Responsible sourcing

We manage our supply chain through our two business units: Microbial Control Solutions (MCS) and Nutrition, Care and Environmental (NCE). Many of the materials we procure are site and product specific. However, common approaches are used across both. We prioritize procuring goods that are produced under environmentally and socially responsible conditions following all applicable international standards and regulations. To ensure our suppliers are aligned with our values and ambitions, we conduct supplier screenings and assessments. 

Additionally, we comply with regionally specific requirements, such as the UK Modern Slavery Act  Statement,  California Transparency In Supply Chains Act Statement and the Swiss Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour. 

Our procured materials contribute to our GHG emissions footprint reductions. We prioritize selecting more environmentally friendly materials and transportation methods, like vessels and rail instead of airfreight. We ensure workers at our supplier sites are treated safely, ethically and with respect, in line with our corporate values of Safety and Health, Ethical Behavior and Respect for People and Planet.

To achieve more sustainable supply chains across the business, we have set a goal for 100% of our key suppliers to complete a comprehensive environmental, social and governance (ESG) assessment by 2030.²¹

In 2024, we launched our EcoArx program that aims to drive our responsible sourcing activities throughout our supply chain. The name EcoArx comes from a combination of the prefix 'Eco,' which underscores our dedication to both 'Ecology' and 'Economics' - two key aspects of sustainability, while also nodding to our collaboration with EcoVadis - and 'Arx' , which is our pledge to uphold the integrity of Arxada's supply chain.

The EcoArx program is grounded in Arxada's sustainability strategy, which is seamlessly integrated across the entire enterprise. It builds off the foundation of our updated Supplier Code of Conduct, which we ask all our suppliers to sign and commit to, and the sustainable Procurement policy which was newly rolled out across the organization.  We trained more than 50 colleagues in the EcoArx program, the supplier risk assessment tool and have set targets for the Procurement organization to drive our responsible sourcing strategy.

The implementation of the EcoArx program led to a nearly 50% improvement in Arxada’s score in the Sustainable Procurement category of the recent EcoVadis assessment, playing a key role in securing the EcoVadis Silver Medal in 2025.

 

Supplier screening & assessment

Prior to entering into a contractual agreement with a supplier, we conduct supplier screening and assessments that consider risk factors such as financial, geopolitical, and environmental risk. In addition to regularly reviewing this risk assessment, we ask our suppliers to complete an EcoVadis questionnaire. This provides a thorough overview of a supplier's corporate social responsibility performance and enables us to better understand the sustainability and risk performance of our value chain. 

 

Our EcoArx responsible sourcing program provides greater insight into the activities of our suppliers, and we are committed to making sustainability improvements within our and our suppliers' operations.

Supplier Code of Conduct

This year, we refreshed our Supplier Code of Conduct (SCoC) in alignment with industry best practice and in addition to English and Chinese, our SCoC is now available in Spanish, Thai, German and Czech. The new Supplier Code of Conduct includes the following updates: 

The code emphasizes our commitment to following the key principles of the United Nations Global Compact and the International Labor Organization (ILO) Forced Labor Standards, the U.S Foreign Corrupt Practices Act, the UK Bribery Act and all applicable anti-bribery and anti-trust laws. Through our sustainability assessments and through use of EcoVadis IQ Plus, we are monitoring our suppliers' adherence to our Supplier Code of Conduct. When non-compliance with our Supplier Code of Conduct is apparent, we have the right to request corrective action and reserve the right to terminate our agreement with that supplier.

Currently 48% of our spend is covered with a Supplier Code of Conduct with a target to achieve 80% coverage by the end of 2025.

Looking forward to 2025

We are excited to continue the implementation of EcoArx and to further embed sustainability in our procurement practices. This will include capability building with our procurement teams and our suppliers, continuous improvement of our supplier management processes and formalizing contractual obligations and improvements with our suppliers to support and enable our sustainable procurement strategy. 

We recognize that addressing Scope 3 emissions is essential to achieving our climate goals and driving systemic change in the chemical industry. Therefore, we are committed to enhancing transparency across our value chain and reducing our Scope 3 emissions by systematically mapping and quantifying emissions from both upstream suppliers and downstream product use. This will help us continue to improve our responsible sourcing efforts across Arxada and our supply chain. 

^{[23] Our key suppliers make up approximately 20% of our supplier base and account for approximately 80% of our spend. With a comprehensive ESG assessment, we intend an evaluation that goes beyond legal and mandatory obligations.}