Allianz Insurance is to “prioritise” suppliers with good environmental, social and governance (ESG) practices under a new sustainable procurement charter.
For future tender assessments Allianz Insurance will apply a minimum weighting of 10% to ESG factors to favour suppliers that have embedded sustainable and ethical practices within their organisation. It added it would also provide support and education to suppliers who are invested in ESG.
The company said the charter would encourage suppliers to adopt and develop practices including reducing carbon emissions, recycling waste, using renewable energy and considering biodiversity elements for buildings.
The charter will apply to suppliers who have a contractual relationship with Allianz in the UK and have a spend profile of more than £20,000.
Allianz also wants suppliers to set themselves social targets, such as paying all employees the national living wage, reducing pay gaps and providing fair opportunities to everyone.
Mechanisms for whistleblowing and ensuring all tendering activities are open and transparent will also be encouraged. Suppliers should be able to track their performance in a reportable format, which could then be used to drive better outcomes, Allianz said.
The company said although the targets would not be binding, suppliers were encouraged to embed them in their operations and supply chain. The charter would act as guidance for internal buyers and suppliers.
Allianz said it had significantly reduced the environmental impact of its operations in the UK, cutting waste by 89%, CO2 emissions by 79%, paper consumption by 61%, and water consumption by 29%, between 2010 and 2020.
Oleh Melnyk, head of procurement and property at Allianz Insurance, said: “We need to act against climate change and we can’t act alone, we need to involve our supplier partners.
“This charter will help develop a shared mindset with them, creating a fairer and more transparent environment. We want to be market leaders in sustainable procurement, that’s part of our ESG ambitions.”
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