Sustainable supply chain

Tieto´s Supplier Sustainability Programme, continued in 2017, is helping to strengthen the implementation and management of Tieto’s ethical requirements throughout the supply chain. By the end of 2017, the Supplier Code of Conduct Rule coverage represented 86% of the total spend on our regular suppliers. 

Tieto's supplier base consists of direct and indirect suppliers. Direct suppliers deliver IT products and services needed for customer deliveries, including hardware, software and IT consultant resources. Our indirect suppliers deliver products and services needed for our own operations, such as human resources services, facility management and travel services.

In 2017, the total monetary value of all our procurement amounted to EUR 607 million (609), representing 39 per cent of our revenues. Approximately 190 of Tieto’s suppliers represent as much as 80 per cent of the company’s spending, making it essential to have an aligned perspective on issues related to corporate responsibility (CR). The vast majority of purchases take place in the Nordic countries. Purchases from suppliers invoicing Tieto from Finland, Sweden or Norway represent over 70 per cent of the total annual purchase volume.

Tieto’s Procurement Policy applies to all Tieto companies and employees in all operating countries, and describes how purchases should be handled. Based on company values, our Code of Conduct, and Operative Decision Making and Authority policies, the Procurement Policy states that the Tieto Supplier Code of Conduct Rule should be implemented in all new supplier contracts. Thus, discussions on ethical and environmental topics are a regular part of our procurement practices. The Tieto Supplier Code of Conduct Rule is based on the United Nations Global Compact (UNGC) principles and amended with Tieto specific requirements.

In Tieto, the group-level Procurement unit holds a key role in the implementation of our Procurement Policy and Supplier Code of Conduct Rule, and works in close co-operation with businesses. Tieto’s Code of Conduct e-learning is mandatory for all employees annually, and each person is informed how to report possible violations. In addition, Tieto conducts self-assessment surveys to prioritized product categories annually to estimate the Code of Conduct implementation, and to mitigate risks in the supply chain.

Tieto updated its Sustainable Supply Chain targets in 2017 to response closely to the risks and changes in the supply base. Tieto already has a good procurement process in place, so the focus will be on new and renewed supplier contracts to cover the Supplier Code of Conduct. In 2017 the coverage of new contracts going through the procurement process including Supplier Code of Conduct was 100%.

Additionally, as Tieto recycles hundreds of tons of E-waste annually, the company wants to have responsible partners ensuring the end-life treatment of ICT equipment and servers.

The coverage of E-Waste recycling partners aligned with Tieto’s Code of Conduct rose to 79% (74%) in 2017.

In general, first-tier suppliers enable easier control and thus provide better opportunities to address sustainability related issues. As a result of consistent consolidation, the number of suppliers in Tieto’s supplier base has decreased significantly during the past years, from 7 200 in 2014 to 6 300 in 2017. As a result, Tieto’s procurement is more centralized and focused on preferred suppliers today, compared to a few years ago, helping the company to mitigate supply chain related risks.

The Supplier Code of Conduct Rule coverage represents 86% of total spending on regular suppliers. 

Tieto’s aim is that all external business undertakings providing goods, services, technology or subcontractors to Tieto on a regular1) basis, will comply with the minimum requirements stated in the company’s Supplier Code of Conduct Rule. By the end of 2017, the coverage represents 86% (85%) of Tieto´s spending on regular suppliers. 45% (49%) of all regular1) suppliers had accepted Tieto’s Supplier Code of Conduct Rule.  This means that the number of regular suppliers has increased, as the total supplier number has gone down.

In addition to this, Tieto has also actively implemented aligned business practices with hundreds of new suppliers following acquisitions made during the year. Zero violations of the Supplier Code were encountered in 2017 through audits or whistleblowing.

Tieto is tackling CR risks in the supply chain in multiple ways, by implementing the Code of Conduct in all new contracts, through the procurement process, as well as evaluating the risks in prioritized category groups. Going forward, Tieto continues to implement its Sustainable Supply Chain Plan for 2017–2020 and to enforce current practices and processes.

1) 1 invoice/month, minimum 12 invoices during the year and minimum 20,000 annual invoicing