We take steps to engage responsible procurement, both by driving innovation with suppliers and conducting business responsibly.
Our supply chains
Our supply chain activities can be split into two broad categories – corporate supply chains and hotel supply chains. Our corporate supply chains cover procurement for our corporate offices and are mainly focused on items such as technology and professional services. At the hotel level, supply chains cover procurement for all items required for running a hotel and cover a wide range of items including food, linens, cleaning supplies and furniture. Hotel procurement happens both at the local level and for some locations, via centralised purchasing arrangements that are available to our hotels. Our hotel owners will also have supply chains at different stages of their hotel’s life cycle, for instance at the construction stage for new build hotels.
IHG’s Vendor Code of Conduct sets out the standards under which IHG suppliers are expected to operate, including in relation to human rights and modern slavery across such areas as voluntary freedom of association, working conditions, forced labour and the exploitation of children. In 2015, we enhanced our procurement systems and have asked the majority of our existing corporate suppliers and all new corporate suppliers to sign the IHG Vendor Code of Conduct, as well as suppliers who support our hotel buying platform in the US. As of January 2016, over 1600 suppliers have signed up to the IHG Vendor Code of Conduct.
IHG suppliers are requested to pass through our supplier registration process through which the relevant due diligence information is gathered. It is only upon passing through the supplier registration process that a supplier can become an IHG accredited supplier.
IHG franchised hotels are independently owned and operated, however, all of our hotels and owners, both managed and franchised, have a shared commitment to responsible business. From 2014, we have required all IHG branded hotels to adopt their own human rights policy and we have provided guidance and training materials to hotels on this topic to enable this.
Diversity in the supply chain
We operate a supplier diversity programme for our US suppliers. We track and report our supply chain diversity profile and during 2016 our spend with diverse suppliers in the US was $59.1m, a modest decrease from 2015. Tracking our spend with diverse suppliers in the US helps support our commitment to provide suppliers with equal access to purchasing opportunities.
We encourage our hotels to use environmentally friendly products and to source goods and services locally wherever possible. In 2015, we developed and rolled out a Sustainable Seafood Policy which applies to all IHG branded hotels globally and which clarifies that shark fin is not permitted to be served in our hotels’ bars and restaurants.
In 2016, we further strengthened our commitment by stipulating that 90% of our top ten seafood products are sourced sustainably in the Americas, Europe and Greater China by 2020, unless otherwise impactable. In AMEA, where there is a broad range in supply chains and operations, we will continue to focus on driving the sustainable sourcing of seafood for our hotels.
In 2016, we also committed to sourcing 100% cage-free eggs throughout our US, Canadian and European hotels by no later than 2022. We also pledged to source 100% cage-free eggs at all our hotels globally, both franchised and managed by 2025. Our Restaurant and Bars teams partner with our corporate responsibility team to constantly scan and review opportunities to further responsibly source the food items served in IHG branded hotels.
Supply chain risks
At the beginning of 2016 we established the Supply Chain Risk Group. The Group has a remit to focus on identifying and evaluating all of our supply risks across both corporate and hotels. We have developed the IHG value chain profile and assessed risks associated with the value chain and control environment.
The output of this work aims to help us to understand our risks and vulnerabilities. From a corporate perspective, our more significant risks are from information security and intellectual property, rather than from an ethical sourcing standpoint. The majority of our ethical sourcing risks are within the hotel environment, where we cannot always control the supply chains, nor have visibility of them.
Systems and policies
In 2015 we introduced a Procure to Pay system which simplifies and streamlines the way we purchase goods and provides us with visibility on who our corporate suppliers are. We also launched a new Global Procurement Policy at the same time, which sets out how our corporate colleagues should conduct business when spending money on IHG’s behalf.