Ethical risks in the supply chain

In accordance with the Supplier Code of Conduct, Nowy Styl's partners and subcontractors agree to comply with our ethical standards. However, the declaration of compliance is only one part of our partner evaluation process. The steps we take depend on how we assess the risks associated with a specific supplier. Therefore, every two years we evaluate every company for risks arising from the following:

• type of product - whether it contains hazardous materials that pose a threat to user health and/or safety, and whether it affects the environment;
• type of production - the nature of the work required, the impact of the processes on workers and the environment;
• country of the supplier - issues such as corruption control, the right to freedom of expression and the rule of law.

In 2021, we carried out risk analysis for 173 entities generating 80% of the company's annual direct purchase value, out of more than 2,500 of our suppliers.

The vast majority of Nowy Styl's suppliers are based in Europe (most of them are in Poland, Germany and Switzerland), and only 9 operate in countries assessed as high-risk countries.

New supplier assessment

In parallel to the risk assessment, we also periodically evaluate suppliers for:

• Employment conditions and H&S,
• Respect for human rights,
• Environment,
• Production processes,
• Purchasing processes,
• Maintenance,
• Improvement processes,
• Compliance with other provisions of our Supplier Code of Conduct.

The average supplier evaluation score for an assessment we conducted in 2021 is close to 90%.
The few suppliers that score under 60%, as well as those whose activities we consider to be risky by our standards go through additional verification. Some of them are obligated to conduct regular social audits according to recognized standards, while others are checked by our auditors from the Supplier Quality Development.

Preparing to report CO2 emissions in the supply chain

Currently, we calculate the carbon footprint of our organization for Scopes 1 and 2, i.e. we take into account CO₂ emissions from energy consumption in our plants, electricity suppliers for our offices and factories, as well as company cars and air travel. We are aware, however, that the majority of our impact in that area comes from our suppliers that manufacture materials and components for our needs. What is the scale of that impact? In 2021, we took the first step to analyse that and, together with our partners, make an effort to reduce greenhouse gas emissions.

In response to our inquiry about emissions that we had sent to our key suppliers, we obtained incomplete data from selected companies. In this way we selected suppliers - including the winners of our Supplier Sustainability Award 2021: Gabriel A/S, BASF Polska and Rehau Sp. z o. o. - the most emissions-aware companies with which we can exchange knowledge and support them on the way to minimizing the carbon footprint. We also sent a clear message to other suppliers, those that did not monitor such data before, that reporting emissions is soon going to become our standard.

Recycled materials

Based on the data collected from our suppliers this year, we can also sum up the figures for recycled and sustainable materials in our products:

• Certified roundwood: FSC - 28%; PEFC - 36%
• Recycled cardboard used in boxes - 76%
• Recycled steel materials - 32%
• Recycled wood or wood-based materials - 20%

Data for 2021
* Data obtained from suppliers generating 80% of the purchase value of a given material.