Our supply chain is long and complex as with other ICT companies but it is also a critical component of our reputation. Responsibility is not only about what we ourselves do, but also concerns how well we manage responsibility issues in our supply chain. This is not always an easy task and requires robust procedures, processes, policies and programs in place and a growing requirement to work with others in the industry to improve transparency across the industry. The old adage - a chain is as strong as its weakest link - remains true.
In 2018, we conducted business with approximately 14 000 suppliers, 80% of our total supplier spend was distributed across approximately 450 suppliers. This includes 3 broad categories of suppliers:
Hardware suppliers which cover the materials that go into our products;
Services suppliers which we offer to customers such as network planning, installation and maintenance and construction of the networks we supply
Indirect suppliers which provide the goods and services we buy to conduct our business, (IT, logistics, consulting, financial, legal, marketing and so on).
Our final assembly includes our own factories in Finland, India and Poland.
Overview - Audits & assessments
Our Supplier Requirements are communicated to our suppliers as part of our supplier contracts, and we expect our suppliers to commit to these as part of their contractual obligations. An overview of those requirements can be found on our public website here.
We run assessments with our supplier network regularly to support them in meeting our ethical standards and improving performance where necessary. We monitor our suppliers through a variety of methods, of which the most important are:
- Our general supplier requirement audits - our general audit which includes corporate responsibility as a subset
- Corporate responsibility in-depth audits on our existing suppliers, align with SA8000 methodology, includes Human & labour rights, health and safety, and environment issues
- Supplier Health & Safety Maturity assessments which target high-risk service suppliers.
- Conflict Minerals Audits which cover Conflict minerals scoping, due diligence and risk management.
We also use a variety of assessment tools such as EcoVadis and CDP. In 2018, the below types of suppliers were addressed through our CR programs
- Over 99% of relevant supplier base is covered by Supplier Health and Safety Maturity Assessment.
- Over 46% of supplier spend is covered by CDP supply chain climate change program.
- 98% of relevant supplier spend is covered by Conflict Minerals program.
- 58% of supplier spend is covered by EcoVadis sustainability assessments.
- 100% of supplier spend is covered by the Request for Information (RFI process, related to anti-corruption due diligence, health and safety, and overall sustainability.
Read more in the Responsible sourcing section of Nokia People & Planet Report 2018.
Materials traceability and conflict minerals. We see the potential risks associated with the mining and minerals trade of the metals from which key minerals in electronic components are extracted. These risks may include military conflict, human rights violations, and negative environmental impacts. Our conflict minerals policy outlines our commitment and our requirements towards socially and environmentally responsible sourcing of Conflict Minerals for our products.
As part of our work to ensure conflict-free minerals we collaborate with our industry peers through the Responsible Minerals Initiative to improve the traceability of minerals and ensure responsible sourcing. Our due-diligence approach is aligned with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals. In 2018, we achieved a 97% rate of suppliers who established full traceability of smelters in our supply chain. Our target remains 100%. We also continued our work with the Responsible Minerals Assurance Program (RMAP) to identify and validate the smelters and refineries in our supply chain that are conflict-free or active in the validation process. Our latest Conflict Minerals Report can be found at http://www.lizai.net.cn/about-us/sustainability/downloads/