Sustainability & responsible sourcing
Resilient supply chains with reliable partners
The aim of our purchasing strategy is to create resilient supply chains based on long-term cooperation with reliable partners.
Within this strategy we have defined clear ethical rules and incorporate social, human rights and environmental criteria aiming
- that no person, nor the environment is harmed in any external process step in our upstream supply chain.
- that legal requirements, particularly those protecting human rights and the environment, are fulfilled
- that the decarbonization of the upstream supply chain is to be driven forward
Therefore, we address and embed Corporate Responsibility requirements in all sourcing activities, to ensure a sustainable business relationship with our suppliers and demand their compliance. ams OSRAM has implemented an appropriate framework to detect and prevent violations of these requirements. This includes capacity building, Tools, Processes and clear rules which reflect country and material inherent risks and chances on Environmental, Social and Governance area.
Commitment to our Code of Conduct for ams OSRAM suppliers
The Code of Conduct defines the basic requirements placed on all suppliers of ams OSRAM concerning their responsibilities towards their stakeholders, affected groups and the environment. We strive for a 100 % coverage of our purchasing volume with this code, collaborating with partners which agree and comply to this Code.
Read more on our Code of Conduct
Human Rights Policy in the Supply Chain
This policy defines our commitment to respect and uphold human rights for people affected by our supply chain. It establishes the standards and principles that direct our actions throughout the supply chain, identifies key risk areas and describes the preventive and corrective measures available to ensure compliance with human rights due diligence obligations.
Supplier management process
Classification, qualification, selection
The requirements toward our suppliers are embedded in the Supplier Management Process.
As part of the supplier classification and qualification process, potential suppliers are first identified, and a subsequent selection process is used to decide whether the company should be included in ams OSRAM's global supplier network.
In addition to business, product-specific and formal decision-making criteria, this process also considers sustainability-related requirements such as human rights due diligence and environmental protection in order to ensure the alignment with the ams OSRAM Code of Conduct.
These requirements, which are reviewed on a yearly base, depend on the material sourced, the country in which it is sourced, and the volume purchased from the suppliers. The fulfillment of these requirements plays an important role during the selection process and provides the supplier with a higher classification in the initial phase e.g., preferred supplier.
Some of the requirements are as follows:
- - Suppliers from countries where social risks are more acute ( acc. to RBA) must submit a self-assessment on relevant aspects of corporate responsibility
- Suppliers of production materials must demonstrate in the selection process that they are certified in accordance with environmental management norm ISO 14001 and comply with the EU RoHS Directive (Restriction of Hazardous Substances in electrical and electronic equipment) and the EU REACH Regulation (Registration, Evaluation, Authorization and Restriction of Chemicals).
- In the qualification phase for automotive suppliers from whom materials are to be purchased directly, the suppliers undergo a process audit as prescribed by VDA 6.3 (German Association of the Automotive Industry). The audit assesses the supplier’s production and service processes.
- Compliance with RMI Conflict Mineral approach
- Applicable suppliers shall disclose information on the carbon footprint using specific questionnaire in Integrity Next platform.
- Regardless of the materials or services they intend to provide for us, prior to being accepted as a supplier of ams OSRAM these companies are checked against international sanctions lists. Updated lists are automatically uploaded to the export monitoring systems and serve as a basis for also checking existing suppliers every time an order is submitted and before every payment run.
- In the process of selecting suppliers for energy-intensive equipment, anticipated energy consumption and the associated CO2 emissions are already taken into consideration in the total cost of ownership calculation (TCO). Cost savings over the entire period of use, such as energy savings, are therefore factored into the decision to buy.
If a potential supplier successfully makes it through this selection process, it is added to ams OSRAM’s supplier network and, as such, continues to undergo regular monitoring. For more information, please visit our training and supplier requirements site.
Monitoring and development
The supplier monitoring process involves mechanisms for systematically reviewing compliance with supplier requirements.
Supplier Ratings
Apart from regular performance evaluations, the monitoring phase also includes regular sustainability ratings for strategic relevant suppliers. Depending on the results, actions are agreed with the supplier as part of the development process, which are to be implemented within a specified period. Rating results are an important indicator for the further collaboration with the suppliers and can lead to a higher classification of the supplier e.g., preferred supplier.
Supplier Assessments
Supplier assessments are also a core element of the supplier monitoring process. These assessment include on-site and desk assessments. The on-site assessments can be conducted from ams OSRAM, or a third party appointed by ams OSRAM. This includes also audits to verify the supplier compliance with the obligations under the Code of Conduct, so called corporate responsibility audits.
During the monitoring process the conducted supplier self assessments will be reviewed and if necessary, measures will be defined.
Qualification requirements
It is a core part of the monitoring process to make sure that the qualification requirements are up to date and comply with the industry standards (several Certifications) as well as legal and customer requirements.
Supplier Development
Depending on the results of the supplier ratings, assessments and audits, ams OSRAM supports the suppliers to understand the requirements and implement the agreed action plans. This can be a part of the yearly business review with the supplier, can be involving respective ams OSRAM responsible person, or the suppliers are supported in form of self paced learning using the information in the training section.
Managing Impacts, Risks and Opportunities
We manage impacts, risks, and opportunities across our supply chain through established procurement and due diligence processes and a risk-based approach to responsible sourcing, supporting resilient and responsible supply chains.
Sourcing & Procurement Risks
CSR Impacts, Risks and Opportunities (Environmental, Social &
Governance)
CSR topics may arise as impacts, risks and opportunities in connection with our operations and our supply chain. We address these topics through a structured approach that combines supplier requirements and expectations, ongoing assessments and follow-up measures, and accessible channels for raising concerns.
Environmental
Environmental topics in the supply chain are addressed through supplier expectations and engagement. Suppliers are expected to manage relevant environmental aspects such as the handling of materials and chemicals, waste and wastewater, and emissions, and to provide relevant environmental information upon request where appropriate. We address these topics through supplier engagement, information exchange and follow-up measures, and support continuous improvement.
Social
Social topics relate to working conditions and labor practices in the supply chain, including forced labor/modern slavery, child labor, occupational health and safety, working hours, and ethical recruitment. We address these topics through a risk-based, impact-oriented human rights due diligence approach, including identification and prioritization, supplier engagement, and follow-up actions where appropriate.
Governance
Governance topics in the supplier context relate to compliance, responsible business conduct and transparency. We support these requirements through clear supplier expectations and processes, and we provide channels to report concerns, including our "Tell ams OSRAM" mechanism, enabling review and follow-up where needed.