the supply chain’s role in reducing environmental impacts

We require our entire supply chain to comply with legislation, contracts and collective agreements, as well as to satisfy our responsibility requirements with regard to environmental responsibility, our service providers’ supply chain responsibility, quality and occupational safety. In selecting suppliers, we emphasise the reliability of operations, ethical and environmental principles, product/service quality and cost efficiency, all of which must meet our strict standards. 

Cooperation with a new contract supplier can only begin after the supplier has completed a self-assessment survey, based on which we decide on starting cooperation and any further actions deemed necessary.

We developed our supplier assessment process

In 2016, we continued to develop our supplier assessment process in relation to our corporate responsibility programme. 

  • We revised the self-assessment and auditing practices for contract suppliers by defining critical points for the assessment as well as the selection criteria for suppliers to be audited.
  • All of our new contract suppliers conducted a self-assessment in 2016. 
  • We set quantitative goals for supplier assessment: 100 biggest suppliers to do self-assessment, auditions based on risk assessment for 5-10 suppliers each year.
  • We adopted a new supplier classification model based on the nature of the purchased service and the intended use of the material in question. Some 98 per cent of all L&T suppliers are classified suppliers.
  • We also introduced a new implementation model for responsible purchasing in 2016. The persons responsible for purchasing at the business level participate in quarterly information and discussion sessions that cover current topics related to purchasing. 

Fighting the grey economy

After more of our suppliers joined the Tilaajavastuu.fi service in 2016, some 98 per cent (2015: 95%) of our service providers were registered on the service at the end of the year. Going forward, joining the service is a requirement for starting and continuing cooperation.

We reduced our environmental impacts

  • We successfully reduced the environmental impacts of our fleet by means such as developing driving styles, improving the efficiency of our operations (increasing the fleet utilisation rate) and reducing the total size of the fleet. For more information on these measures, please refer to the section on environmental responsibility.​

  • We updated our heavy-duty fleet and replaced some of the oldest vehicles with newer Euro 6 class vehicles that have lower emissions. In 2016 we invested altogether 18 million euros in fleet. Together there are 892 (2015: 875) heavy duty vehicles in our use.

 

EURO classification of heavy duty vehicles

​​

  • Some 64  per cent of the heavy duty fleet belonged to Euro 4 –emission class or newer in 2016 (2015: 59 %). We also diminished the environmental effects of our fleet by developing the driving habits, optimizing our functions (increasing the utilization rate of our fleet) as well as diminishing the amount of the fleet. 

  • We have two natural gas, bioethanol diesel and hybrid waste trucks in operation (2015: 7). The use of alternative fuel vehicles has not developed in the desired direction. The reasons for this are related to the limited availability of heavy-duty vehicles as well as tax policy. 

  • Our use of electric vehicles consisted of four vans. 

  • In early 2017, we began using a renewable diesel fuel produced from waste and scraps by Neste in selected waste collection vehicles in the Helsinki metropolitan area. The use of the renewable diesel can significantly reduce greenhouse gas emission as well as local emissions that compromise local air quality. The use of renewable diesel can lead to a significant reduction, as high as 90 per cent, in greenhouse gas emissions over the entire life cycle of the fuel compared to traditional fossil-based diesel. 

  • We offer our customers Nordic Ecolabel-certified Eco-cleaning services, which support our customers in reaching their environmental objectives. Ecolabelled (Swan label) cleaning agents accounted for 72 per cent in 2016 (2015: 82 %). Due to the automatic dosing as well as more effective use of cleaning methods we managed to lower the use of the cleaning agents. The use of the non-ecolabelled disinfectants remained unchanged, which decreased the use of the ecolabelled cleaning agents. We use environmentally certified cleaning agents whenever they are available in the product category in question. The target is to increase the share of ecolabelled cleaning agents detergents to at least 80 per cent. 

Purchasing was mostly domestic

In 2016, L&T had approximately 5,000 (2015: 4,800) suppliers of goods, materials and services in Finland, the total purchases from whom exceeded EUR 1,000 during the year. Total purchases of goods and services amounted to EUR 256 million (2015: EUR 247 million). The total value of purchases increased as a result of the expansion of the recycling business, which led to a higher purchasing volume of supplies, and a higher level of service purchasing. 

In Finland, 94.6 per cent (2015: 94.9%) of purchases were made from companies operating in Finland, and 5.3 per cent (2015: 5.1%) from other EU countries. Practically no purchases were made from countries outside the EU (0.02%). 

Breakdown of procurement by country


 
 
 
 
 
Breakdown of procurement in Finland
 
Total EUR 256 million
 
% of the
total
 
Direct procurement*
60 %
 
Vehicles and equipment**
18 %
 
Indirect procurement, real estate and facilities**
22 %
 
* Direct procurement includes: raw materials and material payments, external workforce, technical materials and supplies.
 
** Vehicles and equipment, indirect procurement and real estate and facilities also include investments.
​​