Components and raw materials currently make up more than 80 percent of the carbon footprint of the product manufacturing process of a wind turbine. As part of our sustainability strategy, Sustainability in Everything We Do, we are committed to reduce carbon emissions from our supply chain by 45 percent per MWh generated by 2030, and to produce zero-waste turbines by 2040. To achieve these goals, we depend on our business partners’ collaboration. Therefore, in the first quarter of 2022, we engaged with 48 strategic suppliers, covering nearly 50 percent of our procurement spend, to achieve substantial improvements in the areas of carbon footprint and circularity. The collaboration with these 48 suppliers is only the start and we will gradually increase the number of suppliers in scope.
The selected strategic suppliers are asked to commit to 100 percent renewable electricity, to set targets for reducing scope 1 and 2 carbon emissions, and to measure production waste for products delivered to Vestas. In 2022, we secured commitments from 46 of our strategic suppliers in setting emission reduction targets for their own operations and suppliers for reducing scope 3 emissions. At the end of 2022, we secured commitments from 46 of our strategic suppliers in setting emission reduction targets for their own operations and suppliers for reducing scope 3 emissions. While 40 strategic suppliers had officially contributed to our circularity commitments and had been awarded a Vestas Supplier Certificate of Circularity Commitment.
Responsible supply chain management
At Vestas, responsible supply chain management is a crucial aspect of our sustainability commitment. We firmly believe in upholding the Vestas Supplier Code of Conduct, which is an integral part of our Purchase Agreements. We expect all our suppliers to adhere to these principles and standards. Our dedication to sustainability extends to respecting human rights throughout our entire value chain standards.
To ensure that we meet our commitment to respecting human rights, we recognize the importance of being aware of the most salient human rights issues. In 2018, we underwent our first corporate-wide Human Rights Assessment (HRA), conducted by external sustainability experts from the organisation Business for Social Responsibility (BSR). Building upon this, we conducted our second HRA in 2022, which identified 15 human rights issues where Vestas could potentially have adverse impacts. Based upon the result of the HRA, we actively maintain and enhance our Conflict Minerals Programme. This initiative, guided by our Conflict Minerals Policy.
Since 2020, the Vestas Sustainable Procurement team has been integrated into the Global Procurement function to strengthen supplier collaboration and oversee the due diligence process on human rights. Furthermore, we have dedicated two specific social sustainability experts to our team as part of our commitment to implementing the 2022 HRA recommendations. This addition ensures improved oversight of human rights issues within our supply chain, further reinforcing our commitment to responsible practices.
Our supplier selection process
Our supplier onboarding process is part of our overall Supplier assessment framework. This is the framework for our due diligence which involves, supplier business assessment (SBA), and high-risk identification models. We then monitor the status and progress by conducting regular supplier reviews using supplier scorecards to record dialogues and track progress.
Through a robust qualification and onboarding process, we continuously strive to enhance our sustainability performance and mitigate risks. The supplier onboarding process consists of the following steps:
- Pre-screening: All suppliers undergo a sanction and business ethics screening.
- Self-Assessment: Suppliers complete a Supplier Business Assessment (SBA), which includes topics from the Supplier Code of Conduct. A satisfactory assessment score allows suppliers to proceed to the next step.
- On-site Assessment: Suppliers undergo on-site assessment based on risk evaluation.
Scenarios for determining supplier assessment scores
The process concludes with the following scenarios and applying a minimum weight in the criteria for supplier selection and contract awarding.
At Vestas, fostering dialogue and engagement is integral to our supplier relationships, whether they are direct or indirect suppliers. We believe in actively addressing any non-conformities identified during supplier assessments and mitigating their negative impact. Each non-conformity is followed up with a corrective action plan aimed at improving supplier practices. Our collaborative approach involves regular communication, monitoring progress, and offering assistance to facilitate their improvement journey. By working together, we strive to establish a sustainable supply chain that upholds the highest standards of social and environmental responsibility, ensuring a positive and responsible impact on our stakeholders and the planet.
Supplier assessment and development results in 2022
Examples of Vestas suppliers
Vestas works with thousands of global suppliers. We continually strive to create a resilient and sustainable supply chain to ensure Vestas sustains its leadership position in the transition towards a world powered by renewable energy. The listed 3 companies are some of the largest suppliers that we work with.
- TPI Composites Inc
- DSV Panalpina A/S
- Gestamp Automocion S.A.