Responsible Sourcing of Natural Rubber: Continental Takes on Pioneering Role

Hanover, September 28, 2022. Continental pursues a holistic approach to make the complex and fragmented supply chains for natural rubber more sustainable: The latest digital technologies, local involvement in the cultivation of rubber, and close cooperation with strong partners are aimed at creating more transparency along the entire value chain. “We actively take responsibility in our supply chains. Only when natural rubber is responsibly sourced we consider it a sustainable material,” says Claus Petschick, Head of Sustainability at Continental Tires. As of today, completely seamless traceability of natural rubber is technically impossible due to the high complexity of the supply chain. With its commitment, Continental is working at full speed on a blueprint for the sustainable and responsible structuring of supply chains.

Natural rubber is still essential for ensuring outstanding tire performance. This natural product accounts for between 10 and 40 percent of the entire weight of modern, high-performance tires. The special properties of natural rubber include the high level of strength and durability caused by the strain-induced crystallization of the rubber. Natural rubber is currently obtained almost exclusively from the rubber tree Hevea Brasiliensis. The European Tyre & Rubber Manufacturers Association (ETRMA) estimates that up to six million smallholders worldwide are financially dependent on rubber extraction. In addition, the natural rubber passes through as many as seven different intermediaries and processing companies before it reaches for example Continental’s factory gates.

To enable it to assess the sustainability performance of suppliers, Continental has been working with EcoVadis, the world’s leading provider of sustainability ratings for companies and global supply chains, since 2017. Clear responsibilities and obligations for the selection of suppliers help minimize environmental risks and emissions, as well as social and human rights risks.

In cooperation with Michelin and the software developer SMAG, Continental is developing technical solutions for mapping sustainability practices in the natural rubber supply chain. The two tire manufacturers and SMAG have established a joint venture with the name Rubberway that aims to identify potential risks in the supply chain at an early stage. An app gathers and then evaluates data on potential environmental impacts and social and human rights risks. The findings form the basis for minimizing social, human rights, environmental, and economic risks along the supply chain. The joint venture and its concept are in line with the goals of the Global Platform for Sustainable Natural Rubber (GPSNR). As a founding member of the GPSNR, Continental works with other partners to further increase traceability in the value chain for natural rubber. In the GPSNR, NGOs and players that collectively account for more than 50% of global demand for natural rubber and represent all stages of the value chain are working to build a fair and sustainable supply chain.

As part of a development partnership with the German development aid agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Continental is getting involved right at the start of the supply chain in Indonesia, the world’s second-biggest producer of natural rubber. Production here is mainly carried out by independent smallholders. More than 2.5 million Indonesian farmers cultivate around 85 percent of the country’s growing areas. The farmers mostly live scattered around remote areas, making it difficult to reach them with offers for advice and training. In a joint development partnership, Continental and GIZ are training smallholders locally in sustainable cultivation practices. This helps the farmers to cultivate higher-quality natural rubber, which in turn helps secure the livelihoods of many smallholdings while also preventing deforestation. The number of farmers involved is to be increased from 450 to 4,000 by 2024.