As a service company, Air France – KLM’s business activity is heavily dependent on procurement which represents around €13 billion per year although this figure was down in 2020 owing to the Covid‑19 public health crisis and air transport operations twice coming to a virtually total standstill. Fuel purchasing amounts to some 40% of this expenditure, followed by aircraft maintenance and components, airport and navigation fees, and airport handling.

L’investissement dans d’autres projets sur la connaissance et la conservation de la biodiversité contribue également à comprendre le dilemme associé aux services écosystémiques comme à la production des biocarburants durables. Si certains types de biocarburants destinés au transport routier peuvent avoir un impact négatif sur la biodiversité, le groupe Air France - KLM veut garantir l’utilisation de carburants aéronautiques durables qui ont l’impact le plus faible sur l’approvisionnement en nourriture, la biodiversité et un impact positif sur le développement local.

 

We make significant contributions to regional and national economies, both through our purchases and the trickle-down impact on other sectors.

    • Air France purchases in France: €1,65 billion, of which more than 400 million euros in French regions
    • KLM purchases in the Netherlands : €1.1 billion

PURSUING A RESPONSIBLE PROCUREMENT PROCESS

Given the significant proportion of external expenses relative to total revenues, optimizing, innovating and making the supply chain more sustainable are priorities for the Group, and contribute to improving profitability. For a number of years, this responsible procurement policy has aimed to factor societal responsibility principles into relationships with suppliers by reinforcing control over ethical, social, environmental and supply chain risks.

The procurement process takes place in the following manner:

  • Questionnaires are sent to suppliers, addressing a number of themes such as safety, environmental management and HR policy.
  • The suppliers are invited to sign the Sustainable Development Charter for suppliers which is based on the principles of the UN Global Compact, or provide their own equivalent document that may be approved upon analysis. Since 2015, this Charter has been supplemented by a Supplier Code of Conduct. Every year, the Group measures the percentage of suppliers who have signed the Sustainable Development Charter. In 2020, this figure reached 53%. The Group has set a target of 75% for 2021.
  • Tender documentation, in many cases, list the criteria enabling the evaluation of the environmental impact of the product or service, which are then taken into account during the evaluation of the different supplier proposals. This is an integral part of the assessment of the total cost of ownership and the life cycle analysis.
  • The supplier contract includes an ethical and environmental clause based on the relevant products and services.

To supplement the existing process, Procurement works with EcoVadis, a company specialized in the evaluation of suppliers based on Corporate Social Responsibility criteria.

The risk mapping process takes into account the different sectors of procurement and the countries in which the suppliers are based. It takes place at the beginning of the procurement process:

  • Buyers must systematically verify the positioning of each supplier in the risk map.
  • In the event of a “high” or “severe level” of risk, suppliers are contacted by EcoVadis or an equivalent organization to address the following four themes: environment, social, ethics and sustainable procurement (as defined in the EcoVadis system).
  • There are six levels of risk. If the risk category of the supplier is lower than “high risk”,  suppliers are encouraged to have themselves evaluated. They can then share their scores with other companies, which may prove to be a competitive advantage in terms of winning bids and contracts.
  • Following the evaluation, suppliers having failed to reach an acceptable level will need to put in place corrective measures to meet the Procurement requirements. At Air France, these cases are discussed during the quarterly Steering Committee meetings, overseen by the Procurement and CSR departments.

In 2020, the number of companies evaluated by EcoVadis or an equivalent body stood at 262. As part of a continuous‑improvement process, Air France – KLM aims to evaluate 100 additional suppliers in 2021.

EMPOWERING THE BUYERS

Air France-KLM buyers are largely committed to respecting the Group’s social responsibility. On their first day in office, they sign a Code of Ethics outlining the ethical rules to be followed when dealing with suppliers. In light of the Anti-Bribery legislation, a Code of Ethics reminder has been sent around to the parties involved. These documents, the Procurement Sustainable Development Charter and the Code of Ethics are available on the Procurement website, which initiates an ongoing dialogue with our suppliers.

