Raw Materials Policy

1. Executive Summary 

This policy document outlines Solapave's strategic approach to responsible raw material sourcing. In an era of increased scrutiny on corporate social responsibility and sustainable business practices, we recognise that our sourcing decisions have far-reaching implications for our stakeholders, the environment, and our bottom line. This policy aims to mitigate risks, enhance our brand reputation, and create long-term value for our shareholders by implementing robust, ethical, and sustainable sourcing practices throughout our global supply chain. 

 

2. Purpose and Scope 

i. Purpose 

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The purpose of this policy is to establish a comprehensive framework for responsible raw material sourcing that aligns with our corporate values, meets stakeholder expectations, and drives sustainable business growth. 

ii. Scope 

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This policy applies to all entities within Solapave, including subsidiaries, joint ventures, and controlled affiliates. It covers all raw materials used in our products and operations, from direct materials to indirect goods and services. All employees, contractors, suppliers, and business partners involved in the procurement, handling, and use of raw materials are expected to adhere to this policy. 

 

3. Strategic Objectives 

Our responsible sourcing strategy is designed to achieve the following key objectives: 

i. Ensure ethical and sustainable sourcing practices that protect human rights, promote fair labour conditions, and support local communities. 

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ii. Minimise environmental impact throughout our supply chain, supporting our corporate sustainability goals and contributing to global climate change mitigation efforts. 

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iii. Enhance supply chain resilience and business continuity by diversifying our supplier base and promoting sustainable practices among our partners. 

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iv. Drive innovation in materials and processes to create competitive advantages and open new market opportunities. 

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v. Improve transparency and traceability in our supply chain to meet evolving regulatory requirements and consumer expectations. 

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vi. Mitigate reputational, operational, and financial risks associated with irresponsible sourcing practices. 

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vii. Achieve full compliance with all applicable laws, regulations, and industry standards related to raw material sourcing. 

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4. Governance and Organisational Structure 

 

i. Board Oversight 

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The Directors will provide oversight of this policy and its implementation. The Directors will review performance metrics quarterly and provide strategic guidance on responsible sourcing initiatives. 

 

ii. Executive Leadership 

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The Chief Procurement Officer (CPO) is ultimately responsible for the implementation of this policy. The CPO will report directly to the CEO and the Directors on matters related to responsible sourcing. 

 

iii. Responsible Sourcing Team 

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A cross-functional Responsible Sourcing Team will be established, comprising representatives from Procurement, Sustainability, Legal, Quality Assurance, and relevant Business Units. This team will: 

• Meet monthly to review progress on key initiatives. 

• Develop and monitor key performance indicators (KPIs). 

• Manage supplier relationships and conduct risk assessments. 

• Drive continuous improvement in our sourcing practices. 

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iv. Integration with Business Strategy 

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Responsible sourcing considerations will be integrated into our overall business strategy, annual planning processes, and performance evaluations for relevant employees. 

 

5. Supplier Code of Conduct 

Our Supplier Code of Conduct is a cornerstone of our responsible sourcing efforts. All suppliers, including their subcontractors, must adhere to this code as a condition of doing business with Solapave. 

 

i. Legal Compliance 

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Suppliers must comply with all applicable local, national, and international laws and regulations, including but not limited to those related to labour, environment, health and safety, and business ethics. 

• Human Rights and Labour Standards 

• Prohibition of child labour: No employment of individuals under the age of 15 or the local legal minimum age, whichever is higher. 

• Elimination of forced labour: No use of forced, bonded, or involuntary labour. 

• Fair wages and benefits: Compensation must meet or exceed legal minimums and industry standards. 

• Working hours: Compliance with local laws on maximum working hours, overtime, and rest periods. 

• Non-discrimination: Equal opportunities regardless of race, colour, gender, nationality, religion, age, or any other protected characteristic. 

• Freedom of association: Respect for employees' rights to form and join trade unions and engage in collective bargaining. 

• Safe and healthy working conditions: Provision of a safe, hygienic, and healthy workplace, including appropriate training and protective equipment. 

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iii. Environmental Stewardship 

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Suppliers are expected to: 

• Implement an environmental management system (preferably ISO 14001 certified). 

• Measure and reduce their carbon footprint, water usage, and waste generation. 

• Protect biodiversity and prevent deforestation in their operations. 

• Invest in renewable energy and energy efficiency measures. 

• Develop and offer more sustainable product alternatives. 

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• Business Ethics 

• Anti-corruption: Zero tolerance for bribery, kickbacks, or any form of corruption. 

• Fair competition: Adherence to antitrust and fair competition laws. 

• Intellectual property: Respect for intellectual property rights and confidential information. 

• Conflict of interest: Disclosure and management of any potential conflicts of interest. 

• Transparency: Maintain accurate records and be willing to disclose sourcing information. 

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v. Management Systems 

 

Suppliers should have management systems in place to: 

• Ensure compliance with this code and applicable laws. 

• Identify and mitigate related risks in their operations. 

• Facilitate continuous improvement in their social and environmental performance. 

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6. Raw Material Specific Policies 

 

i. Conflict Minerals 

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We are committed to eliminating the use of conflict minerals (tin, tungsten, tantalum, and gold) that finance armed groups in conflict-affected and high-risk areas (CAHRAs). Our approach includes: 

• Conducting due diligence in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. 

• Requiring suppliers to complete the Responsible Minerals Initiative's Conflict Minerals Reporting Template annually. 

• Partnering with smelters and refiners to ensure they are certified as conflict-free. 

• Phasing out suppliers unable to demonstrate conflict-free sourcing within an agreed timeframe. 

• Publishing an annual Conflict Minerals Report in compliance with Section 1502 of the Dodd-Frank Act. 

