Fresenius SE & Co. KGaA
Investor Relations & Sustainability
+49 (0) 6172 608-2485
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We require our suppliers and business partners to comply with ethical, social, ecological and human rights standards. To this end, they shall introduce processes to ensure compliance with applicable standards. The requirements for our direct suppliers, service providers and other partners are laid down in Codes of Conduct for business partners and suppliers and corresponding contractual clauses. If we suspect that rules of conduct have been or are being violated, we react accordingly. Depending on how serious the misconduct is, we may, for example, introduce additional control measures, such as audits or certifications. In the coming year, topics of the supply and value chain will be the focus of our activities.
The Codes of Conduct for business partners and suppliers take into account the respective business models of the business segments. The Codes of Conduct are used in purchasing contracts - as annexes or references. Fresenius Medical Care has embedded its expectations in its Global Supplier Code of Conduct. Fresenius SE & Co. KGaA, Fresenius Kabi and Fresenius Vamed have set out their requirements in Codes of Conduct for business partners and suppliers. Fresenius Helios defines its expectations of business partners in the respective contracts. The details of the codes, for example on the regulation of child and forced labor, or on fair working and employment conditions such as working hours and wages, can be found online.
Transparency in the supply chain is important for identifying and addressing human rights risks.
In 2020, Fresenius Medical Care launched their Global Supplier Code of Conduct, which replaces the previously used Sustainability Principles. The Global Supplier Code of Conduct further specifies their expectations to suppliers. It covers the areas of integrity and ethics, human rights and labor conditions, quality, occupational health and safety, and environmental protection. Fresenius Medical Care is gradually integrating it into their contracts with suppliers and internal guidelines and processes. In 2020, Fresenius Medical Care informed strategic suppliers about the new Global Supplier Code of Conduct and the standards it sets. More than 260 employees in procurement, as well as colleagues from departments such as Legal, Finance and Compliance, participated in internal training courses on the Supplier Code of Conduct. Training will continue in 2021 and beyond.
In the context of their Global Sustainability Program, Fresenius Medical Care launched an initiative to evaluate suppliers based on sustainability risks. This helps to cluster their supplier base according to their sustainability risks, monitor them more closely and take corresponding action. Critical suppliers will be asked to provide information about their sustainability performance, for instance in the form of a self-assessment. Fresenius Medical Care will use this to identify suppliers they want to work with in order to ensure compliance with their sustainability standards. Fresenius Medical Care has also started to monitor social media releases regarding suppliers to expose potential issues. By the end of 2020, the social media presence of more than 20% of their most important suppliers by relevant spend were screened.
In 2020, Fresenius Medical Care set themselves targets to further promote sustainability in the supply chain. As a next step, they are planning to roll out a global e-learning course on sustainable supplier management with the goal of reaching their procurement staff in all countries by the end of 2022.
Fresenius Kabi has identified strategic suppliers that the business segment monitors closely because of their importance to the business; this is managed by Fresenius Kabi's global strategic purchasing organization. Based on defined processes, Fresenius Kabi classifies strategic suppliers according to their risk and evaluates them regularly. The business segment also conducts supplier audits.
Since 2019, Fresenius Kabi assesses the aspects of occupational health and safety, environment, human rights, business ethics and sustainable procurement of strategic suppliers, which has been continued in 2020. This enables Fresenius Kabi to identify potential CSRCSR (Corporate Social Responsibility)CSR refers to the social responsibility of companies. Their operations can affect economic, social, and environmental conditions all over the world. risks. Subsequently, suppliers can be requested to implement appropriate measures to reduce their CSR risks. Fresenius Kabi is supported in its supplier evaluation by an external service provider that provides sustainability assessments for global supply chains.
At Fresenius Helios in Germany, strategically important suppliers are regularly evaluated based on standardized criteria and processes. The evaluation for 2020 will be conducted in 2021. The last assessment included evaluation of 162 suppliers with a total procurement volume of about €840 million. Evaluation criteria include quality of processes, IT-infrastructure and quality of operational and strategic cooperation. Besides this current focus, consideration of additional, mainly ecological and social aspects will be required in the future. The new supplier code of conduct, which will be implemented in 2021, will form the basis for this. In addition, procurement of Fresenius Helios in Germany will consider the group-wide unified risk assessment methodology on human rights for further evaluation of their suppliers to enable early identification of potential risks.
Fresenius Helios in Spain has developed a procedure for a general supplier assessment. In this procedure, supplier categories have been defined and detailed criteria for assessment and evaluation of the different groups have been developed. Software to perform supplier evaluation has been selected. Implementation of the project is planned over the next two years within Helios Spain.
At Fresenius Vamed all suppliers worldwide undergo a comprehensive business partner due diligence. With these measures we identify and review those suppliers with a risk or business profile requiring additional diligence under sustainability aspects based on specific criteria in all business segments. We continuously develop these measures further.