A balancing act: How KAEFER adapts to supply chain legislation

Alexander:
My first thought was that it was a ‘multi-layered’ issue, and I quickly realised how complicated it could get. But changing the focus to sustainability in the supply chain, only mirrors the increasing global demands. Our clients, who tend to be big global players, were already ‘pushing’ us to ensure sustainability in both our supply chain and theirs.

Rodrigo:
At the beginning I also had some concerns. Mainly about how to implement and control all the new aspects. In Brazil, we have a lot of different projects and activities all over the country and we deal with a vast number of materials and suppliers. Add to this the lack of familiarity of suppliers with the subject, the possible impact on service deadlines, and you have some of the initial doubts. All in all, I was worried about slowing down the procurement process and compromising our service delivery.
But the more I learned, the more confident I became, because I was able to identify some potential actions to increase safety and quality in the procurement process itself. I think this will benefit us all – KAEFER, the planet and society.

Rodrigo:
In Brazil, we started by appointing three members of the procurement team and training them on the company’s policies. We then communicated the Supplier Code of Conduct and ensured that it was included not only in tender documents and general terms and conditions, but also as part of the purchase orders. As a second step, we defined which suppliers should carry out self-assessments and, where necessary, began to contact them to understand and resolve their concerns.

Now that the groundwork has been laid, we are looking at including an initial sustainability assessment of suppliers at the start of our business relationship and defining which issues need to be prioritised in due diligence visits.

Nathan:
In the UK and Ireland, our focus is on direct engagement with suppliers. We have been talking to suppliers and subcontractors to find out where they are on the journey, sharing information and best practice, and also using tools such as IntegrityNext.

Let me give you an example: KAEFER in the UK & Ireland was trying to minimise waste to landfill and the biggest issue was used abrasives. When talking to suppliers as part of the tender process, I mentioned that it would be great to have a way to recycle this material. One of the suppliers mentioned that they already had a process for recycling abrasives. Through this approach, more than 9,000 tonnes of used abrasives have been diverted from landfill since 2019.

Nathan:
Positive in most cases, it really is a global journey, and everyone is moving at a different pace. What is interesting is that there are many smaller companies that are much further along in their journey than some of the larger organisations. More recently, with the emergence of ESG as such, many companies have appointed senior people within their leadership teams who are driving change faster. This clearly demonstrates their commitment to protecting the environment and the communities in which they operate, and to ensuring that management and governance are of a high standard.

Alexander:
For most of our suppliers in Germany, this is a completely new topic. It is important to realise that most of the companies here are small and medium-sized and therefore not directly affected by the German Supply Chain Act.

This is where I see KAEFER’s duty of care as a global player to help them understand the impact of ESG and what they can do to ensure they are in line with sustainability in the supply chain.

Alexander:
As this is a new topic for most of our subcontractors, some don’t fully understand what we expect of them. For example, when I asked a subcontractor to take part in our sustainability assessment, which is simply a digital questionnaire, there was some confusion. Despite several reminders, the managing director responded by asking if all employees had to complete the training, which showed a misunderstanding of the process.

So part of my role is to clarify our expectations and emphasise the importance of sustainability in our collaboration. Many subcontractors appreciate that we at KAEFER take the time to guide them through this process and see it as a form of support and recognition.

Nathan:
Communicating the importance of sustainability to KAEFER and, as Alexander said, supporting and working with our supply chain to help them make improvements is essential. It also helps to be collaborative and realistic about expectations.

Rodrigo:
Probably awareness and transparency. Raising the awareness of everyone – our procurement team and our business partners – of the importance of meeting sustainability criteria will support the implementation of actions. In the future, of course, supplier selection will be based on clear sustainability criteria. Suppliers will realise that if they do not adapt, it will be much more difficult for them to remain in the market.

Alexander:
Basically, our background knowledge of our subcontractors is improving, which is also a great help for other assessments. Soon, based on the results, there will certainly be a stronger focus on strategic partners, with whom the topic can be developed even more intensively.

Nathan:
Advances in technology and innovative manufacturing drive sustainability. During our Innovation Days, we showcase the latest technologies with our partners. At one event, a blast helmet manufacturer presented a new prototype. An operations manager criticised it for durability and visibility issues. However, after discussing improvements with the manufacturer, a new helmet was developed that incorporated these changes. It is now being sold in several countries. This proactive approach from suppliers is fantastic and sharing these innovations with our clients is key to building successful long-term relationships.

David:
Thank you all very much! From a corporate perspective, I can emphasise the importance of having a clear strategy for implementing sustainability in the supply chain globally. We are currently focusing on risk management through risk analysis, self-assessment, implementation of measures to improve the performance of our suppliers where necessary and, of course, audit and control. At the same time, we recognise that this is a journey we can only take together with our suppliers and service providers. Together we need to find pragmatic and effective ways to further improve the sustainability of our supply chain.