Management Approach 2016 (Disclosure 103-1, 103-2, 103-3)
For our portfolio of approximately 30,000 products, we use some 10,000 different natural and synthetic raw materials sourced from over 100 countries. As a result, we face an array of challenges ranging from negative environmental effects from the sourcing of raw materials to protecting social standards in countries that experience, to some degree, problematic sociopolitical conditions. The reasons for this are not least because of inadequate transparency, the high level of complexity of material flows and the different objectives of the parties involved along the value chain. As a result of measures for responsible sourcing, we can contribute to the achievement of sustainable production patterns (SDG 12) as well as to the preservation of ecosystems (SDG 15).
We are constantly adapting the organizational structure of our purchasing department to the changing conditions on the market. Procurement at Symrise is organized in a decentralized manner in our segments Scent & Care, Flavor and Nutrition. This way we can manage purchasing processes in a more targeted manner and continually optimize the supply chain.
In March 2019, the Flavor segment announced the establishment of the Global Supply Chain and Procurement organizational unit to meet the increasing demands and complexity in the supply chain and procurement areas, as well as to more effective control of processes along the entire value chain. This new organizational unit will promote the improvement of our sustainability in cooperation with other segments, the measurement and management of supply risks as well as the increase of profitability through efficient and quick implementation.
Our long-term goal is to source all our raw materials in a sustainable manner. In 2016, we developed a new Symrise sourcing policy that applies across the Group. By providing a comprehensive description of our goals, aspirations and tools, it serves primarily as a reference document for suppliers, customers and employees. We have also established specific policies for various raw materials that are exposed to high risks, such as in the case of palm oil.
We cannot solve many of the challenges in the supply chain on our own. Therefore, we increasingly rely on cooperative arrangements within the industry and competitive approaches in which we can work together with other actors on long-term sustainable solutions. These include our memberships in the Roundtable on Sustainable Palm Oil or the Sustainable Spices Initiative.
We can best pursue and maintain our goal of sustainable sourcing if we can exert direct influence on the upstream stages of our value chain. Therefore, we pursue the goal of strategic backward integration for our key raw materials. As we demonstrated in the case of vanilla production in Madagascar, we can create immediate value for all participants: We are working in a very targeted manner on the improvement and implementation of environmental and social standards through various joint projects, thus ensuring the consistent high quality of raw materials for our customers. With this integrative approach, we support local socioeconomic structures and can directly monitor compliance with our principles. For the backward integration of our supply chain, we have established corporate guidelines on due diligence and defined corresponding processes that also consider environmental and social risks. The backward integration into the fragrance and flavoring manufactured from natural, renewable raw materials at our US sites in Jacksonville, Florida, and Colonels Island, Georgia, secures valuable and strategic ingredients for Symrise and ultimately reduces our risk of supply bottlenecks.