Audi faurecia tesla_agc_final

Sustainability in Supply Chain Management
Identification of similarities and differences within the
sustainability structures of Audi AG and Faurecia S.A.
Anette Odersky & Jan Groschopp
Sashank Nepal & Mahesh Devarala December 2015

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1. Outline
2. Sustainability aspects published by companies
3. Identification of similarities and differences within the sustainability structures
of Audi AG and Faurecia S.A.
3.1 Sources of both companies for the comparison of sustainability aspects
3.2 Comparison of the Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.)
3.3 Comparison of the Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.)
4. Conclusion of the Comparison
4.1 Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.)
4.2 Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.)
5. Prospect
6. Sustainability aspects of Tesla Motors
6.1 Economic Sustainability aspects of Tesla
6.2 Environmental Sustainability aspects of Tesla
6.3 Social Sustainability aspects of Tesla
6.4 Code of Conduct – Tesla Motors
7. Sustainability aspects of AGC Automotive
7.1 Economic Sustainability aspects of AGC Auto
7.2 Environmental Sustainability aspects of AGC Auto
7.3 Social Sustainability aspects of AGC Auto
8. Sources
1. Outline
Anette Odersky & Jan Groschopp
Sashank Nepal & Mahesh Devarala December 2015

Fußzeile auf Masterfolie eingeben3
2. Sustainability aspects published by companies
The three dimensions of the
Triple Bottom Line form the basis
for sustainable acting
Code of Conduct / Ethics
The Code of Conduct/ Ethics is a definition of rules
and guidelines set by a group or organization for
internal and external business relations.
Economic
Social
Environmental
Supplier Code of Conduct/ Code of
Sourcing
In a near future the sustainability performance of
OEM suppliers will become more important. The
Supplier Code of Conduct/ Code of Sourcing is a
definition of rules and guidelines set by a group or
organization for their suppliers.
Anette Odersky December 2015

3. Identification of similarities and differences within the
Audi AG Faurecia S.A.
Supplier Code of
Conduct
Supplier Code of
Sourcing
Code of EthicsCode of Conduct
Internal policies
External
requirements
for suppliers
3.1 Sources of both companies for the comparison of sustainability aspects

3.2 Comparison of the Code of Conduct (Audi AG) and Code Of Ethics (Faurecia S.A)
5
Social aspects Audi AG Faurecia S.A.
Acting in accordance with the applicable
requirements of the ILO
✓ ✓
Child labor is prohibited ✓ ✓
Equal treatment for ethnicity, skin color,
gender, disability, ideology, faith,
nationality, sexual orientation, social
background, or political conviction
✓ ✓
No discrimination ✓ ✓
Right to form unions/associations and
labor representations
✓ ✓
Providing occupational safety and
health protection
✓ ✓
Elimination of forced labour ✓ ✓
Global Compact ✓ ✓

Social aspects Audi AG Faurecia S.A.
Insertion and development of training ✗ ✓
Respect for the law / regulations ✗ ✓
Professional development and
employability
✗ ✓
Freedom of expression and social
dialogue
✗ ✓
Remuneration and benefits paid must at
least be the minimum national legal
standard
✓ ✗

Environmental aspects Audi AG Faurecia S.A.
Reduce waste and polluting products,
conserve natural resources and recycle
material
✗ ✓
Limit energy consumption, reduce
greenhouse gases
✗ ✓
Implement technology capable of
reducing polluting emissions
✗ ✓

Social aspects expected to be
fulfilled by suppliers
Freedom of association (trade unions and
employee representations)
✓ ✓
No discrimination (employees are chosen based
on their qualifications)
✓ ✓
No forced labor (not bonded and involuntarily) ✓ ✓
No child labor (minimum age according to
national regulations)
✓ ✓
Compensation & Benefits (based on legal
requirements ensuring an appropriate standard of
living)
✓ ✓
Working hours (according to ILO and national
legal standards)
✓ ✓
Occupational health and safety (according to
national standards for safe and hygienic work
conditions)
✓ ✓
3.3 Comparison of the Supplier Code of Conduct (Audi AG&VW) and Code Of Sourcing (Faurecia S.A)
Jan Groschopp December 2015

Economical aspects expected to
be fulfilled by suppliers
Any kind of corrupt action or behavior causing
damage to the company is strictly prohibited ✓ ✓
Personal responsibility for ensuring a fair and
genuine competition in compliance with
competition and trust laws
(fair business practices)
✓ ✓

Environmental aspects expected to
Creation, implementation and application of
environmental management systems for all suppliers´
production sites (laws/ regulations)
✓ ✓
Main suppliers should be certified with an environ-
mental management system in accordance with
international standards such as ISO 14001 or EMAS
✓* ✓*
Active measurement and dealing with environmental
challenges, e.g. the development and market entry of
environmental friendly technologies
✓ ✓
Reduction of raw material and energy consumption ✓ ✓
Expansion of reusable materials and recycling activities
as well as the use of renewable energy
✓ ✓
Striving to minimize the environmental impact of the
suppliers´ products during the whole life cycle,
e.g. avoidance of waste
✓ ✓
New technologies to reduce CO2 emissions ✓ ✓
*For detailed information, please see the conclusion*

