Global operations, local suppliers
We aim to source materials, products, and services in a way that safeguards our planet and its people, without compromising quality or financial efficiency. Our procurement activities are divided into general procurement and procurement of raw materials. Raw materials are all ingredients that are in the steel we produce. General procurement purchases everything that is needed for our production activities and everything else we do at Outokumpu.
In 2024, we had over 7,400 suppliers globally, local suppliers account for about 64% of purchases. Direct suppliers operate in 58 countries.
Three pillars of our supply chain sustainability
Circular and low-carbon supply chains
We prioritize suppliers who enable circularity through recycled content, efficient material use, and low-carbon processes to minimize impacts on nature. Our sourcing criteria increasingly emphasize lifecycle impact, supporting Outokumpu’s goal to decarbonize our value chain, safeguard biodiversity, and reach our science-based climate targets.Responsible and transparent sourcing
We are strengthening due diligence processes across all tiers of the supply chain to identify, prevent, and mitigate human rights risks and environmental harm. Through robust supplier assessments, engagement programs, and data-driven tools, we embed transparency and accountability deep into our value chain.Partnerships for progress
Achieving systemic impact requires collaboration. We work actively with suppliers to build capability and develop practices that drive sustainability. We aim to evolve from transactional relationships to long-term strategic partnerships with suppliers that share our values.Expectations towards suppliers
As our customers require a lot from us as a supplier, we place the most stringent requirements on ourselves and require the same from our suppliers. We take into account the OECD Due Diligence Guidance for Responsible Supply Chain, and are implementing the UN Guiding Principles on Business and Human Rights in our operations and supply chain.
Outokumpu's suppliers have to comply with our Supplier Code of Conduct and Supplier Requirements.
For some products and raw materials, there are specific requirements. Conflict minerals are one example where supplies shall meet the requirements of the OECD Due Diligence Guidance, the Regulation (EU) 2017/821 of the European Parliament, and the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act. Suppliers of conflict minerals shall confirm to Outokumpu via the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI) the supply chain regarding mineral country of origin and that only approved smelters and refiners being utilized.
Supply chain due diligence and monitoring
Outokumpu applies a risk-based approach in supplier management. Upstream value chain mapping helps in setting the right priorities. Outokumpu buys all kinds of materials, products and services and some of them pose more sustainability risks and are more critical to Outokumpu’s operations than others.
A supplier shall be qualified before they can be approved and added to the Outokumpu supplier portfolio. In the qualification process, the potential risks and/or opportunities are identified and evaluated. This ensures that the suppliers comply with the Outokumpu’s requirements and can provide conforming raw materials, products, or services on a consistent basis.
Outokumpu monitors its suppliers through self-assessments, screenings and audits. Most of suppliers are also going through a monthly compliance screening for sanctions. Procurement uses mainly EcoVadis for self-assessments, which focus on environment, labor & human rights, ethics, and sustainable procurement. As a result of the self-assessments, improvement opportunities and requirements can be identified and agreed with the suppliers.Outokumpu monitors its suppliers through self-assessments, screenings and audits. Most of suppliers are also going through a monthly compliance screening for sanctions. Procurement uses mainly EcoVadis for self-assessments, which focus on environment, labor & human rights, ethics, and sustainable procurement. As a result of the self-assessments, improvement opportunities and requirements can be identified and agreed with the suppliers.
The countries in which our suppliers operate are mapped against country-based risk indices by TDi Sustainability’s Alert Index for Responsible Sourcing (AIRS), against the countries listed in the Dodd Frank Act Section 1502, as well as conflict-affected and high-risk areas (CAHRAs) as published by the European Union.
In addition to EcoVadis and the country-risk, raw material suppliers are assessed also based on e.g. available certifications and previous audit results. Based on these indicators, suppliers are selected for on-site reviews. Those reviews vary from sustainability visit, to sustainability audit to human rights impact assessment depending on the perceived risk. The below diagram describes the process in more detail. If you would like to know more about the conducted on-site reviews, please go to Site visits page.
As a result of our due diligence work, we have identified the salient impacts across our value chains. These impacts together with those that we have identified as salient in our own operations, are outlined on the Impacts on human rights page. We address these impacts in our Supplier Code of Conduct and Supplier Requirements to set the expectations towards our suppliers, and work together with them e.g. through sustainability audits and human rights impact assessments to prevent and mitigate the impacts. We also regularly evaluate the saliency of these impacts to monitor our progress and to account for any new risks.
