Our supply chain

We strive to work with suppliers that share our commitment to act responsibly and support us in sourcing sustainable raw materials.

We spend over €1.7 billion a year with more than 6,500 suppliers around the world to support our aseptic carton business, 56% of which goes on raw materials to make our packs.

Demonstrating that our suppliers uphold high ethical, labour, safety and environmental standards is critical to meet customer and investor requirements, and to avoid breaches in our supply chain that could affect our reputation or cause disruptions to supply.

Sourcing raw materials independently certified to standards such as the Forest Stewardship Council™ (FSC™), Aluminium Stewardship Initiative (ASI) and International Sustainability & Carbon Certification (ISCC) PLUS enhances the environmental credentials of our packs.

Sustainable sourcing helps us secure supplies to meet the needs of our customers now and in the future. It also plays a critical role in driving progress in the Way Beyond Good action areas of Forest+, Resource+ and Climate+, and in achieving our overarching ambition to have a net positive impact across the value chain.

Our commitment

All our suppliers are expected to meet our responsibility requirements. For those supplying our aseptic carton business, we monitor their compliance to assess and mitigate social and environmental risks in our supply chain. Assessments focus on the suppliers that are considered most significant to our business – based on their potential to affect our ability to meet customer needs, the high volumes we purchase from them, or sustainability risks identified in the supply chain – as well as the key equipment suppliers for our Global Assembly business that makes filling machines for our aseptic carton packs.

For parts sourced for filling machines, we expect suppliers to confirm that no conflict minerals sourced from conflict-affected or high-risk areas are included in the product.

We are committed to sourcing the A-materials that go into our carton packs – liquid packaging board, polymers, aluminium foil, ink and solvents – from certified, responsible sources. We also strive to increase use of renewable and recycled materials to replace virgin and fossil-based materials. One way we do this is by linking polymers to renewable or recycled materials through an independently certified mass balance system that supports a broader transition away from fossil-based feedstock within the mainstream polymer industry, helping to maintain security of supply and reliable quality for our customers.

Where feasible, we also aim to source locally within each region to increase resilience, support local economies and communities, and reduce environmental impacts from transporting goods over long distances.

Supply chain for our aseptic carton packs

We source A-materials for our aseptic carton packs from around 45 suppliers, ranging from local paper mills that source wood from their own forests to major multinational mining and chemical companies.

Our targets

Our progress

In 2022, we launched a new Supplier Code of Conduct that reinforces our strict requirements on responsible sourcing, and we made further inroads on our journey to 100% certified raw materials. We maintained our industry lead as the only carton provider to procure 100% FSC™-certified liquid packaging board or offer ASI-certified aluminium and, as of January 2023, all aluminium foil for our aseptic carton packs is procured with ASI certification. We are also using more ISCC PLUS-certified renewable polymers¹ as uptake of solutions in our SIGNATURE portfolio grows. Our SIGNATURE FULL BARRIER solution remains the only packaging material for aseptic cartons with all three main materials – liquid packaging board, polymers and aluminium – from certified sources.

Performance in 2022

Working with responsible suppliers

• We continued to screen 100% of our significant² suppliers on social and environmental criteria as part of our onboarding process.
• We launched our new Supplier Code of Conduct in 2022 as part of our efforts to enhance human rights due diligence in the supply chain. The Code applies to all new suppliers, and we have also begun rolling it out to existing suppliers in place of the SIG Business Ethics Code for Suppliers.
• We asked our 581 significant suppliers – representing 68% of SIG’s total spend – to respond to a self-assessment on our responsibility requirements. Of these, 218 (86%) of the direct suppliers³ and 212 (65%) of the indirect suppliers⁴ responded (see charts below).
• 74% of our significant suppliers have accepted the SIG Business Ethics Code for Suppliers or our new Supplier Code of Conduct or have an equivalent code in place (up from 61% in 2021), and we are engaging with those currently under review to bring this up to 100%.
• No audits were required this year as we did not identify any significant suppliers as high-risk in 2021 because all those completing assessments had signed our new Supplier Code of Conduct or our Business Ethics Code for Suppliers, or provided evidence of EcoVadis assessments, SEDEX audits or equivalent third-party programmes. We identified six high-risk suppliers in 2022 and will audit 50% of these in 2023 in line with our target.
• We developed a separate Responsible Sourcing Directive specifically tailored to our Global Assembly business, to be rolled out in 2023. In 2022, 76 of the 81 key suppliers supporting our Global Assembly function have signed up to our new Supplier Code of Conduct, our Business Ethics Code for Suppliers or equivalent, and five of them have achieved certification to recognised external standards (EcoVadis or SEDEX).
• Through our membership of AIM-PROGRESS – a forum of leading fast moving consumer goods manufacturers and common suppliers to promote responsible sourcing practices and sustainable supply chains – we used its established methodology to assess the maturity of our responsible sourcing programme and identify areas to enhance our human rights due diligence processes (see Responsible culture: human rights) related to our supply chain.
• We began exploring how to align supplier assessment processes used by our newly acquired businesses with SIG’s established responsible sourcing programme, and we met with polymer suppliers in the Americas that supply our carton business as well as our new bag-in-box and spouted pouch business to raise awareness of our expectations on responsible sourcing.

