Responsible Procurement

Corporate Responsibility in purchasing

In fiscal year 2021, NORMA Group purchased goods and services worth EUR 481.5 million. It is ensured that aspects of CR are taken into account in this context. The purchasing department works on making contractual relationships with suppliers socially and environmentally compatible and ensures that human rights, labor and environmental standards are adhered to.

The purpose of the purchasing process is to ensure NORMA Group’s high quality standards and to reduce direct costs in order to achieve maximum value for the Company. The purchasing process is subject to risks with regard to negative impacts on environmental and social standards in the supply chain. For this reason, the purchasing process does not take only purely price factors into consideration, but also evaluates quality, logistics and supplier sustainability. ECONOMIC REPORT

Managing sustainability in purchasing is the responsibility of the global purchasing organization, which reports to the Chief Operating Officer. CORPORATE GOVERNANCE REPORT every team member of the purchasing organization contributes to it in the course of making sourcing and nomination decisions.

Supplier Code of Conduct forms the framework

NORMA Group expects its suppliers to conduct their business in compliance with laws, ethics and respect for human rights, as well as occupational safety and environmental standards.

For these reasons, the purchasing department has integrated social and ecological sustainability aspects into its processes and organization. One key example is the purchasing manual, which describes all essential processes and procedures used as a framework for the global organization. The basis for sustainable supplier relations is the SUPPLIER CODE OF CONDUCT This globally valid code of conduct outlines NORMA Group’s expectations for the sustainable management of its suppliers in the areas of human rights, occupational health and safety, the environment and business integrity. With regard to human rights, the Supplier Code of Conduct is based on regulations issued by the ILO, the Universal Declaration of Human Rights, the UN Global Compact and the standard SA8000. In the past fiscal year, the Supplier Code of Conduct - like the other compliance guidelines - was fundamentally revised.

The commitment to the Supplier Code of Conduct plays an important role in the normal purchasing processes. Only a supplier who signs the Supplier Code of Conduct can be classified as “preferred” within commodity group management. The number of “preferred” suppliers remained stable at 17 in 2021 compared to the previous year (2020: 18). The share of total production material sales increased in 2021 to 25 % compared to 21.9 % in 2020. Approval of the Supplier Code of Conduct is a binding criterion in the catalog of requirements when selecting new suppliers.

Sustainability in commodity management

An important way of supporting sustainability in purchasing is the introduction of a new Commodity Strategy Template. These strategy documents include Sustainability Fact Sheets as an analytical approach to assess sustainability throughout the supplier base. The Sustainability Fact Sheets include information on suppliers’ environmental and health and safety certificates (ISO 14001 and OHSAS 18001 or comparable standards). The fact sheets are in line with NORMA Group’s ENVIRONMENTAL STRATEGY. They quantify each commodity’s impact on greenhouse gas emissions and water consumption in the supply chain and show commodity managers direct improvement measures. The majority of all commodity strategies already contain this sustainability information.

Sustainability self-assessment for suppliers

In order to be able to better assess, compare and manage suppliers, NORMA Group uses Group-wide supplier scoring. In addition to the price, numerous other factors are also taken into account, such as quality, cost transparency and logistics services. One of the four pillars is ‘sustainability,’ in which environmental and occupational safety certifications are included in the score.

In 2021, the voluntary sustainability self-assessment again formed part of the supplier scoring. NORMA Group asked its suppliers for detailed information on social issues (freedom of association, grievance mechanisms and accidents), environmental issues (including CO2 emissions, water consumption and waste management) and compliance issues. The evaluation of the self-assessment showed that it was completed by 41.0 % of the suppliers included in the scoring. This was an increase of 9.0 percentage points compared to last year (2020: 32.0 %).

Excluding conflict minerals from the supply chain whenever possible

NORMA Group also purchases minor amounts of components that contain what are known as “3TG raw materials” – tin, tantalum, tungsten and gold in small quantities. These raw materials are particularly controversial in that a large part of the ore deposits lie in conflict regions (particularly those of the Democratic Republic of Congo), where they are partially mined and processed under serious violations of international law. NORMA Group aims to exclude these conflict minerals from its supply chains as far as possible. NORMA Group does not buy these minerals directly. However, they are partially included in components from suppliers. For example, small amounts of gold are used in urea lines, and some components are finished with a coating consisting of tin.

NORMA Group has therefore launched the ‘Conflict Minerals Roadmap,’ which aims to create maximum transparency within the supplier base. The NORMA Group purchasing organization is commited to the principles of the Responsible Minerals Initiative, including the use of due diligence processes provided by the initiative. The due diligence processes are based on the Conflict Minerals Reporting Template (CMRT) of the Responsible Minerals Initiative, which all relevant suppliers have to provide. The management of the CMRT is integrated into the Group-wide e-sourcing platform.

The Group purchasing organization has trained purchasers at all sites on the importance of the issues of conflict minerals and the potential risk related to the materials coming from suppliers who might be involved. In addition, NORMA Group ensures that 100% of affected suppliers have signed the Supplier Code of Conduct, which requires them to confirm that they cooperate with conducting due diligence on conflict minerals issues.

NORMA Group shares the information it receives with its customers as transparently as possible. Given the large number of products, suppliers and subcontractors, it is usually not possible with a reasonable amount of effort to make any detailed traceability statements as to which melting operation or mine the raw materials come from for a specific product for a particular customer.

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These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.