Suppliers : Responsibility in supplier selection and relations

As a financial services company, many of our impacts on society are linked not to our own "production" processes, but to our choice of suppliers, from purchasing paper to contracting service providers for insurance claims. In making these choices, we integrate social and environmental criteria in the selection and management of our suppliers.

Responsible procurement

AXA is a major purchaser of products and services for the purpose of its internal operations as well as services provided to its policyholders. This significant volume of purchases (€11 billion in 2011) opens up an additional field of action for the Group in promoting Corporate Responsibility (CR).

The buyers are required to sign a specific Procurement code of ethics in addition to the Group Compliance & Ethics Guide.

AXA also encourages its suppliers to be socially and environmentally responsible and requests from them a formal commitment to uphold International Labor Organisation principles, through a "CR clause" that was implemented in 2006. The clause has first been included in AXA's IT and "General Expenses & Professional Services" contracts, and the scope was extended to "Insurance Procurement" contracts (related to customer claims) in 2010. In 2011 the Group reached a penetration rate of around 89% of new or renewed contracts for IT and "General Expenses & Professional Services" and around 87% for "Insurance Procurement".

In addition, the Group applies social and environmental criteria to assess supplier performance. These criteria enable the Group to improve service quality and reduce some supply chain risks. Since 2008, an in-depth analysis of the CR performance of 350 local or global suppliers was performed by AXA with the assistance of a specialized service provider. Based on AXA's CR stakes matrix, suppliers combining high or medium risks and high purchase volumes are targeted first. For example, 90 suppliers were assessed or re-assessed in 2011. The objective of this analysis is to identify the main CR risks and give suppliers a tangible incentive to improve their performance. When re-assessed, most suppliers have shown significant progress (the average score of the suppliers with an initial score of 4/10 or less has improved from 3.62 to 4.59/10). Specific training sessions are regularly organised with buyers to explain the issues involved and support them in the process and action plan follow-up.