Procurement

Management approach

Geberit’s production processes entail a high in-house production depth. The purchased materials are largely raw materials and semi-finished products with a high share of raw materials. As such, material costs constitute a low share of net sales. A prudent procurement strategy with a strong local orientation, institutionalised purchase processes and a strong focus on cooperative relationships with suppliers help to ensure that raw materials are available. Owing to a high in-house production depth as well as the very high share of Western European suppliers, the general risk profile of the supply chain in terms of environmental and social risks is relatively low.

Impacts, risks and opportunities

Geberit is accountable for social, environmental and economic impacts in the upstream value chain. The activities at suppliers result in indirect environmental impacts (Scope 3 emissions). The supply chain also poses potential risks for the company, particularly if standards are not adhered to by suppliers. This could lead to a loss of reputation, regulatory challenges, reduced planning certainty and legal consequences. Opportunities exist in the optimisation of the supply chain through close collaboration and in resource-saving processes that both save costs and promote environmentally responsible activities.

Management system

The business activity of partners along the value chain is expected to be correct in every respect. The mandatory central requirements for suppliers and business partners are defined in a Code of Conduct for Suppliers. The Code of Conduct for Suppliers is available in 15 languages. All suppliers are required to comply with the Code of Conduct for Suppliers, which includes international standards such as the UN Global Compact, the Universal Declaration of Human Rights, and the ILO Declaration on Fundamental Principles and Rights at Work, plus due diligence obligations according to Art. 964a ff. of the Swiss Code of Obligations (CO). The Code comprises specific guidelines in areas such as human rights (including child and forced labour), occupational health and safety, pay, environmental protection as well as integrity (including bribery and corruption), and requires suppliers to demonstrate compliance with these provisions. In the event of violations, corrective measures are taken. In case of repeated violations, the business relationship can be terminated. Since 2017, an Integrity Line has also been available to suppliers for anonymously reporting irregularities in the procurement process or non-compliance with the Code of Conduct for Suppliers.

Effective management of environmental and social criteria at suppliers assists compliance with laws, human rights and working conditions. Responsibility for implementation of the management system in Corporate Purchasing lies with Supply Chain Compliance & Sustainability.

Procurement is controlled globally by lead buyers who are responsible for the material groups. A new procurement strategy has been in place since 2021 that aims for a holistic assessment (“total value of ownership”) focusing on environmental and social aspects. New employees in procurement receive training in the process of environmental and socially responsible procurement, and sustainability also forms part of an employee’s annual appraisal meeting. Additional training for lead buyers also takes place on a regular basis.

The highest possible levels of transparency are pursued when assessing suppliers. All partners are assessed according to standardised criteria, such as the company, quality, sustainability, price, procurement, delivery reliability, production and technology. The selection usually includes a quality audit covering inspections of environmental and occupational safety issues. In the event of inconsistencies, an in-depth audit is conducted.

Risk analysis

Supplier management – which has been in place since 2007 – incorporates risk management for environmental, occupational safety and human rights matters. Suppliers are assigned to a risk category depending on production location and material group. The classification is reviewed annually. Audits for suppliers in the highest risk category are carried out with external partners.

In addition to the risk-based approach, a concept is being developed for more intensive collaboration with suppliers in the areas of compliance and CO₂ reduction (Scope 3). In the reporting year, alternatives to plastic and metal were analysed and the availability of CO₂ data inspected.

For further information, see Business Report > Business and financial review > Financial Year 2024 > Procurement.

Key figures

In 2024, Geberit procured raw materials (28.1%), semi-finished products (45.0%), and finished products (29.0%) with a procurement value of CHF 850 million (previous year CHF 883 million) from 1,481 suppliers around the globe. The purchased raw materials and semi-finished products primarily come from suppliers in Western Europe (83.3% of procurement value). The share of the procurement volume from Eastern Europe amounts to 6.8%, that from Asia 8.9%, from America 0.8% and from Africa 0.2%.

For further information, see Business Report > Business and financial review > Financial Year 2024 > Procurement.

Measures and incidents

In the reporting year, 157 suppliers (previous year 168) were identified in the highest risk category, which corresponds to 7% (previous year 6%) of the direct procurement value of Geberit.

In 2024, seven audits were carried out at suppliers with increased risk in Serbia, China and India. The most important obligations in the Code of Conduct and the due diligence obligations related to human rights, social aspects and the environment were complied with; appropriate corrective measures were agreed in cases of non-compliance. Most of these cases related to structural defects, deficiencies in occupational safety or the insufficient recording and documentation of hours worked. Implementation of the agreed corrective measures is checked and documented promptly by Geberit. No violations were reported via the Integrity Line in 2024. All new suppliers undertook to comply with the Code of Conduct for Suppliers, with over 95% of the procurement value already covered by suppliers who have signed the Code.

Reduction of risks at business partners

Geberit sets great store by the occupational health and safety of business partners. Suppliers also commit to ensuring occupational safety and health-promoting working conditions in their operations and supply chain in the Code of Conduct for Suppliers. This is systematically examined as part of supplier audits. No incidents were reported in the reporting year.

Conflict minerals

As Geberit neither directly imports nor processes conflict minerals (tin, tantalum, tungsten, gold) in the EU or Switzerland, it is not deemed to be an “importer” within the meaning of EU Regulation 2017/821 or Art. 964j ff. of the Swiss Code of Obligations (CO). If products containing such metals are shipped to the USA, the provisions of the Dodd-Frank Act (Sec. 1502) apply.

Child and forced labour

Geberit categorically rejects child and forced labour. The avoidance of such practices aids the protection of human rights and maintains the company’s reputation. Within the company, the risk is considered as very low because of a high in-house production depth and quality requirements. The Code of Conduct for Suppliers requires adherence to the ILO core labour standards.

According to the annual Group-wide inspection, there were no cases of child, forced or compulsory labour revealed in 2024. There were likewise no such cases of child, forced or compulsory labour uncovered during the audits carried out at suppliers. Furthermore, the analysis of child labour at high-risk suppliers did not give rise to any reasonable suspicions. Geberit’s due diligence obligations have been safeguarded by an established risk management system for several years.