Procurement Practices | 103-1, 103-2, 103-3

Management Approach 2016 (Disclosure 103-1, 103-2, 103-3)

Effective management of ecological and social effects along the entire supply chain is the key to securing high-quality raw materials, to providing sustainable products to our discerning customers as well as to ensuring ethical business practices. Our long-term goal is to procure all our raw materials from sustainable and responsible sources and to do this in accordance with the Sustainable Development Goals formulated by the United Nations. Due to the high complexity that results from numerous material flows in our raw materials portfolio, our sites face numerous challenges that must be mastered for us to achieve our sourcing goals. These challenges include, for instance, closing information gaps regarding the origin of raw materials as well as providing details that are relevant to the sustainability of production and the processing of raw materials. This information is indispensable in order to analyze performance in the area of sustainability.

We ensure that suppliers also comply with our comprehensive sustainability standards through systematic supplier management and compliance with our responsible sourcing policy. This means that new suppliers must provide information about their sustainability program and the assumption of ecological and social responsibility along their supply chain.

We require the protection of general human rights, the commitment to not engage in any child or forced labor of any type and compliance with statutory requirements for safeguarding health and safety in the workplace. Furthermore, we expect our suppliers to allow their employees the right to freedom of association and collective bargaining, to observe the statutory provisions on working times and pay, and to make a clear commitment against discrimination and abuse. These principles among others are laid out in our Code of Conduct, which applies to all employees and business partners.

We also require that our suppliers conserve resources, reduce or avoid air emissions, ground emissions and wastewater, commit themselves to the preservation and sustainable use of biological diversity and avoid environmental risks effectively.

These standards constitute part of our Group-wide risk management system. In this connection, we conduct risk and performance evaluations of suppliers from economic, ecological and social perspectives. We carry out audits for suppliers that pose an especially notable risk, that have crucial raw materials or that have had problems flagged in the assessment. The number of annual supplier audits are between 120 and 150. These are performed by trained and experienced internal supply audit teams. Additionally, we request at least 50 suppliers annually to carry out SEDEX/SMETA audits by verified, independent audit agencies.

We assess the sustainability performance criteria of raw materials and products using a sustainability scorecard system developed specially for this purpose. This scorecard system offers internal and external stakeholders better guidance for decision-making in order to improve sustainability. At the same time, we are working with multistakeholder initiatives, such as SEDEX and the Sustainable Agriculture Initiative, so that we are able to influence sustainability performance along the supply chain more directly. This also applies to our backward integration approach. With regard to important core competences, we have deliberately chosen locations for our international production facilities where the raw materials primarily used are available locally. We not only purchase our raw materials there but are also integrated in the local economy, produce there and create value there. This approach enables us to support local socioeconomic structures and maximize our ability to monitor and improve compliance with our ethical and ecological principles (see also management approaches to the supplier environmental assessment, child labor, forced or compulsory labor, human rights assessment and supplier social screening).

Symrise obtains the majority of one of its main raw materials, the onion, from farmers within 50 kilometers of the plants where the vegetables are processed. This applies both to Germany and France, where the main production sites are located. Purchasing the onions from the region ensures low transport and energy costs. At the same time, it makes joint development work easier: Symrise works with consulting organizations such as the Hanover Chamber of Agriculture with universities and with the producers and suppliers to make the products even better.

Furthermore, we enter into sustainable partnerships and contribute to a variety of initiates on the topic: Symrise became a member of the Sustainable Spices Initiative (SSI) in 2013. Both for Symrise and the SSI, the focus is on the responsible sourcing and cultivation of raw materials. Together with customers, suppliers and non-governmental organizations, we want to actively cooperate with the SSI, sharing our knowledge while also gaining new experience. Symrise is a founding member of the sustainable vanilla initiative committed to a long-term stable supply of high-quality natural vanilla produced in a socially, environmentally and economically sustainable manner. With the acquisition of Diana, ADF/IDF and the corresponding expansion of our portfolio, animal welfare has become a higher priority for our agenda.

In addition to that, as a member of the Roundtable on Sustainable Palm Oil (RSPO) since 2015, Symrise has set ambitious goals for itself that have already partially been achieved. By the middle of 2016, we converted our Palm Oil supply chain in such a way that all palm oils came from 100 % RSPO “Mass Balance” certified sources. By the end of 2018, we already obtained more than 50 % of primary and more than 68 % of secondary palm oil derivatives from certified sustainable sources. At the same time, numerous recipes have been converted to palm oil free quality. In 2019, we were able to increase the proportion of primary and secondary palm oil derivatives to 60 and 80 % from certified sources. We are off to a good start to obtain all palm oil and palm oil derivatives from certified sustainable sources by the end of 2020. Through our global membership of the Union for Ethical BioTrade (UEBT), we are also committed to ethical sourcing.

Since 2016, we have been a member of the Sustainable Agricultural Initiative (SAI), which underscores our commitment to the responsible sourcing of natural raw materials and the achievement of the strategic goal of backward integration for a number of important agricultural crops.

In 2019, Symrise also joined the Development and Climate Alliance – a multi-stakeholder partnership consisting of hundreds of companies, associations, government agencies and civil society to promote the voluntary compensation of CO2 under the auspices of the German Federal Ministry for Economic Cooperation and Development (BMZ). In the same year, the initiative “Bridging the Gap” was initiated. In collaboration with Unilever, Kellogg’s, Save the Children, Natura, MARS, Tanager, Pernod Ricard, Franklin Baker and GIZ, the Initiative aims to improve the living and working conditions of local farmers and to increase supply chain transparency for our customers through various projects. In the reporting year, Symrise also established the One Planet Business for Biodiversity (OP2B) coalition as a founding member in collaboration with 18 other globally active companies and with the support of the The World Business Council for Sustainable Development (WBCSD). The focus of the alliance is on the conservation and sustainable use of biodiversity in agriculture. The partners have committed themselves to jointly developing more environmentally friendly cultivation practices and changing their added value accordingly.