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 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 raw materials derived from 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 minimizing the damage to the environment and creating thriving farming communities. For soy, corn, and wheat, which we source from the U.S., 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, and partner with them to address social and environmental issues at farm level. Our approach focuses on continuous improvement toward the implementation of the relevant sustainability standard for each of these raw materials.

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 risk assessment results in a high, medium, or low score for each raw material, by pillar.

In 2018, we have updated the risk assessment methodology for the quality and sustainability pillars to improve the reliability of the assessment. We also performed our annual update, which 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. Mitigation actions include the recruitment of new suppliers, certification, and supplier engagement to better understand the situation.

Supplier code

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, or to demonstrate commitment to our code by compliance with company policies that embrace these standards. Possible non-compliances with the code 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, within an agreed timeline. If the issue persists, Corbion may ultimately decide to terminate the relationship with the supplier in question.

In 2018, we have reviewed and updated our supplier code based on stakeholder feedback. We included additional themes such as living wage, impact on local communities, and responsible procurement, and we clarified how our suppliers can demonstrate commitment to the code.

Cane sugar

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 2018, 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 have implemented procedures to verify that our suppliers meet these requirements. For this we use a combination of tools, such as self-assessments, questionnaires, third-party verification, and Bonsucro certification. By now, we have conducted third-party assessments for some 50% of our cane sugar supply. No major non-compliances were found. We requested the suppliers involved to focus on continuous improvement for any minor non-compliances.

Corbion committed to sourcing part of its sugar demand as Bonsucro certified. In 2018, we purchased the first Bonsucro smallholder-certified sugar in Thailand from Saraburi Sugar Company, the first mill to achieve certification against the Bonsucro Production Standard for Smallholder Farmers.

 

 

 

 

 

 

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