We expect our suppliers, sub-suppliers and distributors to implement sustainable business practices and to be transparent about their challenges. Choosing suppliers with good sustainability practices is a way for us to positively influence our supply chain.
Telia Company relies on a vast number of suppliers and sub-suppliers, many of which are located in countries or industries with challenges in upholding ethical business practices, human and labor rights, health and safety and environmental protection. Despite solid responsible sourcing practices, the risk remains that suppliers and sub-suppliers do not comply with our sustainability, security and quality requirements.
Responsible sourcing starts with setting the expectations for our suppliers, primarily through the Supplier Code of Conduct and Supplier Security Directive. We use a risk-based process where suppliers are categorized based on, for example, the region where the company is registered, the type of product or service provided or how critical the supplier is to our operations. This categorization supports in designing appropriate risk mitigation activities such as further due diligence steps (supplier self-assessment, information research and risk analysis) before contracting, and in conducting on-site audits to evaluate whether a supplier’s sustainability performance is sufficient. All due diligence steps are performed in our due diligence platform.
The objective of the due diligence process is to ensure that Telia only engages with suppliers who meet our standards and require the same from their own suppliers.
As part of the due diligence process, an up-front risk assessment is carried out to identify high-risk triggers. If risks are deemed high, the supplier undergoes an in-depth due diligence assessment consisting of a self-assessment against the Supplier Code of Conduct and other relevant requirements as well as screening covering, for example, ultimate beneficial ownership (UBO) and sanctions. Results from the in-depth due diligence assessment can result in high, medium and low risk grading. Potential high risks and serious violations identified in the due diligence process, for example those that relate to labor rights, or other human rights, could trigger a supplier audit.
Due diligence coverage
More information can be found on pages 103-104 in the 2021 Annual and Sustainability Report