Oxiteno's Wins and Challenges: A Brazilian Company's Journey Toward a More Sustainable Supply Chain

July 22, 2022 EcoVadis ‏‏‎

Oxiteno is a Brazil-headquartered multinational manufacturer of chemicals and surfactants and supplies raw materials to more than 30 sectors including cosmetics, personal care, household cleaning and industrial agrochemicals. It has been rated by EcoVadis since 2012 and in 2022 received for the second consecutive year Platinum medal, achieved by only 1% of the highest performing companies. 

Rafael Bica de Freitas, Head of Global Procurement at Oxiteno, talks to us about the company’s sustainability journey, the wins and challenges along the way, and ambitions for the next five years.  

 

Why is sustainability important to your organization and what is the role of procurement and the supply chain when it comes to your sustainability ambitions?

Sustainability is a central element of Oxiteno's strategy. And as such it’s taken into account in all decision-making processes and practices. It is also closely linked to our purpose to contribute to people's well-being through chemistry. We present solutions to the market that combine high performance and quality with sustainability benefits.

Acting responsibly and being aware of our impact are our company values and what we plan for the future. We are aware of our social responsibility and believe that establishing guidelines to reduce the environmental impacts of our performance is the only way forward and the legacy we want to leave.

As the first 100% Brazilian chemical company to partner with EcoVadis, Oxiteno has become better positioned to help ensure strong and responsible supply chains around the world. In this regard, the role of purchasing and the supply chain is fundamental to the excellence of this partnership, as these functions are responsible for analyzing all our suppliers to ensure that the company's solutions reflect, throughout the stages, its commitment to promoting sustainability and creating stable, long-term business relationships with our partners.

Oxitento mid-size company sustainable supply chain

What is the five-year or long-term vision of your sustainable procurement program?

In 2022, for the second consecutive year, Oxiteno was ranked Platinum by EcoVadis, the highest category, achieved by only 1% of the rated companies. Since the first assessment in 2012, our score has increased by 30 points. In addition, it is important to mention that we are listed among the companies with the best practices in the Sustainable Procurement assessment theme.

And when it comes to the main goals we have for our sustainable procurement for the coming years, we want to include all our suppliers in the program and improve the way we implement our action plans to ensure that our sustainability practices match the needs of the society. We also want to improve supplier scores through our collaboration on their improvement plans and establish a process of continuous improvement to promote long-term relationships with the suppliers who share our company values. And on the whole – we want to increase Oxitento’s positive impact on the value chain. 

 

What is your sustainable supplier management program like? What metrics are you monitoring?

The idea behind our Supplier Relationship Program, called Sharing Value,  is to strengthen positive impact partnerships and innovate together to  get better results. With the program we aim to leverage and improve our suppliers’ sustainability practices through management and monitoring of their performance and defining actions to improve their processes. In addition to commercial and financial competitiveness, our metrics include important elements such as the relationship between Oxiteno and the supplier, quality, safety, service level, reputational assessment and sustainability applied throughout the value chain.

 

How are you integrating EcoVadis into your organization? Both within the acquisition processes, and more broadly – how does your company use EcoVadis Scorecards and data?

To achieve the goals set out in our 2030 Strategic Sustainability Plan, we must be able to count on our suppliers. While they already commit to meeting a number of requirements at the time of being contracted, we believe that EcoVadis Ratings provide us with valuable information to further improve our processes and our suppliers and offer the best solutions to our customers from a reliable comparison basis.

EcoVadis’ integration with Oxiteno is underscored by the fact that we consider the EcoVadis Rating, with a weight of 30%, and the Supply Quality Index, added to the other 70%, when we perform the annual Supplier Performance Assessment. So, for each delivery or service delivery performed, as well as meeting sustainability requirements, we assign scores for suppliers, creating a differential, depending on the score obtained. The sum of this score (EcoVadis Assessment + Supply Quality Index) establishes our preferred suppliers, who now have priority in Oxiteno's purchasing strategy.

In addition, the data is used for evaluation in Oxiteno's procurement and improvement processes and scorecards to establish plans to improve sustainable practices with suppliers who have not achieved the minimum score. These plans are validated in partnership with EcoVadis. All this reinforces fully integrated action.

It is also important to mention, as a continuous improvement process, that we will soon start to define practical scoring criteria in purchasing decisions, favoring suppliers who have a positive sustainability score from EcoVadis.
 

As a Brazilian company, what actions do you think had the greatest impact on encouraging suppliers to join the initiative?

At Oxitento we recommend that all our suppliers undergo the EcoVadis rating process and the score is an integral part of our Supplier Performance Assessment. If a supplier does not get the minimum score we require, the risk associated with them is analyzed by Supplies and the outcome of this analysis is a fundamental factor in deciding on whether we continue business with them. 

So, the greatest incentive for suppliers is the fact that EcoVadis Rating is one of the elements of evaluation and recognition of our suppliers, which can be recognized in the annual awards, or overlooked if they do not have the best sustainability practices.
 

What advice would you give to your peers who want to engage their purchasing teams?

As a first step, I would recommend a robust Responsible Supply Policy for teams. Also, support from all Supplies leadership in the team engagement process, emphasizing the importance of team training in all disciplines related to sustainability, and the establishment of an indicator of adherence to the supplier program. 

At Oxiteno, every month we monitor the number of suppliers who joined the program and set individual goals for the entire team for adherence. Both initiatives have shown to be very positive practices.

It is important to note that the buyers responsible for the business relationship are largely responsible for ensuring the engagement of their suppliers in the program.
 

How do you select trading partners to be evaluated, and what happens after the evaluation?

Our entire supplier base is invited to participate in the program. We have an internal criterion for defining critical suppliers, meaning those that supply more sensitive products or services. For them, we have specific goals for participation in the program.

After the evaluation, the suppliers with the best sustainable practices become strong candidates to participate in our supplier recognition award, gaining prominence. For those who have a score below our cutoff point, we have established an action plan, with annual evaluation cycles, to improve performance.
 

Why is it important to also evaluate local suppliers?

For Oxiteno it is important to ensure that even local suppliers have best sustainability practices in their business, so that we can meet our goal of generating a positive impact in all the regions we operate in.

 

Can you give any examples of the benefits or positive impacts your sustainable purchasing program has generated for your company, the purchasing team and suppliers?

The program has resulted in several benefits. As an example, I can mention transport suppliers, who have significantly reduced their greenhouse gas emissions. We also have innovative programs to improve vehicle sanitization processes, which have reduced water consumption and, consequently, their environmental impact. Other benefits include increased packaging lifecycle, and increased engagement, year on year, by internal teams and suppliers in these programs.

All these achievements will be reflected in our annual awards, which will take place in June, and will recognize six suppliers who have the best sustainability practices and best supply scores.
 

Finally, could you say a few words about your experience of working with EcoVadis?

We see EcoVadis as a strategic partner in the development of best practices in sustainability. In addition to its robust tool, which compares global best practices with our area, we have the support of a highly qualified team to help, in addition to the evaluation, create an action plan to improve processes. 

We consider our partnership to be an essential part to the evolution of best sustainability practices not only for Oxiteno, but our entire value chain.
 

 

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 160+ countries.

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