Sustainability

The content and weighting of the corporate social and environmental responsibility criteria depends for instance on the nature of the object of procurement. The target for 2019 was that corporate social and/or environmental responsibility criteria should be applied in 50% of the joint procurements published by HUS Logistics. The outcome exceeded the target: these criteria were applied in 62% of invitations to tender for joint procurements in 2019.

We have increased dialog with our suppliers and raised sustainability as an important topic in market dialog contexts. In early 2019, HUS Logistics signed a contract with Finnwatch ry for collaboration in promoting socially responsible procurement. This was a pilot project where Finnwatch participated in the preparation of two invitations to tender by HUS Logistics and provided recommendations on how to integrate issues of corporate social responsibility into all public procurements undertaken by HUS Logistics. A report will be published on the results of this collaboration in spring 2020.

We continue to monitor compliance with sustainability criteria among other procurement indicators at operative meetings on procurement. We also report on the indicators to the strategic steering group for procurement. In autumn 2020, we will train all HUS Logistics procurement experts in the use of the new manual and tools. We will also continue to develop sustainability criteria in the various categories of HUS Logistics. Our reporting experiences will be leveraged in the sustainability group set up at HUS in 2020, where the HUS Logistics Development Manager in charge of sustainability is a member.

Human rights in countries where procurements are made

The supply chain for products procured by HUS Logistics is global and includes several ‘risk countries’ (BSCI classification). We evaluate the human rights risks involved in each procurement at the market survey stage as we explore where the products to be procured are produced and how those countries rank on the BSCI list of risk countries. We also discuss the market situation and identified risks with potential suppliers. The products commonly imported from BSCI risk countries include surgical and examination gloves and personal protective equipment such as surgical gowns, masks and caps.

Typically, there are risks involved in the procurement of disposable supplies acquired in large quantities whose manufacture requires a great deal of manual labor. The human rights risks we identify include issues with wages, working hours, freedom of association and recruitment fees. Our corporate social responsibility reporting has also highlighted forced labor and the use of child labor. We aim to minimize these risks by insisting on transparency with our suppliers, including e.g. audit reporting. HUS Logistics does not itself audit suppliers or production plants; instead, reliable third party certified audit reporting is included as a contractual requirement in procurements from risk countries.

Evaluating new suppliers

Supplier evaluation is performed on the basis of eligibility requirements imposed on tenderers in the invitation to tender in a procurement process. Eligibility requirements may be imposed on tenderers to ensure that they are qualified to deliver on the procurement and that they have complied with their societal obligations (taxes, social security contributions, pension contributions, etc.) and that neither the tenderer nor anyone in a management position therein is guilty of any offences punishable under the Criminal Code.

Under section 87 of the Act on Public Procurement and Concession Contracts (1397/2016), in EU procurements the procurement unit must demand a European Single Procurement Document (ESPD) as preliminary proof of the tenderer fulfilling eligibility requirements.

Under section 88 of the Act on Public Procurement and Concession Contracts (1397/2016), the procurement unit must, before signing the procurement contract, demand that the winning tenderer submit currently valid certificates and reports to demonstrate whether statutory exclusion criteria apply to it and whether the tenderer fulfils the eligibility requirements imposed by the procurement unit.

Evaluation of new suppliers using criteria of corporate environmental and social responsibility

Criteria of corporate environmental and/or social responsibility were applied in 62% of invitations to tender for joint procurements in 2019. The environmental responsibility criteria were based on the environmental appendix to the procurement guideline. Several invitations to tender requested information on the PVC content of the products, and in some it was a compulsory requirement that the product must not contain PVC or any other halogen-containing plastics. Plastic markings and recycling instructions for the product were commonly required. Environmental labels were given as a compulsory requirement in some invitations to tender, such as the FSC/PEFC or type 1 environmental label (the Nordic Ecolabel (Swan) and the EU Ecolabel. Also, emissions reporting and similar features were required in new transport service contracts.

Public invitations to tender published in 2019 required information to be provided on the country of manufacture and traceability of the products. Several invitations to tender also required commitment to the HUS Logistics Code of Conduct, i.e. the minimum sustainability requirements. Some invitations to tender stipulated information on the precise place of manufacture and a third party certified audit report on the production plant in question. Also, several invitations to tender for supplies called for the suppliers to submit a report on their sustainability policy and to explain how they manage corporate social responsibility, subcontractor auditing and operations development in their business. In addition to the above requirements, we conducted our own risk assessments and imposed further requirements for the evaluation of corporate social responsibility in product groups where the market survey indicated that the products originated in risk countries according to the BSCI classification.

In competitive tenders for new medical devices, the total life cycle costs of the devices were considered in consultation with medical technology experts. The overall comparison price was formed of the purchase price and the life cycle costs over a period of time specified in the invitation to tender. A report on the quality systems in use was required of practically all suppliers in tenders for medical devices.