Sustainable supply chain management

Supply chains are a crucial part of the sustainability of Sampo Group’s products and services. Sampo Group is a major procurer of goods and services, especially in claims handling, and therefore has an impact on the economy, the environment, and people. Sustainability issues can carry significant reputational and operational risks if not managed correctly.

Sampo Group’s upstream value chain includes suppliers of office products and services (e.g. ICT suppliers, external data providers) who support the running of the business. In the downstream value chain, Sampo Group has a large network of suppliers and business partners, of which suppliers in claims handling and loss prevention (e.g. vehicle and property repair contractors), and partners in health and travel services form a major part.

The nature of the business relationships with suppliers varies with respect to the type of product or service purchased and can be long-term or short-term, contractual or non-contractual, project-based or event-based. Sampo Group can, for example, offer networks of repair shops that have a long-term contractual relationship with the company. On the other hand, certain suppliers, such as external consultants, are typically hired on a project basis and can be either long-term or short-term. Sampo Group’s suppliers can have sector-specific characteristics, but they vary with respect to the type of product and service purchased. For example, re-building tends to be highly labour intensive and, content claims are capital intensive when items are replaced, but labour intensive if items are repaired.

Governance

The Sampo Group Code of Conduct provides the group-level guidance principles regarding sustainable supply chain management. According to the Code of Conduct, Sampo Group expects its suppliers and other business partners to comply with the principles of the Code of Conduct throughout their own operations and supply chains. Moreover, Sampo Group aims to take ESG considerations, including climate change, into account in supply chain management. In addition to the Code of Conduct, each Sampo Group company has its own supplementary policies and guidelines for sustainable supply chain management (e.g. supplier codes of conduct, sustainability policies, procurement policies). Sampo Group employees working with suppliers (e.g. in claims handling, procurement, Group services, legal) receive training on related policies and processes.

Sampo Group is committed to encouraging and supporting the company’s suppliers and partners in their efforts to use more sustainable methods in their operations. For example, company-specific policies, such as sustainability policies and supplier codes of conduct, highlight that environmentally friendly alternatives are prioritised when procuring office supplies and services. By actively requesting innovative solutions, resource efficiency, transparency, and responsibility from suppliers, Sampo Group aims to minimise its negative impact and stimulate sustainable production and consumption. Set requirements, in combination with close cooperation with suppliers and other partners, enable Sampo Group to develop its business while also contributing to more sustainable development.

Supplier codes of conduct

Sampo Group has supplier codes of conduct, which define the minimum requirements that suppliers are expected to comply with. The codes cover the areas of human rights, labour rights, the environment including climate change, and anti-corruption, and they are based on the ten principles of the UN Global Compact and its underlying conventions and declarations. Suppliers must, for example, ensure the fair and equal treatment of all employees, take appropriate measures to protect privacy rights and secrecy, promote the development and use of environmentally friendly working methods, and compete in a fair and honest way.

Sector-specific requirements

In addition to supplier codes of conduct, Sampo Group has additional requirements for selected suppliers. For example, If’s property and vehicle repair contractors must also comply with If’s sector-specific Additional Environmental Requirements (AER), which are incorporated into the purchasing agreements. In general, the AERs cover transportation, energy usage, material usage, water usage, handling of chemicals and hazardous substances, and waste handling. The AERs for property repair contractors include requirements to repair more, reduce material usage, demolish less, and increase remote work using video and sensors. They also include requirements for ordered material to be sent directly to the claim site to reduce transportation, use material with environmental certification when available, and increase the use of electric and hybrid vehicles. The AERs for vehicle repair contractors contain a requirement to repair, instead of using new parts, and to reuse spare parts. If has also set expected levels of plastic repairs and used parts, and these are monitored and reported regularly.

Sampo Group’s priority is to ensure that waste and materials from repair processes are managed in the best possible way. Therefore, the company encourages its contractors to minimise their consumption of resources and materials, and to reuse and recycle as much as possible. Regular monitoring to ensure compliance with policies is conducted, for example, by means of reporting and physical meetings.

Supplier-related targets

Sampo Group has set a voluntary science-based climate target (SBT) for suppliers on a subsidiary level. According to the target, If is committed to engaging with its suppliers so that 30 per cent of its suppliers by spend, covering purchased goods and services, will have science-based targets by 2028. The target is approved by the Science Based Targets initiative (SBTi). The progress against the target is monitored regularly and reported externally as part of Sampo Group’s annual sustainability reporting. In addition to the SBT, Sampo Group has other internal metrics and targets to monitor the work related to its supply chain.

Supplier follow-up

Sampo Group cooperates with its suppliers, and the company performs regular (e.g. monthly, quarterly, annual) monitoring, using questionnaires, screening, site visits and other meetings, reporting, and audits, for example. Actions taken on individual suppliers are proportionate to the size and type of the supplier and its potential impact on Sampo Group’s business operations. For example, If assesses all new and large existing suppliers and performs random checks to ensure compliance with its policies (e.g. supplier codes of conduct).

Providing remedy and development of the cooperation

If non-compliance with Sampo Group’s supplier requirements is detected, the first step to remediate non-compliance is to verify what has happened and investigate the reasons leading to it. Depending on the findings, corrective actions taken can be, for example, improvement of processes, correction of mistakes, or audits. If the error or contract breach is major, it may result in termination of the contract.