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We are expanding long-term supplier relationships.
Our global supplier network makes a major contribution to value creation, quality and innovation and hence to the success of the BMW Group. Suppliers therefore have a significant impact on our sustainability performance and the sustainable development of society.
We work with around 13,000 suppliers in 70 countries. It is therefore essential that our partners fulfil the same environmental and social standards we set ourselves. The BMW Group Supplier Sustainability Standard, which requires compliance with internationally recognised human rights, as well as labour and social standards, forms the basis for this.
Our collaboration with our suppliers is based on a mutual understanding of product and production quality, security of supplies, competitive prices and innovation, as well as the continuous integration of our sustainability Faced with complex global supply chains, involving a large number of suppliers and sub-suppliers, these goals present a considerable challenge, but also a great opportunity.
To ensure a holistic approach to sustainability throughout our supplier network and guarantee continuous improvement, we focus on two main areas.
- First, we manage and minimise risk, by identifying and analysing potential sustainability risks throughout the supply chain in a risk management process. Since 2009, we have been asking suppliers to assess their sustainability management and related activities. Supplier production facilities that are at high risk of breaching sustainability requirements and facilities suspected of such a breach are subject to independent audits.
- Second, we take advantage of opportunities and work with our suppliers to leverage potential, for example, in the area of resource efficiency, by training and enabling our employees and suppliers, as well as active involvement in initiatives and with stakeholders.
Our approach focuses, on the one hand, on ensuring broad application of sustainability standards through comprehensive risk management – i.e. at all our direct suppliers – and, on the other, through in-depth analysis of specific raw materials or supplies throughout the entire value chain.
The BMW Group recognises outstanding supplier innovations and development achievements with the BMW Supplier Innovation Award.
Read more about how we work with suppliers to constantly improve and ensure sustainability throughout our supplier network. Learn about the tools and measures we use to minimise risks and exploit opportunities.
- BMW GROUP Supplier Sustainability Policy. (PDF, 154.6 KB)
- BMW GROUP International Terms and Conditions for the Purchase of Production Materials and Automotive Components. (PDF, 268.2 KB)
- Extract from BMW Group “General Terms and Conditions for the Purchase of Goods and Services of BMW AG (Indirect Purchasing)” (PDF, 42.0 KB)
- Joint Declaration on Human Rights and Working Conditions in the BMW Group. (PDF, 144.1 KB)
- BMW GROUP Due Diligence in the Supply Chain. (PDF, 298.2 KB)
Sustainable kenaf project.
Sustainable Value Report.
Supplier Innovation Award.
The winners of the BMW Supplier Innovation Award 2015. This was the third time the BMW Group bestowed the award on supplier companies to honor their most innovative developments.
The award ceremony was held under the patronage of Klaus Draeger, Board Member Purchasing and Supplier Network at BMW AG.
About 200 top suppliers, eight awards and two innovative new cars took center stage at the ceremony for the BMW Supplier Innovation Award 2014.
A test drive gave participants a change to get to know the BMW 2 Series Active Tourer, a new vehicle concept for new target groups.
The event’s impressive entertainment program was a great success with the invited suppliers.
Audience at the BMW Supplier Innovation Award 2014.
Sustainable extraction and procurement of raw materials.
Raw materials are the basis for every industrial production process. However, following the path taken by raw materials from the mine to the final product is highly complicated due to the multi-layered and dynamic global supply chain. This is primarily due to the interconnected trade and processing levels and raw materials trading on the exchange.
It is therefore a major challenge to implement sustainability standards from the extraction stage onwards. In light of this, the BMW Group concentrates on selected, relevant or critical raw materials and supply chains. We analyse and evaluate both the supply chains and the corresponding need for action and develop measures based on this, which we then implement together with our suppliers.
For this purpose, we are also active in cross-industry initiatives supporting sustainable dealings with raw materials. In line with this, we have been supporting the Aluminium Stewardship Initiative (ASI) since December 2012. As a material used in lightweight design, aluminium plays an important role because it is considerably lighter than steel. The goal of ASI is to establish a standard for responsibly produced aluminium across the entire value chain: from responsible company management to compliance with environmental standards to social standards.
From a sustainability perspective, in addition to aluminium, steel as a raw material is also a focal point. Steel is proportionally the most widely-used raw material in our vehicles. Its production is highly energy intensive and therefore responsible for the largest portion of CO2 emissions in the manufacturing phase. For this reason, we are developing measures together with our suppliers to increase the transparency of the supply chain and to unlock CO2 potential.
Due to regulatory demands, the issue of conflict minerals is of major relevance. According to the current legal position, the raw materials pewter, tungsten, tantalum and gold are conflict minerals. The extraction of these minerals helps finance ongoing civil wars in the Democratic Republic of the Congo and its neighbouring states. To prevent the financing of armed groups via these minerals, legislation was introduced in the USA – the so-called Dodd Frank Act. In that country, all companies listed on the US stock exchange were required to disclose whether these conflict minerals were necessary for the production or functioning of their products, as well as whether they were extracted in the DR Congo or its neighbouring states.
Renewable raw materials.
Traditionally, some products in the automotive industry contain natural materials. In the current discussion about limited oil-based resources and the importance of product sustainability, their proportion is constantly increasing. Natural materials are sustainable and offer advantages over oil-based primary materials in a life cycle assessment. However, when using natural materials, we should always consider their origins. Renewable raw materials grow in forests, plantations and on fields, where BMW’s sustainability standards must also be guaranteed. One possibility is the use of certificates and seals, which already exist on the world market for a large number of products, particularly in the lumber and food industry. Taking sustainability certificates into account when selecting materials guarantees compliance with basic principles with respect to social, environmental and compliance issues and is recognised worldwide.
In 2013, the BMW Group became the first car manufacturer to incorporate wood that was certified as sustainable into its products: The BMW i3’s interior trim made from fine eucalyptus is certified by the well-known Forest Stewardship Council (FSC).
We will continue and intensify these efforts to develop a sustainable and transparent supply chain for natural materials by engaging in dialogue and cooperation with our suppliers and NGOs and by participating in industry initiatives.
Key Performance Indicators: supplier management.
SHARE OF PRODUCTION-RELEVANT PURCHASING VOLUME IN THE CDP SUPPLY CHAIN PROGRAMME (IN %).
NUMBER OF FARMERS WE TRAINED IN THE SUSTAINABLE KENAF PROJECT IN BANGLADESH:
Carbon Disclosure Project (CDP).
Since 2014, we have been participating in the Supply Chain Programme of the Carbon Disclosure Project and achieved transparent CO2 reporting by suppliers for 69 % of the BMW Group purchasing volume in 2016.
The CDP is a non-governmental organisation that aims to reduce energy and resource consumption and thus counteract climate change. By participating in this programme, suppliers can record their resource consumption on a generally accepted platform. Every year, we invite suppliers selected on the basis of revenues, emissions and consumption aspects to report their resource consumption, CO2 emissions and potential for improvement to us via the CDP. This allows us to evaluate suppliers for their efficiency, jointly identity potential improvements to conserve energy and resources and monitor development over time. This significantly improves transparency throughout the supply chain. We are already able to achieve detailed Scope 1 and Scope 2 reporting from our suppliers for 21% of our total revenues. Furthermore, we will conduct further activities to improve supply chain transparency: We aim to significantly improve purchasing volume coverage and penetration of overall CO2 emissions in the supply chain (Scope 1, 2 and 3) and will have set ourselves quantitative target for each aspect.