Allianz launches sustainable procurement charter

Allianz Insurance has launched a sustainable procurement charter to encourage its suppliers to adopt and develop sound Environmental, Social and Governance (ESG) practices.

For future tender assessments, the commercial insurer will apply a minimum weighting of 10% to ESG factors, as a way of prioritising suppliers who have embedded sustainable and ethical practices within their organisation.

Allianz will also provide support and education to suppliers who are invested in ESG. The insurer wants to partner with suppliers who understand the nature of the materials, products and services they're providing and the importance of protecting the environment and fostering good relations with their employees and their local communities.

Allianz has significantly reduced the environmental impact of its operations in the UK. Between 2010 and 2020, it cut its waste by 89%, its CO2 emissions by 79%, its paper consumption by 61% and its water consumption by 29%. The sustainable procurement charter will help it further reduce its climate footprint.

With this charter, Allianz aims to encourage suppliers to reduce carbon emissions, recycle waste, use renewable energy and consider biodiversity elements for their premises. Besides these environmental commitments, it would like suppliers to set themselves social targets, such as paying all employees the national living wage, reducing pay gaps and providing fair opportunities to everyone. In terms of governance goals, it encourages them to set whistleblowing mechanisms into their business practices and to ensure all tendering activities are open and transparent. While these targets aren't binding, suppliers are encouraged to embed them in their operations and supply chain, ensuring ESG is a core consideration. They should be able to track their own performance in a reportable format, which could then be used to drive better outcomes.

The sustainable procurement charter is designed for suppliers who have a contractual relationship with Allianz in the UK and have a spend profile of more than £20,000. It will act as guidance for internal buyers and suppliers.

Oleh Melnyk, head of procurement and property at Allianz Insurance, commented: "We need to act against climate change and we can't act alone, we need to involve our supplier partners. This charter will help develop a shared mindset with them, creating a fairer and more transparent environment. We want to be market leaders in sustainable procurement; that's part of our ESG ambitions."

To make its own operations more sustainable, Allianz Insurance takes a wide array of measures, from using recycled stationery to maintaining a fleet of hybrid cars. When it closed its Liphook site, it donated the office furniture and equipment to charities for recycling and when choosing a new Manchester hub, it opted for a sustainable building. Allianz also favours repairs over replacement in property claims and supports the use of green parts in vehicle repairs.

At Group level, Allianz is part of the Net-Zero Owner Alliance and the Net-Zero Insurance Alliance, UN-convened initiatives that will see investors and insurers shift their portfolios and activities to net-zero greenhouse gas emissions by 2050.

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