A responsible approach to procurement

Each year, our company spends around £1 billion on the goods and services it needs to function.

We've developed our responsible procurement process to foster a conscientious culture within our supply chain. This ensures that we have a sustainable and ethical supply chain. To oversee this approach, we appointed a dedicated Responsible Procurement Manager in 2007, whose focus is to ensure the company's values resonate throughout the supply chain.

We're delighted with the progress we've made this year; our procurement team was judged the overall winner in the 2007 Supply Management Awards, run by the Chartered Institute of Purchasing and Supply, and also received the Best People Development Initiative award. Both awards centred around the creation of the Procurement Functional Academy, a training resource which equips employees in procurement with the skills and understanding of the business they need to deliver a world-class procurement operation.

Also in 2007, E.ON UK's efforts in people development and innovation were on display at the inaugural ProcureCon Awards, recognising the best people in the European procurement community. In addition, numerous articles written by members of our procurement team have featured in supply chain magazines, firmly establishing our credentials as a leader in the procurement industry. A number of these articles focused specifically on our work in responsible procurement.

We developed a responsible procurement website to inform existing and potential suppliers of our responsible procurement policy. This has enabled the widespread communication of our values, allowing potential suppliers to familiarise themselves with our key requirements before embarking on any potential relationships with us. The website communicates a very clear and consistent message about our values as a company and the passion we have for sustainability. Our drive is to continually engage with our suppliers to form partnerships with a common goal on sustainability.

We're taking a phased approach to ensuring our entire supplier base signs up to our responsible procurement policy. At least 650 of our top suppliers have already signed up to acknowledge that they agree to abide by the policy. Over 2,000 mailings have been sent to the next tranche of suppliers informing them of our responsible procurement policy and our membership of UN Global Compact. These two tranches comprise around 50% of our supply base and 90% of our spend.

In 2007, we carried out seven third-party social and ethical factory audits relating to four suppliers. These included a number of potential suppliers' factories in China. Not only did these deliver insights into the complexities involved in supply chain issues, particularly across cultures, but they also had a positive impact on workers' conditions, management attitudes and approaches to Health and Safety. This was acknowledged by the feedback received from a UK-based agent of one of our potential Chinese suppliers.

We've been involved in Sustainable Solutions' 'Meet the Buyer' events in conjunction with Action Sustainability. These events have enabled us to share ideas on emerging technology and take on board solutions that we could use.. This collaboration has also allowed us to test some innovative ideas in areas like office stationery, furniture, waste management and work wear.

In early 2007, we were invited to submit a case study on the Action Sustainability website. Our responsible procurement team also joined Action Sustainability in exploring ways in which the supply chain carbon footprint can be reduced. We expect the results of our initial research to be implemented during 2008.