The Role of Sustainable Procurement at Apollo Tyre

To many, our target of using 40% renewable or recycled input materials in our products by 2030 might seem ambitious. To guide our efforts towards this commitment, we have developed a comprehensive approach to sustainable procurement.?

Yet, our sustainable procurement process serves many other purposes, as a significant portion of success can be attributed to the robust foundation of principles and values tied to responsible business operations. As a result, we are faced with a few benefits, including the ability to better mitigate risks associated with resource scarcity, regulatory non-compliance, and reputational harm. Beyond our company, it also helps foster positive change within the wider industry. Below, I will delve into Apollo Tyres’ approach to sustainable procurement.

Sustainable Procurement Vision, Policy and Guiding Principles

Our sustainable procurement vision entails our commitment to minimising the environmental and social impacts associated with our business operations. For example, to reduce our carbon footprint, we prioritise sourcing from domestic partners to optimise transportation logistics and supply proximity to manufacturing locations, with all other factors being equal.

When it comes to our policy, we view our suppliers as long-term collaborators. Therefore, we actively engage with our supply chain partners to champion sustainability objectives, which include integrating environmental, social, and governance (ESG) considerations into core business practices to ensure that sustainability is embedded into core business practices across the value chain.

To ensure that we can achieve our vision, we have identified seven key principles that guide our sustainable procurement processes. These principles include fostering governance, transparency and accountability among our suppliers. We also continuously encourage our suppliers to increase the proportion of recycled and renewable raw materials in their manufacturing process. Moreover, we advocate that our suppliers work towards the highest environmental, health and safety standards in their manufacturing processes and operations. Such advocacy also entails that we urge them to pursue relevant certifications where applicable, such as the ISO 14001 from accredited third-party entities.

Supplier Selection and Audit Process

As our suppliers are regarded as long-time collaborators, we have a rigorous stage-wise evaluation and approval process for selecting new suppliers. The process involves comprehensive commercial and technical assessments and evaluations of sustainability parameters by a cross-functional team comprising representatives from Procurement, Research & Development, Plant Technology, and Manufacturing.

As a part of the selection process, we also conduct Supplier Audits and Performance Evaluations at regular intervals. These audits, conducted by qualified and trained auditors, are organised to ensure adherence to quality, environmental, and occupational health and safety standards. 63 existing suppliers underwent supplier audit processes, and 22 new suppliers underwent training and awareness programmes on vendor quality requirements in FY24. Our efforts in strengthening suppliers’ ESG assessment, providing livelihood opportunities to local communities, especially women, and focusing on Human Rights awareness, also led to a 10-point increase in our Sustainable Procurement ranking by EcoVadis.

Key Initiatives of Green Procurement

To further progress our sustainable procurement, we have implemented a few key initiatives. First, we are sourcing 100% of our natural rubber supplies from companies who have committed to sustainability throughout their supply chain, aligning with the code of conduct set out by the Global Platform for Sustainable Natural Rubber (GPSNR).?

Secondly, we emphasise the use of reusable and recyclable packing materials with minimal environmental impact for our suppliers, such as returnable pallets and metal boxes, as opposed to wooden packaging. Aside from a lower environmental impact, we also benefit from being able to optimise vertical space utilisation in storage warehouses.

We also hold our suppliers to the same legal standards and ensure that they comply with all applicable national and regional regulations. With that in mind, we have formulated a Supplier Code of Conduct that mandates compliance with environmental laws and regulations, covering areas such as chemical and waste management, recycling, wastewater treatment, air emissions controls, and environmental reporting, among others.

To ensure our compliance with sustainability practices, we continue to comply with ISO 20400:2017, which further provides guidance on integrating sustainability within procurement, as described in ISO 26000. The procurement team has undertaken a rigorous process to realign the existing practices, including the strategies, policies and processes, to embed the sustainable procurement elements.

We remain committed to driving sustainability through our procurement processes, aiming to not only meet but exceed industry standards. All businesses could benefit from fostering strong partnerships with suppliers, embedding sustainability into every stage of the value chain, and continually refining their practices. Such a focus on sustainable procurement will continue to be a key driver of positive change within the industry and beyond.