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Supply Chain

Waste Management develops strategies and implements actions to deliver goods and services to satisfy our customers’ needs. Our Procurement Policy defines value as “the best combination of quality, cost, delivery, service technology, sustainability and risk in equipment, materials, goods or services.” The interconnectivity of these strategies involves environmental programs to reduce our carbon footprint, social policy considerations that address workplace and safety issues, and company governance responsibilities that ensure business rules of engagement are properly followed internally and with our suppliers and customers externally. For third-party waste service providers, we require environmental assessments that review compliance with all applicable environmental, health and safety requirements.

The Waste Management Supply Chain team receives training on the Procurement Policy and procedures upon hire and when the procedures are updated. Our objectives are as follows:

  • Include a Sustainability Clause in all Master Products and Service Agreements
  • Educate our supply chain personnel on sustainability basics, Values and Commitments and initiatives to reduce Waste Management’s and our customers’ carbon footprint
  • Provide tools to initiate discussions about sustainability
  • Seek disclosure of relevant sustainability information from suppliers, leveraging shared or existing data where available and communicating preferences for innovative, sustainable solutions
  • Determine the availability of viable and innovative procurement options
  • Engage and reward key suppliers for establishing and meeting sustainability goals

Tracking and reporting on these efforts is an important part of the strategy. Supply Chain works along with other corporate functions to help Waste Management achieve its sustainability goals.

Supplier Code of Conduct

The Waste Management Code of Conduct applies to every Waste Management employee and our Board of Directors. Signed acknowledgments are periodically required, attesting that each recipient understands the responsibilities outlined. The Code also highlights the expectation that our consultants, contractors, vendors and other business partners will act in a manner consistent with our Code when conducting business on behalf of the company. The Code is available in print and online in English, Spanish and French.

The Waste Management Supplier Code of Conduct was launched and rolled out in 2012, revised in 2016, 2017 and 2019, and includes information and links to the UN Global Compact Ten Principles. It also includes information on how to report compliance and ethics issues or concerns on our Integrity Helpline. All suppliers, contractors, and service providers receive this Code as part of their contract signing (and with all renewals and modifications of existing contracts). All Waste Management contract purchases are governed by the Waste Management Supplier Code of Conduct. Although our Code is provided online for our suppliers and is appended to all new contracts, renewals and modifications of existing contracts, we do not retain a file of acknowledgement from our suppliers.

Waste Management is the leading environmental service and solutions company in North America and has limited international operations. To ensure compliance with international laws, Waste Management has established an International Compliance Committee, which manages the company’s international compliance activities and oversees related processes, policies and guidelines. These activities include monitoring the company’s anti-bribery, corruption and trade compliance performance. Waste Management provides periodic and targeted anti-corruption and Foreign Corrupt Practices Act (FCPA) training to employees who are involved in international activities. In addition to this training, every employee receives annual Code of Conduct training, which includes topics related to anti-corruption such as bribery, gifts and business entertainment, and interacting with government officials. The Waste Management employees involved in joint ventures also receive the training described above.

Ensuring Compliance

We conduct periodic business reviews with Tier I critical suppliers to ensure contract and Code of Conduct compliance. The Code of Conduct includes these obligations:

  • Strict bans on offering or accepting bribes, kickbacks, payoffs or other unusual or improper payments
  • A ban on making a political contribution on behalf of Waste Management
  • An affirmative obligation to be a good corporate citizen and a trusted and valued community partner and to safeguard the environment and natural resources
  • A guideline strictly limiting gifts and entertainment
  • An expectation of accurate books and records
  • A requirement to comply with all applicable laws and regulations
  • An obligation to report all work-related incidents relevant to the contract immediately
  • A requirement to maintain a sustainable procurement policy for their own suppliers

The Code of Conduct also includes guidance related to:

  • Environmental standards for the suppliers’ processes, products or services
  • Child labor
  • Fundamental human rights (e.g., labor rights, freedom of association, ILO conventions)
  • Working conditions (e.g., working hours, lay-off practices)
  • Remuneration
  • Occupational health and safety
  • Business ethics (e.g., corruption, anti-competitive practices)

The Supplier Code of Conduct is monitored through a domestic and international Waste Management Compliance and Ethics Helpline number. All consultants, contractors and suppliers are obligated to report any known or perceived violation of laws, regulations, Waste Management policies or our Code of Conduct. We reserve the right to audit and inspect supplier operations during the term of the contract and for a limited time after termination.

