Client
Confidential
Region
Global
Industry
Tyre manufacturing
Client Challenge
Manufacturing bio-based tyre materials that are more sustainable than those made from conventional fossil-based materials.
Solution
Replacing a significant share of fossil fuel-based carbon black, synthetic rubber, and additives with natural rubber and wood-based materials to manufacture bio-based tyre material
Benefits
- Reduced GHG emissions and other environmental footprints
- More sustainable manufacturing of tyre materials from social and governance perspectives
Indufor conducted a due diligence on the environmental, social and governance (ESG) risks in a bio-based tyre material manufacturing project for an external investor.
According to the assessment, the main ESG risks of the project came from the supply chain of natural rubber.
Natural rubber sourcing – as visible in many of the producing countries in Southeast Asia, West and Central Africa, and Central and South America – is associated with high deforestation risks and biodiversity loss. The planned rubber plantations and processing are also associated with other ESG risks, notably concerning chemicals, wastes and hazardous material management, soil erosion, water resources depletion, human rights, working conditions, land tenure and legislative and regulatory compliance. To mitigate the identified risks related to rubber sourcing, Indufor’s team recommended using certified natural rubber. Certification schemes that apply to natural rubber, notably, the Forest Stewardship Council (FSC), the Programme for the Endorsement of the Forest Certification (PEFC) and the Global Platform on Sustainable Natural Rubber (GPSNR) have stringent ESG requirements in their respective standards. FSC forest management (FM) certification disqualifies any plantations established on land cleared of forests after 1 December 1994 (i.e. the cut-off date). As rubber plantations have an economic lifespan of 20–25 years, it can be assured that FSC-certified natural rubber does not come from plantations that are established on deforested land before the cut-off date. Generally, using certified natural rubber from EU-based suppliers also supports the importer’s EUDR compliance.
The ESG risks in wood-based materials sourcing were assessed to be low, because this raw material was planned to be sourced from Nordic-based suppliers who were highly compliant with relevant ESG requirements. The risks in bio-based tyre manufacturing plants were also assessed to be low as measures to fulfil ESG requirements were put in place.
