ITW is committed to working with suppliers who operate with similar dedication to global environmental sustainability. We strive to foster responsibility across our value chain to ensure we are committed to the highest level of integrity and ethical standards.
Partnering with Our Suppliers on Accountability
Our Supplier Code of Conduct and Supplier Expectations serve as the foundation for ensuring that our supplier partners operate according to our high ethical standards. More specifically, our Supplier Code of Conduct applies all relevant aspects of ITW’s Statement of Principles of Conduct to our suppliers. Our purchase order Standard Terms and Conditions further reinforce our expectations.
Managing Our Supply Chain Efficiently and Responsibly
As part of our strategic sourcing effort, ITW employs several practices to ensure our supply chain is managed efficiently and responsibly.
Local and diverse suppliers. Given our decentralized culture and global footprint, local suppliers are often the most efficient way to meet our supply chain needs. The longstanding relationships ITW businesses have with local suppliers help us source more responsibly while supporting the communities in which our businesses operate around the world. In our overall supply chain, approximately 45 percent of global third-party spend is with suppliers who are near the facilities they serve.
As part of ITW’s “Do More” Agenda to promote and support inclusive economic growth, we aim to increase our U.S. third-party spend on products and services from diverse suppliers to 5 percent, up from approximately 3.7 percent in 2020, including a meaningful increase from African-American suppliers. Diverse suppliers include racially/ethnically diverse, women-owned, veteran-owned and LGBTQ-owned companies. We also continue to expand our relationships with diverse supplier partners, including the National Minority Supplier Development Council and the Women’s Business Enterprise National Council.
Efficient distribution and storage. We leverage various planning tools to periodically review our supply networks and identify the most efficient logistics routes, methods and warehousing strategies that meet or exceed customer expectations. This data-supported approach enables ITW and its businesses to optimize distribution and storage patterns, resulting in improved freight routes, less packaging waste and reduced carbon emissions and environmental impact.
Supplier index and audits. We systematically rate and audit our suppliers to evaluate their long-term viability, and therefore their ability to support our businesses sustainably going forward. The index we use to rate our suppliers measures them on a variety of factors, including safety and environmental measures, financial data, leadership stability and operational metrics.
Sustainable materials. We focus our efforts on sourcing more environmentally friendly and sustainable materials for our products. When we consider our steel usage, approximately 85 percent of our steel is derived primarily from scrap metal. We have significantly increased the use of recycled resins in certain businesses. Globally, about six percent of our resin consumption is from recycled sources. Additionally, approximately 28 percent of our addressable solvent use is from recycled sources. We continue to grow the amount of recycled materials used year over year where functionality allows. ITW is also reducing cardboard use and requesting recycled cardboard where possible.
Sourcing Our Minerals Responsibly
As a leader in both practice and policy, ITW is committed to taking necessary actions to ensure our supply chain utilizes tin, tantalum, tungsten and gold (commonly referred to as 3TG) only from certified conflict-free sources. These actions are consistent with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and follow the international framework provided by the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. ITW is actively engaged in several industry consortiums, including Responsible Minerals Initiative (RMI) and Automotive Industry Action Group’s (AIAG) Responsible Materials Working Group (co-chair), and provides thought leadership to help improve approaches in this area. In addition, even though cobalt is a non-regulated mineral, we provide information that our divisions may choose to implement with respect to the responsible sourcing of cobalt. We work to continuously improve our processes and engagement with suppliers with respect to responsible sourcing. More information relating to sourcing of 3TG minerals is available in our Conflict Minerals Policy and our SEC filing.
As reflected in our supplier policies, we are committed to taking proactive measures to respect the human rights of those in our supply chain. Further information can be found in our ITW Modern Slavery and Human Trafficking Statement.