An internal process has been established to develop the buyer’s skills through training, seminars, web information on best environmental practices. All Procurement staff have completed an anti-corruption e-learning module. All new procurement staff receive training on the department’s sustainability commitments, the duty of vigilance and the anti-bribery processes, and on how to use a sustainability scoring tool (EcoVadis).

The Procurement function encourages the maintenance of knowledge on sustainability (news, legislation, events, conferences, webinars, etc.) and the sharing of experience.

The Procurement Action Plan sets out the sustainability undertakings as a strategic lever; this Plan has been distributed to the team and forms part of the induction documentation for new recruits. More than ever, sustainability is a challenge for Air France-KLM, which places sustainable development at the heart of its priorities and projects: the buyers seek suppliers who can help the Group make progress on this issue and contribute suggestions and innovative ideas.

MOBILIZING AND INNOVATING WITH SUPPLIERS

The Supplier Relations Management Program (SRM) is aimed at building long-term relationships between Air France-KLM and its strategic suppliers. The program puts issues like Corporate Social Responsibility central to discussions, and seeks to move forward together on these issues.

In November 2020, an Air France – KLM Supplier Summit took place during which one of the subjects was CSR. The aim was to ensure that the Group’s suppliers understand that CSR is a strategic priority for Air France – KLM and for them. Thus, 67.7% of the Group’s suppliers have CSR as one of their Top 3 strategic goals for 2020, while research and development, CSR compliance, a reduction in CO2 emissions and local procurement are all part of their mindset.

The Procurement function sees its suppliers as bona fide partners in mutually‑beneficial growth. In this capacity, it supports their quest for innovative solutions and analysis of the environmental impact of products. During the drafting of a product specification, the prescriber and buyer work together to identify the environmental and societal characteristics, thereby encouraging the supplier to not only develop the environmental performance of its products but also make a wider commitment to sustainability.

In France, The Group entrusts a significant part of its purchases to SMEs. To promote and protect this ecosystem, Air France participates in initiatives such as the creation of an innovation counter and participation in incubators on specific themes, and is a member of the SME Pact. Every year, an action plan is developed within the context of its relations with SMEs (Mid-caps, startups and VSBs). These actions included a reduction of the settlement period, but also the advancement and introduction of innovations, such as the “start-up kit” which enables them to work in a more agile way with startups, and the realization of PoCs (“Proof of Concept” trials).

MEASURES IN FAVOR OF RESPONSIBLE CATERING

One of the Air France – KLM Group’s priorities is to develop an ever‑more‑ecoresponsible onboard product.

For catering procurement, in partnership with its different catering suppliers, Air France prioritizes local products which are responsible and, whenever possible, seasonal. Certified protected origin products (produits d’appellation d’origine contrôlée et protégée – AOC/AOP), particularly cheese, form part of a broad range of products. Organic food products are also offered, particularly in the meal trays intended for children. Seafood originating from sustainable fishing is an integral part of the catering proposition.

For on‑board tableware, multiple criteria are taken into consideration: weight of the articles, materials used, place of manufacturing, mode of transportation, management of the material’s end of life. Environmental labels and certifications like FSC or PEFC are also prioritized. The selection of new articles is made in cooperation with the suppliers to envisage products with the lowest‑possible environmental impact from a long‑term perspective.

A key performance indicator enables the quantity of single‑use plastic eliminated on a change in product to be evaluated. Aimed at reducing its usage by 80% by 2025, the potential for eliminating single‑use plastic on board is also monitored.

Whenever feasible, KLM chooses products and partners that share the sustainable mission, in order to contribute to the overall objective of attaining the Sustainable Development Goals. The catering policy focuses on environmental preservation in production areas and takes human rights, working conditions and animal welfare into account. It is applied to all flights departing from Amsterdam Schiphol Airport and elsewhere in Europe and, where possible, includes responsible products in catering from destinations.

For KLM, it is important that the ingredients in meals, such as fish, chocolate, palm oil and soy, are sourced responsibly. To this end, KLM is a member of the Responsible Soy (RTRS) and Sustainable Palm Oil (RSPO) Round Tables and offers certified products on board its aircraft such as MSC-certified fish, “better life” egg and chicken, and UTZ certified coffee and tea.

© AIR FRANCE KLM