Supply chain

Pandox’s largest suppliers are companies in the construction industry and property management, and suppliers of goods and services for hotels operated by Pandox. Both construction and hotels are industries where exploitation of labour can occur. Pandox therefore clearly communicates its zero tolerance for criminal activity, human trafficking, prostitution and sexual exploitation in its codes of conduct for employees and business partners, and in a Modern Slavery Act statement.

Pandox uses the Stratsys system for supplier evaluation and works with a supplier review process where all suppliers with a certain spend during the year undergo an evaluation process. The goal of the process is for assessments to be carried out continuously throughout the year at contract signing. Currently, a thorough spend analysis is conducted twice a year to identify new suppliers, who are then categorized and entered into the system for evaluation. Below is a description of the process and a description of the different steps in the process.

1. Sourcing and procurement
All new suppliers with contracts above a certain amount go through a digital audit process via an external tool. First there is a process to verify that the company exists and then a risk analysis is performed in the system based on risk parameters such as industry, country and size of purchases annually. High-risk suppliers are required to fill out a digital self-assessment form as a means of ensuring compliance with laws and international conventions. In 2024 Pandox worked reactively to upload all suppliers categorised in the supplier system spend analysis. In 2025 a risk analysis will be performed before contracts are signed with new suppliers to provide a better basis for decisions in the final stage of negotiations.

2. Setting requirements
Under the terms of their contract, all new suppliers must approve Pandox’s Code of Conduct for Business Partners regardless of the contract amount. 

3. Audit of new and existing suppliers
All suppliers identified as high risk in the risk analysis are to fill out a self-assessment form to ensure that they meet the requirements in Pandox’s Code of Conduct. In 2025 this step must take place before contracts are signed with suppliers rated as high-risk in the risk analysis. In 2026 random checks will also be carried out on suppliers with a medium risk rating.

4. Supplier dialogue
When a deviation is discovered in a self-assessment form, a dialogue begins with the supplier in which they are to propose an action plan. Pandox approves the plan and then follows up to ensure that the actions decided on are carried out within the established timeframe. Depending on the level of seriousness, suppliers that do not remedy the deviations identified may have their contracts terminated. 

5. Site visits
If any serious deviation is identified, the supplier receives an on-site inspection from an independent external party. If an on-site inspection is not possible at the time when an existing construction project is completed, the supplier is red-flagged in the system and cannot be used again until the supplier can submit accurate information.

Exemption
Suppliers may be granted exemption from the process described above if special circumstances exist, such as if there is only one supplier of certain materials in the market or only one demolition contractor. Exemptions may only be granted by Pandox’s purchasing council, which has representatives from the executive management team. Each individual case is to be documented and archived.