NN N : Procuring more sustainable products and services for our own operations

One of the areas that NN Group focuses on in its efforts to contribute to the transition to a more sustainable world is procurement. In our role as business partner, we engage with our suppliers to encourage them to make the products and services that we receive from them more sustainable. 'NN Group has an annual procurement spend of over a billion euros, and thousands of suppliers. This means our demand for more sustainable products and services can have an overall positive impact,' says Anies Langerak, Sustainability Officer Procurement. 'Our most carbon intensive and high-spend procurement categories are IT, consultancy and facility management, with over two thirds of our emissions related to suppliers delivering to NN Group's Dutch business units and staff departments.'

From spend-based to supplier-specific emissions reporting

We currently use a spend-based method to report on purchased goods and services emissions. However, in future we aim to use supplier-specific emissions, so we can more effectively monitor individual business partners' emission reduction progress. A number of our suppliers are, or will be, subject to the Corporate Sustainability Reporting Directive (CSRD) or voluntarily disclose their sustainability data. We will start gathering actual GHG emissions data from those suppliers who are ready to provide them.

Responsible Procurement and Supplier Engagement

In 2024, we developed a responsible procurement approach to support reducing emissions related to purchased goods and services. We started with implementation for the Dutch business units and staff departments and will roll out to our international business units in 2025 and 2026. One key element of this approach is our Supplier ESG Engagement Programme, also launched in 2024. As we rely on our suppliers to help us reduce the emissions associated with the products and services we purchase, monitoring their climate ambition and net-zero progress, especially when the impact is material, is vital.

Following our suppliers' net-zero journey

The programme helps us assess and score where suppliers are on their net-zero journey and looks at targets, transition plans and emissions reporting. We aim to engage at least 35% of the NN Group supplier base (based on spend) by the end of 2025. We engage with existing suppliers who do not meet our standards to encourage them to increase their efforts to achieve net zero. For new suppliers, at the moment of contracting, we may suggest improvement plans such as measuring and reporting emissions and setting a net-zero target. Progress on these improvement items will then be evaluated when contracts come up for renewal.

Contributing to change in the real economy

Although restricting our business relationships to only low carbon emitting suppliers would result in a swifter decarbonisation of our own supply chain, this does not help reach net zero in the real economy. We prefer to engage rather than terminate contracts and work together with high emitters on decarbonisation to help contribute to change. That said, we still develop clear minimum requirements and timelines and may decide to not extend contracts if there is not sufficient progress.

You can read more about our climate activities and ambitions for all areas of our business in our latestClimate Action Planand on ourwebsite.