Supplier Sustainability Risks

We have established a process to identify key supplier risk factors and determine how to mitigate those factors. We observe and check the progress of the supplier risk profile over a period of time. We methodically examine the supplier risk profile for the purpose of explanation and interpretation. A risk profile is established for the supplier and the overall category. In this way, we continually assess the strengths and weaknesses of our suppliers, and the impact these could have on our business.

1. Monitor: Observe and check the progress of the supplier over a period of time

2. Analyze: Methodically examine the supplier risk profile for the purpose of explanation and interpretation

3. Mitigate: Establish plans to reduce and manage the risk profile of a supplier

4. Certify: Establish supplier risk profile and their current service level to Waste Management

Potential sustainability risks include financial and insurance-related risks (including compliance and governance considerations), safety and health and supplier diversity. In our mission of continuous improvement, we monitor insurance declarations through an automated system checking for expired or out-of-date insurance declarations, which triggers notification to the supply chain managers for corrective action; we conduct site visits and unannounced inspections of suppliers’ facilities, particularly with our top fleet suppliers; and we work closely with the operations in the field to observe the service level provided to our operations. Any slippage observed from a safety or service disruption standpoint will warrant a corrective action plan.

The following table provides an overview of the process and criteria used to assess various types of risks associated with each of our suppliers:

Supplier Risk Assessment Criteria
Financial Review the financial strength and welfare of the supplier
Operational Evaluate the service or product provided to Waste Management
Strategic Long-term viability of the supplier and the value of the relationship
Compliance Supplier follows Waste Management and legal rules and regulations
Business Impact How a supplier disruption will affect Waste Management
Likelihood of Occurrence Waste Management evaluation of supplier's ability to provide business continuity
Outlook Future barriers to supplier's ability to perform
Confidence Supplier's ability to provide uninterrupted service

Waste Management defines high-risk suppliers as those that operate or do business in or with high-risk countries, are high-dollar suppliers, are critical Tier I suppliers, provide products or services that can have a negative impact on the environment or have high safety risks, or those whose economic/operational performance is below industry peers. Potential red flags that could indicate a concern include financial and insurance-related issues (including compliance and governance considerations).

How We Measure Progress

The Supply Chain team has set measurable targets to ensure continuous progress toward our goals. Each supply chain manager has responsibility to update their project status at least yearly, which allows the team the opportunity make sure annual targets are achievable and discuss any mitigation for targets that may be off track. Key performance indicators are reported on an annual basis. They include:

Supplier Diversity

13%
increased spend in 2019
Goal: 10%
Growth
in annual spend by 2038

Inclusion of Sustainability Clause
in Master Service Agreements

14%
of contracts included the Sustainability
Clause in 2019
Goal: 100%
Inclusion
by 2025

Spend on Sustainability Projects

$250M+
verified spend on sustainability products
and services in 2019
Goal: 10%
Increase
in annual sustainability spend

Improving Supply Chain Sustainability

As the Supply Chain team interacts with suppliers to provide the services our internal customers need, we engage with suppliers on ESG opportunities, specifically carbon footprint reduction opportunities and diverse-owned businesses. All ESG factors articulated in our Procurement Policy are considered essential balancing criteria and must be considered in supplier selection. There is no formal weighting template. Compliance with regulatory ESG standards is a mandatory threshold, with carbon footprint reduction initiatives considered along with sustainability, cost, risk and other factors.

For 2020, Waste Management has included specific contract language describing the importance of sustainability to Waste Management. In addition to communicating our sustainability goals, we plan to include the following sustainability clause in all our Master Service Agreements contracts by 2025:

“Waste Management has positioned itself as the leader in environmental services, developing strategies and implementing actions to reduce our overall impact on the environment. We encourage our suppliers to develop and participate in sustainability programs and engage their supply chain networks to be aware of our joint impact on the environment. We will support suppliers’ efforts to cut waste, use recycled materials and maximize the use of their resources to help us meet our sustainability goals.”

The Waste Management Supply Chain team has developed a Sustainable Supplier Partnership Playbook to direct conversations with suppliers and maximize the opportunity to identify and implement new projects. A key component to this Playbook is the Supplier Sustainability Questionnaire, first distributed in 2019, which will allow our suppliers to document their sustainability programs and have ongoing dialogue on joint sustainability activities. We are currently in the process of training the Waste Management Supply Chain team on this document and will be complete by the end of 2020.

