Our standards and requirements. Our Supplier Sustainability Standards, which are an integral part of our conditions of business, define our requirements for working conditions, human rights, environmental protection, safety, business ethics and compliance. We urgently require our direct suppliers of goods and services all over the world to comply with these standards.

We expect our suppliers of production materials to operate with an environmental management system that is certified according to ISO 14001, EMAS or other comparable standards. We also expect this of our suppliers of non-production materials on the basis of our risk assessments. With regard to animal protection, we require our suppliers to comply with applicable laws and regulations. We do not tolerate or support the unethical treatment of animals.

We demand that our direct suppliers commit themselves to observing our sustainability standards, communicating them to their employees and to their upstream value chains, and then checking to ensure that the standards are complied with. We support them in these activities by providing them with targeted information and training and qualification measures. The central information platform for suppliers is our Daimler Supplier Portal.
Daimler Supplier Portal

Supplier review. Our employees review new suppliers of production materials to Global Procurement Trucks & Buses in high-risk countries by means of sustainability-related on-site assessments. At Mercedes-Benz Cars, new suppliers in less risk-prone countries are also investigated by our procurement and quality employees, with a specific focus on their sustainability performance. We also conduct a more thorough assessment where this is necessary. The results of the assessment are discussed in management committees and flow into decisions on whether to award a contract.

To ensure that our direct suppliers comply with the sustainability standards, we regularly conduct risk analyses. We use regular database research and other measures to discover any violations of our sustainability and compliance rules by our current suppliers. We systematically follow up all reports of violations. With the help of an online survey, we also question our main suppliers about their sustainability management and their communication of these requirements to their upstream value chains. On the basis of the results, we define measures to improve their sustainability performance.

We have established a complaint-management process that enables individuals to draw attention to possible human rights violations at suppliers. In this context, we work together closely with the world employee committee. We bring together all the available information and take action if the reports are well founded. The suppliers are requested to respond to the accusations; after that, we assess the facts of the case and take the necessary measures. This can lead to the termination of a business relationship. However, it is not always productive to end cooperation with a supplier immediately after a case of misconduct. It often makes more sense to work together with the supplier to improve the situation. This approach also benefits the people at the location. In addition to the complaint-management process, information on misconduct can always be submitted to the BPO whistleblower system established by Daimler.
BPO whistleblower system

Dialog and training. In order to achieve consistent sustainability management in the supply chain, we need to ensure that suppliers have a common understanding of sustainability and possess the knowledge needed to implement specific measures. For this reason, we have been organizing supplier training courses with other vehicle manufacturers for many years now.

In 2018 we held training courses for suppliers in the focus countries Thailand, Hungary and Spain in cooperation with the European “Drive Sustainability” initiative.
Drive Sustainability initiative

We also participate in the creation of local networks and training workshops within the framework of the German Business Initiative for Sustainable Value Chains that was established by econsense — Forum for Sustainable Development of German Business and the Wittenberg Center for Global Ethics (WCGE). Initial supplier workshops whose participants also included Daimler suppliers were held in the focus countries and regions China and Mexico in 2018.
econsense initiative for sustainable value chains

Existing and potential suppliers can also participate in a free e-learning training program that helps them continuously improve their knowledge of sustainability issues.

In addition, we use a special e-learning program to provide our global procurement staff with information on sustainability topics and improve their qualifications. Training courses on current topics such as human rights violation risks are also held at regular intervals at Mercedes-Benz Cars Procurement facilities in various locations around the world (Austria, Argentina, China, India, South Africa, Mexico, the USA and Thailand).

Involvement in associations and sustainability initiatives. Our many years of involvement in various German and international industrial and business-sector associations helps us ensure sustainability in complex supply chains. We work with German associations such as econsense, the Association for Supply Chain Management, Procurement and Logistics (BME), and the German Association of the Automotive Industry (VDA), as well as international associations and organizations. For example, we are a member of the Automotive Industry Action Group (AIAG) in the USA and a lead partner in the “Drive Sustainability” initiative of the European automotive industry. Among other things, these associations and initiatives develop measures to improve sustainability in supply chains. The common framework established by the Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain sets minimum social and ecological standards for automotive companies and their suppliers.

In order to help ensuring efficient sustainability management and improve our ability to compare conditions, we also work with standardized instruments such as the industry-wide sustainability Self-Assessment Questionnaire.

Daimler is also expanding its activities for improving sustainable raw material supply chains through its participation in initiatives such as the Responsible Cobalt Initiative, the Responsible Minerals Initiative, the Responsible Steel Initiative and the Aluminium Stewardship Initiative. Here we focus on targeted cooperation with relevant stakeholders in raw material supply chains in order to improve working conditions and prevent human rights violations in raw material mining operations. These initiatives serve as important platforms that also make available sophisticated instruments for ensuring the safe origin of materials such as cobalt, steel and aluminum. Daimler continues to actively support their practical implementation.

Human Rights Respect System for the supply chain. The Daimler Human Rights Respect System is designed to enable the early identification and avoidance of systemic risks and possible negative effects of our business activities with respect to human rights. This system is also designed to achieve that the human rights of employees are respected by our direct suppliers and, on the basis of risk analyses in the case of specific supplier products, by upstream suppliers as well.
Human Rights Respect System