We are committed to conducting business with the highest ethical standards, and we expect the same of our suppliers. At the same time, we also see opportunities to generate shared value through sustainability.
As we advance on our sustainability journey, we believe partnering with our suppliers will play an important role in our ability to generate significant positive impacts beyond our own operations.
Our Supplier Sustainability Team has worked closely with our Source-to-Pay organization to identify critical suppliers, factoring in aspects such as total spend, single source, and the specific needs of our business operations. Prioritizing among our thousands of suppliers will allow us to focus on high-impact relationships.
In the fall of 2021, we formally engaged a third-party partner to conduct sustainability assessments of our critical suppliers. This platform will enable us to evaluate each supplier using methods meeting the GRI Standards and the principles of the UN Global Compact. We received scorecards for 42 out of 182 critical suppliers identified by the end of December. We will work toward a 100% participation rate among all critical suppliers in the future. This process will give us a holistic view of our supply chain’s environmental and social impacts. With this information, we can take strategic actions to mitigate risk and drive improvements with our business partners.
One of the focus areas for our Supplier Sustainability 2025 roadmap is promoting circularity in our packaging. Our Tuscola, IL, USA plant acted on this initiative by switching to wooden pallets with composite blocks made of chipboard from recycled wood, reducing the need for new lumber in these pallets by approximately 30%.
Likewise, our Cilegon, Indonesia plant recently worked with a local supplier to reclaim 100% of used flexible intermediate bulk containers, making them into plastic pallets and bringing them back for plant use. This closed-loop system reduced pallet disposal costs and eliminated the downstream waste impacts, creating both economic and environmental benefits. Efforts like these have helped us achieve 100% of wooden pallets containing renewable or recycled content and 93% of plastic pallets sourced with recycled or reused materials.
In an electric truck pilot with sennder, we successfully completed one of Europe’s first cross-border transports using a heavy-duty zero-emissions electric truck. As we advance in our commitment to achieve net zero ambitions, we are engaging with suppliers that offer carbon offsets and sustainable solutions that minimize impact on the environment. In this pilot, sennder transported 17+ tonnes of product for us from the port of Rotterdam to Antwerp, Belgium and then returned to base – a round trip covering a distance of more than 300km.Learn More
Our team in China has been developing a leasing program for our plastic pallets. Instead of selecting standard single-use pallets for key customers in China, we coordinated with our partners both upstream and downstream in our logistics supply chain to identify a better solution. The alternative allows for pallets to be sent back to the nearest network point for redistribution to Cabot and our partners, enabling a savings of approximately 85 metric tons of plastic per year.
In our effort to avoid unnecessary disposal of bags used to package our product, our team in Brazil has been partnering with a supplier to develop a radio-frequency identification (RFID) tag that could help track the movement of these bags. This would allow us to improve the percentage of bags returned for reuse and coordinate with customers accordingly. Currently, approximately 65% of bags are returned to Cabot from our customers, and we anticipate this rate to increase to about 80% with the use of RFIDs. This system will also help us monitor the condition of bags being reused and enhance our ability to track packages throughout their distribution.