Ensuring responsible and sustainable sourcing
Gränges is committed to promoting responsible and sustainable practices in the company’s supply chain and incorporating sustainability criteria into its sourcing agreements and partnerships. Sourcing activities are mainly managed by the local procurement organization and the supplier base is generally geographically close to the respective markets.
- 98 per cent (97) of significant suppliers had a valid commitment to the Supplier Code of Conduct or had an equivalent standard in place.
- The share of sourced aluminium scrap increased to 28.5 per cent (22.5) of total sourced metal inputs.
- The share of renewable energy increased to 15 per cent (13).
- Number of production sites that have recieved the ASI Performance Standard or Chain of Custody Standard (2/2) (1/0).
A global supply chain
In 2021, Gränges had approximately 4,200 suppliers in total. Of these, 240 were defined as significant1). Approximately 85 per cent of the purchase value from these suppliers was direct materials (primary aluminium ingots, slabs, aluminium scrap and alloying elements) whereas indirect materials and services accounted for 15 per cent. The largest indirect categories include energy, transports, and maintenance. In total, 74 per cent of the direct materials was sourced through commodity traders.
Sustainability risks in Gränges’ supply chain
Gränges’ risk screening model was developed in 2019 with support from a third-party. Country risks were defined based on relevant sustainability country indices within human rights, corruption, and environment whereas sector risks were decided based on qualitative information from news articles, industry reports, NGO databases and other reports. The largest impacts identified were associated with the extraction industries of primary aluminium and alloying elements.
Social risks identified include human rights, labour rights as well as health and safety. Indigenous communities can for example be affected by bauxite mining since mines are frequently located near or on indigenous peoples’ territories, and extractors may not always obtain free, prior, and informed consent. Mining activities can also lead to illegal settlements and relocations, as well as violations of land rights.
Environmental risks include water consumption, leakage, noise from heavy vehicles, air emissions, and significant altercations to the landscape due to digging the open-pit mines. Clear-cutting trees and grasslands to extract bauxite contributes to biodiversity loss, increased carbon emissions, and soil erosion.
Corruption risks are associated with extraction of certain alloying minerals and can be associated with mining approvals.
1) All metal suppliers and other suppliers with a purchase value above SEK 5 million or equivalent in local currency.
Achieving ASI sustainability certifications
To promote responsible production, sourcing, and stewardship of aluminium across the aluminium industry, Gränges is a member of Aluminium Stewardship Initiative (ASI) which is a global non-profit standards setting organization which works to maximize the contribution of aluminium to a sustainable society. ASI offers two independent certification standards: the Performance Standard and the Chain of Custody (CoC) Standard, and Gränges’ target is that all sites by 2025 should have such ASI certifications in place.
In 2021, Gränges had achieved two Performance Standard certifications (Shanghai and Finspång) and one CoC Standard certification (Finspång) and in January 2022, also Gränges Shanghai achieved certification in accordance with the CoC Standard.
The CoC Standard forms the basis for selling ASI-certified aluminium, which assures that Gränges’ products are responsibly sourced and produced across the entire supply chain, from extraction of raw materials to the finished product. Gränges uses the ASI certifications to provide assurance to its customers and other business partners that Gränges is committed to meeting their increased sustainability requirements and demand for sustainable aluminium.