Environmental aspects expected to
Logistic strategies that minimize environmental impacts ✓ ✓
Avoiding damage to the environment and the health of
employees
✓ ✗
Training employees with regards to the environmental
protection
✓ ✗
Purchased products must not contain any material or
substance prohibited by the legislation or regulations
applicable in the suppliers’ countries
✗ ✓
Suppliers must address the European REACH
procedures or national equivalents such as the US TSCA
(Toxic Substances Control Act)
✗ ✓
Disclosure agreements on the use of certain substances
and materials for regulations compliance purpose
✗ ✓

4. Conclusion of the comparison
4.1 Code of Conduct (Audi AG) and Code of Ethics (Faurecia S.A.)
 Similarities
• A lot of social aspects are similar, for example the regulations
for prohibited discrimination, child labor or forced labor
• Both companies are guided by the ILO’s prescriptions and also
use the Global Compact as their basis
 Differences
• Faurecia has some extra ethical aspects in its Code of Ethics:
It has implemented a note about insertion and development of training for
kljlltheir employees as well as the respect for the law and other regulations.
Furthermore the topic about freedom of expression & social dialogue and
klillprofessional development and employability is enclosed
• Audi has added regulations for the remuneration of their employees.
This regulation of remuneration must at least fulfill the country’s standard
• One interesting fact is, that Audi only has social aspects in its Code of Conduct
(environmental and economic are not included)

 Similarities
• All social and economical requirements to suppliers are similar,
especially regulations regarding discrimination, corrupt action as well
as child & forced labor
• Similar environmental requirements for suppliers have been identified
too, for example the implementation of environmental management
systems or the reduction of raw material and energy consumption
 Differences
• While Audi is expecting its main suppliers to be certified under ISO 14001 and/ or EMAS,
Faurecia is looking for an ISO 14001 or equal certification for all suppliers
• The importance of the environmental awareness of the supplier’s employees is
emphasized by Audi in its Supplier Code of Conduct. Training sessions in the field of
environmental protection sharpen the employees’ senses regarding the reduction of
damage to the environment as well as to their own health.
• Faurecia S.A. as a supplier to the OEM’s is mainly focused on the compliance of
international material standards - especially ensuring that the procurement processes
and the use of certain substances are transparent and in compliance with the law
13
4. Conclusion of the comparison
4.2 Supplier Code of Conduct (Audi AG/ VW) and Code of Sourcing (Faurecia S.A.)

All Audi plants are certified under EMAS and ISO 50001 (energy management system) and furthermore
two plants are certified under ISO 14001
Special training for Audi employees regarding environmental requirements
40 % reduction of CO2 emissions is the goal that Audi has set for its Ingolstadt and Neckarsulm plants
by 2020 compared to 2010
Corporate CO2 footprint certification in accordance with ISO 14064 standard
Acquiring more renewable energy from huge photovoltaic systems on the roof of Audi plants (already
implemented at the Audi Brussels plant)
Cooperation with non-profit organizations such as “Lebenshilfe” which employs handicapped people
producing shock absorbers for Audi AG Ingolstadt
5. Prospect
 What measures in the area of sustainability and CR have already been taken by Faurecia as there is no
information available yet?
 If Faurecia is already working on a similar concept – there should be a motivation to continue
Corporate Responsibility Report of Audi AG – an orientation guide for Faurecia S.A.?
• On a voluntarily basis Audi AG is representing its work in the area of Corporate Responsibility to
external and internal stakeholders as well as the interested public
• The CR Report contains concrete measures and goals:

6. Tesla Motors & AGC Automotive
• Tesla’s Model S uses over 3,000 purchased
parts that are sourced globally from over 350
suppliers.
• Tesla does not produce a standard
sustainability report; instead, they outline their
sustainability standards for legal compliance on
their legal webpage.
Sashank Nepal & Mahesh Devalara
15
• AGC Automotive group is a Tier 1 supplier
of windshields to Tesla Motors.
• The AGC group provides a Corporate
Social Responsibility report available here.
Sashank Nepal December, 2015

6.1 Economic Sustainability – TESLA MOTORS
16
Areas of Focus Description Key Points
Innovation Tesla’s primary focus is on R&D as it
aims to be the industry leader in the
production of Electric Vehicles to
position itself securely for the future.
See notes.
Consumer cost Ensure that consumers are
continuously able to save on yearly
costs.
No dependency on fuel, free solar-
powered charging stations, battery
producing Gigafactory. See notes.
Competition Tesla’s strategies to remain
competitive in the high-end and
medium priced industry.
Reduce costs, improve production
flows, innovate now to have
competitive advantage in the future.
Capital Funding Tesla has raised $5.3 Billion in equity
and debt since 2010, and on track to
gross $5.5 Billion in revenues in 2015,
up 54% from 2014.
Invested capital allows Tesla to
innovate new designs and remain
competitive.
Strategies for present and future economic viability

