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Responsible sourcing

SSAB has approximately 20,000 suppliers globally. The input materials needed to make iron and steel account for SSAB’s most significant purchases. Suppliers must comply both with SSAB’s own standards and with international social and environmental guidelines in order to remain qualified suppliers for SSAB.

Efficient and responsible sourcing of goods and services

SSAB has an extensive supply chain including approximately 20,000 active suppliers in more than 60 countries. SSAB buys input materials, products and services in most of the countries in which we operate. These materials and services range from input goods like scrap, iron ore, coal and alloys to gas, refractories, zinc, paint, maintenance services and spare parts. SSAB spends more than SEK 40 billion annually on external purchases. The majority of our purchases are from countries where we have our main production sites; 31% from Sweden, 15% from Finland and 30% from the USA.

SSAB contracts only the most competitive suppliers and the strategies for this depend on the products or services purchased. Since the supply chain is global, it is important to evaluate supplier risks and suppliers’ ability to address social and environmental issues. At SSAB, sustainability is an integrated aspect of sourcing operations and supply chain management. Stringent quality requirements and long-term business relationships provide the sourcing organization with a good insight into conditions at suppliers. We assess suppliers on the basis of quality, delivery reliability, cost and sustainability.

Incorporating sustainability and human rights criteria in sourcing

SSAB is a signatory to the UN Global Compact initiative and the principles of the compact are applied in our work with suppliers. SSAB has a Supplier Sustainability Policy based on the UN Global Compact principles. The purpose of the policy is to ensure that SSAB collaborates with suppliers who share our sustainability values. 

SSAB supports the UN Guiding Principles on Business and Human Rights and included a commitment to the principles in the Code of Conduct in 2017. The Supplier Sustainability Policy includes basic sustainability guidelines, including human rights, with which our suppliers must comply. Contracts with suppliers refer to the Supplier Sustainability Policy. SSAB also reserves the right to conduct reviews of our direct suppliers or on-site audits to ensure compliance with the Supplier Sustainability Policy. SSAB has limited influence on Tier 2 suppliers and expects our direct suppliers to monitor Tier 2 suppliers for commitment to environmental and social responsibility. Imposing sustainability requirements on direct suppliers drives the development of stricter sustainability demands and raises awareness of sustainability issues.

Sustainability risks differ between countries. In 2018, SSAB plans to evaluate human rights risks in countries where we have identified top spend suppliers. This data will be important when selecting suppliers for the annual audit plan. Supplier selection is based on a pre-evaluation of the supplier´s social and environmental risk profile taking into consideration also geographic location and product category.

Where SSAB sources its input materials 
Iron ore pellets  Sweden and Russia
Metallurgical coal Australia, North America, Russia
Injection coal Russia
Scrap USA, Sweden, Finland
Limestone Sweden, Norway and France
Alloys Brazil, Russia, China, South Korea, Chile, USA 

Supplier Sustainability Policy

Global Procurement Council 

SSAB has a Global Procurement Council headed by the Chief Procurement Officer. The Council consists of the heads of Procurement from each of SSAB’s divisions, as well as from our subsidiaries Tibnor and Ruukki Construction, and other relevant stakeholders including the Head of Ethics and Compliance who supports the Council’s work in terms of ethical issues. The Council’s mission is to enhance the global procurement processes and projects, but also to collaborate on sustainability and continue our strong focus on responsible sourcing. The Council also measures and follows up on important sustainability targets. 

How we measure progress:
1. Share of total spend sustainability assessed (classified/identified and self-assessment done) 
2. Share of new suppliers sustainability assessed, including screened for social criteria
3. Number of site visits including social and environmental performance of suppliers  
4. Number of third party sustainability audits 

Governing documents

SSAB has several documents that support our responsible sourcing:

  • Code of Conduct 
  • Supplier Sustainability Policy; based on the UN Global Compact and includes labor, human rights, health & safety, anti-corruption and environmental issues
  • Instructions regarding procurement (updated during 2017), which address the governing principles for procurement, quality, delivery performance and cost, as well as the principles of the UN Global Compact and how to take them into account when evaluating suppliers
  • Procurement Compass; a guide in the employees’ everyday work to stay on track with internal instructions
  • Instructions regarding anti-corruption, which provide employees with information on how SSAB defines bribery and improper benefits, and how employees are expected to act in relation to suppliers, customers and other business partners 

 

Focus on identification and evaluation of supplier risks

SSAB systematically identifies the risks related to our direct suppliers. We do this by placing suppliers in various risk categories depending on the countries in which they operate. The classification is based on Maplecroft’s Human Rights Risk Index and Transparency International´s Corruption Perceptions Index. The classification illustrates the risks in areas such as human rights, labor conditions and corruption. Suppliers who are placed in the medium- or high-risk group are required to complete a self-assessment questionnaire containing questions about, for example, their social conditions and environmental performance. Unsatisfactory answers are investigated.

