Sustainable supply chain management

Sourcing ingredients responsibly

Protecting the world’s forests

Published 21 Aug 2018

People depend on forests. They are an important resource and essential to our ecosystem. Forests improve air quality, protect watersheds, prevent soil erosion, and provide habitats for animals. They also help mitigate climate change. Destroying forests, also called deforestation, causes about 15% of global greenhouse gas emissions. At DSM, sustainability is the core value of the company. DSM is taking steps to reduce deforestation by sourcing ingredients like palm oil, soy, glycerin and wood fibers in a more sustainable way.

DSM is intensifying its sustainable supply chain management by requiring all suppliers to trace the companies, plantations, fields and mills along their supply chains. We understand that sourcing these ingredients in a more traceable, sustainable way can be complex and challenging. Therefore, we support and promote suppliers who show real commitment to tackling those challenges.

DSM uses a limited amount of palm oil when making certain nutritional products. The company is a member of the Roundtable for Sustainable Palm Oil (RSPO), a not-for-profit, multi-stakeholder organization aimed at making sustainable palm oil the market norm. At DSM, all palm oil purchases are made according to RSPO standards and procedures. DSM purchases directly through RSPO or indirectly through GreenPalm “Book & Claim” certificates.

You can view DSM’s RSPO profile here. The RSPO accreditation guarantees the criteria for processing RSPO Certified oil palm products.

The RSPO has four different supply chain models for certification: “Identity Preserved”, “Segregation”, “Mass Balance” and “Book & Claim”. Have a look at these infographics to learn more about the difference between these four models.

DSM’s objective is to use 100% RSPO certified sustainable palm oil and oil palm products using RSPO “Mass Balance” supply chain models by 2020. Going forward, DSM aims to have all of the production sites that use palm oil or palm oil derivative products RSPO certified.

In 2017, DSM procured 1,333.5 MT of Palm Oil & Palm Oil derivative products. Eighty-four percent (1118.5 MT) was directly RSPO-certified under the “Mass Balance” and “Segregation” supply chain models (with a breakdown of 80% and 4%, respectively). The remaining 16% (214 metric tonnes) was sourced under “Book & Claim” RSPO credits.

DSM Nutritional Products’ production sites in Grenzach and Sisseln are certified under both the RSPO “Mass Balance” and “Segregation” supply chain models, and one site in Singapore is certified under “Mass Balance”.

For non-RSPO purchases of palm oil, palm kernel oil and derivatives, DSM buys GreenPalm “Book & Claim” RSPO certificates. The “Book & Claim” program allows us to offset each ton of palm (kernel) oil we use, by purchasing certificates from an RSPO certified palm oil grower. In this way, we indirectly support RSPO certified growers and farmers.

DSM uses soy derivatives in the form of soy bean meal, soy protein and soy flour for certain animal nutrition and human nutrition activities.

In 2017, DSM procured 11,000 metric tonnes of soy bean meal entirely from Proterra-certified suppliers. Proterra is a certification organization which follows a “segregation” model that ensures full traceability in the supply chain.

DSM procured 43MT of soy protein from a supplier who is a member of the Roundtable of Responsible Soy Association (RTRS), but not yet certified. RTRS covers less than 1% of global soy production despite having a globally-recognized certification scheme.

DSM also procured 130 MT of soy flour in 2017 of which 30% (40 metric tonnes) was certified by Proterra. This was mainly used by the production site in Seclin. The remaining 70% was procured in China. Going forward our aim is to source 100% sustainable soy flour.

Crude glycerol, also known as glycerin, is the main byproduct of the biofuel industry. DSM uses glycerin in enzyme blending activities and for personal care products at production sites in Europe and China. In 2017, DSM’s European sites procured 3300 metric tonnes of glycerin from rapeseed-based bio(fuel) producers in the U.S. and Europe. In China, where the biofuel industry is less developed, the glycerin DSM sources originates from palm oil byproducts. In 2017, DSM started a project to identify more sustainable sources of glycerin for its production facility in China. By the end of the year, 57% of the glycerin procured in China was from RSPO-certified suppliers. DSM aims for 100% of our Chinese-sourced glycerin to be purchased from RSPO certified suppliers by 2020.

Across DSM, wood fiber-based products are sourced mainly for pallets, cardboard, paper bags and for our biomass plant in Switzerland. In 2018, DSM started the Green Tender Initiative, a step-by-step approach to attaining more sustainable suppliers across all of these categories.

When sourcing pallets, DSM gives preference to suppliers who can demonstrate that at least 70% of their products originate from sustainably-managed forests with a Forest Stewardship Council (FSC)/PEFC certification.

Going forward our ambition is to have our supplier use at least 80% of their wood consumption from FSC / PEFC certified forest.

DSM will also source wood chips (biomass) for the biomass cogeneration plant currently under construction at our site in Sisseln, Switzerland. The new cogeneration plant will reduce DSM’s CO2 emissions by approximately 50,000 ton/year thanks to more efficient production of renewable steam and electricity. The origin of the wood chips that will be used is restricted by contract to forestry harvesting residues (such as tops and branches) and residues from forest industries (such as bark, shavings and sawdust) from the surrounding forests. Wood chips shall be sourced according to the criteria from the Roundtable on Sustainable Biomaterials (RSB) regarding climate change, soil protection, conservation of resources, and biodiversity and traceability, from within a 200-km perimeter.

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