Create a sustainable supply chain for Corbion’s key agricultural raw materials
A significant part of the environmental and social impact in our value chain is upstream of our own operations. To safeguard an overall positive environmental and social impact of our sustainable ingredient solutions, we need to ensure our raw materials are sourced responsibly.
Our responsible sourcing strategy focuses on our agricultural raw materials. A sustainable agricultural supply chain is essential for the communities in which we operate, as well as for our business. We focus on sugarcane, soy, corn, wheat, and palm oil, which represent some 90% of our agricultural-derived raw materials by quantity.
Farming of sugarcane and oil palm has been linked to a number of serious social and environmental sustainability risks. These include forced and child labor, hazardous labor conditions, conflict over land rights, loss of biodiversity, and deforestation. Implementation of sustainable agriculture is the only way to maintain economic performance while halting the damage to the environment and farming communities. For soy, corn, and wheat, which we source from the US, the main areas of improvement relate to land use (biodiversity and soil health), water, greenhouse gas emissions, and farmer livelihoods.
Corbion is not directly involved in the growing, harvesting, and processing of these crops. We therefore focus our efforts on our tier-1 suppliers that source directly from farmers, requiring them to take responsibility for addressing social and environmental issues at farm level. Our approach focuses on continuous improvement towards the implementation of the relevant sustainability standard for each of these raw materials. We use a combination of tools including crop schemes such as Bonsucro and RSPO, Field to Market, Sedex, self-assessments, and third-party verification against Corbion’s requirements where a relevant verification system is not available or in case of high sustainability risks.
Our responsible sourcing commitment also includes the commitment to set a carbon footprint target for raw-material-related emissions. Reducing agriculture’s carbon footprint is central to limiting climate change, as the global food system, from fertilizer manufacture to food storage and packaging, is responsible for up to one-third of all human-caused greenhouse-gas emissions. At the same time, climate change is expected to have a negative impact on agricultural productivity due to increases in extreme weather events—including extreme heat and drought as well as more variable rainfall patterns.
Security of supply
Our security-of-supply assessment evaluates raw materials on three pillars: procurement, quality and food safety, and sustainability. For each pillar, several criteria are rated to estimate the risk of supply issues. The business impact of a supply issue is taken into account to determine the overall score. The risk assessment results in a high, medium, or low score for each pillar per raw material.
In 2017, we have updated the assessment. This involved a review and update of the underlying data where necessary and the inclusion of new raw materials. For new high-risk raw materials, mitigation plans have been developed and are being implemented. For all of the high-risk raw materials identified in 2016, actions have been taken to mitigate the risk.
Mitigation actions range from the recruitment of new suppliers to supplier visits to perform a more detailed risk assessment.
Our supplier code (see below) defines Corbion's expectations in respect of our suppliers meeting our responsible sourcing commitment. The code includes principles and criteria for business ethics, human rights and labor conditions, and environmental practices. The code includes core principles from the OECD Guidelines for Multinational Enterprises and the eight fundamental conventions defined by the ILO, including freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation. We require our suppliers to sign our supplier code for confirmation. Possible non-compliances with the codes will be investigated and discussed with the supplier. If deemed necessary, the supplier is expected to implement a corrective action plan to effectively and promptly resolve the issue, with an agreed timeline. If the issue persists, Corbion may ultimately decide to terminate the relationship with the supplier in question.
In 2018, we will review and update our supplier code to ensure that it continues to be aligned with stakeholder expectations.
Our cane sugar code (see below) is an extension of our supplier code with additional principles and criteria in respect of land rights, good agricultural practices, and biodiversity. It is based on the definitions for sustainable sugarcane and derived products as set out by Bonsucro. In 2017 we continued to implement this code and the majority of our cane sugar suppliers have now committed to Corbion's cane sugar sourcing requirements. We are implementing verification procedures to verify that our suppliers meet these requirements. For this we use a combination of tools, such as self-assessments, third-party verification, and Bonsucro certification.
To promote sustainable development for the Thai sugarcane industry, we have supported a white paper on the sustainability of the Thai sugarcane sector to identify key opportunities for driving the sustainability agenda forward using the Bonsucro standard as a reference framework. This study is now used to define next steps on the ground.
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