Automotive Industry Updates its Guiding Principles to Enhance Sustainability in the Supply Chain

The Automotive Industry Action Group (AIAG) and Drive Sustainability today announced an updated version of the “Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain.” This collaboration between AIAG, Drive Sustainability and key automotive organizations provides guidance to our valued supplier partners concerning the latest industry expectations. Additionally, a supplementary reference document was created to provide further explanation and examples for the updated principles.

Along with AIAG and Drive Sustainability, BMW Group, Daimler, Fiat Chrysler Automobiles Group, Ford Motor Company, General Motors, Honda, Jaguar Land Rover, Nissan, Scania, Toyota, Volkswagen Group, Volvo Cars, and Volvo Group, all participated in this revision of the 2014 document, and in creating the additional explanatory resource. This extraordinary alignment between automakers came out of a need to address issues relevant to the automotive industry today, and to speak with a unified voice on the importance of a sustainable, ethical supply chain.  

With these goals in mind, Steve Kiefer, senior vice president, General Motors Global Purchasing and Supply Chain, says, “GM views the pursuit of positive environmental and social impact throughout the supply chain as a global priority.” Kiefer goes on to explain, “GM is focused on efficient business with our global partners, and AIAG’s guiding principles ensure that the entire auto industry is working together to use our scale and resources for good.” 

The amended text augments previously stated positions, and is more inclusive of principles that reflect current industry concerns pertaining to business ethics, human rights, working conditions, and environmental leadership. As Tanya Bolden, director of corporate responsibility, products & services, AIAG, explains: “We are pleased that the effort initiated a decade ago by the North American automakers has grown in scope and global acceptance. Due to the degree of complexity in today’s automotive supply chain, it is more important than ever that we all work together, and communicate these vitally important issues in a clear and unified voice.”

Updates to the Principles include a number of new expectations, as well as a brief description of each point. In one example, Business Ethics, new guidelines state that companies are expected to responsibly source raw materials and to work to minimize the risk of counterfeit or diverted parts and materials in their products. The importance of transparency in accurate quality reports, financial reports, and filings is also emphasized, as well as the need for companies to disclose both financial and non-financial information, according to regulations and industry practices. A final bullet point explains that companies need to establish processes so that employee concerns can be raised anonymously, without fear of retaliation.

Certain areas have also been reworked and expanded upon in the Environment section. Additions include a statement on air quality, which stipulates that companies must work to monitor and eliminate (as much as possible) emissions contributing to air pollution, as well as a note on managing chemicals responsibly to minimize or eliminate restricted substances.  

As Tom Lake, vice president, Honda North America Purchasing, notes: “Automakers have a responsibility to work together and offer guidance concerning the expectations we have as an industry, and to highlight the importance of strong governance structures to safeguard business ethics. These updated Guiding Principles and Practical Guidance documents are a great resource for our supplier partners to reference as they make important decisions that impact their business and ours.”

To further elaborate upon the guidelines outlined in the Principles, the supplementary text, “Global Automotive Sustainability Practical Guidance,” addresses the practicalities and legalities of meeting industry expectations. For instance, to create a safe and healthy working environment—one of the fundamental values noted in the Principles—companies should educate their employees on emergency and evacuation procedures. They should also offer personal protective equipment when required, as well as focus on training for machine safety. Other examples offered include the need to maintain legally required permits and licenses, and verify that fire detection, alarm, and suppression systems are in place and in working order at all times. 

“The new release of the Guiding Principles and Practical Guidance is part of Drive Sustainability’s enhanced commitment to sustainability,” Stefan Crets, executive director, CSR Europe, and facilitator of Drive Sustainability explains. “Drive Sustainability is a partnership of automotive companies that made a pledge to move to the next level of sustainability and supply chain management. We are happy to collaborate with AIAG and its members to put the basis of a global automotive strategy on supply chain sustainability. This is the foundation to strengthen Drive Sustainability activities like local supplier capability networks (in China & Turkey), and raw materials actions.”

Additional resources like the tools, trainings, and workshops AIAG offers, also help companies of all sizes meet sustainability performance expectations. Free online courses and assessments such as the Supply Chain Sustainability eLearning and the Supply Chain Sustainability Knowledge Assessment (Practitioner Level), along with additional options for AIAG members, all support the same industry goals regarding the social and environmental performance of the supply chain.

View the Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain

About AIAG

The Automotive Industry Action Group is a unique not-for-profit organization where automakers, suppliers, service providers, government entities, and individuals in academia have worked collaboratively for 35 years to drive down costs and complexity within the supply chain. AIAG membership includes preeminent manufacturers and many of their parts suppliers and service providers. 

About Drive Sustainability

Drive Sustainability is a partnership of 11 leading automotive companies that work together to improve sustainability in the supply chain. Starting with 2012 the companies have assessed over 20,000 suppliers in more than 100 countries and engaged over 1500 suppliers in capacity building initiatives. Over 40 training sessions have been conducted in 10 countries. Drive Sustainability operates under strict anti-trust policies. Drive Sustainability is facilitated by CSR Europe.

About CSR Europe
CSR Europe is the leading European business network for Corporate Social Responsibility. Through its network of around 45 corporate members and 41 National CSR organisations, it gathers over 10,000 companies, and acts as a platform for those businesses looking to enhance sustainable growth and positively contribute to society. In its mission to bring the CSR agenda forward, CSR Europe goes beyond European borders and cooperates with CSR organisations in other regions across the world.

 

Source: AIAG CR Team