Supply Chain

IAG is working on the challenge of establishing consistent sustainability principles in our supplier partnerships.

In an increasingly diverse business, IAG faces a continuing challenge to consistently apply sustainability principles into our supplier partnerships.

"We have thousands of suppliers across the Group. We deal with printers, IT companies, smash repairers, builders, doctors and a whole range of other types of suppliers," says Group Procurement Manager Chris Heptinstall. "That means our approach to sustainability in dealing with this diverse group needs to be flexible. With some of our suppliers we're quite advanced in partnering on sustainability outcomes, with other suppliers we've barely begun. Given the scale of our supply relationships we have a terrific opportunity to partner with these suppliers to deliver improved sustainability outcomes. We're building consistency in our approach and engaging more and more suppliers on sustainability goals and performance, but we have a long way to go," said Chris.

In Australia, many of IAG's larger 'corporate' suppliers have sustainability goals built into their supplier performance reports, with 23% of suppliers (accounting for 49% of total supplier spend for the corporate suppliers) having these provisions. These reports cover areas such as employee relations, environmental responsibility, and community engagement.

In New Zealand, IAG has recently sent 50 national suppliers and 350 smash repair businesses¹ a Guide to Sustainable Values based on the New Zealand Business Council for Sustainable Development Code of Conduct, as well as a 'sustainability performance review' to be completed over the coming year. Sustainability considerations are built into 'Request for Proposals' and supplier contracts. "It's about sharing and promoting our commitment to sustainability with our business partners," said Tim Griffiths, IAG's National Procurement Manager, New Zealand.

In December 2006, IAG presented its sustainability category Supplier Award to Corporate Express for the way it had embraced IAG's sustainability policies in delivering its service. Corporate Express scored points for their contribution to our Easy Being Green employee offer, its environmental reporting practices including disposal of packaging, and its research and consultation on environmentally friendly product alternatives.

¹ Note that letters to New Zealand smash repairers were sent in July 2007 which is outside the reporting period for this Sustainability Report. Letters to national suppliers were sent in June.

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