Incorporating CSR principles all along the value chain
A sustainable supply chain
Thales’s Sustainable Procurement policy sets out clear commitments based on six key priorities:
- Holding suppliers accountable for compliance with the law
- Forging partnerships based on mutual good faith
- Sharing expertise to drive progress
- Involving suppliers in climate action
- Providing targeted support to local SMEs with international growth potential
- Expanding partnerships with the third sector
Holding suppliers accountable for compliance with the law
Thales believes that trust-based relationships with suppliers are essential to its success and underpin its long-term growth and development. We expect our suppliers to comply fully with all applicable laws and regulations in the countries where they are registered, operate or deliver services, and to require the same of their own partners and subcontractors.
We require all our suppliers and subcontractors – wherever they are in the world – to adhere to our CSR principles. By signing our Integrity and Corporate Responsibility Charter, our partners pledge to abide by Thales’s Code of Ethics, to uphold the principles of the United Nations Global Compact and to comply with OECD guidelines.
|Sustainable procurement indicators (NFPS)||2020||2021||2023 target|
|Percentage of new suppliers that have signed Thales’s new Integrity and Corporate Responsibility Charter.||91%||97%||100%|
Percentage of suppliers assessed among those considered “at risk” according to due diligence mapping.
This is the first time this indicator has been measured (the process was rolled out in 2020). A significant improvement is expected in 2021.
Forging partnerships based on mutual good faith
Building solid relationships
Thales establishes cooperative relationships with its partners based on mutual good faith. Acting in good faith towards suppliers is an integral part of the procurement process and calls for:
- transparency concerning the rules by which suppliers are selected
- fair treatment of each company throughout the decision-making process
- the development of balanced relationships based on trust and respect
- a commitment to apply the terms negotiated
- a guarantee of neutrality and independence throughout the duration of Thales’s relationships with suppliers.
Thales’s procurement policy is also based on 10 sustainable practices set out in the Charter for Responsible Supplier Relations, which we signed in 2010.
Sharing expertise to drive progress
Procurement plays a key role in further enhancing Thales’s potential for innovation by harnessing the expertise of its ecosystem of suppliers. Underpinning Thales’s relationships and interactions with its suppliers should be a clear understanding of all relevant technology roadmaps – which is why we hold regular information-sharing sessions on these topics with our strategic suppliers.
Thales has also modified its procurement process to facilitate access to start-ups, and we organise regular interactions between the Procurement and Technical Departments about the young innovative companies working with us.
This approach is also in line with the French Ministry for the Economy’s Innovative SME Charter, signed in 2012.
Involving suppliers in climate action
Meeting the challenge of climate change
Thales is striving to provide a consistent response to the major challenge of climate change through its activities and services, and in particular through its “low-carbon future” strategy, which details how the Group will contribute to limiting global warming to 2°C or less in line with the Paris Agreement.
Procurement plays a key role in meeting this challenge. Thales has undertaken to make a more complete determination of the carbon footprint of its suppliers with the highest emissions in order to develop action plans in pursuit of ambitious reduction targets for indirect CO2 emissions.
In 2021, we sent a low-carbon questionnaire to more than 100 suppliers in those purchasing categories identified as having the highest greenhouse gas emissions. The survey measures suppliers’ maturity by asking them to report on their own carbon footprint and reduction strategy.
In 2021, the Procurement Department launched pilot tenders for air travel, short- and long term car rentals and packaging that included weighted selection criteria for emissions and environmental impact reduction measures. The resulting contracts will commit suppliers to quantified, milestone based emissions-reduction targets.
proofs of concept (PoCs) involving these start-ups have been developed to date
Thales’s total procurement spend with EAs and ESATs in 2020
Providing targeted support to local SMEs with international growth potential
Thinking globally, acting locally
Thales’s customers operate in increasingly complex environments and have global footprints, so it’s important for us to fully understand their business challenges, strategic objectives and operating needs. We’re rolling out global strategies – including in procurement – in order to meet their expectations.
We are, however, mindful of our role as a major employer and customer in some parts of the world – which is why we pay close attention to public- and private-sector organisations in every place where we do business.
The Procurement Department is taking targeted action to support SMEs at both regional and national levels, as well as working to help SMEs grow internationally and benefit from Thales’s commercial strength and its knowledge of local markets and contexts.
