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Responsible Supply Chain Management

ITW is committed to working with suppliers who operate responsibly and with dedication to global environmental sustainability. We strive to foster responsibility across our value chain to ensure we conduct business 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 Code of Conduct to our suppliers and is consistent with the United Nations Global Compact. Our purchase order Standard Terms and Conditions further reinforces 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.

Diverse Suppliers: As part of ITW’s “Do More” Agenda to promote and support inclusive economic growth for diverse suppliers, we have established the following supplier diversity goals:

  • By 2021, increase U.S. third-party spend on products and services from African American suppliers to $6 million. In 2021, ITW grew our African American spend significantly to a total spend of over $4 million. We are committed to doing more in this regard and continuing to grow with African American and other diverse suppliers.
  • By 2025, increase our third-party spend on products and services from diverse suppliers to more than $180 million.

Diverse suppliers include racially/ethnically diverse, women-owned, veteran-owned and LGBTQ+-owned companies. We also continue to expand our relationships with advocate organizations, including the National Minority Supplier Development Council (NMSDC), the Chicago Minority Supplier Development Council (ChicagoMSDC) and the Women’s Business Enterprise National Council (WBENC), to grow our outreach with diverse suppliers.

Local Suppliers: Given our decentralized culture and global footprint, local suppliers are often the most efficient and reliable way to meet our supply chain needs. The longstanding relationships ITW businesses have with local suppliers enable us to support the communities in which our businesses operate around the world more efficiently while minimizing our carbon footprint. In essence, we strive to buy where we sell. In our overall supply chain, approximately 45 percent of global third-party spend is with suppliers who are near the facilities they serve.

Efficient Distribution and Storage. In addition to local sourcing, 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. Each year, ITW has made progress in streamlining our distribution activities for a more efficient approach.

Sustainable Materials: We focus our efforts on sourcing more environmentally friendly and sustainable materials for our products. Each year, we increase the volume of recycled materials used in our operations where functionality allows. For example:

  • Approximately 85 percent of our steel is derived primarily from scrap metal.
  • Globally, about 7 percent of our resin consumption is from recycled sources.
  • Approximately 16 percent of our addressable solvents and oils are from recycled sources.

The majority of our cardboard usage is derived from recycled sources. In addition, we are investing in resources to identify ways to reduce packaging overall, while still protecting our product throughout the delivery process. We are also helping our customers identify ways to incorporate recycled materials into their manufacturing processes.

Supplier Index and Audits. We 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. The audits provide visibility into supplier operations while helping to support our responsible sourcing due diligence efforts.

 

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. We work to continuously improve our processes and engagement with suppliers with respect to responsible sourcing.

In addition, while cobalt and mica are non-regulated minerals, some ITW divisions are reporting on these minerals as well. ITW actively engages in several industry consortiums, including the Responsible Minerals Initiative (RMI) and the Automotive Industry Action Group’s (AIAG) Responsible Materials Working Group (co-chair), providing thought leadership to help improve approaches in this area. In 2021, ITW joined Drive Sustainability’s Drive+, a group of automotive tier-1 suppliers focused on accelerating sustainable supply chains in the automotive sector.

More information relating to sourcing of 3TG minerals is available in our Responsible Materials Policy and our SEC filing.

 

Modern Slavery

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.

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