One of the largest Antipodean banks is to flesh out a ‘sustainable procurement’ policy for its suppliers this year.
Australia and New Zealand Banking Group, which spends A$2.2billion
($1.6bn, £935m) annually with more than 20,000 suppliers
worldwide, is to write the new policy, which it finalized at the end of
2005, into new and existing supplier contracts in Australia during 2006.
It will then ‘progressively expand’ the policy to New Zealand and its
other international operations from 2007. The bank’s core operations
are in Australia and New Zealand, where it has six million customers
altogether. Worldwide, including Asia, Europe and the US, it has a
total of 30,000 employees. The policy will affect a very wide range of
businesses supplying anything from toilet paper and food to furniture
and electricity.
The policy projects an overall vision of what the company wants to
achieve, but ANZ now has to work out how to translate that into action.
It says this will involve drafting standards for suppliers on the use
of energy, information technology, waste and transport, and developing
criteria to evaluate their performance. As a starting point, suppliers
will be required to provide information on their social and
environmental performance by completing a ‘sustainable procurement
self-assessment form’.
ANZ says that it will take a pragmatic approach and encourage suppliers
to improve their performance, but they could be dropped if they fail to
comply. The initial focus will be on the top 100 suppliers in Australia judged
to have the largest environmental and social footprint. Requirements
will apply to all suppliers regardless of size, but the bank says
‘special consideration’ will be given to small and medium-sized
enterprises ‘to ensure that our assessment process does not place them
at a disadvantage in doing business with ANZ’.
One of the first tasks will be to establish performance agreements with
key suppliers and then to develop a monitoring process to track
progress. The system will be reviewed annually in consultation with
suppliers, and ANZ’s use of it will be verified by external assessors.
The bank will report publicly every year on how it has managed to
influence the suppliers’ social and environmental performance.
Most of the work will be carried out in-house by the ANZ operations,
technology and shared services division, which manages the bank’s
information technology infrastructure, back office payments processing,
property and human resources.
The bank, which made profits of A$3bn ($2.22bn, £1.27bn) in 2005, has
significantly increased its emphasis on social and environmental
principles during the past year, and recently published its first CSR
report.
It has also developed new screening methods to assess the potential
social and environmental impacts of its lending and has upgraded its
health, safety and wellbeing strategy, which is being introduced across
the group.
