A sustainable supply chain. That is the primary goal of "Drive Sustainability," the collaborative initiative between eleven automotive manufacturers. Now the focus is expanded: "Drive+" is new. Suppliers can now become members and actively participate in the sustainability initiative. In a video conference, Michaela Hofmeister and Alexander Möhle, Drive Sustainability committee representatives on behalf of Daimler Procurement, explain the details.
11 automotive manufacturers working together to ensure sustainability in their supply chains – what has been achieved so far from Daimler AG's perspective?
Alexander Möhle: The entire automotive industry has complex value chains and a deeply structured supplier base. As an initiative of 11 automotive manufacturers, we are working to provide suppliers with a consistent message regarding sustainability activities and requirements. Drive Sustainability is, therefore, primarily about the automotive manufacturers involved speaking a common language on the topic of sustainability.
Experience has shown that this is not yet the case today. A positive example of a uniform approach is the SAQ, the "Self Assessment Questionnaire". This supplier questionnaire examines the supplier's due diligence record – this includes, for example, appropriate risk management systems or processes for dealing with conflict minerals. As such, the SAQ is part of the industry-wide long-term strategy as a unified tool. On the one hand, the SAQ is intended to improve the supplier qualification process, as this enables shortcomings to be identified, which are then addressed as part of joint action plans. On the other hand, it should also reduce the processing burden on suppliers by allowing them to provide their responses on a single shared platform. This platform is operated by the service provider NQC. The figures use clear language here: To date, over 35,000 SAQs have been submitted from suppliers in over 100 countries.
Michaela Hofmeister: From Daimler AG's perspective, we have also achieved a level of awareness and demand, particularly from supplier associations, for Drive Sustainability as the automotive industry's mouthpiece on sustainability issues. For us, this is a significant sign that suppliers to the automotive industry are looking for signs of where the journey is headed in terms of sustainability. We therefore intend to make even greater use of Drive Sustainability in the future and to formulate and communicate shared expectations among automotive manufacturers to suppliers.
Alexander Möhle: This is particularly important when it comes to the topic of standards and auditing. The diversity of raw materials in our vehicles and the complex supply chains through to our own production facilities are addressed by a large number of standards. In the field of industrial mining, we have only had reliable standards for a short time, and they have yet to be fully established. This inevitably leads to uncertainty in the supply chain. Through our commitment to Drive Sustainability, we aim to ensure comparability and competition at a high ethical level.
Michaela Hofmeister: Incidentally, we do not leave our suppliers to fend for themselves. One of Drive Sustainability's core activities is conducting supplier training on sustainability topics. These training courses are tailored to the laws and conditions of the corresponding country and examine social and environmental sustainability, business conduct, compliance, and supply management, among other topics. Although there was an interruption in 2020 due to Corona, a number of training courses are on the calendar again for 2021.
Now, Drive Sustainability has launched a new strategy. What is it intended to achieve going forward?
Alexander Möhle: We have already created a good foundation with the SAQ. The task now is to take the next steps and refine the joint approach. That is why we have agreed on a new strategy within the initiative. This new strategy will shape our joint activities for years to come.
What strategic issues are
we talking about?
Michaela Hofmeister: DRIVE's new strategy is made up of four pillars: sustainable raw materials, working conditions, CO2 neutrality, and circular economy. Consistent objectives in these topics also facilitate implementation in the supply chain.
Alexander Möhle: Columns and subject areas always seem somewhat abstract at first glance. That's why it's good to breathe some life into it. On the topic of "sustainable raw materials", we are working specifically on three points within the initiative. One is about assessing systemic risks in commodity supply chains. These risks are the same for all automakers. However, it is often very difficult for a single company to handle these on its own. That's why this is a joint solution.
Michaela Hofmeister: In the second field, the topic "sustainable raw materials" is about the joint introduction of standards. l. From discussions with suppliers, we know that clear indicators from the manufacturers are helpful here. The stronger and more consistent the signal, the better the chance for comparable conditions, transparency, and competition. All at a high ethical level.
Alexander Möhle: In the third field, we want to launch joint projects to improve the situation in the mining countries.
Also new is "Drive+". Suppliers will be involved even more directly in the future. Why actually? And in what form does that take?
Alexander Möhle: We are successful when all parties involved – from the manufacturer to the direct suppliers and the subcontractors – actively cooperate. The fact is that our suppliers are often closer to risks and can make much more of a difference. That is why we need an in-depth exchange with our suppliers. And that's why Drive Sustainability is now expanding its membership model.
Michaela Hofmeister: Drive+ is aimed at direct suppliers and supplier associations; they should be able to become members of Drive+. This is a separate group with close ties to Drive Sustainability. Drive+ members receive support for working with Drive Sustainability tools, including sharing the measures in their supply chains. Website and online registration for Drive+ are currently under development, for advance questions, there is an email contact for interested suppliers email@example.com. We would be delighted if, over the next few months, as many of our direct suppliers as possible would join Drive+.