Article: Thinking ahead: Sustainability assessment of suppliers
Our long-term goal is to only work with suppliers that operate sustainably. We have established a roadmap to achieve this systematically and collaboratively.
Growing sustainably together – thanks to a forward-looking partnership between Procurement and suppliers
The clear commitment to sustainability and to environmental, economic and social responsibility is integral to the actions of DB AG and our Strong Rail strategy. DB AG has a social responsibility to act as a role model and allocate investments in a forward-looking and sustainable manner. Cooperation with demonstrably sustainable suppliers is a vital prerequisite for this.
Our roadmap for DB suppliers that practice end-to-end sustainability:
Phase plan
With our roadmap for a sustainable and transparent supplier landscape, we want to systematically increase sustainability requirements for our suppliers and advance sustainability in a collaborative partnership.
From 2023, sustainability assessments following contract conclusion are mandatory in all EU contract awards. From 2024, they will be required for all contract awards worth EUR 100,000 or more. Starting in 2025, a qualitative component will be added. This will require suppliers to achieve an industry-standard minimum score in their sustainability assessments.
A sustainability rating (e.g. from EcoVadis) makes it easy to evaluate and compare the corporate social responsibility (CSR) of business partners and suppliers. DB has defined specific fields of action that a sustainability assessment must include at minimum (see illustration).
Fields of action of a sustainability assessment
Our preferred partner for sustainability assessments is EcoVadis. As part of the Railsponsible industry initiative, DB AG encourages suppliers to undergo a sustainability assessment by EcoVadis to promote common standards among the different companies within the European rail industry.
Deutsche Bahn has already been certified since 2014 by the EcoVadis rating agency.
FAQ – What else is important to know:
How will this be implemented?
Suppliers commit to undergoing a CSR rating (e.g. EcoVadis) when they enter a contractual relationship with DB. To this end, a new clause has been added to contracts as a special condition of execution. The clause applies to newly concluded contracts.
We will proceed in stages according to value thresholds:
From 2023 in EU contract awards: Sustainability rating required when contract concluded
From 2024 in all contract awards > EUR 100,000: Sustainability rating required when contract concluded
From 2025 in EU contract awards: Sustainability rating with an industry-standard minimum score required
From 2026 in all contract awards > EUR 100,000: Sustainability rating with an industry-standard minimum score required
A valid rating must be available from EcoVadis or a comparable provider no later than six months after conclusion of the contract and must be made available to the client upon request at any time throughout the term of the contract. Existing ratings are valid provided they are not older than two years.
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What is an industry-standard minimum score?
This is proof that the supplier meets the minimum sustainability requirements customary in its industry. The requirements will be communicated in good time by DB (e.g. via the Supplier Portal). For EcoVadis assessments, the minimum requirement may be the average industry rating at time x, for example.
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What happens with contracts < EUR 100,000?
For contracts < EUR 100,000, the sustainability standards of the DB Code ofConduct apply.
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Do the ratings have to be kept up to date over the entire contract period?
Throughout the term of the contract, proof of the sustainability assessment must be made available to the client at any time upon request. The proof must not be older than two years.
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How is an EcoVadis assessment performed?
Eco-Vadis's assessment of corporate social responsibility focuses on the fields of environment, labor and human rights, ethical business practices and sustainable procurement. The company uses questionnaires and expert and document analyses to assess the company's performance on a scale of 1 to 100 and ranks it in comparison with the relevant industry. This information is published on a scorecard with recommendations for improvements and a summary of the company's strengths.
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Are alternatives to EcoVadis also allowed?
Yes, alternatives equivalent to EcoVadis may be used. The supplier is responsible for proving that the chosen alternative is equivalent in line with the fields of action defined in the contractual provision. As part of the Railsponsible industry initiative, DB AG encourages suppliers to obtain a sustainability rating from a rating agency such as EcoVadis or a similar provider so as to promote common standards across the European rail sector.
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Can I share an existing EcoVadis rating with Deutsche Bahn?
EcoVadis is a popular option in the market, and it is often the case that suppliers have already been evaluated by the platform. In this case, all they have to do is share their scorecard with Deutsche Bahn via EcoVadis and become part of the DB network. The supplier should also briefly inform the relevant contact person at DB (e.g. lead buyer).
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What if the supplier is part of a larger corporate group?
If a parent company has carried out an assessment at whole-group level (indicated by "Group" in EcoVadis), these generally also apply to the wholly-owned subsidiaries. The supplier must provide proof of this.
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How does a bidding group, joint venture group or consortium prove their rating?
All members of a bidding group, joint venture group or consortiummust have a rating performed.
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What contribution does EcoVadis make to meeting the due diligence obligations under the German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz, "LkSG")?
The EcoVadis supplier assessment is a valuable tool that provides important support with the various due diligence requirements of the LkSG. EcoVadis provides DB Procurement with valuable, immediate insights into the sustainability performance of individual suppliers, particularly with regard to the assessment of country or industry risk and also to the specific risk areas covered by the LkSG, on which we will be reporting to the German Federal Office for Economic Affairs and Export Control from 2023/24 onwards. At the same time, the transparency and resilience of DB's entire supply chain will improve as the roadmap allows us to measure the sustainability performance of more and more parts of the supply chain. The information provided by EcoVadis will serve as a basis for sustainability risk management. Particularly when it comes to analyzing specific risks, an available sustainability assessment by EcoVadis can facilitate the process for both sides. For the purposes of ensuring due diligence in relation to preventive measures, EcoVadis is a proactive means of increasing suppliers' awareness of their own sustainability performance through the self-assessment process. In addition, the results of the assessment provide an opportunity to work with suppliers to identify potential improvements and develop corrective actions.
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