Over the years, Societe Generale's practices related to environmental and social issues have developed to form a basis of virtuous practices. The goal is to strengthen these practices and make them automatic, to manage the CSR risks in the sourcing processes of the Group:
Compliance with the Responsible Sourcing Charter
Since April 2017, Societe Generale's preferred suppliers and all suppliers invited to tender (in France and worldwide) receive the Responsible Sourcing Charter. The Responsible Sourcing Charter is a joint initiative by French companies of the Banking & Insurance sector who want to associate their suppliers in the implementation of due diligence measures in their Corporate Social Responsibility (CSR) initiatives.
Included in all contract templates of the Sourcing division in France and in line with the Societe Generale Code of Conduct, the charter details all the Group's CSR commitments and obligations, and the expectations of suppliers in terms of compliance with sustainable development standards.
The mutual commitments provided in the Responsible Sourcing Charter are based on the fundamental principles of the United Nations Global Compact in the field of human rights, working conditions (Health and Safety), the environment and the fight against corruption.
The KYS (Know Your Supplier) plan
During the requests for proposals and throughout the contract term, suppliers are evaluated against international standards and those of the Societe Generale group through regular checks on three aspects of risk management.
Compliance: checking suppliers' compliance with international regulations relating to embargoes and sanctions. For French suppliers only, the collection and verification of legal documents by a specialised and independent orgainsation.
Operational: assessment of suppliers' financial situation and default risk, via specialised and independent agencies. Checks on the economic dependence with the Group and implementation of actions plans when necessary.
Reputation: assessment of suppliers' reputation through the analysis of public information including key words on environmental and social themes related to the respect of human rights and governance.
In addition, for the most critical suppliers, an assessment of performance in the areas of the environment, social practices, business ethics and subcontracting by an independent third party is required.
CSR risk mapping
In 2006, the Group defined the first map of its Environmental and Social risks (E&S) to assess the intrinsic CSR risks of every sourcing category. A global review of this map of Environmental and Social risks (E&S) was carried out between 2017 and 2018 in conjunction with three other French banks and the support of a specialised consulting firm.
The mapping covers around 100 product and service categories. The category identified as representing the greatest risk was building work (renovations, interior refitting and construction of new buildings).
Introduction of mandatory environmental and social criteria in Requests for Proposals (RFPs)
To minimise and manage the risks when purchasing products or services related to categories of greater risk, the Group includes environmental and social criteria in the requests for proposals. For these categories of greater risk, these environmental and social criteria are assigned a minimum 5% weight and up to 20%.
Tools have been developed since 2016 to gradually make these practices systematic in all purchasing processes led by the Group’s Sourcing division.
Corrective actions plans in the event of insufficient performances, and on-site audits for risky sourcing categories
In addition to the KYS process, an extra-financial assessment of environmental, social, business ethics and outsourcing performance by an independent third party is required for a targeted scope of suppliers under contract.
The Sourcing division encourages suppliers to engage in continuous progress by inciting those identified as of greater risk to implement a corrective actions plan. A process to provide support in the implementation of these corrective actions plans was defined to help suppliers improve their non-financial performance. This process also includes measures for on-site audits which complement the system for the most critical suppliers.
Inclusion of a Sustainable Development clause in agreements
A CSR clause is included in all the contract templates of the Sourcing division in France. It refers to the Group's Code of Conduct, to the Responsible Sourcing Charter and, for certain suppliers, to a required non-financial rating. Its purpose is to associate all Group suppliers in the implementation of vigilance measures in the field of Human Rights, working conditions (Health and Safety) the environment and the fight against corruption.
Raising the buyers' awareness on CSR issues
A specific "Responsible Sourcing" course is included in the internal training programme for newly employed buyers. Awareness-raising sessions on sustainable development are provided to all buyers on a regular basis.
In addition, all members of the Sourcing division have CSR targets.
Improving payment of supplier invoices with the "30-day payment term"
In 2014, Societe Generale made an important choice to pay its suppliers in under 30 days, greatly exceeding regulatory requirements. To meet this challenging target, Societe Generale considerably simplified its approval process and implemented innovating solutions like dematerialising invoices, through which the invoice’s date of issue by the supplier is much closer to the date when it is received by the Group for payment.
In June 2016, Societe Generale was awarded the Prompt Payment Prize for Corporations at the 3rd Prompt Payment Conference and Awards by Emmanuel Macron, then the French Minister for the Economy, Industry and Digital Sector. In 2017, the Group provided its suppliers with a new digital platform to submit invoices. This platform contributes to accelerating payments and provides real-time tracking of invoices.