Rating significant¹ suppliers on responsible sourcing standards

Sourcing sustainable raw materials

• We remain the only carton producer to offer packs with ASI-certified aluminium, and we continued to offer the world’s first and only packaging material (SIGNATURE FULL BARRIER) for aseptic cartons with all three main materials – liquid packaging board, polymers and aluminium foil – from certified sources.
• We increased the proportion of A-materials⁵ from certified sources to 74% (by volume) in 2022. We continued to lead the industry as the only beverage carton producer to procure 100% FSC™-certified liquid packaging board for our aseptic carton packs – since January 2021. We engaged with aluminium suppliers to encourage more of them to achieve ASI Chain of Custody certification and secured further supplies of ASI-certified aluminium to enable us to procure 100% of the aluminium foil for our aseptic carton packs with ASI certification from January 2023 (see case study above). We also increased sales of solutions in our SIGNATURE portfolio that linked to renewable polymers⁶ certified to ISCC PLUS (or in some cases REDcert²). There remains no suitable certification for fossil-based polymers and our focus is on increasing use of renewable or recycled alternatives.
• 71% (by volume) of our A-materials⁵ came from renewable sources in 2022 (up from 69% in 2021), mostly liquid packaging board. Growing customer demand for our SIGNATURE portfolio solutions has increased our use of polymers linked to 100% renewable materials,⁶ but the overall amount remains low compared with the amount of fossil-based polymers we source for our aseptic cartons.
• In 2022, we maintained our Group certification to the ASI Performance Standard for our aseptic carton business. We had FSC™ and ASI Chain of Custody certification, as well as certification to control ISCC PLUS materials, in place at all our operational aseptic carton production plants – including ASI and ISCC PLUS certification for the first time at our former joint venture in Riyadh (Saudi Arabia) and ISCC PLUS for the first time at our second production plant in Suzhou (China). We achieved FSC™ and ASI Chain of Custody certification at our newly constructed plant in Mexico ahead of production commencing in 2023. In addition, we added our recently acquired chilled carton production sites in China, South Korea and Taiwan to the SIG FSC™ multi-site certificate, and maintained ISCC PLUS certification at two newly acquired sites in Europe for handling polymers linked to recycled material for bag-in-box solutions.
• Seven of our eight aseptic carton pack production plants have already moved from fossil-based solvents to plant-based bioethanol for our printing processes, and we are continuing to explore how to extend the switch to renewable alternatives worldwide.
• We continued to source 100% of the corrugated cardboard boxes we use as secondary packaging for our aseptic cartons in Europe, Latin America and Asia Pacific South from FSC™-certified sources, and we aim to extend this to our Middle East and Africa region through our upcoming tender process.

Sourcing A-materials¹ for our aseptic carton packs

1 Via an independently certified mass balance system.

2 Significant suppliers are those considered most significant to our aseptic carton business (excluding Global Assembly suppliers that are managed separately) – based on their potential to affect our ability to meet customer needs, the high volumes we purchase from them, or sustainability risks identified in the supply chain.

3 Direct suppliers provide raw materials for our packs and secondary packaging, and manufacture the spouts used on our packs.

4 Indirect suppliers provide services such as facilities management, HR and logistics.

5 A-materials are those that go directly into our aseptic carton packs – paperboard, polymers, aluminium foil, ink and solvents.

6 Via an independently certified mass balance system.