Michelin Group

RATING

SECTOR

Consumer Durables

WEBSITE

CONTACT

23 Place des Carmes-Déchaux
63040 Cedex 9 Clermont-Ferrand
France

Tel: +33 (0) 4 73 30 14 85

STOCK EXCHANGE

LISTING

Forbes Lists:

  • America’s Best Employers 2021
  • #32 Best Employers for Veterans 2020
  • #59 World’s Best Employers 2020
  • America’s Best Employers By State 2020
  • #381 Global 2000 2020
  • America’s Best Employers 2021
  • #32 Best Employers for Veterans 2020
  • #59 World’s Best Employers 2020
  • America’s Best Employers By State 2020
  • #381 Global 2000 2020

Other lists:

  •  CDP Leadership Rating 2019
  •  Ecovadis Gold CSR Rating 2019
  • ISS-OEKOM Prime Corporate Responsibility Rating 2019
  • MSCI AA Rating 2019
  • Vigeo Eiris A1+ Rating 2018
  • Sustainalytics Outperformer 2018
  • Dow Jones Sustainability Index

EMPLOYEES

127,187

CHIEF SUSTAINABILITY OFFICER

Jennifer Bravinder

AWARDS

CONTENT SOURCE

FURTHER READING

Report created by Youmna Abdallah

Michelin Group

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Michelin Group is a French multinational tire manufacturing company based in Clermont-Ferrand, France. It operates 67 production plants in 17 different countries on every continent and has produced over 200 million tires to this day, making it the largest tire manufacturer in the world. 

In addition to the Michelin brand, the group owns various subsidiaries such as BFGoodrich, Kleber, Kormoran, Riken, Tigar and Uniroyal. The company manufactures tires for space shuttles, aircraft, automobiles, heavy equipment, motorcycles, and bicycles, and offers numerous innovations such as airless puncture-proof tires made using 3D-printing technologies.

Michelin Group is also known for its travel guides, roadmaps and the Michelin Red Guide, the oldest European hotel and restaurant reference guide awarding up to three Michelin stars for excellence to hospitality establishments.

Company Sustainability Activity

Michelin aims to achieve sustainable mobility by becoming one of the most innovative, responsible, and high-performing companies worldwide across all of economic, environmental and social responsibilities. The Group’s sustainable development commitment encompasses numerous strategies in the areas they operate which include the following:

  • Create innovative technologies to maximise the tires’ lifespan and improve road safety, and provide recycling solutions to end-of-life tires to support the circular economy
  • Reduce and manage waste, the environmental footprint of its manufacturing and logistics operations, as well as the CO2 emissions generated during the tires’ use phase.
  • Provide clear, appropriate, and transparent key figures of its social and environmental performance to stakeholders through sustainable development reports.
  • Commit to ethical practices through community engagement, support of educational programs, sustainable procurement, and employee health and safety

Since 2020, the Michelin Red Guide also comprises a green clover to recognise the work of hospitality establishments committed to preserving the environment through sustainable practices.

Highlights

  • Launched the construction of the first tire recycling plant in the world in 2021.
  • Created Uptis, an airless puncture-proof tire available on the market by 2024.
  • Invested €3.4 million in the Livelihoods Carbon Fund.
  • Adopted a 4R strategy (Reduce, reuse, recycle, renew) across all its products and services.
  • Formalized its public commitments in the Sustainable Natural Rubber Policy in 2016.
  • Runs the Michelin Education Program which provides human capital to public schools in North America.

Targets

Ethics and Compliance

  • Implementing business practices aligned with a Code of Ethics, applicable across the entire Group.
  • Taking a firm stand against corruption by introducing an Anti-Corruption Code of Practice which describes corruption and bribery-related risks and the procedures for managing them, and the measures to be put in place to ensure compliance with the Group’s policy of zero tolerance for corruption.
  • Maintaining principles of sustainable procurement through the Michelin Purchasing Principles.
  • Assessing the CSR performance of the Group’s 400 leading suppliers and enabling 70% of them to be confirmed as compliant with Group CSR standards (the assessment is conducted by the EcoVadis rating agency).
  • Committing to its partnership with WWF pursuing initiatives to support a sustainable natural rubber market (the sustainable natural suppliers have been participating in EcoVadis reviews of their social responsibility and environmental performance as of 2013).
  • Mapping  80% of its sourced natural rubber volumes by 2021 on its Rubberway mobile application to map highlights the areas of potential social and environmental risk.
  • Encouraging the major rubber-tree farming stakeholders to make responsible natural rubber production the norm. This commitment played a key role in setting up the multi-stakeholder Global Platform for Sustainable Natural Rubber (GPSNR), an independent platform designed to lead improvements in the CSR performance of the entire natural rubber industry.

Human Rights and Governance

  • Increasing the percentage of women in supervisory and management roles to 30% by 2020.
  • Maintaining the Health and Safety Total Case Incident Rate (TCIR)  to <2 as of 2020.
  • Reaching an 85% employee engagement rate. 
  • Reaching a percentage of 70% of suppliers in compliance with Group standards for fair working conditions during desktop reviews of their CSR performance.
  • Addressing the risk of child labor in the natural rubber supply chain through the Rubberway mobile application.
  • Ensuring wage equality by closing the gender pay gap in all countries it operates
  • Promoting employment for people with disabilities and retaining employees who become disabled.
  • Offering fair compensation and benefits, support employees’ growth and development as well as their engagement in local communities.

Environment

  • Reducing energy consumption due to tires by 20% per kilometer driven by 2030.
  • Helping mitigate climate change by reducing the environmental footprint of its production facilities by 50%, as measured by the Michelin Environmental Footprint (MEF) performance indicator, by improving their energy efficiency by 38% compared with 2005.
  • Incorporating 30% sustainable materials, from renewable or recycled sources, in the tires within the next 30 years.
  • Reducing and managing waste by improving the 4R Strategy ((Reduce, reuse, recycle, renew) across all its products and services).
  • Reducing water withdrawals and effluent discharge.
  • Increasing the use of renewable energies for their production sites across all countries.
  • Actively improving energy performance in the transportation industry through the improvement of tires energy efficiency, and creating hydrogen-powered mobility, the embodiment of Michelin’s “All Sustainable” vision.
  • Maintaining a unifying stance as a global stakeholder for sustainable mobility by leading international forums such as the Movin’On Summit and Movin’On Lab.
  • Reducing greenhouse gas emissions from logistics operations.
 

Progress

Ethics and Compliance

  • In 2019, a total of 1,037 incidents of alleged non-compliance were reported across the Group, a 7% increase from the 965 allegations recorded in 2018. 
  • In April 2019, Michelin received the ISO 20400 Sustainable Procurement standard.

Human Rights and Governance

  • The percentage of women in supervisory and management roles reached 27.4% in 2019.
  • Consolidated TCIR declined to 1.43 in 2019 from 1.94 the year before.
  • The employment engagement rate reached 81% in 2019. 
  • The suppliers in compliance with Group standards for fair working conditions reached 82% in 2019, a 12% increase from the Group’s initial target.
  • The gender wage gap stood at -2.67% in 2019 (information based on a sample of 33,196 people with the same level of responsibility)
  • The Group has organized three major worldwide action programs: Local Community Engagement, Michelin Development and the Michelin Foundation.

Environment

  • Between 2005 and 2019 the Michelin Environmental Footprint improved by more than 51%, exceeding the 2020 target of 50% that had already been met in 2018.
  • The Group’s total CO2 emissions decreased by 30.4% compared with 2010 and of 1.3% compared with 2018. In absolute value, they declined by 25% over the period, to less than three million tonnes from nearly four million in 2010. 
  • In 2019, the Group’s energy consumption went down by 1.1% year-on-year and by 17.2% since 2010. 
  • Incorporates 26% sustainable materials, from renewable or recycled sources, in the tires.
  • As of 2020, the Group recovers or reuses 96.9% of all waste as materials or fuel, as part of their 4R strategy, with 56 of the 78 facilities recovering more than 95%.
  • Dropped more than 32% of water used per tonne of tires produced since 2010.
  • Since the end of 2019, the Gravanches plant in Clermont-Ferrand has been heated by a heat pump system that recovers waste process heat, making it the Group’s first zero emission site.

Certificates

United Nations Sustainable Development Goals

United Nations SDGs Compliance

SDG 3

  • Michelin Group is involved in several partnerships on United Nations initiatives assisting public authorities of low and middle-income countries in addressing key gaps in their road safety systems. In research and development, the company innovates to ensure that its products maintain high performance throughout their lifespans. The Group was also ranked by Forbes No. 1 Employer in the Automotive Industry and 34th overall out of 500 large employers.

