Governance of our supply chain
It is important that we work with suppliers who share our values and who embrace standards of ethical behaviours consistent with our own. In order to do business ethically, how our third parties behave is of the utmost importance. Our supply chain management and Supplier Principles – Guidance for Responsible Business (the Supplier Principles) are focused on high achievement of our standards.
Risk-based due diligence is undertaken for all third parties with whom we engage, whether supplier, adviser, potential joint venture partner, acquisition opportunity or other third party. Where required, this may include establishing the identity of the third party in terms of beneficial ownership and gathering of sufficient information to assess relevant bribery and corruption risks. At the contracting stage we ensure that contracts contain appropriate anti-corruption and anti-bribery provisions and stipulate the expectation to comply with our standards on ethical business conduct, compliance, Supplier Principles, safety, environment and human rights.
Once a supplier has been approved and a contract has been signed, we continue to actively manage and monitor that supplier throughout the life of their contract. This includes managing any significant changes in our relationship with the supplier as well as ongoing risk-based due diligence.
To clarify what we expect from our suppliers and their supply chains we have developed the Supplier Principles, which reflect the standards we set for our suppliers. During 2020 we commenced a review of our Supplier Principles. In 2021 that review will be concluded to further strengthen our sustainability agenda.
The Supplier Principles expect compliance with all relevant national and international laws and set out best practice guidance in relation to matters such as anti-corruption behaviours, environmental issues, responsible payment, conflict minerals and how employees are treated.
We use the Supplier Principles as part of a risk management framework to assess new suppliers. They are also used as an integral part of our supplier evaluation, selection and approval processes.
During 2020, we undertook supply chain assurance activity to assess compliance with our Supplier Principles. Our assessments covered 20% of global spend. 14 low-level risks were identified and resolved. We also continued to collaborate with suppliers during these unprecedented times to facilitate best practice sharing and champion the sustainability agenda.
Supporting our supply chain during COVID-19
Our supply chains are the critical links which make much of what we do possible. During 2020, our activities focused on responding to pandemic-related disruption by reinforcing supply chain resilience and sharing best practices across our business and supply chain (where feasible). In 2020, in response to COVID-19, we provided £151m of financial support, by way of early or advance payments, to around 200 suppliers across the Group.
In 2020, in response to the global pandemic and to further strengthen our supply chain resilience, we identified suppliers globally that were critical to programme delivery. These were defined as suppliers that are required in direct support of business critical activities, either on site or off site and for both goods and services. We engaged critical suppliers and carried out financial assessments to ensure continuity of supply and to understand the impacts of COVID-19 on their business and supplying our programmes. We worked closely with our supply chains to mitigate disruptions where possible and maintain resilience, in some cases advancing payments where required.