Managing our supply chain to mitigate risks, promote responsible sourcing practices, uphold human rights, and reduce environmental impacts is a core element of Axalta’s sustainability program.

Axalta works with more than 5,000 suppliers throughout our global supply chain. These companies provide the raw materials that go into our products, supplies that are used in our manufacturing facilities, laboratories and offices, and services that support the operations of our company. Supply chain risk management activities are of increasing importance at Axalta, and we continue to strengthen our policies, programs, and performance in this area.

Supplier Code of Conduct

Regardless of what our suppliers are providing to Axalta, where they are located in the world, or how much we spend with them each year, we have the same high expectations of them. Axalta’s Supplier Code of Conduct is the foundation of our expectations of the participants in our supply chain. Our Supplier Code of Conduct complements the Axalta Code of Business Conduct and Ethics. The 10 expectations in our Supplier Code are for our suppliers to:

  1. Act in compliance with laws.
  2. Do business ethically.
  3. Avoid inappropriate gifts, meals, and entertainment.
  4. Demonstrate respect for people.
  5. Respect fundamental human rights.
  6. Provide a safe working environment.
  7. Comply with environmental regulations.
  8. Cooperate on conflict minerals.
  9. Keep accurate books and records.
  10. Manage and protect information.

Compliance with the expectations in our Supplier Code of Conduct is a requirement outlined in our standard terms and conditions with all suppliers, and is just one element of our supply chain risk management program.

Supplier Sustainability Risk Management

Axalta has worked to enhance our supply chain sustainability risk management efforts over the past several years. These activities, led by our Procurement, Sustainability, and Legal and Compliance teams, occur throughout the life cycle of our supplier relationships.

Before companies do business with Axalta, prospective raw materials suppliers must complete our Initial Commercial Assessment questionnaire as part of our supplier qualification process. The assessment requires information about health and safety performance, financial and procurement information, logistics, and quality, among other topics. We introduce the Supplier Code of Conduct during this supplier qualification process, and we request prospective suppliers to acknowledge that they would be able to adhere to the principles in our Supplier Code.

When suppliers begin to do business with us, our standard terms and conditions with them include requirements to adhere to all applicable laws and regulations related to the environment, labor, working conditions, forced labor, child labor, conflict minerals, among others, and to adhere to our Supplier Code of Conduct.

Goal

Utilize our Supplier Sustainability Risk Management Program to proactively evaluate our supply chain to ensure human rights issues are identified and addressed.

On track

On an ongoing basis, Axalta conducts screening of existing suppliers on a risk-ranked basis to identify potential sustainability, compliance, and human rights risks in our supply chain. After developing and conducting a supply chain sustainability risk management pilot screening program internally in 2018 and engaging with internal and external stakeholders, Axalta decided to enhance our screening by using the Self-Assessment Questionnaire (SAQ) developed by the automotive industry and administered by NQC. The questionnaire covers the topics included in Axalta’s Supplier Code of Conduct. This platform standardizes the information being asked of suppliers throughout the automotive supply chain. For the initial screenings using the SAQ, Axalta focused on raw material suppliers of higher risk materials, with significant spend, located in higher risk countries. We will continue to use the SAQ to screen our suppliers on sustainability performance on a risk-ranked basis. We review the responses from our suppliers and follow up with them if we identify any responses that are unsatisfactory.

If at any point concerns are raised or risks are identified—via our ongoing screening and due diligence activities, through reports made to our Axalta Ethics Hotline, by our customers or other external stakeholders, or via other channels—Axalta will fully investigate and conduct further due diligence on our suppliers. This may include third-party audits using social and environmental criteria, the development of corrective action plans, or suspending or even terminating purchases from suppliers. Please see the Minerals Sourcing section of this report for information on how we’ve investigated and remedied concerns in our mica supply chain in recent years.