Significant supplier requirements
We recognize that our social, ethical, and environmental impact is closely tied to the practices of our business partners. As international laws and regulations increasingly hold us accountable for non-compliant behavior within our supply chain, we believe it is essential to work collaboratively with sustainability due diligence and compliance.
Our significant suppliers are identified based on spend and geographical location, prioritizing high-risk markets. They are required to sign our Business Partner Criteria to confirm compliance with our Code of Conduct. To verify that their business practices meet our requirements, we invite key suppliers to conduct a third-party ESG assessment. For us this is a way to ensure responsible business conduct throughout our value chain.
This process relies on an external system which provides an initial risk mapping, considering the supplier’s line of business and geographical location. Additional evaluation of high-risk suppliers is prioritized and conducted either through the system and/or through onsite audits, covering topics such as environmental performance, human rights, ethical business conduct, and responsible procurement practices. We base our internal support guidance on the UN Global Compact’s recommendations and template.
We also work directly with our main suppliers to actively encourage them to improve their sustainability due diligence, for example when it comes to responsible sourcing of minerals.
Responsible sourcing of minerals
Mining and trading of certain raw materials can finance armed groups associated with human rights abuses, including forced labor, human trafficking, and/or child labor. Although we do not procure directly from smelters or refiners, parts of our supply chain do. For this reason, we take measures to detect and prevent the use of so called conflict minerals, even though we are not directly subject to the Dodd-Frank Act or EU Regulation 2017/821.
Our Business Partner Criteria require direct suppliers to commit to responsible sourcing of all minerals used in the components and products they sell to us. We investigate the responsible sourcing of minerals through a comprehensive program that covers tin, tantalum, tungsten, gold (3TG) and cobalt. We follow the Responsible Minerals Initiative’s (RMI) guidelines and use their standard reporting templates both to report on our own practices and when gathering information from our suppliers.
We recommend our suppliers to source from smelters verified by third parties like RMI’s Responsible Minerals Assurance Process (RMAP) and encourage them to improve their sustainability due diligence practices to safeguard a responsible supply chain.
We aim to be transparent with our efforts and if asked we provide customers with information about the smelters used in our supply chain and we collaborate with stakeholders where needed to further strengthen procedures.
Managing substances of concern
We maintain lists of substances that are either prohibited or must be declared due to their potential negative impact on people’s health or the environment. Prohibited substances are not allowed in our products or processes. Items containing declarable substances are avoided or replaced whenever possible. Compliance with these lists is part of our Business Partner Criteria which all significant business partners must sign and comply with. Substances of concern are controlled through our Prohibited and Declarable lists.
- Prohibited substances must not be included in any product or processes unless clearly exempted in the Prohibited and Declarable lists.
- Phase-out substances will soon be included in the Prohibited List and must be phased out.
- Declarable substances must be reported.
The above instructions apply to products we sell, to items delivered to us by business partners such as suppliers, contractors or subcontractors, as well as to production processes outsourced from us to someone else.
Different substances trigger different actions
Business partners must check and verify their compliance with our Prohibited and Declarable lists and take the following actions:
Managing PFAS
Also known as "forever chemicals", PFAS are widely used, long lasting substances which break down very slowly over time. Atlas Copco Group commits to comply with any legislation which apply to our products such as REACH, RoHS, and TSCA. For this purpose, we maintain lists of prohibited and declarable substances that are communicated to our suppliers.
Although certain groups of PFAS substances have already been phased out (for example PFOA and PFOS), the majority of PFAS have not yet been regulated. Nevertheless, regulations and restrictions on PFAS are currently being introduced in different countries with varying requirements and definitions.
Atlas Copco Group is committed to high standards in product safety and to continuously improve our environmental performance. We are therefore currently working with our suppliers to establish the usage of PFAS in our products with the details required for upcoming legislation and reporting requirements. We are also working with suppliers to find viable alternative materials to those containing PFAS.
