Supplier services make up 80% of the total costs of vehicle production. It is therefore essential for Renault to involve its suppliers in its approach to sustainable development.

Encouraging supplier commitment

1 – Employee rights

In its October 2004 Declaration of Fundamental Social Rights, Renault states that it will encourage its suppliers to "implement equivalent principles in their own companies”. The Group makes these principles a condition for a long-term partnership.

By 2006, 95% of the Group's usual suppliers had agreed to respect the principles of the Declaration of Employees' Fundamental Rights. This formal commitment is a criterion of supplier selection for three priorities below:

• no child labour;
• no forced labour;
• a policy of health, hygiene and safety that complies with Renault's own policy in this area.
  

2 - Environment   

Also in 2006, the supplier selection process was amended to request the formal agreement of suppliers concerning all applicable environmental legislation.

Calls for tender systematically refer to the environmental standards applicable to the substances used to make the parts delivered and to the recycling of parts and materials.

The Purchasing Department makes sure that all legislation is respected, particularly the ban on lead in alloys, rings and bearings, applicable from July 2008.

It also makes sure that suppliers contribute fully to the success of Renault Commitment 2009, with particular reference to cutting CO2 emissions and implementing an innovative recycling policy.

In 2007, the sustainable development plan for purchasing reached maturity with its second phase. A wide range of actions with significant content were rolled out

Objective:Raise and maintain a high level of social and environmental commitment across the supply chain.

The process implemented by buyers to manage social and environmental aspects is part of a policy of continuous progress: when necessary, suppliers are asked to put in place action plans to achieve compliance.

Actions seek mainly to:

• Train suppliers and buyers

Training efforts focused particularly on the impact of the European REACH regulation (Registration, Evaluation and Authorization of Chemicals). More than 400 buyers received training in this regulation. For suppliers, Renault provided a guide on the regulation along with a booklet helping them to follow a step-by-step process to compliance with REACH 2008. Renault also opened a REACH hotline for its suppliers.

• Map strong and weak points through self-assessments

A self-assessment tool was placed at the disposal of suppliers in 2006.

The objectives were to:

- remind suppliers of Renault's social and environmental standards;
- help them identify any deviations and possible risks;
- help them make progress through action plans, where necessary.

Feedback provided the basis for implementing action plans not only on supplier premises but also in-house at Renault.

Another wide-ranging self-assessment campaign is scheduled for 2008. The aim is to map the social and environmental characteristics of Renault's global supplier fabric.

• Assess the compliance of supplier sites through our quality specialists

The roll-out of supplier site assessments by personnel from the quality section of Renault's Purchasing department (DQDA) started in earnest in 2007. A total 112 sites have been assessed worldwide. When non-conformities are identified, buyers request action plans.

This figure is expected to increase in 2008.

• Have some sites audited by outside firms

The first external audits started in early 2008, following a decision at end-2007. By providing suppliers with the services of experts in social and environmental analysis, Renault is helping them to meet international standards, thus benefiting their entire business and all their customers.

A total 25 audits are scheduled for 2008. Numbers are expected to increase in the future.

Raise and guarantee the degree of social and environmental maturity for the procurement chain

In 2007, Sustainable Purchasing Development is entering its second maturity phase.
The objectives of this phase are, in particular:

• to improve the identification of social and environmental risks in the supply chain, notably by using self-evaluation feedback and checks on supplier sites by Renault personnel,
• to launch external audits and the resulting action plans.

At the same time, the Purchasing department will check that supplier contribute in full to the success of the contract 2009, notably in reducing CO2 emissions, innovative energies and air quality inside the passenger compartment.

The substance management put in place in 2006 will be strengthened in 2007 in 2008 with a view to REACH (Registration, Evaluation & Authorization of Chemicals): this European directive is intended to identify and regulate toxic substances