2020 Sustainability Report

25 Economy It has always been very important to us that the materials and products we procure are manufactured in conditions where both people and nature are treated with respect. Whenever it is possible and financially viable to do so, we prefer to choose manufacturers and raw materials suppliers who are based within a radius of 600 km of our production sites. By doing this, we can be confident that we are buying products that are right for us in terms of quality and all commercial and technical aspects, at the best price. It also gives us the security of knowing that, in addition to the matters of price and quality, the risks relating to environmental and social issues are limited thanks to the legal framework, as are any indirect environmental costs, while the risk of injury at work and breaches of human rights is kept to a minimum. In 2017, the European Union made it a legal requirement under the CSR Directive 2014/95/EU for companies to meet their social obligations and make a positive contribution to society. This includes environmental, employment and social matters, measures to ensure that human rights are respected and measures to combat corruption at businesses and their suppliers. Exercising environmental and social responsibility is an integral part of our corporate culture. We fully acknowledge the obligation on companies to do business sustainably and demonstrate social responsibility (CSR – Corporate Social Responsibility). Supply chains have become complex and global, which makes it a big challenge to ensure that the environment and people are protected right along the chain. For a company of our size, with limited numbers of staff, it is a particular challenge to cope with the changes in the procurement market. Not only have the raw materials supply chains been largely reduced to a few key sources around the world, but the manufacturers of certain important supplied components have also become concentrated in the Far East in recent years. In 2020, nearly 82 % of the goods we procured came from the European Union, over 15 % from Switzerland, nearly 2 % from North America and the UK where the CSR conditions are similar to the EU, and the remaining small proportion of 1.6 % from Asia. This means that we can largely be confident that the materials we buy in comply with our require- ments in terms of human rights and environmental standards. This is of great importance to us, because we do not have the capacity to carry out regular checks on sustainability and compliance at all our suppliers’ sites. In addition, and regardless of their geographical location, the Girsberger Code of Conduct for Suppliers ensures that they meet the criteria for dealing responsibly with people and nature, complying with the legislation and preventing corruption. Apart from two still out- standing exceptions in Canada and Germany, the Girsberger Code of Conduct has been signed by all our A-suppliers and numerous B-suppliers. We carry out an environmental analysis of our suppliers to ensure that structures are in place that provide for systematic improvement and continuous development. For Girsberger, it is a matter of course that we continue to optimise our procurement for resource- and energy-efficiency, avoid exchange rate risks and, above all, do less damage to the environment by making transport routes shorter. The unexpected global pandemic of 2020 and all its implications have brought home to us just how right and relevant our procurement goals are. Inevitably, like everyone else, at the start of 2020 and during the rest of the year we had to cope with some issues relating to the availability of materials. Procurement practices Supplier assessment according to social and environmental criteria