Site visits and audits

SSAB also conducts regular visits to major suppliers around the world, including high-risk suppliers. Suppliers selected for site visits and third party audits are identified in the annual audit plan. Supplier selection is based on many criteria, including a pre-evaluation of the supplier’s social and environmental risk profile taking into consideration also geographic location and product category.

On these visits, purchasers and specialist functions visit production sites and conduct supplier inspections. SSAB has on-site protocols in place and the procurement organization has been trained to evaluate information about the supplier’s social and environmental performance gathered during site visits.

HSEQ cluster for joint evaluations of contractors

SSAB is member of an HSEQ cluster (health, safety, environment and quality) for joint evaluations of contractors. Several of SSAB´s contractors working on SSAB´s sites are audited through this cluster by a third party every year.

Sustainability impacts from mining raw materials

SSAB purchases iron ore pellets, metallurgical coal and injection coal from different mines around the world. The nature of mining activities may have implications for sustainability and may also involve potential human rights risks. Mining requires access to land and water. Mining activities may have a negative impact if not carefully managed and affect the individuals living close to the mines. Some mining activities involve hazardous chemicals, which may pose risks to the health and safety of employees or contaminate water resources if not handled properly. SSAB will enhance our focus to better understand these potential supplier risks.

Actions against modern slavery

SSAB is a signatory to the UN Global Compact and supports its ten principles. Those principles are a natural part of SSAB´s business and are reflected in the Code of Conduct and SSAB´s Supplier Sustainability Policy. SSAB also supports the UN Guiding Principles on Business and Human Rights. SSAB is committed to maintain and improve systems and processes to avoid complicity with human rights violations related to or own operations and our supply chain. SSAB has taken a variety of actions to verify the absence of child labor, forced labor, slavery and human trafficking in our supply chain. These actions include sustainability principles for our suppliers, sustainability risk assessments, site visits and audits and training of our employees.

No conflict minerals in SSAB’s steel

SSAB does not use conflict minerals (including gold, tin, tungsten and tantalum) and, upon request, provides customers with certification affirming this.1)

1) “Conflict minerals” is a term used for minerals derived from areas characterized by large-scale internal strife, where the mining of minerals risks contributing to, or financing, continued conflict and violation of human rights.

SSAB is a signatory to the UN Global Compact

SSAB and Aspo ESL Shipping signed a long-term agreement for raw material sea transport to reduce CO2 emissions

SSAB needs volume flexibility for key input materials to meet fluctuations in the blast furnace consumption of these materials. SSAB’s vision of a stronger, lighter and more sustainable world, encourages the pursuit of solutions to limit environmental impacts, where sea transport is of significant importance.

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SSAB and Aspo ESL Shipping signed a long-term agreement for raw material sea transport to reduce CO2 emissions

SSAB needs volume flexibility for key input materials to meet fluctuations in the blast furnace consumption of these materials. SSAB’s vision of a stronger, lighter and more sustainable world, encourages the pursuit of solutions to limit environmental impacts, where sea transport is of significant importance.

SSAB and Aspo Group’s ESL Shipping Ltd signed a long-term frame agreement covering sea freight for SSAB’s inbound raw material sea transport within the Baltic Sea and from the North Sea. The agreement secures deliveries of coking coal, iron ore and PCI coal to SSAB’s coking plants and blast furnaces in Raahe, Luleå and Oxelösund. The new combined sea freight agreement will result in a reduction of more than 50% in CO2 emissions per tonne of cargo transported compared to present vessels. Besides these environmental benefits, the cost savings provided by new technology will also allow better profitability. The cost savings related to the agreement are part of SSAB’s synergy program announced in conjunction with the merger with Rautaruukki in 2014. The new agreement will result in ESL Shipping building two new, energy-efficient LNG-fueled ships. The two ships have been ordered and will be delivered during 2018.