Sustainable Supply Chain

We provide highly complex and tailormade logistics solutions for our customers along global supply chains. For more information about the nature and scope of our services, please refer to the Company Profile section. We also coordinate the entire supply chain and establish integrated logistics chains, which we also manage across the entire value creation process – especially in the areas of project and process management, technology, IT and quality. In this, we mainly work with products and components provided by our customers. Consequently, the influence we can exercise on upstream processes is often limited.

Within the scope of our own decision-making, we consistently apply sustainable standards. This applies in particular, but not exclusively, to our procurement and purchasing processes, which encompass more than 100 material categories and are managed by our central Purchasing department. The focus of the selection criteria is also increasingly on energy efficiency, which alongside quality, price and delivery times is, for example, a central criterion in the procurement of lighting systems and forklift trucks. Our main procurement markets are located in Germany and neighboring EU countries, which are also subject to binding sustainability standards.

For the fourth year in succession, we are facing supply chain disruptions due to new and existing crises and as a result are in some cases still experiencing considerably longer delivery times for certain goods. The further hike in raw material prices in the reporting year also presented energy procurement challenges.

Clear standards, clearly communicated

We communicate very transparently to our customers how we meet our ethical, social and environmental responsibilities. We expect no less of our suppliers and take the relevant aspects into account when selecting suppliers and awarding contracts. For example, when commissioning subcontractors for transport services, we pay particular attention to industry-specific human rights risks such as the appropriateness of remuneration, the right to freedom of association, and respect for general occupational health and safety rights. Only in this way can we implement sustainability along the supply chain systematically and in compliance with the law. Our requirements with regard to environmental and social responsibility and ethical best practices are formulated in our Supplier Code of Conduct, which we are currently revising on a point-by-point basis in order to fully reflect the legal requirements of the German Supply Chain Due Diligence Act, which came into force on January 1, 2023. It goes without saying that the statutory provisions relating to the treatment of employees, occupational health and safety and environmental protection must be complied with at all times. We also expect appropriate measures to be taken to avoid or mitigate negative impacts on people and the environment. Our suppliers, in turn, are responsible for ensuring that their subcontractors are informed about and comply with the requirements. Comprehensive induction training in the criteria set out in the Supplier Code of Conduct is also mandatory for employees in Purchasing. www.blg-logistics.com/en/general-terms-and-conditions

We ensure compliance with supply chain–related due diligence obligations primarily through the closely coordinated interaction of the Risk Management, Purchasing, Compliance, Legal and Human Resources departments. Responsibility for overarching coordination and oversight is vested with the central Sustainability department. We are currently in the process of further streamlining the relevant organizational processes across all departments involved.

Systematic management: risk analysis and supplier evaluation

We use systematic risk analyses to identify any human rights or environmental risks along our supply and subcontracting chains. These consider various aspects, such as the purchased product group or service, the country of origin or the market from or in which the service is provided, the nature and scope of potential risks, and the volume of the relevant goods or services procured. On this basis, we classify suppliers and service contractors according to risk. If they are prioritized, the next step is to request a self-declaration – including proof of any certifications specified in this context. We conduct audits in the event of documented violations, if there is specific cause for suspicion, in cases where the self-declaration is insufficient and in selected random checks.

Since 2016, we have additionally evaluated suppliers and service providers in cooperation with the responsible locations according to a defined scheme. Using a comprehensive catalog of questions, which we are currently aligning even more closely with the ESG criteria of our Supplier Code of Conduct, also in accordance with the LkSG, we evaluate criteria such as pricing, quality, delivery times, environmental protection, sustainability and communication. This allows us not only to identify weaknesses and risk, but also potential. We not only share the findings with the suppliers concerned, but they also flow into our procurement strategies and supplier management. The latter will be directly linked with our risk management in 2023. The evaluation is carried out annually and also on an ad-hoc basis as needed, and for new suppliers as standard. In addition, face-to-face meetings and on-site visits are an integral part of our dialog with main and new suppliers.

The process is completed without further action if there are no complaints, which applied to all evaluations in the reporting year. If, on the other hand, we identify a need for change or optimization, we work with the supplier to define steps for in-house or active development. We terminate relationships with suppliers that are unable to meet our requirements even in the medium term.