3.3 Sustainable supply chain practices 3.3 Sustainable supply chain practices – Based on a holistic “Prevent – Detect – Respond” Our governance and policies for strategic approach procurement – Evaluation of suppliers based on self­assessments The core objectives of the strategic procurement processes are and on­site audits to sustain the company’s success by making a consistently high – Focus on human rights: climate protection and contribution to our earnings from purchases of materials and responsible sourcing of minerals services, to assert high quality standards along the entire supply chain, to identify and exploit opportunities to create value through procurement competence, and to ensure Management approach compliance and sustainability. Sustainability is our guiding Siemens procures materials and services from all over the principle. The sustainability initiatives we take are an essential world. We work with approximately 67,700 suppliers in aspect of the successful implementation of our programs. Our around 140 countries. In fiscal 2023, Siemens purchased understanding of sustainability in the supply chain is based on goods and services valued at just under €37 billion, the our company values to be responsible, excellent and innova- equivalent of about half of our total revenue. Due to the tive. As a Support Function in the Service and Governance varying conditions in these countries, ensuring strict compli- units, Siemens Supply Chain Management has the process and ance with our globally applicable sustainability requirements regulation responsibilities for procurement principles. poses a significant challenge for our daily procurement practices. Our mandated purchasing units take general responsibility for implementing and complying with Siemens’ procurement Our purchasing activities have impacts on our suppliers, principles. Therefore, only mandated purchasing units are local communities, and the environment in our procurement authorized to conclude contracts with suppliers. markets. As such, we monitor and engage with our suppliers to drive and support their efforts to enhance sustainability We have developed policies that describe our standards for practices. Our supplier relationships provide us with the suppliers in terms of their social, environmental, and ethical opportunity to make contributions to securing jobs and performance. They lay the foundation for guiding supplier promoting adherence to both international work and envi- selection, evaluation, and ongoing engagement. ronmental standards. Using our holistic sustainable supply chain management approach, we work to prevent situations The Siemens Code of Conduct for Suppliers and Third-Party where suppliers may be tempted to compromise the well- Intermediaries (Supplier Code of Conduct) is designed to being of their workforce or violate environmental regulations. - cover our sustainability requirements. Among other princi ples, it is based on the principles outlined in the United Nations Global Compact (UNGC) and our Business Conduct Guidelines (BCGs), which sets out the basic principles of sustainability for our suppliers. Siemens purchased goods and services worth €37 billion from The Supplier Code of Conduct requires suppliers to adhere to about 140 countries standards on: → Fundamental rights of employees, including a protected grievance mechanism for employees → Health, safety, and environmental protection SIEMENS SUSTAINABILITY REPORT 2023 44