6.2 Environmental Sustainability – TESLA MOTORS
17
Areas of Focus Description Key Points
Emissions Environmental impact Zero emissions vehicles, reduced noise
pollution, reduction of fossil fuel use
Product Life Cycle Recyclable materials are used in
manufacturing
Aluminum is used on body frames, non-toxic
batteries
Safety Industry leader in safety See notes
Innovative strategies to reduce environmental harm

6.3 Social Sustainability – TESLA MOTORS
18
Areas of Focus Description Affected Parties
Legal and Regulatory
Compliance
Compliance with all national and
other applicable laws and regulations.
Tesla Motors and all Tier 1 suppliers
Conflict Minerals Ensure that procurement of materials
do not benefit armed groups in the
Democratic Republic of the Congo
and surrounding countries.
Tesla Motors, Tier 1 suppliers, smelters
and refiners
Human Rights Ensure that suppliers do not use
slave labor to engage in human
trafficking.
and refiners
Supplier Compliance Supply chain should address risks
associated with conflict minerals,
human trafficking, and slavery
and refiners
Focus on Conflict Minerals and Human Rights

Due Diligence framework of Tesla Motors
19
Steps Due Diligence Performed
Step 1 Establish strong company management systems
Step 2 Identify and assess risk in the supply chain
Step 3 Design and implement a strategy to respond to identify risks
Step 4 Carry out independent third-party audit of supply chain due
diligence at identified points in the supply chain.
Step 5 Report on supply chain due diligence.
In 2014, Tesla Motors was able to successfully identify 112 high-risk
suppliers who supply 3TG (Tantalum, Tin, Tungsten, and Gold) in their
products and required all of those suppliers to perform and report on
their supply chain due diligence through the use of CMRT. They were
able to receive 100% supplier responses with over a thousand unique
smelters and refiners reported comprehensively. See notes section for
more information.
6.3 Social Sustainability – TESLA MOTORS

7. Code of Conduct – TESLA MOTORS
20 Sashank Nepal December, 2015
Code of Conduct Description
Health and Safety The company strives to provide each employee with a safe
and healthy work environment.
Discrimination and Harassment Tesla is firmly committed to providing equal opportunity in
all aspects of employment and will not tolerate any illegal
discrimination or harassment of any kind.
Competition and Fair Dealing Stealing proprietary information, possessing trade secret
information that was obtained without the owner's consent,
or inducing such disclosures by past or present employees
of other companies is prohibited.
Compliance Procedures Tesla has checks and balances in place to ensure prompt
and consistent action against violations of this Code.
Tesla’s Code of Conduct policy can be found here.

Economic Sustainability
Turn around the performance of the glass business
Minimize profitability decline in the display business
Group-wide efforts to enhance efficiency
7.1 Economic Sustainability: AGC AUTOMOTIVE
Generate sustainable results for future business growth
Mahesh Devalara December, 2015

Area of focus Description
Reduction of energy Reduction of energy used in-process of production
through environmental related products.
Prevention of pollution Prevent opportunities for pollution by making changes in the
production process.
CO2 emissions Aim of the company is to do a six-fold reduction by 2020
7.2 Environmental Sustainability: AGC AUTOMOTIVE

7.3 Social Sustainability – AGC AUTOMOTIVE
Social Sustainability Focus Areas
Human resource development
Occupational health and safety
Creation of pleasant work environments
Creating a Safer Work Place
Globally developing the “Serious Accident Eradication
Project”
Establish subcommittees for occupational accidents on four
themes that are particularly high risk across the group.

• http://www.audi-cr2014.de/uploads/files/500866230528072313-audi-code-of-conduct.pdf
• http://sustainabilityreport2014.volkswagenag.com/sites/default/files/dd_online_link/en/22_SISR_brochure_englisch.pdf
• http://www.faurecia.com/files/media/site_com_corporate/Suppliers/documents/faurecia_code_of_conduct_sourcing_supplychain.pdf.
• http://www.faurecia.com/files/corporate/widgets/documents/2014_code_of_ethics-eng.pdf
• https://www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx
• https://www.nachhaltigkeit.info/artikel/nachhaltigkeitsberichte_1039.htm
• http://www.audi.com/corporate/en/corporate-responsibility/corporate-responsibility-report.html
• Tesla Motors – OECD Due Diligence Guidance For Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
• Tesla Motors – Forbes Magazine article on Tesla‘s Innovative Strategies
• Tesla Motors – Conflict Minerals and Human Rights Policy
• Tesla Motors – Code of Conduct
• AGC Automotive – CSR Report
24
8. Sources
Anette Odersky, Jan Groschopp, Sashank Nepal, Mahesh Devalara December 2015

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Notes de l'éditeur