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ESG disclosures
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We're cultivating a sustainable supply chain focused on environmental responsibility, diversity, and ethics. We've ramped up due diligence to assess sustainability risks and engage suppliers on climate action, while also expanding supplier diversity.
Engaging suppliers to reduce their emissions is a key element in our strategy to achieve net-zero emissions. We take an active role in guiding suppliers on how to begin their carbon accounting, set their science-based targets, and report to the CDP. Additionally, we have amended supplier contracts to include sustainability language, committing them to set science-based targets.
This year, we achieved an all-time high response rate on the CDP supplier engagement survey, with 246 of our suppliers responding to the questionnaire. This represents a 7% increase in response rate over last year, indicating a growing interest and commitment among our suppliers toward our sustainability efforts.
To increase the diversity of our supplier pipeline, we attend relevant events and share our connections with our sourcing managers to find synergies for upcoming projects. In 2023, we attended two conferences – the Disability:IN Conference and the NMSDC National Conference – which provided opportunities to connect with potential suppliers. Additionally, we initiated two supplier mentorship programs and kicked off a Supplier Spotlight Series where suppliers demo their services to our procurement team.
We expect our partners to adhere to the highest ethical standards and operate in compliance with all applicable laws and regulations. Our Supplier Code of Conduct, reflecting social and environmental considerations, guides our suppliers' business integrity, labor practices, health and safety, and environmental stewardship. Any concerns or suspicions of violations of that Code can be reported through Moody's Integrity Hotline.
We also update our Modern Slavery and Human Trafficking Statement annually.
As part of our due diligence process, we conduct sanctions screening on all new suppliers and evaluate key suppliers using Supply Chain Catalyst, a tool that assesses supply chain risks, including risks associated with sanctions, modern slavery, human rights violations, and environmental crimes. We also quantify ESG risks, such as cybersecurity and compliance with global ethical standards for key suppliers before we formalize new relationships.
In 2023, we enhanced our supplier risk management by assigning team members to monitor specific risk domains, including financial risk, operations, compliance, and ESG.
In 2023 Moody's become a member of the Sustainable Purchasing Leadership Council (SPLC), a leading organization focused on developing sustainable procurement programs. Our membership provides us with the opportunity to innovate, collaborate with other industry leaders, and amplify our sustainability impact across our value chain.
As of year-end 2023, our suppliers by spend that have science-based targets increased to 54% and exceeded our internal annual target of 50% (60% target by 2025).
In 2023, we were named a Supplier Engagement Leader by CDP for the fourth consecutive year, placing us among the top 4% of companies assessed for supplier engagement on climate.
In 2023, we added over 100 businesses that align with our procurement needs to our small and diverse supplier pipeline.
As of year-end 2023, we have assessed 100% of our key suppliers and have not identified any high-risk suppliers.