Responsible purchasing

We work with around 5,000 suppliers and our group expenditure with third parties amounted to £656 million in 2006/07. We subscribe to the code of conduct of the Chartered Institute of Purchasing and Supply (CIPS) and we were successfully re-accredited to the standard last year. Our priority is to adopt a more integrated approach to sustainability issues in core purchasing processes.

Areas progressed:

• we piloted a new supplier questionnaire in order to build environmental and social criteria into our evaluation processes
• we continued to support our suppliers to maintain good environmental and social practices (see below)
• we made more timely payments to our suppliers. In March 2006, just under 70% of invoices were paid on time. This rose to over 80% by March 2007
• we developed plans to introduce category-based procurement. This will enable a more strategic approach, including controlling waste, maximising value and taking account of the social and environmental considerations that may influence purchasing decisions

The following are examples of our partnership approach, where we have worked with our suppliers for mutual benefit and to support sustainability goals.

Supporting suppliers in good practice

European Union directives to minimise the impact of waste electrical equipment (WEEE) and to restrict the use of hazardous substances (ROHS) are now part of our standard tendering process. After due diligence, whereby we were assured of our supplier’s compliance with the new legislation, we awarded a new contract for disposal of IT equipment. Ongoing reviews will provide us with assurance that these environmental standards are continuing to be met. Read more about how we manage waste.

New hire car agreement to reduce environmental impacts

We have worked with our supplier to make diesel cars our hire of choice. Our supplier now prioritises Nationwide requests. Central monitoring enables us to track usage and supports compliance with the policy. Nationwide’s diesel car hire has exceeded the supplier’s average by around 10%, which is a highly positive outcome. We are now considering with our supplier the possibility of them adding to their diesel fleet to support our growing demand. Read more about how we manage our travel impacts.

Promoting Fairtrade products

In 2004, we introduced Fairtrade coffee in vending machines in our main administration centres in a partnership with suppliers including Percol and Aramark, which was the first of its kind in the UK. Fairtrade coffee has been a popular choice ever since and by the end of 2006 accounted for around a quarter of sales in our Swindon centre. We also support sustainable products through our yearly Fairtrade Fortnight and through product sales in our staff restaurants. Sales of Fairtrade products have increased by 40% globally in recent years, benefiting farmers, workers and communities in the developing world.

Purchase and recycling of corporate clothing

Over 8,000 Nationwide employees in branches around the UK wear corporate clothing, which is an important part of our brand identity on the high street. Corporate clothing is manufactured overseas and we pay careful attention to working with a supplier who can assure us that the people making the garments are getting a fair deal in well-managed factories and workshops. Our supplier, incorporatewear, acts as an independent verifier and carries out regular factory inspections. Nationwide’s corporate clothing comes from specific factories in China and Portugal. Worn every day at work by our customer-facing employees, our corporate clothing is replaced every two years. We recycle obsolete corporate clothing through Wilcox Industrial Supply, which exports to Africa, Asia and Eastern Europe.

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