Allianz Insurance has launched a sustainable procurement charter to encourage its suppliers to adopt and develop sound Environmental, Social and Governance (ESG) practices. The move looks set to become standard practice across the insurance sector and means suppliers of hire cars, building materials, IT services and more, will all have to tick the ESG box – and prove it via company reports, accounts and statements.
For future tender assessments, the commercial insurer will apply a minimum weighting of 10% to ESG factors, as a way of prioritising suppliers who have embedded sustainable and ethical practices within their organisation.
Allianz will also provide support and education to suppliers who are invested in ESG. The insurer wants to partner with suppliers who understand the nature of the materials, products and services they’re providing and the importance of protecting the environment and fostering good relations with their employees and their local communities.
Allianz has significantly reduced the environmental impact of its operations in the UK. Between 2010 and 2020, it cut its waste by 89%, its CO2 emissions by 79%, its paper consumption by 61% and its water consumption by 29%. The sustainable procurement charter will help it further reduce its climate footprint.
With this charter, Allianz aims to encourage suppliers to reduce carbon emissions, recycle waste, use renewable energy and consider biodiversity elements for their premises. Besides these environmental commitments, it would like suppliers to set themselves social targets, such as paying all employees the national living wage, reducing pay gaps and providing fair opportunities to everyone. In terms of governance goals, it encourages them to set whistleblowing mechanisms into their business practices and to ensure all tendering activities are open and transparent.
While these targets aren’t binding, suppliers are encouraged to embed them in their operations and supply chain, ensuring ESG is a core consideration. They should be able to track their own performance in a reportable format, which could then be used to drive better outcomes.
The sustainable procurement charter is designed for suppliers who have a contractual relationship with Allianz in the UK and have a spend profile of more than £20,000. It will act as guidance for internal buyers and suppliers.