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.

Performance 2021

• 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. 

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¹⁾ All metal suppliers and other suppliers with a purchase value above SEK 5 million or equivalent in local currency.