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Audi faurecia tesla_agc_final

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Sustainability in Supply Chain Management
Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A
tesal motors and AGC automotive
all the information used is legally available

Published in: Engineering
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Audi faurecia tesla_agc_final

  1. 1. Sustainability in Supply Chain Management Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. Anette Odersky & Jan Groschopp Sashank Nepal & Mahesh Devarala December 2015
  2. 2. Fußzeile auf Masterfolie eingeben 1. Outline 2. Sustainability aspects published by companies 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.1 Sources of both companies for the comparison of sustainability aspects 3.2 Comparison of the Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.) 3.3 Comparison of the Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.) 4. Conclusion of the Comparison 4.1 Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.) 4.2 Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.) 5. Prospect 6. Sustainability aspects of Tesla Motors 6.1 Economic Sustainability aspects of Tesla 6.2 Environmental Sustainability aspects of Tesla 6.3 Social Sustainability aspects of Tesla 6.4 Code of Conduct – Tesla Motors 7. Sustainability aspects of AGC Automotive 7.1 Economic Sustainability aspects of AGC Auto 7.2 Environmental Sustainability aspects of AGC Auto 7.3 Social Sustainability aspects of AGC Auto 8. Sources 1. Outline Anette Odersky & Jan Groschopp Sashank Nepal & Mahesh Devarala December 2015
  3. 3. Fußzeile auf Masterfolie eingeben3 2. Sustainability aspects published by companies The three dimensions of the Triple Bottom Line form the basis for sustainable acting Code of Conduct / Ethics The Code of Conduct/ Ethics is a definition of rules and guidelines set by a group or organization for internal and external business relations. Economic Social Environmental Supplier Code of Conduct/ Code of Sourcing In a near future the sustainability performance of OEM suppliers will become more important. The Supplier Code of Conduct/ Code of Sourcing is a definition of rules and guidelines set by a group or organization for their suppliers. Anette Odersky December 2015
  4. 4. Fußzeile auf Masterfolie eingeben4 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. Audi AG Faurecia S.A. Supplier Code of Conduct Supplier Code of Sourcing Code of EthicsCode of Conduct Internal policies External requirements for suppliers 3.1 Sources of both companies for the comparison of sustainability aspects Anette Odersky December 2015
  5. 5. Fußzeile auf Masterfolie eingeben 3.2 Comparison of the Code of Conduct (Audi AG) and Code Of Ethics (Faurecia S.A) 5 Social aspects Audi AG Faurecia S.A. Acting in accordance with the applicable requirements of the ILO ✓ ✓ Child labor is prohibited ✓ ✓ Equal treatment for ethnicity, skin color, gender, disability, ideology, faith, nationality, sexual orientation, social background, or political conviction ✓ ✓ No discrimination ✓ ✓ Right to form unions/associations and labor representations ✓ ✓ Providing occupational safety and health protection ✓ ✓ Elimination of forced labour ✓ ✓ Global Compact ✓ ✓ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. Anette Odersky December 2015
  6. 6. Fußzeile auf Masterfolie eingeben6 Social aspects Audi AG Faurecia S.A. Insertion and development of training ✗ ✓ Respect for the law / regulations ✗ ✓ Professional development and employability ✗ ✓ Freedom of expression and social dialogue ✗ ✓ Remuneration and benefits paid must at least be the minimum national legal standard ✓ ✗ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.2 Comparison of the Code of Conduct (Audi AG) and Code Of Ethics (Faurecia S.A) Anette Odersky December 2015
  7. 7. Fußzeile auf Masterfolie eingeben7 Environmental aspects Audi AG Faurecia S.A. Reduce waste and polluting products, conserve natural resources and recycle material ✗ ✓ Limit energy consumption, reduce greenhouse gases ✗ ✓ Implement technology capable of reducing polluting emissions ✗ ✓ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.2 Comparison of the Code of Conduct (Audi AG) and Code Of Ethics (Faurecia S.A) Anette Odersky December 2015
