Innovating Responsible Solutions
The ITW Business Model guides our approach to innovation, which starts with our customers and their pain points. Quite often, our customers are challenged with environmental issues such as how to reduce energy use or emissions. Working collaboratively with our customers and suppliers, we focus on enhancing the positive impact of solving customer pain points. As part of their long-range plans, our businesses focus on long-term sustainability as appropriate to meet customer needs relative to clean technology (clean-tech), including water conservation, renewable energy use and emissions reduction. Our focus on eco-efficiency is exemplified by ITW’s Food Equipment Group, which has earned its 10th consecutive EPA ENERGY STAR® Partner of the Year Award for its commitment to energy efficiency. Regarding ITW’s clean-tech products, which in turn help our customers reduce the environmental impact of their own products, ITW is proud to provide more than $3.1 billion of products that support overall eco-efficiency. Clean-tech products represent approximately 22 percent of ITW’s overall revenue.
Partnering with Suppliers to Drive Sustainable Solutions
Guided by our Strategic Sourcing framework, ITW’s sourcing team works with our businesses around the world to build an effective supplier network. Our supplier engagements are guided by ITW’s Supplier Code of Conduct, which defines our commitment to operate with the highest levels of integrity and makes clear that we hold our suppliers to these same high standards. Our code includes the following principles:
- Zero tolerance for child labor or forced labor
- Right to freedom of association
- Anti-discrimination measures
- Rules to prevent improper gifts or payments
- Protection of intellectual property rights
Managing Our Supply Chain Efficiently and Responsibly
As part of our Strategic Sourcing effort, ITW takes several steps to ensure our supply chain is managed efficiently and responsibly.
- We review our supply network to identify the most efficient logistics routes, methods and warehousing strategies that also allow ITW to meet or exceed customers’ expectations. The data-supported approach enables ITW and its businesses to recommend changes to distribution and storage patterns to drive efficiency and reduce the impact on the environment by eliminating unnecessary miles in freight routes.
- We focus our efforts on sourcing more environmentally friendly and sustainable packaging materials for our products.
- 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 $3.1 billion of our third-party spend is with suppliers who are located in close proximity to the plants they serve. Additionally, ITW purchases over $96 million of products and services from diverse suppliers, including racially diverse, woman-owned and veteran-owned companies.
- We systematically review and rate our suppliers to evaluate their long-term viability, and therefore their ability to support our businesses sustainably going forward. This supplier index measures ITW’s suppliers on a variety of factors, including safety and environmental measures, financial data, leadership stability and operational metrics.
Sourcing our Minerals Responsibly
Consistent with §1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and following 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 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. We work closely with our businesses to ensure a robust process to create transparency on the origin of 3TG in our products, including obtaining supplier declarations from affected suppliers whose products contain (or may contain) 3TG. ITW is also engaged in several industry consortiums to help improve disclosures. More information is available in our SEC filings.
ITW is committed to using our best efforts to ensure that our supply chain is free of any kind of modern slavery. Actions we have taken include:
- Training our sourcing personnel on the risks associated with modern slavery in the supply chain and providing guidance on risk factors to consider and possible actions to take if they encounter situations that may cause concern. To date, no issues of concern have been raised by our sourcing personnel regarding any potential modern slavery anywhere in our supply chain.
- Evaluating our purchased products and considering them against the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor for likely countries and industries prone to modern slavery to help identify any high-risk suppliers ITW may utilize.
- Reviewing our Supplier Code of Conduct explicitly with identified possible high-risk suppliers (based on the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor in likely countries) and asking them to certify their compliance. We have obtained certifications from 100 percent of these identified possible high-risk suppliers that they comply with ITW’s Supplier Code of Conduct.
- Onsite visits to selected suppliers to review operations and management practices.
Further information can be found on the ITW.com website, including our California Transparency in Supply Chains Act and UK Modern Slavery Act Disclosure.