Neste has undertaken several initiatives to identify and understand how risks may be present in our operations and supply chains. To ensure our suppliers’ compliance with the Supplier Code of Conduct, Neste has implemented systematic controls for counterparty screening and monitoring in which all potential business partners and suppliers undergo automated screening, escalated to a manual review if any issues are found or the counterparty’s business case matches predefined criteria. While the screening is predominantly focused on economic sanctions and similar compliance issues, counterparties are also screened for selected ethical concern categories in third-party enforcement databases and major news outlet sources.
A key element in understanding sustainability risks in our supply chains is to assess country risk. We use a bespoke, industry leading country risk assessment methodology to map sustainability risks for the countries in which we operate and have supply chains.
All of our contracts with renewable raw material suppliers include strict terms on sustainability; e.g. commitment to sustainability, protecting biodiversity, and respecting human rights are requirements that must be met before a contract is signed.
Our renewable raw material suppliers are committed to the following policies and principles:
- Sustainability Policy
- Neste Supplier Code of Conduct
- Neste Responsible Sourcing Principle
- Sustainability Principle
Identifying and selecting good partners are crucial to the sustainability of supply chains. Ensuring the sustainability of Neste’s supply chains begins before a deal has been closed or raw materials, products, components, materials or services are delivered.
All our suppliers are required to fulfill the requirements of our Supplier Code of Conduct. A supplier’s ability to meet the requirements of the Supplier Code of Conduct is regarded as a significant factor when Neste is deciding an initiation or continuation of a business relationship with a supplier.
Raw material suppliers for our renewable products are subject to rigorous sustainability due diligence as part of our Principle on Renewable Products (RP) Supplier Sustainability Approval. The principle applies worldwide to any Neste company which is establishing a business relationship with a supplier of renewable raw material for Neste’s renewable products and it sets the minimum requirements for supplier sustainability approval through a five-step sustainability due diligence process:
- Raw Material Evaluation
- Country and Raw Material Risk Assessment
- Counterparty Screening (incl. Risk-based Financial Risk assessment)
- Sustainability Desktop Review
- Sustainability Audits
Read more about our supplier selection from the Sustainability report at page 79-.
Supplier Sustainability Portal development in collaboration with suppliers
We have developed a Supplier Sustainability Portal (SSP) collaboratively with our suppliers since 2017 to facilitate and enhance evaluation of both potential and existing renewable raw material suppliers and to support performance monitoring and active engagement with our suppliers.
The portal was brought fully into use in 2020. In 2021 the total number of onboarded renewable raw material suppliers was 223. In 2021, our focus area with the portal was to finalize the supplier deployment and continue our development work.
How do we deal with shortcomings?
We continuously improve our procedures for processing raw material-related grievances. We publish monthly grievance log updates on our website, and track and publicly disclose the number and type of grievances that have been raised in person or via our whistleblowing channel.
We take all allegations of suspected sustainability violations and shortcomings seriously and investigate the cases. Upon learning about serious allegations concerning our suppliers, we put all further purchases from those suppliers or supply chains on hold. If the sustainability criteria and requirements included in our contracts have been verifiably breached, the nature of these is considered serious and progress to resolve those issues is not made in a reasonable time, we terminate our contract with the supplier in question.
Our primary means of action is based on engagement and cooperation with our supplier to remediate the issue. This is because we believe that ending purchases does not sufficiently ensure that problems are resolved.
If you wish to report a concern or submit a complaint, please do so via phone or online service:
We address shortcomings once we become aware of them by:
Requiring the supplier to report the situation as part of Neste’s grievance mechanism.
Engaging and cooperating with suppliers. This is our primary way of action.
Providing an assessment and, if necessary, conducting supply chain audits locally by Neste’s or the partner’s sustainability experts.
Requiring a detailed plan for corrective actions from the supplier.
Cooperating with the supplier and other stakeholders to develop operations and perform necessary corrective actions.
Monitoring and updating on the progress online.
Ending purchases, if we do not see adequate progress or if the supplier loses their certificate.
Reviewing, improving and adjusting our processes where needed.
Read more and become a Neste supplier.