  8. 8. Fußzeile auf Masterfolie eingeben8 Social aspects expected to be fulfilled by suppliers Audi AG Faurecia S.A. Freedom of association (trade unions and employee representations) ✓ ✓ No discrimination (employees are chosen based on their qualifications) ✓ ✓ No forced labor (not bonded and involuntarily) ✓ ✓ No child labor (minimum age according to national regulations) ✓ ✓ Compensation & Benefits (based on legal requirements ensuring an appropriate standard of living) ✓ ✓ Working hours (according to ILO and national legal standards) ✓ ✓ Occupational health and safety (according to national standards for safe and hygienic work conditions) ✓ ✓ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.3 Comparison of the Supplier Code of Conduct (Audi AG&VW) and Code Of Sourcing (Faurecia S.A) Jan Groschopp December 2015
  9. 9. Fußzeile auf Masterfolie eingeben9 Economical aspects expected to be fulfilled by suppliers Audi AG Faurecia S.A. Any kind of corrupt action or behavior causing damage to the company is strictly prohibited ✓ ✓ Personal responsibility for ensuring a fair and genuine competition in compliance with competition and trust laws (fair business practices) ✓ ✓ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.3 Comparison of the Supplier Code of Conduct (Audi AG&VW) and Code Of Sourcing (Faurecia S.A) Jan Groschopp December 2015
  10. 10. Fußzeile auf Masterfolie eingeben10 Environmental aspects expected to be fulfilled by suppliers Audi AG Faurecia S.A. Creation, implementation and application of environmental management systems for all suppliers´ production sites (laws/ regulations) ✓ ✓ Main suppliers should be certified with an environ- mental management system in accordance with international standards such as ISO 14001 or EMAS ✓* ✓* Active measurement and dealing with environmental challenges, e.g. the development and market entry of environmental friendly technologies ✓ ✓ Reduction of raw material and energy consumption ✓ ✓ Expansion of reusable materials and recycling activities as well as the use of renewable energy ✓ ✓ Striving to minimize the environmental impact of the suppliers´ products during the whole life cycle, e.g. avoidance of waste ✓ ✓ New technologies to reduce CO2 emissions ✓ ✓ *For detailed information, please see the conclusion* 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.3 Comparison of the Supplier Code of Conduct (Audi AG&VW) and Code Of Sourcing (Faurecia S.A) Jan Groschopp December 2015
  11. 11. Fußzeile auf Masterfolie eingeben11 Environmental aspects expected to be fulfilled by suppliers Audi AG Faurecia S.A. Logistic strategies that minimize environmental impacts ✓ ✓ Avoiding damage to the environment and the health of employees ✓ ✗ Training employees with regards to the environmental protection ✓ ✗ Purchased products must not contain any material or substance prohibited by the legislation or regulations applicable in the suppliers’ countries ✗ ✓ Suppliers must address the European REACH procedures or national equivalents such as the US TSCA (Toxic Substances Control Act) ✗ ✓ Disclosure agreements on the use of certain substances and materials for regulations compliance purpose ✗ ✓ 3. Identification of similarities and differences within the sustainability structures of Audi AG and Faurecia S.A. 3.3 Comparison of the Supplier Code of Conduct (Audi AG&VW) and Code Of Sourcing (Faurecia S.A) Jan Groschopp December 2015
  12. 12. Fußzeile auf Masterfolie eingeben12 4. Conclusion of the comparison 4.1 Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.)  Similarities • A lot of social aspects are similar, for example the regulations for prohibited discrimination, child labor or forced labor • Both companies are guided by the ILO’s prescriptions and also use the Global Compact as their basis  Differences • Faurecia has some extra ethical aspects in its Code of Ethics: It has implemented a note about insertion and development of training for kljlltheir employees as well as the respect for the law and other regulations. Furthermore the topic about freedom of expression & social dialogue and klillprofessional development and employability is enclosed • Audi has added regulations for the remuneration of their employees. This regulation of remuneration must at least fulfill the country’s standard • One interesting fact is, that Audi only has social aspects in its Code of Conduct (environmental and economic are not included) Anette Odersky December 2015
