The construction industry generates large quantities of goods and services, and employs a considerable number of people. The responsibility for business transactions and projects is delegated far down along the line in every market where NCC is active and the business culture and climate may vary from location to location. Consequently, our values and the Code of Conduct have a pivotal role to play in terms of preventive efforts concerning ethical issues among both employees and business partners.
Developing sustainable and competitive purchasing is a key issue for NCC. The Group's purchasing of goods and services totals about SEK 38 billion. In addition to direct materials purchasing, NCC purchases significant amounts of energy, consumables and various types of subcontractor and consultancy services. The purchases are made through more than 50,000 suppliers. The purchasing volumes mainly comprise services and materials relating to shafts and transports, staffing, consultants, installation, foundations, prefabricated concrete and steel, as well as construction materials.
Working closely with international suppliers
Currently, NCC's purchases outside the Nordic region account for 6 percent of the total purchasing volume; the aim is to raise this proportion to 25 percent. NCC purchases goods from, for example, China, Thailand, Turkey, Portugal, Poland and Estonia. Over the years, NCC has built up a stable international supplier base, in part by establishing its own purchasing offices in various locations worldwide. Close cooperation with suppliers in the international market permits NCC to raise the reliability and efficiency of its supplier chain.
Coordination of purchasing operations
During 2013, NCC took a further step in enhancing the efficiency of purchasing activities by establishing a function to control and coordinate the Group's strategic purchasing operations. An action aimed at boosting efficiency and cutting costs simultaneously.
Success factors will be:
- The ability to enhance the coordination of purchases to strengthen the strategies set for each product range.
- Increase the coordination of work methods, and tools, to ensure improved interplay between the purchasing organization and projects.
Supplier Assessment Audits
Some of NCC's international suppliers conduct manufacturing in societies marked by different conditions than those in our domestic markets. For example different conditions in terms of work environment and human rights.
As part of efforts to monitor and develop it's international suppliers, NCC conducts audits of social responsibility, environment and quality. NCC applies a 12-month supplier-assessment audit cycle for all international suppliers to ensure compliance with, and development in, these areas. Serious deviations among suppliers, that are not rectified after having been observed, lead to the termination of cooperation.
NCC audits are conducted by in-house personnel and combined with third-party audits conducted by consultants. As an example, third-party audits are conducted within the framework of NCC's affiliation to the Business Social Compliance Initiative (BSCI) and UN's Global Compact.
Group purchasing strategy
During 2013, a shared, Group-wide strategy was introduced for the purchase of materials and chemicals up until 2020. The strategy is aimed at clarifying the ownership of environmental issues in the purchasing process and to clarify NCC's intended direction in responsible purchasing.
The strategy is based on NCC's vision and encompasses several aspects of responsible purchasing such as
- The control and phasing out of chemical products with known hazardous properties
- The systematic prioritization of construction products and materials with high environmental performance
- Ensuring that NCC's supplier base largely comprises suppliers that work systematically in respect of social responsibility, the environment, quality and occupational health and safety
In recent years, NCC has noted an increasing interest in green transactions. Partly in respect of products that NCC supplies, but also interest from players wishing to identify companies with a sustainable strategy.
These investors demand that the companies or projects they lend to, or invest in, entail high environmental ambitions. As early as in 2012, NCC concluded a long-term loan contract amounting to SEK 500 M with the Nordic Investment Bank, relating to the construction of energy-efficient office buildings by NCC Property Development.
NCC believes that this type of investment market will grow to represent an attractive financial complement, as well as acting as a powerful driving force in inducing adjustments toward a sustainable society.