To help prioritize Supply Chain’s sustainability and ESG efforts, the team has initiated sustainability Projects as a required individual goal in the Waste Management annual goal planning process. To be considered a Project, the initiative must have a proven environmental or social benefit, such as material reduction, use of recycled content materials or GHG emissions reduction. Our goal documentation template has been updated to include supplier diversity Projects and carbon footprint reduction opportunity Projects. This template is reviewed by the entire Supply Chain team throughout the year. Each of the Projects that the Supply Chain team manages is put into a project management tool that is used to monitor Project activity and track progress. This tool represents the core of our Supply Chain function and is reviewed on a weekly basis.

In addition to the work Supply Chain does, other departments within Waste Management and local operational locations play a vital role in ensuring our ESG goals are met. We align our processes and procedures to the operational needs for services. We rely heavily on their daily interactions with our business partners to provide feedback through our collaborative supplier vetting process. For example, our real estate department oversees the deployment of recycled and energy-efficient materials in its Capital Projects and Construction Management Program, identifying vendors for controlled lighting and HVAC, occupancy sensors, recycled-content carpet and furniture, and low-emitting paints and adhesives.

Our operations are committed to responsibly managing the materials we use daily by:

  • Recycling plastic garbage and recycling containers to make new plastic containers
  • Reclaiming steel from scrap containers
  • Retreading tires where possible
  • Recycling used oil for other purposes
  • Closing the loop on paper by not only recycling the paper we use, but also committing to purchasing recycled content paper whenever possible

Waste Management has committed to purchasing 100 percent renewable electricity for all sites we control by 2025. We are currently developing a strategy to ensure all market areas use 100 percent renewable electricity as current utility contracts expire. The strategy options to achieve this goal will include replacing expired contracts with green energy electricity providers through our standard bid process and exploring options to purchase Renewable Energy Certificates (RECs) to meet our goals.

How Waste Management closes the loop on paper use

Closing the Loop
on Paper Use

Not only does Waste Management process recyclables, including paper, for our customers, but we support the recycled paper market by recycling our own office paper and prioritizing recycled-content paper in our own supply purchases. Partnerships with suppliers, including shredding service providers, paperless billing vendors and office supply companies, help us make an impact throughout the paper life cycle.

Supplier Diversity

It is Waste Management’s privilege, policy and practice to proactively seek diverse suppliers. Through our supplier diversity program, we build relationships with businesses that are at least 51 percent owned by minorities, women and service-disabled veterans capable of providing commodities and services at competitive prices. By engaging and developing diverse value-added suppliers, we create a sustainable competitive advantage and build a supplier base that reflects our diverse customer base.

Waste Management, in accordance with our business values and ESG strategies, strives to conduct business with all suppliers in an environment that demonstrates mutual trust, fairness, integrity and inclusion of different perspectives. As a critical review, we have added supplier diversity to our project review documentation that is evaluated throughout the year during category reviews and is a requirement on all Supply Chain members’ yearly goals.

WM Diversity spend 2016-2020

Bar chart showing Waste Management's diversity spend from 2016 through 2019 with the 2020 forecast

Our goal is to have 10 percent growth in annual spend with diverse suppliers through 2038. Waste Management does not have an internal diversity certification program, but rather recognizes third-party public- and private-sector certifications, such as the National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council (WBENC). WBENC and the Minority Business Enterprise (MSDC) are the main agencies we use to impact our diversity spend. We purchased $246 million in products and services from certified diverse suppliers in 2019.

Supply Chain Stakeholder Engagement

Waste Management believes that active engagement in business groups and broad-based stakeholder groups is one of the best ways to continually challenge ourselves to do better. Improving the sustainability of our fleet requires collaboration, such as membership in the National Clean Fleets Partnership. This partnership operates more than 1 million commercial vehicles nationwide, and it is committed to finding ways to improve the fuel efficiency of U.S. trucks. We are also members of the U.S. EPA’s SmartWay Transport partnership, which is dedicated to improving heavy-duty vehicle efficiency and reducing emissions throughout the transport supply chain.

Closing the Loop on Paper Use

  1. Paper mill for processing into new paper
  2. Paper Stock: 37% of 2019 paper product purchases were eco-friendly
    • Paperless billing & duplex printing reduce total procurement needs: 2,289.8 MTC02e avoided 2016-2019
  3. Waste Management facilities and offices: 1,740 trees saved through duplex printing
  4. Third-party facility for shredding: 1,106 MTC02e of GHG emissions avoided in 2019
  5. Material Recovery Facility for Recycling
WM Diversity spend 2016-2020
WBENC MSDC YOY Increase
2016 42% 58%
2017 38% 62% 45% Increase
2018 41% 59% 23% Increase
2019 54% 47% 13% Increase
2020-Forecast 54% 47% 10% Increase