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2018 Annual Report


2018 Annual Report

Continental Corporation - 2018 Annual Report

Purchasing and Responsibility in the Supply Chain

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Continental processes a wide range of raw materials and semi-finished products. The manufacture of these goods is associated with economic, ecological and social impacts along the global supply chain.

Management approach
At Continental, purchasing is organized by product group and business unit with teams in various countries. The aim of the purchasing organization is to create added value for the operating units with market expertise and sustainable procurement solutions. There is therefore close coordination between the purchasing, development and production units.

Supplier relationships are based on the General Conditions of Purchase, which define quality and handling requirements, among other things. Since 2011, we have also required suppliers and service providers to sign the Business Partner Code of Conduct which covers ethical, social and ecological aspects. In addition, we expect our business partners to work toward the implementation of the Code of Conduct or similar values in their own supply chains. Compliance with this Code of Conduct is assessed primarily with self-assessments via the generally accepted sustainability platforms Ecovadis and NQC. In addition, subject-specific audits, such as for environmental protection, are carried out for some suppliers. Violations can also be reported via the Compliance & Anti-Corruption Hotline. In the case of non-compliance with the Code of Conduct, Continental reserves the right to demand corresponding improvements or ultimately to terminate the business relationship.

Results and performance indicators
The purchasing volume in the reporting year was €29.9 billion in total, €20.3 billion of which was for production materials. The Automotive Group uses primarily steel, aluminum, precious metals, copper and plastics. Key areas when it comes to purchasing materials and semi-finished products include electronics and electromechanical components, which together make up about 44% of the corporation’s purchasing volume of production materials. Mechanical components account for just under a quarter of production materials. Natural rubber and oil-based chemicals such as synthetic rubber and carbon black are key raw materials for the Rubber Group. The total purchasing volume for these materials amounts to around a sixth of the total volume for production materials. For more information, see the Development of Raw Materials Markets section in the Economic Report.

The integration of sustainability into our procurement processes was enhanced in the reporting year. As at December 31, 2018, the two sustainability platforms Ecovadis and NQC contained valid selfdisclosures for more than 750 suppliers. This corresponds to a completion rate of over 60% of suppliers selected for this process on a rolling basis.

For natural rubber, a strategic purchasing issue, the “Continental Sustainable Natural Rubber Sourcing Policy” was published in the reporting year with the involvement of various stakeholders, which formulates specific requirements for Continental itself and for business partners in this supply chain. In Indonesia, the first implementation steps on the way to more sustainable natural rubber are being defined in a development partnership between Continental and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The aim is to compile a list of criteria for the sustainable production of natural rubber, to train farmers in sustainable farming methods in accordance with these criteria, and to enable the traceability of rubber from the small farmers to its use in production at Continental. In addition, Continental has participated in industry activities for sustainable natural rubber, which were initiated among others by the World Business Council for Sustainable Development (WBCSD) together with the industry and various stakeholders.