Management approach

Our organization

The purchasing and supply chain organization is designed to coordinate the entire network of Purchasing and Supply Chain professionals, who number around 380 and around 2,400 respectively. They are responsible for:

• creating additional value through simple and clear purchasing processes and excellence programs;
• and for organizing a sustainable and timely supply of goods and services to all of Solvay’s sites and customers.

The organization must provide not only the required level of service and safety, but also an optimized total cost of ownership. The purchasing strategy is defined by the Purchasing and Supply Chain Excellence Function, jointly with the 11 GBUs. The strategy can be executed and deployed at a global, regional, or local level, whichever best leverages the supplier market structure.

Purchasing CSR Committee

Solvay has set up a CSR committee to analyze and arbitrate any supplier breach based upon the principles in the Solvay Supplier Code of Conduct.

In 2019, no severe infringements were reported.

Our policies

In 2016, Solvay adopted its Responsible Purchasing and Sustainable Supply Chain Statement. This statement outlines how Solvay conducts business with its suppliers, what it expects from them, and what they can expect from Solvay. It covers, inter alia, Solvay’s contribution to a circular economy and conflict-free minerals. The Statement is published on the Solvay website and helps Solvay demonstrate to customers its commitment to sustainability. The commitments Solvay makes in this Statement are progressively embedded in its sourcing strategies.

Responsible Purchasing and Sustainable Supply Chain Statement

Moreover, in 2017 Solvay reinforced its commitment to meeting its responsibility to respect human rights and issued a new Solvay Human Rights in Business Policy that covers all Solvay Business Partners, including suppliers. During the past year, the Group terminated its relationship with one transportation supplier who did not properly respect the principles set out in this policy.

Solvay’s Human Rights in Business Policy

Solvay Way

Solvay’s Supplier Code of Conduct is aligned with Solvay’s Code of Conduct and the CSR agreement with IndustriALL Global Union. It was inspired by the UN Global Compact principles and Responsible Care^® practices.

All written purchase contracts need to make reference to the Solvay Supplier Code of Conduct or a valid alternative. In addition, and notwithstanding the existence or the absence of a written purchase contract, all critical suppliers must subscribe to the principles detailed in the Solvay Supplier Code of Conduct.

Indicators

Core Suppliers

During the course of 2019, a new supplier segmentation was introduced with the “Core Supplier” approach. Core Suppliers have been defined to include three categories:

• Strategic Alliance: contributes to Solvay growth and market differentiation;
• Strategic Partner: delivers strategic materials or services to Solvay with a possible business impact;
• Bottleneck: represents a high potential risk to Solvay or the Business.

This new supplier segmentation objective is to focus on managing the performance of our suppliers and improve the relationship with our Core Suppliers. This new approach greatly helps Solvay focus on what matters and drive improvement within the Supply Chain.

Together for Sustainability initiative

In 2011, Solvay became a founding member of the Together for Sustainability initiative (TfS), an international non-profit association located in the CEFIC offices in Brussels. TfS aims to develop and implement a global audit program to assess and improve sustainability practices within the supply chains of the chemical industry.

Following the principle, “An audit for one is an audit for all”, sustainability assessments and audits are shared between all of its members.

Solvay CPO Kristian Saksida is a member of the TfS Steering Committee.

Since the start of the TfS initiative, almost 14,000 supplier sustainability evaluations have been conducted under the TfS program. The sustainability performance of 12,200 suppliers has been rated within the TfS initiative based on EcoVadis assessments, and 2,030 TfS audits have been conducted by means of the TfS Audit Program.

In the year 2019, 1,043 new supplier assessments were performed via EcoVadis, and 309 TfS audits were conducted through the TfS Audit Program.

Within Solvay’s portfolio, 1,674 suppliers have a scorecard from within the past three years. In 2019, 830 scorecards were new or updated. Of the 750 companies reassessed, 59% improved their score.

CSR Questionnaire

If performing a third-party assessment is not feasible for the supplier, for instance in cases of small spends or urgent purchases, Solvay uses its online Standardized CSR Questionnaire. All results are stored in a shared repository, which also allows the buyers to better monitor underperforming suppliers.

At the end of 2019, 118 completed CSR questionnaires were registered. The average score was 3.2 on a scale of 4.

Raw materials

As a large chemical manufacturer, Solvay uses raw materials from a range of suppliers and sources: it used or purchased over 5.6 million tons in 2019. The Solvay group transforms large quantities of petrochemicals and uses large amounts of water. Solvay supports increased supply chain transparency and sources conflict-free minerals: Solvay is concerned that the trade in tantalum, tin, tungsten and gold - and the metals refined from such minerals (referred to as 3TGs) - mined in certain conflict-affected and high risk regions, including but not limited to the Democratic Republic of the Congo and its adjoining countries, may be contributing to human rights abuses. We pledge to continue working to verify the integrity of our sourcing, and to support the actions of governments, our customers and suppliers toward this end on a global basis. To the extent that our suppliers fail to meet our expectations in this regard, Solvay will take these factors into consideration in future business and sourcing decisions.

2019 Key achievement

Solvay works closely with local suppliers to substitute part of the coal needed for steam generation for its plants with biomass. In Dombasle, France and in Rheinberg, Germany, the co-firing of wood pellets in the coal boilers prevented 20,000 tons of CO₂ in 2019. Further projects are ongoing in Spain, where Solvay is testing the substitution of part of the coal with olive cake (waste from olive oil).

Solvay Chimica Italia has been testing since May 2019 the transportation of Sodium Bicarbonate Bicar^® with trucks powered by Liquid Natural Gas (LNG) through its partnership with Italy’s Pialiacelli Group. The efforts produced significant results with respect to the operational performance of LNG Trucks on the route from the Solvay plant in Rosignano to San Rocco al Porto, near Milan, the headquarters of Formec Biffi, Solvay’s partner that manages the packaging and distribution of our core products for domestic use. CO₂ emissions per kilometer fell by approximately 15%, from about 840 grams / kilometer for a diesel vehicle to about 710 grams / kilometer for an LNG vehicle.