Allianz launches sustainable procurement charter

Allianz Insurance has launched a sustainable procurement charter in a bid to encourage its suppliers to adopt and develop better environmental, social and governance (ESG) practices.

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, Allianz said.

For future tender assessments, the commercial insurer will apply a minimum weighting of 10 percent 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 said it has "significantly" reduced the environmental impact of its operations in the UK. Between 2010 and 2020, it cut its waste by 89 percent, its CO2 emissions by 79percent, its paper consumption by 61 percent and its water consumption by 29 percent. The insurer expects its sustainable procurement charter to help 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 insurer said.

Oleh Melnyk (pictured), head of procurement and property at Allianz Insurance, commented: “We need to act against climate change and we can’t act alone, we need to involve our supplier partners. This charter will help develop a shared mindset with them, creating a fairer and more transparent environment. We want to be market leaders in sustainable procurement; that’s part of our ESG ambitions.”

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