Outokumpu to develop its supplier monitoring and transparency in sourcing

Outokumpu to develop its supplier monitoring and transparency in sourcing

Outokumpu is taking actions to further develop the monitoring of its suppliers and to increase the transparency of its sourcing. After the report of the Finnish NGO Finnwatch in February, the company has also decided to audit Vale, one of its ferronickel suppliers.

”The Finnwatch report was an important reminder of the importance of responsibility throughout Outokumpu’s supply chain. As the leading provider of sustainable stainless steel, we have set high standards for our suppliers. It is essential for Outokumpu, our customers and the overall society that our raw materials are produced and procured in an ethical and responsible manner”, says Heikki Malinen, President and CEO of Outokumpu.

”We are committed to further review and develop our policies, terms and conditions as well as our actions from the perspective of social responsibility and human rights, including the UN Guiding Principles on Business and Human Rights.”

”To ensure that these requirements are met in practice, we are taking additional measures for monitoring our supply chain. In collaboration with industry sustainability experts representing our stakeholders, we are aiming to further develop the transparency of Outokumpu’s sourcing”, he continues.

An independent audit at the ferronickel supplier Vale’s operations in Brazil

After the Finnwatch report, Outokumpu and Vale management representatives have agreed on regular reviews of the situation. Outokumpu has emphasized the importance of complying with the company’s high standards and requirements set for its suppliers. Outokumpu has also decided to conduct an independent audit of Vale’s Onça Puma mine in Brazil as soon as the pandemic regulations allow a visit to the site.

Additional information:

Outokumpu will report the development steps of its supply chain monitoring and increased transparency in the future on the company website: www.outokumpu.com in section ”Sustainable supply chain” at www.outokumpu.com/en/sustainable-supply-chain

Corporate Communications, tel. +358 9 421 3840

Background information:

In 2020, Outokumpu had approx. 9,000 suppliers. Top20 suppliers covered 80% of the total direct material spending.

The Brazilian company Vale supplies ferronickel, which is a necessary alloying element for manufacturing certain grades of stainless steel. Ferronickel, that Outokumpu is purchasing externally, makes up a part of nickel in the production of stainless steel. The use of ferronickel is being reduced by increasing the amount of recycled metal, which was 93% in Outokumpu in 2020.

Requirements set on Outokumpu suppliers

All Outokumpu’s suppliers are expected to act according to applicable laws and regulations. They are also expected to comply with the company’s Code of Conduct or similar standards, sign general terms and conditions, and be able to clearly define, document, and share their supply and production control processes including material traceability.

Outokumpu monitors its suppliers through self-assessments, screenings, and audits. Results are discussed with suppliers and Outokumpu monitors the implementation of corrective actions. If the situation continues without progress, Outokumpu can discontinue purchasing from the supplier.

Outokumpu assesses continously its existing suppliers. If there is evidence of any kind of violation of the supplier requirements, the suppliers are requested to provide an improvement plan and evidence of improvement. If the situation continues without progress, Outokumpu can discontinue purchasing from the supplier.

In 2020, a supplier performance assessment was conducted for 103 of Outokumpu's key suppliers, covering almost 60% of key suppliers. Suppliers are assessed using the following criteria: technology, quality, supply, cost, health and safety, sustainability and environment, financial risk and social as well as ethical aspects. As a result, improvement opportunities and requirements were identified and communicated to suppliers.

Misconduct reporting channel SpeakUp

Outokumpu has a reporting channel for all kind of misconduct. Our SpeakUp channel is available on the company’s website all over the world and it covers also the suppliers’ activities. SpeakUp channel can be used confidentially and anonymously if allowed by the local laws and regulations.