Our Stakeholders

We seek to foster both competitive and collaborative relationships throughout our global supply chain.

Supplier approvals are carried out in full accordance with the relevant regulatory authorities.

Our global sourcing process assesses potential new supplier’s ability to deliver to Rolls-Royce standards. This includes an assessment of the supplier’s manufacturing capability, financial stability, and ability to deliver on time and for the right price. We also review and consider potential new suppliers’ ability to adhere to our Global Supplier Code of Conduct, prior to entering contractual negotiations.

In addition, all new and existing suppliers, as well as customers, joint venture partners and other third-parties, are subject to screening assessments through the Dow Jones Risk and Compliance Platform on sanctions, watch-lists and adverse media reports.

We recognise that disruption to our internal or external supply chain is a principal risk. We invest significant time and resource in identifying and mitigating potential points of weakness in our external supply chain.

We require all strategic suppliers to share business continuity plans with us. This helps us to understand and mitigate potential business continuity risks associated with geographical location, facilities and people.

Rolls-Royce has taken a leading role in the establishment of the Aerospace Engine Supplier Quality Committee and International Aerospace Environmental Group, both aimed at agreeing sets of common industry-wide standards. This helps to remove variability and waste from supplier processes.

We work with our suppliers to address risks associated with material stewardship and sourcing.

We recognise the importance of paying suppliers on time for the goods and services they deliver. This is part of our commitment to supporting our suppliers and maintaining a resilient supply chain. We monitor on time payment metrics across the Group.

We are consistently striving to improve the sustainability of our procurement practices and to support our supply chain. Our Global Supplier Code of Conduct helps our suppliers to understand and manage their risks.

We also encourage strategic suppliers to seek certification to international environmental standard ISO14001 to help them to mitigate their environmental impacts and associated costs. Suppliers are also involved in our Revert programme of metal recycling.

We are working with our suppliers to help them to meeting their obligations under the REACH (Registration, Evaluation and Authorisation of Chemicals) regulations with a focus on the managed reduction and phase out of the use of targeted substances that are hazardous to health and dangerous to the environment. Through our active participation in the IAEG we are also helping to introduce new standards to facilitate efficient data sharing, focused on hazardous substances, across the aerospace supply chain.

We recognise the role we have to play in minimising the risk of armed conflict and human rights abuse related to the mining of Conflict Minerals. In response to the Dodd-Frank Act and emerging EU legislation we have established a global programme team and are developing a programme and policy based on the OECD’s framework for managing conflict minerals in the supply chain. Early work with our raw material supply chains, where we are close to smelters and refiners, has not identified any issues.

Our supplier finance programmes enable suppliers to benefit from Rolls-Royce’s superior credit rating and access funds at lower interest rates.

We also support SMEs through our Supplier Diversity Programme to help support them in becoming part of our supply base. More than 200 small and medium sized companies are registered with the programme.

Rolls-Royce partners with a leading third-party provider of sustainability screening and assessments to understand the inherent sustainability risks within our supply chain and take appropriate mitigating actions where required.

All active suppliers are screened using recognised industry/commodity and country risk indices looking at Environmental, Ethics and Labour & Human Rights risks, combined with the spend and strategic importance of a supplier, to determine which suppliers are significant to Rolls-Royce from an ESG perspective.

Where significant risks are identified, or suppliers are deemed significant regardless of risk, suppliers are requested to complete a comprehensive assessment of a companies policies, actions and results with regards to sustainability management to understand if the identified risks are appropriately managed or not. Where gaps are identified, suppliers are requested to put in place improvement plans, and are offered support and resources to help with this via our third party partner.

Rolls-Royce prioritises sustainability in its sourcing and contracting processes, encouraging all suppliers to conduct sustainability assessments and share their results with customers. A third-party platform has been contracted to administer voluntary assessments on group supply chain sustainability performance, which also benefits suppliers as their participation is globally recognised. Our efforts are also aligned with International Aerospace Environmental Group (IAEG), a collaboration of aerospace organisations across the globe. More details on IAEG can be found here

At Rolls-Royce, we are committed to creating a working environment where we all understand the value of diversity, inclusion and belonging, in everything we do. Valuing our unique relationships with our stakeholders and the diverse environments that we serve, we view supplier diversity as a strategic and ethical business advantage and a core component of our Diversity and Inclusion (D&I) strategy.

We seek to integrate supplier diversity into our procurement processes and establish and maintain excellent supplier relationships with diverse suppliers.

We achieve this with a focus on: