Pirelli has been named a Global Compact LEAD company by the United Nations Global Compact. Pirelli was recognized for its ongoing commitment to the UN Global Compact and its Ten Principles for responsible business. The company was recognized as one of the most highly engaged participants of the world’s largest corporate sustainability initiative.
Why is sustainability important to Pirelli?
Pirelli’s VP of Public Affairs and Sustainability Maureen Kline, who has been in New York for Climate Week activities, said there are multiple reasons.
“The urgency has escalated. Certainly in Europe and also here in the United States,” Kline said. “The momentum of the message is coming from the ground up.”
She said Pirelli has known for years its obligations to do its part.
Secondly, Kline said because they are a part of the automotive industry supply chain, that sustainability is becoming more important to customers.
“They put demands on us and we put demands down our supply chain,” Kline said.
Pirelli is also under pressure from other stakeholders, including investors, to look at environmental, social and governance risks to the company and making sure any issues are dealt with appropriately.
Pirelli joined the compact in 2004, underlining its belief that effective solutions must be pursued through an integrated approach to development, combining economic, social and environmental capital based on joint efforts of sustainable companies and stakeholders globally.
The compact has been stepping up its demands on corporations for the tracking of progress, a definitive means for accountability.
In order to qualify as a LEAD participant a company must take part in at least two UN Global Compact Action platforms, demonstrating its commitment to defining and fostering leadership practices. Pirelli’s sustainability team has focused a lot of effort on decent work and global supply chains, financial innovation for sustainable development goals for 2030 and its reporting on what they are doing to address sustainable development.
Kline used the supply chain platform as a prime example of Pirelli’s work. The company has a sustainable natural rubber policy that supports UN Sustainable Development Goal 15 called Life on Land. One of the specific targets is that by 2020 the company would endeavor to promote the implementation of sustainable forest management. Pirelli has implemented a policy in that area based on 12 pillars which include taking care of people, protecting ecosystems, no deforestation-no peat-no burn, traceability and risk mapping among those near the top of the list.
Kline said most of the rubber that Pirelli imports comes from Indonesia, Malaysia and Thailand. About 20% of the tires that are manufactured in Rome and other Pirelli plants comes from natural rubber.
“What we want to do is partner with people on the ground and hold our supply chain accountable for sourcing natural rubber in ways that are sustainable, not causing deforestation,” Kline said. “We are doing our best to contribute to that sustainable development goal.”
Pirelli is working to improve the transparency of where the rubber is coming from and what they actually know about the rubber.
“In addition to the deforestation issue, how has the process affected biodiversity in the area where it came from, has the rubber been harvested by farmers who are being paid a living wage, is there any land grabbing going on?” Kline said
The sustainability is extremely complex and much more than just simply counting the number of trees or number of acres that have been cut to supply the raw product.
Kline said the process involves telling Tier One suppliers that they have to show a road map for how they go down their supply chain in conjunction with the 12 pillars that Pirelli has established. The company wants to work with its suppliers rather than simply cutting someone off if they fall short in certain aspects of the process.
A major effort is underway involving car companies, natural rubber firms and just about everyone to develop a collaborative effort to create common solutions so no one company is undercutting another. Kline said she considers that a remarkable development across a highly competitive industry. Kline is hopeful that the cooperative effort is part of a trend where the auto industry, “at some point you’ll be able to know that all of the parts of the car came from either supply chains that are transparent and environmentally sound and that something was not made with child labor or forced labor.”
There is growing pressure across the industry to be able to trace the entire supply chain.
“That trend is called responsible sourcing,” Kline said.