05 June 2008
Australian bank Westpac has told its vendors they will be removed from its supply chain if they don't comply with a new code of practice.
Westpac's Sustainable Supply Chain Management Code of Conduct will establish strict environmental, social and ethical standards for more than 10,000 suppliers. It claims to be the first Australian bank to launch such a scheme.
Lyn Lennard, general manager, group and risk services, said: "The strength and integrity of our supply chain is a critical factor in Westpac's overall sustainability performance. It's important that we set out clearly our minimum standards and expectations."
The 22 sustainability targets include standards on the environment, labour laws and health and safety in the workplace. It also requires suppliers to monitor their own vendors and strengthen internal corporate governance, ensuring processes are ethical and transparent.
The bank has also introduced "high impact" sustainability targets for other areas of the supply chain. Commodities such as paper and office coffee will be subject to purchasing policies to ensure they are sourced sustainably. Lower pollution cars will also be used for its fleet.
Philip Emsley, director and chief operating officer of carbon management consultancy Green 2020, said the initiative is a positive step for the environment.
He added: "Suppliers will react in a three-year cycle. First they will be angry, then they will resent the changes and finally they will accept them."