SDG 4

  • Michelin Group implemented several programs for education support through philanthropic endeavors and volunteer initiatives. The Group’s regular areas of focus worldwide include schooling for children lacking access to primary education.

SDG 5

  • Similar to SDG 4, Michelin Group implemented several programs to spark interest in technical careers for both young men and women and adopted a Code of Ethics to implement ethical values and practices in the workplace. It has committed to increasing the percentage of women in supervisory and management roles to 30%. 

SDG 6

  • Michelin has set an objective for reduction of the environmental impact of its industrial activities, including water use. Since 2010, the volume of water used per tonne of tires produced has dropped more than 32%.

SDG 7

  • Michelin is working in two areas to increase the share of renewables in the global energy mix: setting up renewable energy production installations on sites and developing hydrogen-powered mobility solutions.

SDG 8

  • The Group has implemented an inclusive Sustainable Mobility strategy that is fully integrated into an approach grounded in the circular economy. The Group’s top priority is to make its tires more energy efficient while simultaneously continuing to improve their other performances. The Group is making major long-term investments in research and development to offer the most environmentally responsible products possible. 

SDG 9

  • The Group has implemented an inclusive Sustainable Mobility strategy that is fully integrated into an approach grounded in the circular economy, the “4 Rs” strategy, including a commitment to responsible management of natural rubber and using biomaterials to limit reliance on fossil-based raw materials.

SDG10

  • The Group applies a structured approach to foster diversity alongside objectives and indicators that are monitored each year, ensuring that 75 percent of management positions are held by people from within the company, reflecting its ever-increasing diversity, increasing the percentage of local top managers in growth zones to 80 percent, and offering employment to people with disabilities and retaining employees who become disabled. 

SDG 11

  • The Group is committed to road safety through the technological progress offered by its products and services, the support of local authorities to improve road safety systems in developing nations as part of the United Nations’ “Road Safety Collaboration,” the “Global Road Safety Partnership,” and as a founding member of Youth for Road Safety. Michelin is also involved in the “SIMPlify” project, an urban mobility planning resource made available to cities to help them develop sustainable urban mobility plans approved by the European Commission. 

SDG 12

  • Michelin is working both to reduce the amount of waste generated by its tire production sites and to reduce the amounts of raw materials needed to manufacture tires while increasing durability.

SDG 13

  • The Group supports efforts to prevent climate change through a 2015 policy that defines four priority actions: reducing energy consumption, reducing CO2 emissions, using its innovative methodologies to develop long-range electric vehicles and integrating its products and services into new forms of mobility for people and goods, and supporting implementation of a global carbon price.

SDG 15

  • Michelin has been developing a global cooperation agreement with WWF since 2015 to promote sustainable natural rubber production worldwide. The Michelin Corporate Foundation also funds awareness-raising programs in Indonesia, which aim to get local stakeholders involved in environmental issues and encourage development while integrating the need to preserve the forest.

SDG 17

  • Michelin’s Movin’On Labs bring together more than 200 entities, including major companies, startups, international organizations, corporate and academic research centers, consultants and experts in Europe and North America to promote practical innovations and solutions for better sustainable mobility, and ultimately to promote them to governments.

Evaluation

Michelin Group evidently works towards implementing numerous sustainable development strategies in most areas it operates and provides a comprehensive report on their target’s progress.

Some of their notable initiatives include the development of innovative solutions to maximize the tire lifespans to reduce waste and CO2 emissions and improve road safety, their ongoing support to a sustainable natural rubber market, and the construction of the first tire recycling plant in the world.

Whilst the company’s efforts to tackle all pillars of sustainability and the ISO certifications 20400, 14001, and 26000 it complies with are noteworthy, Michelin Group would benefit from implementing certain measures and targets that accurately depict their goals. 

Michelin Group complies with the UN Sustainable Development Goals, basing a priority for SDG 8, 9, 11, and 12. Their efforts towards sustainability are noteworthy, and for these reasons, Michelin Group has been rated a B. 

Analyst Outlook: Neutral

Whilst Michelin Group implemented considerable measures to achieve sustainable development across all sectors it operates, the company could better focus its targets to improve the accuracy of its goals. For this reason, our outlook is Neutral.

 

Key Points

  • In 2019, a total of 1,037 incidents of alleged non-compliance were reported across the Group, a 7% increase from the 965 allegations recorded in 2018.
  • The introduction of a green clover in 2020 in the Michelin Stars rating is facing some controversy.
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