Natural rubber is one of the main ingredients for tires. It is the livelihood of hundreds of thousands of families living in countries where the local legislation and working conditions have not been fully developed.
Natural rubber is cultivated in forests, often on small farms. Most of the natural rubber that we use comes from Malaysia and Indonesia.
Traceability remains problematic as the supply chain is fragmented. There are approximately 3–6 million farmers of natural rubber who collect the milky latex or cup lumps and sell them to local dealers. They collect them from several farmers and then sell the latex forward to processing plants.
More than 85% of the world’s natural rubber is produced on farms smaller than two hectares in size whose daily output may be just a couple of kilograms of latex.
Processing plants purify the natural rubber, process it as specified, pack it for further use, and sell it to the global traders or customers. Nokian Tyres exclusively purchases rubber, which is being processed in the plants our company has approved. You can read more of our sustainability audits here.
Nokian Tyres considers cooperation with the industry and other stakeholders to be vital in improving these conditions. The tire industry has made a joint effort to move towards sustainable natural rubber, also as concerns labor rights. In 2019, Nokian Tyres joined the Global Platform for Sustainable Natural Rubber (GPSNR), which is a platform established by WWF, several other nonprofit organizations, rubber traders and processors, and large tire manufacturers.
GPSNR strives to increase the supply and uptake of sustainable natural rubber in the global marketplace. Members of the platform will develop sustainable natural rubber standards, mechanisms and guidance on the implementation, monitoring, and verification of sustainable natural rubber commitments from companies.
In 2021, Nokian Tyres adopted a Sustainable Natural Rubber Policy that is fully aligned with the policy framework of the GPSNR. The policy was approved by SVP, Supply Operations, who is a member of the Group’s Management Team, and the company’s sustainability in natural rubber is developed through the framework of this policy. The policy includes eight major components:
• commitment to legal compliance
• healthy functioning ecosystems
• respecting human rights
• community livelihoods
• increased production efficiency
• supply chain assessment and traceability
• monitoring & reporting and
• driving effective implementation of all these components.
In 2022, 78% of Nokian Tyres’ approved natural rubber processors were either members of GPSNR or committed to develop their operations according to Nokian Tyres Sustainable natural rubber policy.
Nokian Tyres developed new tools to assess sustainability
In 2019, Nokian Tyres’ procurement team developed a new classification model for assessing the risks possibly attached to our suppliers globally, excluding the suppliers of sales companies and our own Vianor chain. The new model was implemented in the fall of 2019 and it included all the new suppliers.
During 2020, all the suppliers were risk assessed according to the new classification model. The assessment has four different categories: quality, sustainability, business/strategic criticality and safety at work.
In 2021, we created a risk mitigation plan for new suppliers that were classified as critical or medium critical in any of the four categories in the classification model. The plan includes actions such as sustainability on-site audits, requesting a management system certification in terms of quality, environment or safety, responding to self-assessments, for example.
The procurement category managers also created risk mitigation plans for existing suppliers who have been identified as having risks. The backgrounds of all new suppliers are checked according to Nokian Tyres’ Due Diligence process before supplier approval.