3.3 Sustainable supply chain practices The supplier management process at Siemens incorporates Self-assessments and site audits as control strict criteria for supplier selection and qualification. When mechanisms engaging with new suppliers, we categorize and if necessary Based on the risk categories, we conduct appropriate evalu- proactively address potential sustainability risks based on ations of suppliers in accordance with our risk assessment. these criteria. This may apply to suppliers exhibiting the These reviews range from supplier self-assessments of their following risk characteristics: own sustainability practices to on-site sustainability audits conducted by external auditors. → Locations in high-risk countries → Products subject to the requirements for the responsible Corporate Responsibility Self­Assessments sourcing of minerals CRSAs are an integral part of our supplier qualification pro- → Products and services with large carbon footprints cess. They are subject to regular review and updates to align them with evolving standards and regulations. As part of this To identify these risk characteristics, we categorize our process, potential suppliers undergo a mandatory qualifica- suppliers as follows: tion procedure, while existing suppliers are re-assessed every three years. → Purchased material and service fields: We classify suppliers based on the specific types of materials and services they The number of completed CRSAs increased by about 4% from provide. This allows us to tailor our measures to individual 4,912 in fiscal 2022 to 5,096 in fiscal 2023. The number of suppliers: for example, incorporating specific contract agreed-upon improvement measures increased in fiscal 2023 clauses, requesting proof of compliance, or flagging them to 5,493, as compared to the 3,109 reported in fiscal 2022. for on-site audits. → Country risk levels: Suppliers are assigned to risk levels based on country-specific sustainability indicators in Corporate Responsibility Self-Assessments (CRSA)¹ areas like legal compliance, corruption and bribery, Fiscal year human rights in the workplace, and child labor. (Number) 2023 2022 Europe, Middle East, Africa, C.I.S.² 1,122 1,147 We centralize sustainability-related data about our suppliers Americas 767 654 on the SCM Sustainability Platform, which enables us to Asia, Australia 3,207 3,111 gather information from diverse internal and external sources. Total 5,096 4,912 This includes data on carbon reduction initiatives, corporate responsibility self-assessments (CRSA), on-site audit results, Agreed upon improvement³ 2023 2022 and risks associated with conflict minerals. All employees in Legal Compliance/prohibition of corruption Siemens’ purchasing departments can access this integrated and bribery 1,698 915 tool. Respect for the basic human rights of employees 1,194 564 Information is evaluated in the platform using a point system Prohibition of child labor 168 80 and is presented visually. This uniform assessment approach Health and safety of employees 1,103 879 enables sustainability to serve as a consistent evaluation Environmental protection 1,116 546 factor throughout Siemens. It supports and complements Supply chain 214 125 local purchasing decisions with globally available supplier Total 5,493 3,109 sustainability information. 1 Self-assessments completed mainly by suppliers from non-OECD countries with a purchasing volume of > €50,000 per year. Questionnaires that were initiated, completed, and concluded in the reporting period. 2 Commonwealth of Independent States. 3 Improvement measures agreed on with suppliers relate either to actual deviations from the Supplier Code of Conduct, structural improvements in management systems, or a lack of specific processes and guidelines implemented by the supplier. SIEMENS SUSTAINABILITY REPORT 2023 46