliers who are engaged using AGL’s supplier agreements are required to comply with obligations outlined in our Supplier Code of Conduct. One hundred percent of our AGL Supplier Agreements signed in FY17 contained the requirement for our suppliers to comply with the Supplier Code of Conduct; while we're pleased with this performance, we're looking at ways to improve our processes to assess supplier performance against the Supplier Code of Conduct.

To read more about our approach to sustainable procurement, visit the supply chain section of the 2017 Sustainability Report.