The construction and development sector are characterized by long and complex supply chains. Skanska has a supply chain consisting of suppliers of goods and materials, along with a variety of service providers including professional consultants and sub-contractors, performing work on project sites. The construction sector is mainly regional, and the contractors stretch from large corporations to one-person business.
It is important that Skanska’s ethical standards also extend to the supply chain insofar as this is within Skanska’s control. Skanska works with more than 300,000 suppliers across the Group, which means it is vital that business processes are robust enough to ensure that both local laws ad the Code of Conduct are upheld.
Extraction of raw materials for large volume products such as concrete (cement, sand and gravel) and ferrous/non-ferrous metals for reinforcement and other components of structures can have significant negative sustainability impacts at their sites of extraction and production. Significant opportunities therefore exist to improve the sourcing and use of virgin materials and their replacement by other suitable, more sustainable, alternatives, such as reused or recycled materials.
Skanska sees this as an essential and efficient business practice that we are integrating into the way we work. The purpose is to generate benefits to our customers, Skanska and society, while maximizing resource efficiency and minimizing damage to the environment, meeting our ethical, human rights and employment standards and promoting diversity and equality throughout the supply chain. Our Supplier Code of Conduct is used across all business units when signing agreements with suppliers.
The process to ensure that our suppliers and supply chain are in line with our sustainability requirements differs slightly country by country.
The first line of defense is to endeavor to do business with third parties who also share Skanska’s values. The Group carries out a risk-based assessment followed by deeper due diligence for certain categories of supplier or if the initial assessment indicates this is necessary. Mandatory due diligence is carried out for intermediaries, joint venture partners and sellers or buyers of land or real estate assets.
Since 2018 the screening process has included checking relevant sanctions lists. In 2019 an automated process came into operation, that uses a global database to check all active suppliers, according to the Group’s sanctions procedure, every 24 hours.
Contracts and Supplier Code of Conduct
Once Skanska is ready to go forward with a supplier, it is ensured that the terms agree will offer the opportunity for continuous monitoring and audit if appropriate. An option to terminate the agreement in the event of major breaches, such as corruption or inclusion on the sanctions list, is usually included.
The Skanska Code of Conduct and the Supplier Code integrate human rights aspects. Skanska is working to be more specific about the rights which are impacted by the Group’s business and to ensure Skanska promotes and protects them throughout the supply chain.
Workers’ rights are particularly significant, and Skanska aims to ensure that conditions are fair at all the workplaces. Skanska has a zero tolerance towards any form of human trafficking, forced or child labor ad is vigilant to ensure that this doesn’t not affect anyone working on the sites.