  13. 13. Fußzeile auf Masterfolie eingeben  Similarities • All social and economical requirements to suppliers are similar, especially regulations regarding discrimination, corrupt action as well as child & forced labor • Similar environmental requirements for suppliers have been identified too, for example the implementation of environmental management systems or the reduction of raw material and energy consumption  Differences • While Audi is expecting its main suppliers to be certified under ISO 14001 and/ or EMAS, Faurecia is looking for an ISO 14001 or equal certification for all suppliers • The importance of the environmental awareness of the supplier’s employees is emphasized by Audi in its Supplier Code of Conduct. Training sessions in the field of environmental protection sharpen the employees’ senses regarding the reduction of damage to the environment as well as to their own health. • Faurecia S.A. as a supplier to the OEM’s is mainly focused on the compliance of international material standards - especially ensuring that the procurement processes and the use of certain substances are transparent and in compliance with the law 13 4. Conclusion of the comparison 4.2 Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.) Jan Groschopp December 2015
  14. 14. Fußzeile auf Masterfolie eingeben14 All Audi plants are certified under EMAS and ISO 50001 (energy management system) and furthermore two plants are certified under ISO 14001 Special training for Audi employees regarding environmental requirements 40 % reduction of CO2 emissions is the goal that Audi has set for its Ingolstadt and Neckarsulm plants by 2020 compared to 2010 Corporate CO2 footprint certification in accordance with ISO 14064 standard Acquiring more renewable energy from huge photovoltaic systems on the roof of Audi plants (already implemented at the Audi Brussels plant) Cooperation with non-profit organizations such as “Lebenshilfe” which employs handicapped people producing shock absorbers for Audi AG Ingolstadt Jan Groschopp December 2015 5. Prospect  What measures in the area of sustainability and CR have already been taken by Faurecia as there is no information available yet?  If Faurecia is already working on a similar concept – there should be a motivation to continue Corporate Responsibility Report of Audi AG – an orientation guide for Faurecia S.A.? • On a voluntarily basis Audi AG is representing its work in the area of Corporate Responsibility to external and internal stakeholders as well as the interested public • The CR Report contains concrete measures and goals:
  15. 15. Fußzeile auf Masterfolie eingeben 6. Tesla Motors & AGC Automotive • Tesla’s Model S uses over 3,000 purchased parts that are sourced globally from over 350 suppliers. • Tesla does not produce a standard sustainability report; instead, they outline their sustainability standards for legal compliance on their legal webpage. Sashank Nepal & Mahesh Devalara 15 • AGC Automotive group is a Tier 1 supplier of windshields to Tesla Motors. • The AGC group provides a Corporate Social Responsibility report available here. Sashank Nepal December, 2015
  16. 16. Fußzeile auf Masterfolie eingeben 6.1 Economic Sustainability – TESLA MOTORS 16 Areas of Focus Description Key Points Innovation Tesla’s primary focus is on R&D as it aims to be the industry leader in the production of Electric Vehicles to position itself securely for the future. See notes. Consumer cost Ensure that consumers are continuously able to save on yearly costs. No dependency on fuel, free solar- powered charging stations, battery producing Gigafactory. See notes. Competition Tesla’s strategies to remain competitive in the high-end and medium priced industry. Reduce costs, improve production flows, innovate now to have competitive advantage in the future. Capital Funding Tesla has raised $5.3 Billion in equity and debt since 2010, and on track to gross $5.5 Billion in revenues in 2015, up 54% from 2014. Invested capital allows Tesla to innovate new designs and remain competitive. Strategies for present and future economic viability Sashank Nepal December, 2015
  17. 17. Fußzeile auf Masterfolie eingeben 6.2 Environmental Sustainability – TESLA MOTORS 17 Areas of Focus Description Key Points Emissions Environmental impact Zero emissions vehicles, reduced noise pollution, reduction of fossil fuel use Product Life Cycle Recyclable materials are used in manufacturing Aluminum is used on body frames, non-toxic batteries Safety Industry leader in safety See notes Innovative strategies to reduce environmental harm Sashank Nepal December, 2015
