Supplier Sustainability
At Vestas, we recognize that components and raw materials currently account for over 80 percent of the carbon footprint in our wind turbine manufacturing. As part of our comprehensive sustainability strategy, called Sustainability in Everything We Do, we have set ourselves ambitious goals to reduce our environmental impact. By 2030, we aim to reduce carbon emissions from our supply chain by 45 percent per megawatt-hour (MWh) generated. Furthermore, we aim to produce zero-waste turbines by 2040. To achieve these commitments, we continue our collaboration with key suppliers. We are proud to announce that 77 of our suppliers have committed to tracking and reporting their CO2e emissions. In addition, they will establish emission mitigation targets for their own operations and their suppliers. Together, we are driving positive change across the industry.
In 2023, we hosted our annual Supplier Forum where more than 150 suppliers attended. Themed “Scaling New Heights Together,” this event emphasized the critical role of data transparency and accuracy for a successful collaboration. By sharing insights, best practices, and innovative approaches, we collectively elevate sustainability performance within our industry. We also encouraged suppliers to collaborate with each other to elevate the industry's sustinainability performance.
Beyond environmental considerations, Vestas places a strong emphasis on safety, inclusivity, and social responsibility. We collaborate with our suppliers to minimize any potential adverse impacts on workers throughout the value chain. Recently, we reviewed our due diligence framework for tier-1 suppliers and began preparations for a new human rights risk heatmap specifically focused on our tier-2 suppliers. Our overarching goal is to leverage our influence to mitigate any potential adverse human rights effects on workers within the value chain.
As part of our ongoing commitment, we are embarking on a journey to establish social sustainability targets related to value chain workers. Additionally, we have implemented robust policies, streamlined processes, and innovative initiatives to effectively manage and address any potential adverse impacts.
Memberships and supply chain initiatives
In 2024, Vestas joined the Wind Energy Initiative , a multi-stakeholder collaborative effort between EcoVadis, WindEurope, ENGIE, Hitachi Energy, Siemens Gamesa and Statkraft. Recognizing the importance of supply chain sustainability, the Initiative aims to enhance transparency and elevate performance standards across Environmental, Social, and Governance (ESG) topics. As part of this commitment, Vestas plans to use the EcoVadis methodology. Through this third-party assessment process, suppliers will receive feedback and improvement plans validated by professionals, empowering them to enhance their ESG performance and contribute to a more responsible and resilient supply chain. Taking into account the feedback from the assessment, Vestas plans to collaborate with suppliers to implement recommended corrective measures and enhancement plans, focusing on addressing any sustainability gaps while building a resilient supply chain.
Vestas is also part of networks that push forward responsible and inclusive agendas, such as: Nordic Business Network for Human Rights, the local UN Global Compact network on Human Rights, and the Dutch International Responsible Business Conduct Agreement for the Renewable Energy Sector.
Responsible supply chain management
At Vestas, responsible supply chain management is a crucial aspect of our sustainability commitment. We firmly believe in upholding the Vestas Supplier Code of Conduct, which is an integral part of our Purchase Agreements. We expect all our suppliers to adhere to these principles and standards. Our dedication to sustainability extends to respecting human rights throughout our entire value chain.
To ensure that we meet our commitment to respecting human rights, we recognize the importance of being aware of the most salient human rights issues. In 2018, we underwent our first Corporate-Wide Human Rights Assessment (CW-HRA), conducted by external sustainability experts from the Business for Social Responsibility (BSR) organisation. Building upon this, we conducted our second CW-HRA in 2022, which identified a number of adverse impacts, whereof some occur in the supply chain. More information about the CW-HRA can be found here.
Based upon the result of the CW-HRA, we actively maintain and enhance our Conflict Minerals Programme. This initiative, is guided by our Conflict Minerals Policy . In line with the recommendations of the assessment, we established a steering committee with cross-functional members from Corporate Social Responsibility (CSR), People and Culture (P&C), Sustainable Procurement, and Health, Safety, and Environment (HSE) to work on implementing actions to identified areas of improvement.
Since 2020, the Vestas Sustainable Procurement team has been integrated into the Global Procurement function to strengthen supplier collaboration and oversee the due diligence process on, for example, human rights. The team has currently three social sustainability experts that run projects to ensure improved oversight of human rights issues within our supply chain, further reinforcing our commitment to responsible practices.
Our supplier selection process
- Screening: All suppliers undergo a sanction and business ethics screening.
- Supplier Business Assessment & Verification: Suppliers complete a Supplier Business Assessment (SBA), which is based on the specific scope of supply.
- Remedy/Mitigation: If non-conformities are identified in the SBA, a corrective action plan will be provided.
- Purchase Agreement: Qualified suppliers are required to commit to the Supplier Code of Conduct.
Scenarios for determining supplier assessment scores
The process concludes with the following scenarios, applying a minimum weighting to the criteria for supplier selection and contract awarding. In the assessments we conduct, there are three assessment scenarios for our suppliers, which are shown in the figure on the right.
Promoting dialogue and engagement is essential to our supplier relationships, whether they are direct or indirect suppliers. We believe in actively addressing any non-conformities identified during supplier assessments and mitigating potential negative impact. Non-conformity is followed up with a corrective action plan aimed at improving supplier practices. Our collaborative approach involves regular communication and monitoring progress to facilitate the supplier’s improvement journey. By working together, we strive to establish a sustainable supply chain that upholds the highest standards of social and environmental responsibility, ensuring a positive and responsible impact on our stakeholders and the planet.
Supplier assessment and developments results in 2023
Vestas divides all suppliers into three segments; Strategic Partners, Critical Suppliers and Transactional Suppliers, using a structured approach to bring an appropriate level of focus and resources dedicated to each segment. The suppliers are segmented based on their alignment with Vestas' strategy and culture, engineering, innovation and technology capabilities, spend, financial health, quality and safety performance and other factors related to the commodity and supplier commitment level.
Examples of Vestas Suppliers
Vestas works with thousands of global suppliers. We continually strive to create a resilient and sustainable supply chain to ensure Vestas sustains its leadership position in the transition towards a world powered by renewable energy. The listed 3 companies are some of the largest suppliers that we work with.
- TPI Composites Inc
- DSV Panalpina A/S
- Gestamp Automocion S.A.