Circular and Sustainable Sourcing
At LANXESS, raw materials, other materials, equipment and services are subject to globally standardized requirements with regard to safety and environmental protection. Their procurement is the responsibility of our Global Procurement & Logistics (GPL) Group function, the head of which reports directly to the Board of Management member Dr. Hubert Fink. In close coordination with our business units, this administrative unit organizes Group-wide procurement, establishes corresponding guidelines, and initiates measures to promote purchasing synergies and sustainable behavior by our suppliers.
A global procurement guideline for the entire Group defines our employees’ conduct when dealing with suppliers and their employees. We have specified standardized workflows in the context of procurement in more detail in a process description.
According to the principles of the U.N. Global Compact, the International Labour Organization (ILO), Responsible Care® and other CSR codes, we expect our suppliers to comply with national and other applicable laws and regulations for environmental protection, health and safety at work and with regard to labor and recruitment practices. Acceptance of the requirements of our Supplier Code of Conduct is an essential prerequisite for all suppliers wishing to work with us. To flesh out our requirements, we revised the content of the Code during year and added additional topics. In connection with this, the name was changed to the “Business Partner Code of Conduct” in order to make it clear that we expect sustainable and ethical conduct not only from our suppliers.
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Our organic raw materials are currently still based primarily on fossil sources. We are striving to increase the proportion of sustainable raw materials. The market for sustainable raw materials is undergoing long-term development. To make progress, we are already working with multiple major partners and testing the materials and products that they are researching or have already brought to market. A realistic scenario is that we will increasingly bring individual products based on sustainable raw materials to market before this is possible for the entire product range. However, the use of bio-based organic raw materials also entails challenges and potential conflicts. For example, the production of food must always take priority over the use of biomass to manufacture chemical products. Therefore, we proceed with caution when purchasing bio-based raw materials and ensure that the biomass we use is produced in a renewable manner and is not competing with food production.
Our inorganic raw materials are primarily obtained from the biological cycle, e.g. nitrogen from the air or sodium chloride from seawater. These raw materials are renewable in principle, but not necessarily sustainable, as their extraction requires high energy usage in the form of electricity. In order to reduce their carbon footprint, more renewable energies will have to be used for their extraction. Here, too, we are engaged in strategic partnerships with our suppliers in order to achieve this.
We strive to promote sustainability, increase transparency throughout our supply chain, and thereby further minimize procurement risks. This is why LANXESS is a founding member of the 'Together for Sustainability' (TfS) initiative. TfS has established itself in the chemicals industry as the clear standard for a sustainable supply chain. The focus here is on environmental protection, workers’ rights and human rights including the prevention of child labor, labor standards, occupational safety, business ethics and sustainable procurement practices.
More information about the 'Together for Sustainability' initiative.
It is also encouraging to see that our suppliers’ average EcoVadis sustainability assessment of 50.1 points is above the EcoVadis benchmark of 44.7 points. We had no reason in 2022 under review to end our collaboration with suppliers due to sustainability aspects.
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