  18. 18. Fußzeile auf Masterfolie eingeben 6.3 Social Sustainability – TESLA MOTORS 18 Areas of Focus Description Affected Parties Legal and Regulatory Compliance Compliance with all national and other applicable laws and regulations. Tesla Motors and all Tier 1 suppliers Conflict Minerals Ensure that procurement of materials do not benefit armed groups in the Democratic Republic of the Congo and surrounding countries. Tesla Motors, Tier 1 suppliers, smelters and refiners Human Rights Ensure that suppliers do not use slave labor to engage in human trafficking. Tesla Motors, Tier 1 suppliers, smelters and refiners Supplier Compliance Supply chain should address risks associated with conflict minerals, human trafficking, and slavery Tesla Motors, Tier 1 suppliers, smelters and refiners Focus on Conflict Minerals and Human Rights Sashank Nepal December, 2015
  19. 19. Fußzeile auf Masterfolie eingeben Due Diligence framework of Tesla Motors 19 Steps Due Diligence Performed Step 1 Establish strong company management systems Step 2 Identify and assess risk in the supply chain Step 3 Design and implement a strategy to respond to identify risks Step 4 Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain. Step 5 Report on supply chain due diligence. In 2014, Tesla Motors was able to successfully identify 112 high-risk suppliers who supply 3TG (Tantalum, Tin, Tungsten, and Gold) in their products and required all of those suppliers to perform and report on their supply chain due diligence through the use of CMRT. They were able to receive 100% supplier responses with over a thousand unique smelters and refiners reported comprehensively. See notes section for more information. Sashank Nepal December, 2015 6.3 Social Sustainability – TESLA MOTORS
  20. 20. Fußzeile auf Masterfolie eingeben 7. Code of Conduct – TESLA MOTORS 20 Sashank Nepal December, 2015 Code of Conduct Description Health and Safety The company strives to provide each employee with a safe and healthy work environment. Discrimination and Harassment Tesla is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. Competition and Fair Dealing Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Compliance Procedures Tesla has checks and balances in place to ensure prompt and consistent action against violations of this Code. Tesla’s Code of Conduct policy can be found here.
  21. 21. Fußzeile auf Masterfolie eingeben Economic Sustainability Turn around the performance of the glass business Minimize profitability decline in the display business Group-wide efforts to enhance efficiency 7.1 Economic Sustainability: AGC AUTOMOTIVE Generate sustainable results for future business growth Mahesh Devalara December, 2015
  22. 22. Fußzeile auf Masterfolie eingeben Area of focus Description Reduction of energy Reduction of energy used in-process of production through environmental related products. Prevention of pollution Prevent opportunities for pollution by making changes in the production process. CO2 emissions Aim of the company is to do a six-fold reduction by 2020 7.2 Environmental Sustainability: AGC AUTOMOTIVE Mahesh Devalara December, 2015
  23. 23. Fußzeile auf Masterfolie eingeben 7.3 Social Sustainability – AGC AUTOMOTIVE Social Sustainability Focus Areas Human resource development Occupational health and safety Creation of pleasant work environments Creating a Safer Work Place Globally developing the “Serious Accident Eradication Project” Establish subcommittees for occupational accidents on four themes that are particularly high risk across the group. Mahesh Devalara December, 2015
  24. 24. Fußzeile auf Masterfolie eingeben • http://www.audi-cr2014.de/uploads/files/500866230528072313-audi-code-of-conduct.pdf • http://sustainabilityreport2014.volkswagenag.com/sites/default/files/dd_online_link/en/22_SISR_brochure_englisch.pdf • http://www.faurecia.com/files/media/site_com_corporate/Suppliers/documents/faurecia_code_of_conduct_sourcing_supplychain.pdf. • http://www.faurecia.com/files/corporate/widgets/documents/2014_code_of_ethics-eng.pdf • https://www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx • https://www.nachhaltigkeit.info/artikel/nachhaltigkeitsberichte_1039.htm • http://www.audi.com/corporate/en/corporate-responsibility/corporate-responsibility-report.html • Tesla Motors – OECD Due Diligence Guidance For Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas • Tesla Motors – Forbes Magazine article on Tesla‘s Innovative Strategies • Tesla Motors – Conflict Minerals and Human Rights Policy • Tesla Motors – Code of Conduct • AGC Automotive – CSR Report 24 8. Sources Anette Odersky, Jan Groschopp, Sashank Nepal, Mahesh Devalara December 2015

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