Using defined criteria, Porsche reviews human rights and environment-related aspects as well as adherence to the Code of Conduct for Business Partners.
The S-rating has been an established mandatory criterion for selection within the Volkswagen Group since 2019 and is revised regularly in accordance with procedural requirements. The assessment logic distinguishes between a positive and a negative S‑Rating: Direct suppliers with a positive S‑Rating meet the sustainability requirements and are therefore generally eligible for contract awards.
A negative S-rating means that the supplier has not yet submitted all the necessary evidence or is in violation of the sustainability requirements. Direct suppliers with a negative S-rating are not eligible to be awarded contracts. This provides a direct incentive for direct suppliers to improve their sustainability performance.
The screening for the S-rating involves risk-based and ad-hoc audits as part of a multistage process and is mandatory prior to any new contract award. This is based on a risk analysis that takes environmental and social aspects into account.
Risk exposure is determined from a combination of a country’s risk and self-assessment by the direct suppliers on company processes and policies. The sustainability performance is also reviewed in risk-based audits. The risk exposure of the direct supplier determines the scope of the audit.
The review for direct suppliers starts with a standardized self-assessment questionnaire (SAQ). The SAQ is an industry-wide standard developed jointly as part of the “Drive Sustainability” initiative, which assesses sustainability, human rights and environmental requirements. In addition, suppliers are selected for on-site audits based on risk by an independent sustainability auditor.
If the auditor observes any irregularities, the direct supplier is given a negative rating. If target achievement falls below a defined threshold, Porsche initiates a corrective action plan in collaboration with the supplier, who must remedy the identified concerns within the agreed time frame. The effectiveness of the actions is monitored on a case-by-case basis, e.g., in a follow-up audit. As a matter of principle, the suppliers concerned are not considered for contracts by Porsche until they meet the sustainability requirements.
