Responsible purchasing: Renault Group's commitment
Building a responsible supply chain with our suppliers
Before selecting a supplier and committing to a contract, Renault Group pays attention to three criteria: performance, quality and corporate responsibility. For this reason, the role of extra-financial selection criteria (environmental, social and governance) in the supplier choice increases each year.
The Group strives to develop channels of communication with its suppliers that are constructive and built on trust, respect and transparency.
In recent years, Renault Group has implemented voluntarist policies in areas such as human rights, labour law, compliance, safety, quality and the environment.
In this way, in partnership with our suppliers, we are committing ourselves to a philosophy of shared progress. The “Renault Group Corporate Social Responsibility Guidelines for Suppliers” are communicated to all Renault Group Procurement staff worldwide, as well as suppliers. They are a reminder of Renault Group’s social and environmental commitments, and a formal statement of the expectations the Group has for its suppliers.
These guidelines are also accompanied by the “Global Framework Agreement”. This system encourages the implementation of continuous progress actions throughout the supply and manufacturing chain for our products.
Making progress together
1. Human rights and working conditions
2. Regulatory and ethical compliance
3. The environment
4. The implementation on the entire supply chain
Regular assessments are conducted by external organizations. Where our partners have not achieved the expected level, we require them to implement action plans to ensure that they adhere to our guiding principles.
Upstream of the supply chain, with reference to raw minerals, we are making daily changes to our risk prevention policy in respect of basic social rights. These risks are specific to this domain, and are based on OECD guidelines. This is all informed by a single goal: to play a part in building responsible supply chains. For instance, in 2018, in the interests of transparency, Renault has shared its cobalt supply chain.
In addition, since 2021, Renault Group has entered into several partnerships to ensure the traceability and decarbonisation of the raw materials for its electric batteries with Vulcan to secure low-carbon lithium in Germany; with Terrafame, in Finland, for low-carbon nickel sulphate; and with Managem Group, for a supply of low-carbon cobalt sulphate from Morocco. Renault Group is thus securing supplies closer to its ecosystem of low-carbon electric battery manufacturing in Europe.
Pillars of our responsible purchasing policy
a. SUPPLIER RISKS
Renault Group maps its supply chain (row 1) to enable it to rank its supplier sites in order of extra-financial risk. A programme whereby external firms audit high-risk supplier sites is then implemented.
b. MATERIAL RISKS
Renault Group produces a map of material risks based on CSR criteria. This makes it possible to prioritise medium-term actions to be undertaken for sensitive supply chains. Actions are taken in compliance with the OECD Guidelines on Due Diligence for Responsible Supply Chains of Minerals from Conflict and High Risk Areas: Third Edition.
Every year, more than 80% of Renault Group’s purchase demands are covered by an extra-financial assessment in the domains of working conditions and basic social rights, regulatory and ethical compliance, environment and responsible supply chain management.
An initial level of assessment is carried out at group level. Next, depending on the results, a second level of assessment is carried out at potentially high-risk supplier sites by certified external audit firms.
Following the on-site audits, particular attention is paid to following up corrective action plans implemented by the lowest-ranking suppliers, with mandatory re-auditing required.
Renault Group also joins forces with other companies to undertake collective initiatives to increase the impact of the actions undertaken. For example, Renault is a member of the “Responsible Minerals Initiative” (RMI, USA) and an active participant in working groups on Cobalt and Mica. In addition, Renault Group is a member of the Child Labor Platform (CLP) of the ILO (International Labor Organization of the United Nations).
Our 2021 assessment
Since 2018, Renault Group has been conducting audits on certain suppliers, using independent external audit firms. These audits cover basic social rights, working conditions, the environment, business practices, etc., and their aim is to assess risks and prevent any serious breaches in these areas throughout its supply chain.
In the context of mitigating risks and prevent serious infringements, Renault Group has commissioned 102 social, environmental and ethics audits of supplier sites since 2018, performed by external companies in six countries: Algeria, China, India, Romania, Russia and Turkey.
Specific emphasis was given to the monitoring of corrective action plans put in place by the suppliers with the lowest scores, with mandatory re-auditing for these suppliers.
In 2021, Renault Group continued to monitor the progress of corrective actions taken by suppliers who obtained insufficient results in audits. However, the coronavirus pandemic has had many consequences on follow-up activities, including the cancellation of a new audit campaign.
Specifics work on cobalt / electronics batteries sector
As a result of its commitment to basic social rights, and in particular to the fight against child labour in its minerals and materials supply chains from high-risk countries, Renault Group has since 2017 been focusing its efforts on cobalt – a mineral used in electric batteries.
An audit firm specialising in this sector was mandated to conduct comprehensive mapping of its supply chain and also on-site audits of identified actors. So far, 17 audits have been conducted at each level of the supply chain, leading back as far as a number of small-scale mines in the Democratic Republic of Congo (DRC). No critical non-conformities have yet been identified, and tracking of corrective action plans is underway.
Based on the lessons learned from the audit campaign, Renault is updating its risk mapping starting from 2021. Since 2021, Renault has also set up working groups to rebuild its approach to risk management and audits. These actions will continue in 2022. In addition to these actions, Renault Group also initiated a strategy of direct partnership with key raw material suppliers for its battery supply chain in 2021.
Renault Group and Managem Group sign an agreement for a sustainable supply of Moroccan Cobalt. This cooperation guarantees a long-term traceability system for the supply chain of cobalt for batteries.
The Managem Group has met the ESG prerequisites (i.e. signature of CSR codes of conduct, assessment by a third-party assessor) and has committed to join the IRMA certification programme (Initiative for Responsible Mining Assurance) - one of the most demanding ESG certification standards for mines today. Renault Group has noted that certifications have already been implemented (Environmental standard (ISO 14001) and Health & Safety (45001)). Renault Group continues to apply its ESG Due Diligence for the Bou-Azzer Cobalt mine, Morocco - which will include a site audit - while keeping abreast of the actions already taken by the Managem Group. The ESG Due Diligence will be finalised before the planned start of industrial production of Managem Cobalt Sulfate for Renault Group's electric value chain in 2025.
“Responsible purchasing” Awards
Renault Group has been holding an annual awards programme since 2017. These awards recognise particularly high-performing suppliers in five priority areas for Renault, including Responsible Purchasing. In the last edition - in 2020 - three suppliers were awarded for their very good extra-financial performance: the French companies ALTEN GROUP and BONTAZ and the Romanian company SC COMPONENTE AUTO.
