Porsche suppliers to conform to new S rating

PORSCHE announced a new standard which from July 1 will be imposed on suppliers of all Volkswagen Group brands.

It’s called the S rating, which stands for “sustainability.”

The S rating will apply to the procurement processes suppliers go through. It makes sustainability part of the contract to be entered into, and which will be considered early on in the purchasing process. Suppliers will have to address questions about their products’ effects on environmental and social issues which may come with these.

Porsche said the S rating binds suppliers to declare their environmental and energy management systems, as well as the working conditions in their facilities. Because suppliers must get an S rating before they could be awarded contracts, potential risks in the supply chain are reduced at an early stage, according to Porsche.

“This enables us to elevate the issue of sustainability in procurement to the same level as the factors of quality, cost and punctual logistics,” explained Uwe-Karsten Stadter, member of the executive board for procurement at Porsche AG.
The carmaker said it bought in 2018 more than $10 billion worth of products and materials from 7,654 suppliers.

“Sustainability is a matter of course for us. Our company founder Ferry Porsche already often reflected on what could be done to reduce the burden on the environment. That is why he anchored responsible behavior firmly in the company’s philosophy. Thanks to the S rating, our sustainable actions will also have an impact on our value chain,” Stadter said.