How we have an impact within the chain
As one of the larger players in the telecommunications sector in the Netherlands, it is our responsibility not only to take a close look at our own activities and products, but also to look at the chain as a whole. What impact are our suppliers, partners and customers having and what can we, at VodafoneZiggo, do to influence this in a positive way?
VodafoneZiggo builds and maintains the infrastructure that is necessary in order to create a fast, reliable and future-proof network. With this in mind, we work with suppliers who assist us by carrying out construction, installation and maintenance work. Dutch companies and consumers subsequently make use of this network in order to be able to make phone calls, surf the internet and watch TV. In order to do this, however, they need equipment, such as mobile phones, modems, Wi-Fi boosters and media boxes. VodafoneZiggo doesn’t manufacture this equipment itself but purchases it – often in collaboration with VodafoneZiggo’s parent companies Vodafone and Liberty Global – from suppliers and subcontractors in countries such as China, Taiwan, South Korea and the United States, l. Products that are used by our customers, such as modems, are sent out to the end users, our customers, via our distribution partners. We also purchase goods and services that we use ourselves. Examples include network equipment, office furniture and office needs, but also IT software and hardware, energy and call centre services.
We realise that due to the size of our organisation, we can have a significant positive impact by means of our purchasing power. That is why we make sure that as many of the products we buy are sustainable and why we are working hard to make our procurement process more sustainable. Everything we purchase must fulfil our sustainable and ethical standards and we make agreements about this with our suppliers. Those agreements are not only about environmental impact, but also relate to working conditions, fair wages and safety. For example, we only purchase certified energy generated by European wind turbines. And whenever we collaborate with subcontractors to further expand our GigaNet, we make agreements about safety. In 2020, our suppliers carried out more than 250 workplace inspections during activities with a high risk profile. These activities include working at heights, working in confined spaces and working with electricity. Usually, our Executive Director Technology and his management team visit one location every quarter to assess health and safety issues. Unfortunately, however, that was not possible in 2020 due to COVID-19.
We outsource part of our call centre services to parties outside the Netherlands, including in Suriname and Turkey. Agreements have been made with those suppliers on matters such as working conditions and fair wages. We have provided a summary of all of the agreements made in our Sustainable and ethical procurement code. In addition to working conditions and fair wages, our procurement code also includes other topics that relate to the OECD guidelines, such as corruption, the environment, safety and health.
Carefully selecting our suppliers
At VodafoneZiggo, we set high requirements for our suppliers, also in terms of sustainability. Together with them, we want to achieve our sustainable ambitions. Before entering into a collaboration, we carry out a due-diligence procedure in order to ensure that we know the risks that a possible collaboration with a party entails. Each supplier or party we may potentially wish to do business with is screened with the help of the World Check tool, to determine whether they trade in countries where sanctions apply, whether they have ever been fined for bribery or whether their reputation has been harmed as a result of negative reporting in the media. Based on the risks identified by the tool, we sent a letter to 300 suppliers in 2020, in which we drew their attention to our procurement code. Even once an agreement has been signed, we continue to monitor whether there have been any changes to the situation. In a number of cases, identifying risks in the case of partners or potential business partners can lead to a discussion at management level or to a decision to terminate a contract. In 2020, no abuses or breaches of our procurement code occurred.
Partnership with Ecovadis to carry out supplier audits
In June 2020, we entered into a long-term partnership with Ecovadis. Ecovadis is an independent consultancy that offers a tool to help us audit our suppliers’ sustainability performance. In collaboration with Ecovadis, we ask our suppliers to provide an insight into 21 CSR-related topics (subdivided into four themes: environment, labour practices & human rights, fair trading practices and sustainable procurement). The criteria are based on international CSR standards, such as the Global Compact Principles, the conventions of the International Labour Organization (ILO), the standards of the Global Reporting Initiative (GRI), the ISO 26000 standard and the CERES principles. Our partnership with Ecovadis not only ensures greater transparency and makes it possible to apply more requirements in that regard in due course, but by taking this step, we are also creating an increasing awareness among our partner companies and suppliers. This enables us to increase our indirect impact on the chain and to accelerate the shift towards a sustainable future. In 2020, we connected 21% of our top 250 suppliers and our ambition is to ensure that at least 70% of our top 250 register with Ecovadis in 2021.
Total expenditure paid to suppliers who have completed the Ecovadis assessment
% of top 250 suppliers in Ecovadis (in ‘22, top 500)
Via our parent companies, Vodafone Group and Liberty Global, international contracts have been concluded with telephone manufacturers such as Samsung and Apple and with manufacturers of modems, boosters and media boxes. Those manufacturers are almost exclusively located in Asia. Sustainable procurement is also high on our parent companies’ agenda, as it is within our organisation. Read more here about the approach of Vodafone Group and Liberty Global.
How we collaborate within our sector to improve the sustainability of our chain
VodafoneZiggo is a member of JAC, an international association of telecommunications companies aiming to carry out joint audits and exert influence on the CSR performance of influential suppliers within the sector. In these ways, we are joining forces and increasing our influence on a global level. In collaboration with JAC, we were able to carry out audits at major suppliers from, among other places, Japan, China, India, South Korea, Eastern Europe and Taiwan in 2020.
Dilemmas and challenges
Making our procurement process more sustainable regularly gives rise to challenges and dilemmas, both internally and externally. Making our products, services and processes more sustainable often goes hand in hand with higher costs. Striking the correct balance in that regard takes time and requires a careful approach to involving relevant internal stakeholders. That is why in 2020, we devoted a great deal of attention to strengthening internal awareness-raising regarding themes such as sustainable procurement and why it is so important for the future of our organisation. In November 2020, during the People Planet Progress festival, a webinar was organised on this topic, in which over 700 colleagues took part.
One of the challenges we were faced with in 2020 was the vulnerability of our supply chain in times of a pandemic. At the beginning of last year, COVID-19 was the cause of a global lockdown, which had significant consequences with regard to our procurement process and our stocks. Much of our hardware, such as modems, media boxes and telephones, is produced in and subsequently shipped from Asia. When most of Asia went into lockdown in April 2020, this immediately restricted purchasing possibilities. We managed to limit the damage that this caused by focusing on spreading the risk by increasing our stocks and ordering longer in advance. In this way, we managed to prevent shortages in the longer term and were able to strengthen our relationship with our chain partners.