Mirvac has released a comprehensive overview of its supply chain sustainability, which it says is the first of its kind for an Australian property company, and something it intends to release annually.
A detailed questionnaire was sent out to approximately 270 suppliers, representing 68 per cent of the supply chain by FY14 value, with suppliers comprising 32.8 per cent of that value responding.
Of the 107 suppliers that responded, 94 per cent had a formal environmental policy in place, and just under 80 per cent followed an Environmental Management System, the Supplier Annual Report found.
Producing the report is an element of the group’s commitment to prequalify 50 per cent of its supply chain, by value, on social and environmental sustainability criteria by the end of 2015.
Ninety per cent of the suppliers that participated in the survey agreed to engage annually to assess sustainability, and 78 per cent said they could comply with the company’s draft Vendor Code of Conduct. A further 18 per cent said they could comply with some exceptions, and three per cent said they were unable to comply with the draft code.
Based on feedback from the firms that engaged with the survey, the group is now updating the code.
An area of concern noted in the report was that 63 per cent of firms did not have a policy against bribery and corruption.
The report said Mirvac would audit processes to identify and evaluate fraud, bribery and corruption risks, as part of the ongoing risk assessments its business leaders are required to undertake.
Other areas the survey covered included health and safety, inclusiveness, volunteering, charity partnerships, quality management systems, and risk analysis and risk management practices.
“Within our supply chain there is a huge amount of unlocked potential in existing products and innovation,” group general manager sustainability Paul Edwards said. “We know that engaging this pre-existing source will help Mirvac, and our suppliers, achieve a more sustainable future.
“Over the past 12 months, Mirvac has set responsible sourcing requirements in our internal procurement policy, developed a sustainability questionnaire and a Vendor Code of Conduct. We’re also incorporating sustainability requirements into new contracts with suppliers in our ‘subcontract’ category working on Mirvac construction sites.”
Mr Edwards said achieving specific environmental benchmarks was currently not a requirement because the company recognised “this is the start of a partnership” that aimed to “educate, encourage and engage suppliers to create a more sustainable and resilient supply chain”.
“Therefore we do not specify indicators or score companies or prevent them from working for Mirvac. However if they do not have a health and safety policy, bribery policy or environmental policy and it would be expected in their line of work this will be captured in the contract anyway.”
He said the information provided on ESG factors was considered during supplier selection, but was not mandated, nor were results scored. But the capability is there to do so and the property group may in future decide to assess in this way.
“Our approach is a proactive and inclusive one because we want our suppliers to come on this journey with us. We want to see sustainability grow in our supply chain rather than excluding suppliers from the conversation simply because they’re not quite there yet,” Mr Edwards said.
Those firms that participate in the supply chain survey are provided with a personalised online dashboard that allows them to review their score on ESG criteria, see where improvements can be made and also access an inbuilt library for advice.
As the supply chain initiative progresses, they will be able to view trend analysis of their performance and track it against that of their peers.
Mr Edwards said that to bring the percentage up to the 50 per cent of FY14 value by the end of this year, the group would continue to engage its suppliers directly or via other forms of communication, and that another 500 surveys were about to be issued to other firms in the supply chain.
See the Supplier Annual Report.