In recognition of INNIO Group’s outstanding commitment to sustainability, the Group’s Procurement team has been awarded the 2024 EcoVadis Sustainability Achievement Award for “Best New Program.” The award honors the relentless pursuit of sustainable solutions and the Procurement team’s commitment to a carbon-free future. In addition, it affirms that INNIO Group is on the right path – a path that is not just about cost-effectiveness but also about environmental stewardship and social responsibility.
To qualify for EcoVadis’ Best New Program award – presented at EcoVadis’ “Sustain” conference in Paris 2024 – INNIO Group’s Sustainable Procurement program and roadmap could be no older than three years. INNIO Group leadership formalized the Group’s roadmap in the summer of 2021.
Procurement is a central part of INNIO Group’s activities as original equipment manufacturer (OEM). Building transparency or processes, taking responsibility for the supply chain, and showing transparency toward regulations and standards as well as socio-environmental accountability are critical attributes.
For instance, a key goal for the Procurement team is to reduce greenhouse gas (GHG) emissions related to purchased components. The company achieved a 12% absolute cradle-to-gate GHG reduction in purchased components in 2023 from a baseline of 2020.
A collaboration that strengthens sustainability
The GHG equivalent of purchased goods in 2023 accounted for approximately 40% of Scope 3 (excluding use phase emissions) for INNIO Group. By expanding the use of recycled and reclaimed materials and optimizing upstream transportation, INNIO Group can promote a more sustainable, less carbon-intensive supply chain.
To further strengthen this commitment, INNIO Group began a collaboration with EcoVadis that aims to assess the sustainability performance of INNIO Group’s suppliers through proactive ratings and evaluations using EcoVadis’ methodology. So far, this assessment has enabled INNIO Group to gain a clearer view of its suppliers, evaluate them, and promote responsible business practices throughout the supply chain. Additionally, INNIO Group has been able to continue to gain important insights into challenges and collaboration opportunities to jointly decarbonize the value chain.
For instance, the Procurement team set clear packaging and process guidelines for suppliers to ensure packaging is performed in an efficient and resource-responsible way. The recycling or reuse of raw materials was prioritized, helping to reduce waste disposal. From a baseline average of 56% recycled materials across Jenbacher and Waukesha engines in 2022, the Procurement team increased this to 61% in 2023.
The Procurement team also has developed a cradle-to-gate emissions calculation training for suppliers, including Scope 1 and 2 and upstream Scope 3 based on the GHG protocol and industry best practices. Collaboration with more advanced suppliers to both improve this training and INNIO Group’s understanding of cradle-to-gate emissions is also a priority. In 2023, INNIO Group worked with more than 20 suppliers to partially complete their product carbon footprints (PCFs).
Code of Conduct supports sustainable procurement
INNIO Group’s sustainable supply chain approach includes a dedicated environmental, social, and governance (ESG) and Procurement Policy, a Supplier Code of Conduct, and a Conflict Minerals Policy through which clear guidelines and sustainability standards are set. The Procurement team works with suppliers who actively sign that they follow the 10 Principles of the UN Global Compact, and it implements dedicated ESG assessments and audits for them. INNIO Group’s Procurement team sets clear internal and external ESG-related goals as well as a detailed ESG Procurement roadmap to achieve these goals.
To formalize joint commitments between INNIO Group and its suppliers, INNIO Group has requested that suppliers set ESG-related and carbon-reduction goals. By the end of 2023, more than 80% of its top 200 suppliers have committed to a 50% reduction in their GHG emissions by 2030. INNIO Group plans to further engage with suppliers to achieve these sustainable targets. The Procurement team also began a campaign to increase the ESG coverage of its indirect suppliers, reaching an ambitious goal of 40%.
What’s next?
INNIO Group is empowering the transition to net zero, not just with energy solutions and services that are flexible, scalable, and resilient, but also with outstanding business practices. And these successes are only the beginning. The Procurement team’s goal is to have more than 90% reused, recycled, or reclaimed materials by 2030.
