Challenges

The Group is aware that rising global demand may result in poor practices, which could be detrimental to forests, biodiversity and the lives of smallholder farmers.

Supply Chain

An ambitious journey towards sustainability.

30 million people make their living from rubber tree cultivation

One of the biggest challenges in the natural rubber industry is to instill more sustainable practices across a highly fragmented and complex supply chain: 85% of the global natural rubber production originates from smallholder farms with an average surface area of 2 to 3 Ha. bought and sold through the multiple tiers of intermediaries.

In Indonesia and Thailand, it is common for natural rubber processing factories to source raw material through different levels of intermediary dealers. This results in a very complex supply chain, with a single natural rubber processing factory having thousands of smallholder farmers within their supply, having little or no direct interaction with them.

The way forward for a sustainable supply chain

For several years, Michelin has been working with its suppliers to engage all players in the value chain to adopt best social and environmental practices through a collaborative approach.

Leveraging on a digital solution, RubberWay™ helps to assess and map social and environmental risks. Based on the results of these ESG risk assessments, mitigation actions and capacity building projects are implemented to support smallholder farmers in their sustainability journey.

Livelihoods

Improving the livelihoods of farmers and local communities by providing expertise is a part of Michelin’s societal involvements.

Michelin tackles the challenge of decent livelihoods on several fronts

The ability of smallholders to secure a decent livelihood while practicing good environmental and social practices is key. Farmers often face livelihood challenges, such as limited access to agricultural training, income diversification options, and other soft skills.

Leveraging on RubberWay™ digital assessments which help the Group to understand better farmers and the specific guidance they need, targeted capacity building projects have been launched in Sumatra and East Kalimantan in Indonesia, as well as in Brazil and Sri Lanka. An agroforestry program is also being deployed in Thailand.

These projects will engage at least 10,000 smallholder farmers in the coming years.

In 2024, Michelin, its subsidiaries and joint ventures in Brazil, Indonesia and West Africa, conducted 507,000 field trainings for over 90,000 smallholder farmers .

Land Use

Supporting farmers in their efforts to use land responsibly.

Towards better land management

One of the most important issues is to improve yield per-hectare, a crucial way to reduce land pressure and deforestation risks as demand for natural rubber increases.

Michelin is coupling its risk mapping solution RubberWay™ with a global deforestation risk assessment.

More recently, efforts have been focused on supply chain mapping in line with the European Union’s Regulation on Deforestation-free products (EUDR). Since 2023, Michelin has been working with its natural rubber subsidiaries, joint ventures and suppliers to geolocalize its supply chain at the farm level and collect geographic coordinates of millions of rubber plots. These farms are also analyzed for compliance with deforestation-free commitments and regulations.

With global forests rapidly disappearing, it is critical for the natural rubber industry to move towards zero deforestation practices while avoiding habitat loss for endangered species and preserving biodiversity.