Procurement and logistics
For GF, sustainable management includes the establishment and maintenance of long-term, trusting partnerships with its sourcing and logistics partners.
Alongside economic considerations, GF has specific expectations for its business partners regarding ethical conduct and compliance with relevant laws, regulations, and international standards for social and environmental conduct. GF considers this — along with environmentally friendly and efficient transport solutions — an important part of good business conduct and of progress toward its business goals.
The Code for Business Partners plays a crucial role in this context. By the end of 2020, almost all GF’s key suppliers had signed the Code for Business Partners or demonstrated that they have equivalent requirements in place (GF Piping Systems 100%, GF Casting Solutions 100%, GF Machining Solutions 95%).
Several sustainability criteria are part of the onboarding process and periodic evaluation process for GF´s suppliers. These criteria include, but are not limited to, questions about human rights, environmental risk exposure, health and safety in the manufacturing process, and conformity with relevant legislation (such as REACH, the Dodd-Frank Act, and the Consumer Protection Act). For example, GF is committed to ensuring that its supply chain has no conflict minerals. Due to the complexity of tracing the minerals’ origins, the process is a step-by-step effort. Based on the information obtained from suppliers, GF is unaware of any conflict minerals present in the materials it purchased in 2020 to manufacture its products.
Responsible supply chain
In 2019, GF designed an approach for systematically assessing its three divisions’ commodity groups and suppliers. The aim was to achieve deeper insights into the quality of GF’s supply chain from a sustainability perspective. The high level process for 2021–2025 includes:
- risk assessment of commodities purchased
- self-assessment by suppliers in categories identified as having higher risks and covering 80% of the spend
- audits of suppliers identified as having weaker processes
- follow-up and engagement with the suppliers needing improvement.
GF concluded an agreement in late 2020 to work with EcoVadis to support the rollout of the supplier sustainability assessments. The program will start in 2021 and will focus on the three divisions’ roughly 500 suppliers. A cross-divisional project team was formed in 2020 to coordinate the implementation of the sustainability assessments’ findings.
Since early 2019, GF has been an active participant in the Sustainable Supply Chains working group organized by the UN Global Compact’s Swiss network. This group serves as a forum for companies to share knowledge and best practices on topics such as improvements to supply chain visibility and traceability, supply chain risk assessment, supplier engagement, and human rights due diligence. In September 2020, GF hosted one of the meetings of the working group and shared its own experiences with the other members.
GF purchases a variety of raw materials and goods from its supply chain and then delivers the finished products to sales companies and customers around the globe. To ensure that this process is environmentally friendly, GF has set a target of reducing energy consumption, carbon emissions, and packaging material.
The divisions therefore took additional steps in 2020 toward improving transparency of their logistics networks’ environmental footprint in areas where GF has a possibility of influence.
In 2020, GF Piping Systems reduced its air freight relative to sales — 1’000 kilometers per CHF 1’000 of sales — by 31% compared with the average for 2014–2015. This is equivalent to a reduction of 2’650 tonnes of CO2 per year. The division conducted a detailed analysis of its available data for road, air, and ocean transport with its most important transport service providers in Europe. In cooperation with a large key customer in Germany, the division also developed a plan to shift from daily deliveries (mainly by parcel transport) to one or two bundled deliveries per week. It worked with the customer to design and agree on an optimized delivery plan and schedule with 65 bundling points. The plan simplifies logistics for both the customer and GF. It is expected to reduce the number of shipments by 60%, which will minimize the environmental impact in terms of both carbon emissions and packaging materials.
GF Machining Solutions worked with its logistics partners to review and analyze a number of possible solutions and is currently evaluating a systematic track-and-trace screening of its ocean and air freight’s GHG emissions.