World-first analysis of natural rubber producers by ZSL’s SPOTT reveals transparency issues across sector
Used in everyday products, such as tyres, yoga mats, shoes and condoms – global natural rubber production is lacking the transparency and subsequent sustainability commitments to protect both people and wildlife.
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That is the finding of the world’s first analysis of the natural rubber industry undertaken by international conservation charity ZSL (Zoological Society of London) – who have assessed 15 of the most significant natural rubber companies and calculated an average score of just 35% on SPOTT (Sustainability Policy Transparency Toolkit).
Unlike other industries such as palm oil or timber, which have received extensive external pressure to improve sustainability, natural rubber is often overlooked. This is due to 85% of the global supply being produced by smallholders made up of local people cultivating small patches of land, unable to absorb the costs associated with moving towards more sustainable practices.
ZSL’s SPOTT assessed 15 producer and processor companies (representing 13.5% of the global land used by the sector) against 120 transparency indicators. The analysis, published today (Tuesday 26 November), found an average score of 35%. This is not dissimilar to other industries such as palm oil and echoes the call from many conservation organisations that more must be done by companies if they’re to improve sustainability of their industries and limit their impact on wildlife.
Furthermore, though companies have committed to some environmental, social or governance (ESG) policies, far fewer report any evidence of implementing them: 11 out of 15 (73%) have committed to conserving biodiversity, while only 4 out of 15 (27%) report identifying species of conservation concern and only 7 out of 15 (47%) provide examples of species or habitat conservation management. Identifying endangered species on company land is often the first step to understanding how to better protect them.
Eszter Wainwright-Deri, ZSL’s SPOTT Research Coordinator, said: “After the successful application of our SPOTT model to the palm oil and the timber and pulp sectors, we have expanded to cover rubber production due to the effects the sector is currently having on wildlife and people across Asia.
“As 85% of the world’s natural rubber is produced by smallholders, it’s important for companies to not only focus on the sustainability of their own operations, but also support all their suppliers – including smallholders. Though a good portion of companies are aware of this, only 4 out of 14 (29%) provide any information or evidence of how they’re currently engaging or assessing them. This is vital if we want to make sure the natural rubber sector as a whole – including smallholders – becomes more sustainable.”
Made from the latex sap of the rubber tree (Hevea brasiliensis), a tropical tree native to Latin America, natural rubber is mainly cultivated in the tropical regions of Asia, with six countries providing 95% of the global production, including Thailand, Indonesia, Malaysia, Vietnam, India and China - covering almost 12 million hectares.
Rapid expansion of large-scale natural rubber monocultures in southeast Asia over the past three decades has resulted in natural forests, rich in wildlife, being converted to make way for rubber trees, impacting the habitat of threatened wildlife such as silvery langurs (Trachypithecus cristatus) and Asian elephants (Elephas maximus).
Mainly used by the medical and automotive industries – with 75% of natural rubber used for tyres – manufacturers established the Global Platform for Sustainable Natural Rubber in 2017. An initiative whose impact has been made clear as the analysis showed 5 out of 15 companies scored an average of 48.7% compared to 27.8% for non-GPSNR member companies. As a member, ZSL supports its vision and participates in setting the agenda for Sustainable Natural Rubber.
Stefano Savi, Director of GPSNR, said: “The Global Platform for Sustainable Natural Rubber is working to improve respect for human rights, prevent land-grabbing and deforestation, protect biodiversity and water resources, improve yields, and increase supply chain transparency and traceability. Transparency is a key focus for the GPSNR, because it is fundamental for achieving a sustainable value chain in any commodity sector and natural rubber is no exception. Tracking transparency can provide an important incentive for companies to improve and uphold their sustainability commitments.”
Full assessment report can be found here: www.SPOTT.org/natural-rubber
What is natural rubber?
There are two types of rubber: natural and synthetic. Natural rubber can be produced from several different species – and even from dandelions – but the species most commonly used by industry is Hevea brasiliensis, a tropical tree native to Latin America. Natural rubber is made from the latex sap of the rubber tree while synthetic rubber is produced from crude oil. Although the majority of rubber products are now made using synthetic rubber, natural rubber has unique characteristics such as high mechanical resistance or resilience that makes it an essential ingredient for many products.
In 2017, 46.5% of the global rubber consumption was natural rubber and around 70% of this was used by the tyre industry. Tyre manufacturers use a combination of natural and synthetic rubber because both have properties that are important in tyres, and it is currently impossible to fully substitute natural rubber with synthetic – for example, aircraft tyres are made of 100% natural rubber.
The rapid expansion of natural rubber monocultures in recent decades doubling from 5.5 million ha to 11 million ha between 1983 and 2016 has resulted in similar environmental and social impacts than other plantation-based commodities and demand for natural rubber is expected to grow even more in the short to medium term – although there are also forecasts of overproduction in the next few years.
Natural rubber assessment
SPOTT’s assessment focused on companies with large-scale rubber plantations because they are directly associated with the largest potential environmental and social impacts. At the same time, these companies also have the greatest capacity to bring about sustainability changes in the sector. Negative impacts, however, also represent financial, regulatory and reputational risks to financial institutions and downstream companies.
The ZSL analysis also found that 9 out of 14 (64%) both commit to and provide evidence on supporting smallholders – a step to the right direction. However, there is a lack of information on traceability only 5 out of 14 (36%) commit to traceability for their whole supply chain and in general on how they engage or assess their suppliers on compliance with their policies, as only 6 out of 15 (40%) provide any information on this.
Water is also another area that could be drastically improved, as production is a water-intensive process, but only 1 out of 15 (7%) has a clear and comprehensive commitment to improving water usage and 2 out of 14 (14%) for improving water quality.
Other more general major problems with the natural rubber industry involve a boom and bust culture, whereas prices go up, people plant lots of rubber trees but seven years later when trees start to produce it creates a surplus and prices fall. As the industry is made up of 85% smallholders but with many ‘middlemen’ taking a cut before the final stages, prices are low and not sustainable for families.
Taking into consideration the needs of SPOTT users, and aiming to identify companies and geographies with leverage to drive positive impact, we selected 15 natural rubber producers and processors based on the following general considerations:
- Area of land owned or leased
- Market capitalization
- Nominated by interested stakeholders from the finance sector, buyers, and other SPOTT users (optionally anonymous)
- Operations also in the palm oil or timber and pulp sectors and assessed on SPOTT
- Bakrie Sumatera*
- FELCRA Berhad Malaysia*
- Groupe Blattner Elwyn*
- Halcyon Agri
- Hoang Anh Gia Lai (HAGL) Group
- Indofood Agri*
- J.A. WATTIE TBK
- Kirana Megatara
- Royal Lestari Utama
- Sampoerna Agro*
- Siat Group
- Société Internationale de Plantations d’Hévéas (SIPH)
- Vietnam Rubber Group (VRG)
* These companies are also assessed on SPOTT in relation to their palm oil operations. Groupe Blattner Elwyn is also assessed in relation to its timber and pulp operations.
Nominate rubber producers
Please contact the SPOTT team if you would like to nominate a natural rubber company that you would like to see assessed on SPOTT here: www.spott.org/contact/