Integrity in Business

Suppliers

Management Approach  GRI 102-9


Kuehne+Nagel works closely with its partners, suppliers and transport carriers to reduce impacts from shipments as well as to jointly drive sustainability improvements in critical parts of customers’ supply chains.

As a global company, standardised processes are in place to manage the suppliers. This is done with the help of the Supplier Management System (SMT). SMT is a web-based application of suppliers across Kuehne+Nagel‘s business units covering operational, legal and compliance criteria.

58,000
registered suppliers

SMT supports in identifying the most suitable suppliers and business partners on the basis of individual customer requirements, helping to optimise customers’ supply chains.

On all levels, responsible Kuehne+Nagel personnel monitor and evaluate performance of suppliers. The evaluation process is conducted by questionnaires which contain relevant criteria for suppliers selection and evaluation. In 2019, Kuehne+Nagel started to evaluate the suppliers internally, by performing annual risk assessments and evaluated 104 suppliers through physical audits. (SDG 17)


CO2 focus with our suppliers

In our efforts to reduce the CO2 footprint we have close interactions with our corporate partners in sea and air freight. Together with the carriers we are seeking alternative routings, new combustion technologies and joint pollution reduction programmes. See herein our activities described on Net Zero Carbon programme.

In the past year, we focused on renewable and alternative energies for our own and 3rd party truck fleets. One project concentrated on bio-fuel for long-haul trucking. After a thorough assessment, we came to the conclusion that bio-fuel might be an alternative energy for the future. Due to cost and network limitations, this is not yet perceived as an efficient option for current practice. Further, project groups are defined to elaborate on new technologies and procurement.
 

Enabling Third Parties for Kuehne + Nagel  

A significant number of Kuehne+Nagel’s business transactions and activities are performed by business partners, including suppliers or subcontractors that work with us or on our behalf. To protect Kuehne+Nagel from harm caused by such third parties, the business partners and subcontractors are expected to operate within the limits of Group’s Ethics and Compliance standards. At a minimum, they are required to sign the Kuehne+Nagel Supplier Code of Conduct. (SDGs 8 and 17)

Kuehne+Nagel has published a one-pager “doing business with integrity – jointly against corruption”, used for communication with third parties. Kuehne+Nagel regularly assesses the integrity of existing or potential business partners by following procedures that address compliance risks or other concerns related to the involvement of third parties. A key emphasis of Integrity Due Diligence (IDD) procedures is focusing on interactions with government officials such as customs clearance when subcontracted to third parties. The total number of business partners evaluated through IDD is increasing following continued growth of the business as well as extensive application of IDD as a risk-based safeguard. At the same time, the total number of annual renewals is developing proportionally, following the requirement to comprehensively update an IDD decision every three years supplemented by annual confirmations thereof.

If there are significant findings from the research, we are required to establish a mitigated and improved environment by introducing reasonable safeguards, or else consider rejecting collaboration to prevent harm from our own business environment including customers. Procedures over suspending third parties have been strengthened in 2019 and are frequently reported upon and closely monitored.

For more details about Supplier Code of Conduct and Evaluation process, please see our 2018 Sustainability ReportGRI 308, GRI 414