These actions are fully in line with Thales’s regional policy, its commitment to the SME Pact association, of which it has been a member since 2010, and the SME Action Agreement signed with the French Ministry for the Armed Forces in 2019. The primary aims of this agreement are to improve SMEs’ access to information, to increase experimentation, to continue partnerships developed in the upstream study phase, to support exports and to promote start ups.
Expanding partnerships with the third sector
Moving forward together
In France, Entreprises Adaptées (EA) and Etablissements et Services d’Aide par le Travail (ESAT) are third-sector organisations that play a key role by promoting workplace inclusion for people with disabilities. Thales has worked with members of these organisations for many years, particularly in the areas of industrial subcontracting and general procurement.
Through our Sustainable Procurement commitments, we aim to increase our reliance on companies and establishments that employ people with disabilities, particularly by expanding our working relationships to other segments and procurement categories. This ambition is in line with the Group’s Disability Agreements and is the subject of regular discussions with the Human Resources Department.
An initiative was launched in early 2020, in cooperation with the GESAT network, to expand the use of EAs and ESATs to the electronics, engineering and mechanical industrial procurement segments. GESAT analysed industrial services purchasing for these segments, and project launches will continue in 2021 under the partnership agreement.
In 2021, Thales received the Supplier relations and Sustainable procurement Label,
which is awarded to companies that maintain balanced and sustainable relationships with their suppliers. This certification is a welcome reminder of the crucial role that procurement plays in Thales’s CSR policy.
" This certification is particularly important because it is fully aligned with ISO 20400, the international sustainable procurement standard that integrates social responsibility into the purchasing function. "
A recognised track record in responsible supplier relations
Thales signed the United Nations Global Compact in 2003 and complies with its 10 principles on human rights, labour standards and environmental law, which are inspired by the Universal Declaration of Human Rights and the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.
In 2020, Thales achieved Advanced level – the highest level of reporting under the Global Compact differentiation programme, which includes 21 specific criteria – for the ninth year in a row. The Advanced level programme requires external evaluation, which Thales successfully passed through a peer-review process.
In September 2020, Thales signed the Statement from Business Leaders for Renewed Global Cooperation introduced by the United Nations Global Compact at the opening of the UN’s 75th General Assembly.
Thales also took part in the Uniting Business LIVE summit, which convened business leaders, government and civil society for a three day virtual meeting in advance of the General Assembly to highlight their commitment to the UN’s mission.
Thales is continuing to consider the human rights impact of its activities. In 2019, we joined Enterprises pour les Droits de L’Homme (Businesses for Human Rights), a forum for discussion, initiatives and proposals by international companies to promote improved integration of human rights into business policies and practices through due diligence procedures. We have engaged with a broad range of stakeholders as a member of several working groups.
In 2004, Thales ceased all business activities in the field of cluster munitions. This move was a proactive response to calls from human rights-focused NGOs and a way to pre-empt the requirements of the Convention on Cluster Munitions (the Oslo Convention).
In 2019, Thales made a public commitment to stop producing and selling materials containing white phosphorus by June 2022 at the latest.
There is no universally recognised definition of what constitutes a “controversial weapon”. The term can encompass different types of weapon depending who is defining it (international organisations, NGOs, financial institutions, companies, etc.).
The definition also varies across countries and even within Europe.
For Thales, a controversial weapon is any weapon banned under current treaties recognised by France and the European Union.
Thales therefore does not design, manufacture or sell chemical or biological weapons, which are banned under the Geneva Conventions.
In addition, Thales does not design, manufacture or sell anti-personnel mines, cluster munitions or any of their component parts, in accordance with the Anti-Personnel Mine Ban Convention (the Ottawa Treaty, 1997) and the Oslo Convention (2008).
International treaties do not ban the use of white phosphorus in weapons. Yet this substance is often categorised as a controversial weapon by NGOs and financial institutions because of its characteristics and the danger it poses.
Thales does not produce incendiary weapons. We only use white phosphorus to make smoke-screen equipment, which acts as a protective agent for soldiers. This activity is extremely marginal, since it generated no revenue in 2019 and 2020. Thales is, however, aware of the controversies surrounding this substance. In 2018, we launched a substitution programme to develop a new generation of phosphorus-free smoke products. And even though this programme is ongoing, we have pledged to stop producing and selling materials containing white phosphorus by June 2022 at the latest.