Raw material sourcing
Neste only accepts sustainably-produced renewable raw materials from carefully selected partners. Sustainability of the raw materials used in the production of renewable fuels is a minimum requirement for us.
All of our contracts with renewable raw material suppliers include strict terms on sustainability; e.g. commitment to sustainability, protecting biodiversity, and respecting human rights are requirements that must be met before a contract is signed.
A key element in understanding sustainability risks in our supply chains is to assess country risk. We use a bespoke, industry leading country risk assessment methodology to map sustainability risks for the countries in which we operate and have supply chains.
Our renewable raw material suppliers are committed to Neste Supplier Code of Conduct and Neste Responsible Sourcing Principle. However, Neste encourages and supports its suppliers to continually improve and develop beyond the minimum, to reach the human rights standards and expectations set out in the Neste Human Rights Principle.
Sustainability due diligence
Raw material suppliers for our renewable products are subject to rigorous sustainability due diligence as part of our Principle on Renewable Products (RP) Supplier Sustainability Approval. The principle applies worldwide to any Neste company which is establishing a business relationship with a supplier of renewable raw material for Neste’s renewable products and it sets the minimum requirements for supplier sustainability approval through a five-step sustainability due diligence process:
1. Raw Material Evaluation
2. Country and Raw Material Risk Assessment
3. Counterparty Screening (incl. Risk-based Financial Risk assessment)
4. Sustainability Desktop Review
5. Sustainability Audits
Neste’s sustainability due diligence process is mainly managed on Neste’s Supplier Sustainability Portal (SSP), a digital platform that is used to facilitate our evaluation of potential and existing renewable raw material suppliers, to support performance monitoring and to enable active supplier engagement.
Read more about our supplier selection from Neste's Sustainability Report 2022 on page 88.
Neste carries out sustainability audits to mitigate the risks in the supply chain. When selecting suppliers to be audited, we pay special attention to raw materials or countries with the highest sustainability risks. Based on the supplier risk assessment, we are better able to prioritize sustainability audits, conducted either by our own local sustainability specialists or a third-party auditor. The purpose of Neste sustainability audits is to verify that our suppliers comply with local regulatory requirements, Neste Supplier Code of Conduct and Neste’s Responsible Sourcing Principle, where applicable. After the audit, we follow up cases of non-compliance and require our suppliers to remediate significant open issues within a specified timeframe.
Neste's grievance process
We continuously improve our procedures for processing raw material-related grievances. We publish monthly grievance log updates on our website, and track and publicly disclose the number and type of grievances that have been raised in person or via our whistleblowing channel.
We take all allegations of suspected sustainability violations and shortcomings seriously and investigate the cases. Upon learning about serious allegations concerning our suppliers, we put all further purchases from those suppliers or supply chains on hold. If the sustainability criteria and requirements included in our contracts have been verifiably breached, the nature of these is considered serious and progress to resolve those issues is not made in a reasonable time, we terminate our contract with the supplier in question.
Our primary means of action is based on engagement and cooperation with our supplier to remediate the issue. This is because we believe that ending purchases does not sufficiently ensure that problems are resolved. If you wish to report a concern or submit a complaint, please do so via phone or online service.
We address shortcomings once we become aware of them by:
- Requiring the supplier to report the situation as part of Neste’s grievance mechanism.
- Engaging and cooperating with suppliers. This is our primary way of action.
- Providing an assessment and, if necessary, conducting supply chain audits locally by Neste’s or the partner’s sustainability experts.
- Requiring a detailed plan for corrective actions from the supplier.
- Cooperating with the supplier and other stakeholders to develop operations and perform necessary corrective actions.
- Monitoring and updating on the progress online.
- Ending purchases, if we do not see adequate progress or if the supplier loses their certificate.
- Reviewing, improving and adjusting our processes where needed.