CHT Sustainability Report 2022


REPORTING PERIOD: January 1<sup>st</sup> to december 31<sup>st</sup>, 2022 (editorial deadline may 31<sup>st</sup>, 2023)


Supplier management

Demanding and promoting sustainability

The CHT Group procures numerous raw materials, preliminary products, technical goods and services. Our aim is to secure competitive advantages for our group through a professional purchasing organization. Our suppliers are also an important part of our value chain. Together with them, we aim to further expand our commitment to sustainability and minimize risks. We count on reliable suppliers who provide us with high-quality raw materials at competitive prices. Our aim is to make our suppliers’ contribution to sustainability transparent and to create a uniform, global program for responsible procurement and for improving environmental and social standards at suppliers.

Our purchasing organization includes a reliable supply of raw materials, energy, intermediate products, technical goods, and services. In addition to economic and qualitative criteria, we also take environmental, social and ethical aspects into account when working with our suppliers.

In 2023, we are developing a supplier risk assessment process that includes human rights risks and environmental risks, which has been applicable to large companies since January 2023 as part of the German Supply Chain Due Diligence Act (SCDDA). CHT Group is not subject to this reporting requirement. In 2022, we summarized our human rights positions in a human rights declaration and published it on our website.

Our existing supply chain management tools, such as our Code of Conduct for Suppliers or the systematic supplier self-assessment and auditing of suppliers, remain important elements and will be further developed in the future.

nachhaltige beschaffung 60 von 100

The EcoVadis Sustainability Audit 2022 determined a score of 60 for the CHT Group’s sustainable procurement management.

The previous CHT supplier evaluation process is simplified by a globally standardized questionnaire that is sent to each supplier at least once to determine their baseline sustainability performance.

In 2022, a total of 473 suppliers were evaluated. They cover a purchasing volume in raw materials of approximately EUR 315 million and thus the majority of the CHT Group’s total raw material requirements.

In 2022, 342 suppliers were assessed as sustainable according to the CHT criteria, an improvement of 9 % compared to the previous year. We support suppliers where we identify a need for improvement in the further development of their sustainability. After a defined timeframe, we conduct a reassessment.

Suppliers are informed that CHT reserves the right to terminate the cooperation in the event of particularly serious deviations and if no improvement is identified. In 2022, this was not necessary in any case.

The current sustainability rate was 91 % at the end of 2022. This means that the average target value of 90 % set for 2022 was exceeded for all companies.

In addition to the above-mentioned performance criteria for quality management and requirements in the EHS (Environment, Health, Safety) area, the location of the supplier is also considered in the case of our suppliers in the services and MRO (Maintenance, Repair, Operations) area. Local suppliers are preferred for reasons of shorter transport distances (reduction of emissions).

We count on reliable and long-term supplier relationships. We have set out our expectations of suppliers in the globally applicable Code of Conduct for Suppliers. We support suppliers in improving their sustainability performance, for example through joint projects or by helping them to eliminate deficits. In addition, in 2022 we began working with our suppliers to increase the transparency of upstream greenhouse gas emissions (Scope 3) and reduce the CO2 footprint of our value chain. To this end, we hold regular sustainability meetings with suppliers and jointly review how Scope 3 emissions can be reduced.

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