Sustainable Supply & Ethical Supply

As a global materials technology and recycling group, we purchase and recycle minerals and metals for use in a wide range of products and technologies. For our operations to function, we need raw materials, transportation, energy and other goods and services. Sustainable procurement is a key driver in Umicore’s Horizon 2020 aspiration to make sustainability into a competitive edge.

We have developed a Sustainable Procurement Charter based on our vision and values as outlined in the Umicore Way to reflect our commitment to sustainable development in all areas of procurement. The Charter outlines our commitment to fair dealing, transparency and communication, health and safety, and our efforts to include smaller sized and local suppliers in our procurement processes wherever possible, to support local economies where we operate.

In return, we expect our suppliers to be committed to business integrity, to promote the principles of sustainable procurement in their supply chain, to be compliant with local environmental laws and to respect international human rights law on their own sites and from their own suppliers, including to abolish child and forced labor and eliminate discrimination.

Overall, we have over 18,000 suppliers worldwide to which we paid over € 8.5 billion (including the metal content of raw materials) in 2018. Umicore’s Purchasing & Transportation teams worldwide manage indirect procurement processes for energy and other goods and services (accounting for 10% of our spend) while the metal-bearing raw materials are purchased directly by the business units (accounting for 90% of our spend). In 2018, EcoVadis continued to assess indirect procurement streams for Umicore.

Securing adequate volumes of raw materials is an essential factor in our operations and service offering and in meeting our Horizon 2020 growth objectives. The risks and opportunities vary considerably from one business unit to another, and consequently we have a decentralized approach to risk and opportunity management.

In some regions of the world, exploitation of natural resources is used to fund conflict or can be associated with violations of human rights. We are determined to ethically and sustainably secure a competitive edge in our approach to critical raw materials. Considering our commitment to support and contribute to the respect of human rights and ethics in business, we have developed a Responsible Supply Chains Of Minerals From Conflict-Affected And High-Risk Areas policy based on the current OECD Guidelines.

Umicore continues to ensure that gold production operations are certified as conflict-free.

Our customers are increasingly requesting such guarantees and we provide them with the necessary documentation to assure the conflict-free status of our products. Our Hoboken and Guarulhos sites are certified as conflict-free smelters by the London Bullion Market Association (LBMA), and in 2018, our Hoboken smelter successfully passed the LBMA voluntary conflict-free silver audit of its 2017 activities. For more information on our many accreditations see Statements, note V3.

For over a century Umicore has been a world leader in cobalt products, used in many applications, from tooling to rechargeable batteries for electric cars. Some reserves of cobalt ore are in regions fraught with challenges, giving rise to unethical practices
such as forced labor, poor health and safety conditions, child labor and corruption.

For us, sustainable procurement of cobalt means considering economic, environmental and social performance of our suppliers, and the social and environmental impact of the supply, in the purchase of materials. To source cobalt, we have implemented a pioneering Sustainable Procurement Framework for Cobalt and were the first to obtain external validation for its approach in this area.

To ensure the traceability of materials in our supply chain we carry out detailed research and risk assessments of our suppliers. This includes visiting plants, screening policies and procedures and, if required, developing improvement programs. In 2018, Umicore again performed due diligence activities for all its purchased cobalt materials used in rechargeable batteries, tools, catalysts and several other applications.

Umicore obtained, for the fourth year in a row, third-party assurance from PwC that our 2018 cobalt purchases are carried out in-line with the conditions set out in the Framework. Our yearly reporting on due diligence activities is not only unique to Umicore, but also reflects a high level of pro-active transparency. The share of cobalt from recycled origin was also reviewed by PwC as part of the assurance process and was 6.1% for 2018.