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ii. Forestry Products 

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For all wood and paper-based products, we commit to:

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• Sourcing 100% from Forest Stewardship Council (FSC) certified or recycled sources by 2025. 

• Implementing a "Zero Deforestation" policy throughout our supply chain. 

• Supporting reforestation projects in key sourcing regions. 

 

iii. Synthetic Materials 

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For petroleum-based and synthetic materials, we commit to: 

• Increasing the use of recycled and bio-based alternatives. 

• Partnering with suppliers on innovative, low-impact materials. 

• Implementing a closed-loop recycling program for relevant products by 2027. 

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7. Traceability and Transparency 

 

i. Supply Chain Mapping 

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We will map our entire supply chain, including: 

• Tier 1 suppliers: 100% mapped by end of current fiscal year. 

• Tier 2 suppliers: 80% mapped within two years. 

• Tier 3 and beyond: Develop a roadmap for full visibility within three years. 

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ii. Supplier Management System 

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We will implement a state-of-the-art supplier management system to: 

• Track supplier compliance, performance, and risk profiles. 

• Facilitate supplier self-assessments and audits. 

• Manage corrective action plans and improvement initiatives. 

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iii. Public Disclosure 

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We commit to transparency by: 

• Publishing an annual Responsible Sourcing Report. 

• Disclosing our supplier list down to Tier 2 by 2025. 

• Participating in relevant industry benchmarks and transparency initiatives. 

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8. Risk Assessment and Due Diligence 

i. Supplier Risk Assessment 

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We will conduct comprehensive risk assessments of our supply base: 

• Annual risk scoring of all Tier 1 suppliers based on country risk, material risk, and past performance. 

• Quarterly review and update of high-risk suppliers. 

• Integration of risk assessments into sourcing decisions and supplier relationship management. 

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ii. Audit Program 

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Our audit program will include: 

• Annual self-assessments for all Tier 1 suppliers. 

• On-site audits for all high-risk suppliers, conducted by qualified third-party auditors. 

• Surprise audits for a random selection of medium-risk suppliers. 

• Follow-up audits to verify closure of non-conformities. 

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iii. Corrective Action and Continuous Improvement 

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• Development of time-bound corrective action plans for all identified non-conformities. 

• Provision of capacity building and support to suppliers to address root causes. 

• Clear escalation process, including potential termination for severe or persistent non-compliance. 

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9. Capacity Building and Partnerships 

 

i. Internal Capacity Building 

• Mandatory responsible sourcing training for all procurement staff. 

• Integration of responsible sourcing metrics into performance evaluations and incentive structures. 

• Regular workshops and knowledge-sharing sessions on emerging responsible sourcing trends and best practices. 

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ii. Supplier Capacity Building 

• Annual supplier online meeting focused on sustainability and responsible sourcing. 

• Online learning platform with training modules on key responsible sourcing topics. 

• Mentorship program pairing high-performing suppliers with those needing improvement. 

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iii. Industry Collaborations 

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Active participation in: 

• Relevant industry initiatives. 

• Pre-competitive collaborations to address systemic challenges in raw material sourcing. 

• Public-private partnerships to drive sustainable development in key sourcing regions. 

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10. Grievance Mechanism 

 

i. Reporting Channels 

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We will maintain multiple channels for stakeholders to report concerns: 

• 24/7 multilingual hotline operated by a third party. 

• Web-based reporting tool with option for anonymity. 

• Direct access to our Responsible Sourcing Team via a dedicated email address. 

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ii. Investigation Process 

• All reported concerns will be acknowledged within 48 hours. 

• A cross-functional team will investigate all credible reports. 

• Whistle-blowers will be protected from retaliation. 

• Outcomes of investigations will be communicated to relevant stakeholders. 

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iii. Remediation 

• We commit to providing appropriate remediation for any adverse impacts we have caused or contributed to. 

• We will use our leverage to encourage remediation by our suppliers where we are directly linked to adverse impacts. 

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11. Performance Measurement and Reporting 

 

i. Key Performance Indicators 

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We will track and report on the following KPIs: 

• Percentage of suppliers adhering to our Supplier Code of Conduct. 

• Traceability metrics (e.g., percentage of supply chain mapped). 

• Audit results and closure rates for corrective actions. 

• Environmental metrics (e.g., carbon footprint, water usage) of key raw materials. 

• Diversity and inclusion metrics for our supplier base. 

• Number and types of grievances received and resolved. 

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ii. External Reporting 

• Annual Sustainability Report following Global Reporting Initiative (GRI) Standards. 

• Participation in relevant ESG ratings and indices (e.g., DJSI, MSCI ESG). 

• Disclosure aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. 

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iii. Assurance 

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We will obtain third-party assurance on our responsible sourcing data and claims to ensure credibility and accuracy. 

 

12. Policy Review and Continuous Improvement 

 

i. Annual Review 

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This policy will be reviewed annually by the Responsible Sourcing Team and approved by the Directors. 

 

ii. Stakeholder Engagement 

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We will regularly engage with stakeholders, including customers, investors, and community representatives, to gather feedback on our responsible sourcing efforts and identify areas for improvement. 

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iii. Benchmarking 

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We will benchmark our responsible sourcing practices against industry leaders and integrate best practices into our approach. 

 

13. Conclusion 

 

Solapave is committed to setting the gold standard for responsible raw material sourcing in our industry. By implementing this comprehensive policy, we aim to create shared value for our business, our suppliers, and the communities in which we operate. We recognise that responsible sourcing is a journey of continuous improvement, and we are dedicated to transparency, collaboration, and innovation as we work towards our vision of a fully sustainable and ethical supply chain.