Supply Chain
Responsible Sourcing and Partnership
As part of our Procurement strategy, our approach to supply chain management places sustainability at the heart of all our activities. We go beyond just acquiring raw materials and goods, working diligently to ensure that the process respects both the environment and the people involved. We prioritise fair working conditions, health and safety practices, ethical business conduct, and responsible sourcing. Our vision of a sustainable future also includes promoting recycling, incorporating sustainable materials, and aggressively reducing our CO₂ footprint across our entire supply chain.
Our approach to supply chain management
The vision of a sustainable future isn’t ours alone; we encourage our partners to share our goals as well as actively support and contribute to them. We’re proud of our network of suppliers, who are truly innovative in their approach to sustainability. For example, during waste procurement processes, we prioritise partners who align with the waste hierarchy, emphasising prevention as the top priority and aiming to eliminate the use of landfills – mirroring the practices at our own production facilities. This shared vision also helps us to build long-term and transparent relationships with our suppliers.
Our approach to supply chain management
The vision of a sustainable future isn’t ours alone; we encourage our partners to share our goals as well as actively support and contribute to them. We’re proud of our network of suppliers, who are truly innovative in their approach to sustainability. For example, during waste procurement processes, we prioritise partners who align with the waste hierarchy, emphasising prevention as the top priority and aiming to eliminate the use of landfills – mirroring the practices at our own production facilities. This shared vision also helps us to build long-term and transparent relationships with our suppliers.
Curiosity Fuel: Sustainably innovative coffee
At Škoda Auto, we look at things from multiples angles, often taking unconventional approaches to our work. This philosophy also guides our sustainability strategy, where we believe small steps can lead to big changes. One example is our new coffee called Curiosity Fuel, which has been enjoyed by our employees – from assembly line workers to the Board of Management – since October 2023. We have full control over the supply chain, which allows us to streamline the process while also supporting local businesses and communities – from India and Tanzania to the Czech Republic. What’s more, we don’t discard the coffee husks; instead, we are exploring their use in the leather tanning process for some of our models.
How our suppliers contribute to a greener future
For instance, LG utilises renewable energy in manufacturing batteries for our Enyaq. Sage Automotive Interiors and Aunde have creatively developed upholstery made from 85% recycled PET bottles. We’ve also partnered with Bridgestone, who provide us with light-weight low-rolling-resistance tyres. Demonstrating remarkable ingenuity, the Trèves Group transforms old mattresses into acoustic insulation for our vehicles. ArcelorMittal provides us with XCarb-certified steel. This collaboration led to the use of 5,295 metric tonnes of green steel in 2022, saving an impressive 11,181 metric tonnes of CO₂. This marked a threefold improvement from 2021, a testament to our collective dedication to environmental responsibility.
How our suppliers contribute to a greener future
For instance, LG utilises renewable energy in manufacturing batteries for our Enyaq. Sage Automotive Interiors and Aunde have creatively developed upholstery made from 85% recycled PET bottles. We’ve also partnered with Bridgestone, who provide us with light-weight low-rolling-resistance tyres. Demonstrating remarkable ingenuity, the Trèves Group transforms old mattresses into acoustic insulation for our vehicles. ArcelorMittal provides us with XCarb-certified steel. This collaboration led to the use of 5,295 metric tonnes of green steel in 2022, saving an impressive 11,181 metric tonnes of CO₂. This marked a threefold improvement from 2021, a testament to our collective dedication to environmental responsibility.
Holding our partners to high standards
Our partnership with suppliers isn’t merely transactional; we enforce high standards through our Code of Conduct for Business Partners. This lays out the Volkswagen Group’s sustainability requirements for all our business relations and explicitly defines our expectations concerning human rights, health and safety, environmental protection, responsible sourcing, and the fight against corruption. Compliance isn’t optional – it is contractually binding, a commitment that our business partners make as they register in our supplier database and reconfirm when signing an agreement.
Rigorous supplier selection criteria
Under our Next Level – Škoda Strategy 2030, we’re realigning our Procurement, putting recycled and recyclable raw materials front and centre. To ensure the components we use meet stringent criteria, we carefully select suppliers based on the Volkswagen Group’s Sustainability Rating (S-Rating), which encompasses environmental, social and compliance aspects. Together, we’re committed to circular economy principles that enable us to consistently reduce the environmental impact of our business activities.
Rigorous supplier selection criteria
Under our Next Level – Škoda Strategy 2030, we’re realigning our Procurement, putting recycled and recyclable raw materials front and centre. To ensure the components we use meet stringent criteria, we carefully select suppliers based on the Volkswagen Group’s Sustainability Rating (S-Rating), which encompasses environmental, social and compliance aspects. Together, we’re committed to circular economy principles that enable us to consistently reduce the environmental impact of our business activities.
Sustainability Rating
The S-Rating is divided into two sections: the Environmental and Social rating, which focuses on the production site, and the Compliance rating, which assesses the business location. We use three main tools to determine these ratings: the self-assessment questionnaire (SAQ), audits, and Business Partners Due Diligence (BPDD).
Self-Assessment Questionnaire (SAQ)
Potential partners must submit key company details and demonstrate alignment with our values and the Volkswagen Group’s minimum requirements, including our Code of Conduct for Business Partners. Evidence of commitment to human rights, working conditions, and environmental protection is essential.
Audit
If a company’s SAQ suggests a higher sustainability risk, we conduct an On-Site Check (OSC) or audit at their premises. The OSC reviews the same areas as the SAQ but goes a step further by inspecting how these policies are applied in practice.
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Business Partners Due Diligence (BPDD)
The BPDD is designed to identify and minimise potential risks like corruption or money laundering at the earliest stage possible. This critical compliance check is carried out exclusively by the Volkswagen Group, ensuring thoroughness and consistency across all our partnerships.
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S-Rating results
Achieving a positive S-Rating is a prerequisite for any business hoping to partner with us. Several factors, including the number of employees, the company’s location, and the country’s risk profile, contribute to this rating. It’s important to remember, though, that the S-Rating isn’t a one-time achievement; it’s a continuous process.
S-Rating is valid for a limited time
It should be noted, that the evaluation is not valid indefinitely. New versions of the SAQ are issued regularly, uploaded certificates have only limited validity, new requirements are introduced… A business partner may (but does not have to) lose a positive rating even because an on-site inspection has expired. That’s why the S-Rating is a never-ending story – for us, and for our business partners.
S-Rating is valid for a limited time
It should be noted, that the evaluation is not valid indefinitely. New versions of the SAQ are issued regularly, uploaded certificates have only limited validity, new requirements are introduced… A business partner may (but does not have to) lose a positive rating even because an on-site inspection has expired. That’s why the S-Rating is a never-ending story – for us, and for our business partners.
Human rights due diligence
Our sustainable supplier management prioritises safeguarding people vulnerable to human rights violations. Steered by the UN Guiding Principles on Business and Human Rights, our approach focuses on ongoing risk assessment and introducing preventive measures. To address serious human rights and environmental challenges, we’ve established a dedicated system that pinpoints high-risk supply chains based on our internal evaluations.