NKT Procurement Sustainability

Ensure that suppliers and service providers adhere to the NKT Code of Conduct, which outlines expectations regarding environmental practices, labour standards, ethical behaviour, and compliance with laws and regulations.  

NKT has established a grievance mechanism through its whistleblower hotline. The hotline provides a safe channel for raising concerns about conduct that does not comply with the standards and principles of this policy. The hotline is available to all companies within the NKT Group, allowing employees and business partners to report actual or potential concerns.  

The whistleblower hotline is embedded in the NKT Code of Conduct and is regularly communicated to employees, business partners, and other stakeholders to ensure awareness of its existence.  

The implementation of a sustainable procurement program is increasingly recognized as a strategic necessity, driven by evolving legislation, stakeholder expectations, and corporate commitments to environmental and social responsibility. 

At NKT, responsible sourcing is a fundamental pillar of our procurement strategy and sustainability agenda. NKT is committed to upholding the highest standards of ethical conduct by actively integrating social, environmental, and human rights considerations into our operations and supply chains. 

NKT approach to sustainability due diligence follows the OECD Six-Step Framework for Responsible Business Conduct, ensuring that its  procurement decisions are informed, transparent, and aligned with global best practices. 

Step 1: Embedding Responsible Conduct in Policies and Systems 

NKT embeds sustainability and ethical sourcing principles within NKT Procurement Sustainability Policy, NKT Supplier Code of Conduct, and internal procurement processes and ways of working.  

NKT Supplier Code of Conduct defines the principles and expectations it set for its suppliers, including respect for internationally recognized human rights, fair labor practices, and proactive identification and mitigation of environmental risks by strengthening our climate agenda. Through adherence to these standards, NKT aim to promote sustainable development, safeguard the well-being of people and the planet, and generate long-term value for all stakeholders— including our suppliers, communities, and the regions in it operates. 

Step 2: Identifying and Assessing Adverse Impacts 

In NKT procurement there are comprehensive multi-tiered risk assessment that combines: 

This structured risk assessment enables prioritization of suppliers and materials that require broader due diligence. 

NKT takes conscious steps and actions to enhance  traceability and transparency in its supply chain through supplier engagement  and industry collaborations. 

Step 3: Preventing and Mitigating Adverse Impacts 

High risk suppliers are required to undergo due diligence process and qualification  steps with requirements related to self-assessments and relevant certifications to be in place.  Medium risk and low risk suppliers are monitored through relevant assessments through regular meetings on identified risks and mitigating actions. 

NKT emphasize on partnership and collaboration, supporting suppliers in strengthening their ESG performance and reducing their environmental footprint. 

Step 4: Tracking Progress and Verification 

NKT monitor progress through different sustainability data analytics and internal key performance indicators by consolidating data on suppliers onboarding, registrations, adherence to Supplier Code of Conduct, Risk assessment results and qualification process. We regularly also monitor the supplier performance through analysis of self-assessments, certifications such as ISOs, Due diligence supporting certifications such as Copper Mark, Aluminum Stewardship Initiative(ASI) etc. and corrective actions. 

This data-driven approach allows NKT to measure real impact and continuously improve its responsible sourcing framework. 

Step 5: Communication 

NKT shares its due diligence processes and progress through our Annual Sustainability Report, customer briefings, and supplier engagement forums. Externally, we communicate our commitment to ethical procurement through participation in industry sustainability platforms and partnerships promoting responsible supply chains such as Copper Mark, UNGC etc. 

Step 6: Remediation 

NKT is committed to ensure its  suppliers and supply chain partners have access to grievance and remedy. NKT has its  Whistleblower. 

Climate & Circularity is one pillar of NKT’s Procurements Sustainability Strategy. Supplier Decarbonization is a large lever for NKT to decarbonize and support NKT’s corporate Climate & Circularity strategy and SBTI target ambition. The impact of materials on a cable’s carbon footprint is approximately 70%.  

The work with suppliers on climate & circularity is an integral part of Procurement’s strategy and supplier lifecycle management. As part of the segmentation & risk assessment suppliers are scoped for decarbonization engagement.  

The scoping is based on supplier’s carbon impact, procurement category relevance for cable system and strategic fit of corporate initiatives (double materiality, Scope 3 and ESRS reporting requirements).  

Once the high impact/ risk suppliers are identified risk mitigation actions are defined.  

The supplier decarbonization engagement framework defines the level of engagement depending on the impact / risk profile of suppliers. The levels are defined as follows: This includes the definition level of engagement as follows.  

NKT's supplier engagement programme aims to build and maintain strong relationships with strategic suppliers through collaboration and continuous engagements on relevant topics. NKT focuses on working with strategic and high-risk suppliers on supply chain risk and to achieve the production and sustainability goals.  

The maturity level of decarbonisation actions of strategic suppliers such for copper, aluminium and insulation materials among other suppliers are assessed for setting targets that are aligned with Paris agreement.  

The suppliers with high-risk are encouraged to mitigate identified and potential risks in their supply chain by promoting working with globally recognised standards such as Copper Mark.