Through continued focus on sustainability at Nokian Tyres, we are committed to minimizing the company's negative impacts and maximizing its positive impacts on the economy, environment, and people. An essential part of driving this positive change is understanding how our stakeholders view sustainability and which sustainability topics are relevant for society and our business. This is done by conducting materiality assessments every three years. The assessments form a basis for sustainability at Nokian Tyres.
We carried out a sustainability double materiality assessment during September 2023–February 2024. The assessment process consisted of a contextual analysis based on public and internal sources, stakeholder survey, internal assessment and working group meetings. The results were reviewed and validated by Nokian Tyres’ Group Management Team, the Audit Committee, as well as the Board of Directors. The process followed the principles of internal control and risk management confirmed by Nokian Tyres’ Board of Directors.
The final list of material topics includes the following, categorized by ESRS (European Sustainability Reporting Standards) topics:
- E1 Climate change – greenhouse gas emissions, energy
- E2 Pollution – tire and road wear particles, chemicals
- E4 Biodiversity and ecosystems – biodiversity impacts, particularly in raw material sourcing
- E5 Resource use and circular economy – material use, sustainable materials, circularity and end-of-life tires
- S1 Own workforce – secure and fair working conditions, health, safety, well-being, motivation, diversity and inclusion, skills and career development
- S2 Workers in the value chain – human rights
- S4 Consumers and end users – product safety, end-user guidance and awareness, responsible communications and marketing, customer privacy
- G1 Business conduct – ethical business conduct, sustainable sourcing, responsible political engagement
E1: Climate change
Greenhouse gas emissions, energy
Nokian Tyres is committed to reducing greenhouse gas emissions, improving energy efficiency, and preferring renewable energy. Less than 5% of Nokian Tyres' total greenhouse gas emissions are generated in the company’s own operations, mainly through energy use in factories. Over 80% of the emissions are generated during tire use, and fuel consumption during driving is the single most significant environmental impact over a tire’s service life. Approximately 10% of the emissions come from purchased goods and services, and the remaining share from other sources along the value chain.
Nokian Tyres reduces emissions according to the company's science-based targets by improving energy efficiency, increasing the proportion of zero CO2 energy in production, lowering the rolling resistance of tires, and driving raw material suppliers and logistics partners to reduce their emissions. The new factory in Romania is the first zero CO2 emission factory in the tire industry.
The key risks related to climate change include higher tire material costs and environmental fees (e.g. taxes, certification). On the other hand, climate-friendly technologies, a competitive product portfolio, and innovative and low-carbon materials are recognized opportunities.
E2: Pollution
Tire and road wear particles, chemicals
Nokian Tyres continuously improves the quality, safety and environmental friendliness of the products, services, and processess. Nokian Tyres’ key impacts regarding pollution come from tire and road wear particles (TRWP) and chemical use. TRWP are considered as microplastics and can degrade local air quality, water and soil, and have negative effects on both ecosystems and human health.
Improved tire properties and innovative designs are ways to reduce the amount of TRWP (compared to business-as-usual practices). Nokian Tyres’ tires no not contain any Substances of Very High Concern, and the company works to avoid the use of harmful substances, thereby minimizing risks to occupational health in production and warehousing. Ensuring chemical and environmental safety in all operations is part of the continuous sustainability work.
The risk of increasing regulatory obligations related to pollution can lead to increased costs of materials and product development. There's also a risk of penalties and litigation from the use of banned or restricted substances. However, innovation in tire design and materials could give Nokian Tyres an advantageous position in addressing TRWP.
E4: Biodiversity and ecosystems
Biodiversity impacts, particularly in raw material sourcing
The direct effects of Nokian Tyres’ normal operations on biodiversity are minor. The biggest biodiversity impacts are indirect, taking place in the beginning of the value chain as they are mainly caused by the cultivation of natural rubber. Thus, sustainable sourcing of raw materials is necessary with the aim of reducing the negative biodiversity impacts, e.g., land use change, deforestation, and effects on species.
As a member of the Global Platform for Sustainable Natural Rubber (GPSNR) Nokian Tyres is committed to a shared responsibility towards improving the social, environmental, and economic sustainability of the global natural rubber value chain. In 2023, 100 percent of Nokian Tyres’ approved natural rubber processors were either members of the GPSNR or committed to develop their operations according to Nokian Tyres’ Sustainable Natural Rubber Policy, which covers various commitments related to social and environmental aspects, such as human rights, labor rights, and protection of the environment and biodiversity.
The risks are related to increasing regulation. For example, the EU deforestation regulation concerning natural rubber obliges companies to ensure that products sold in the EU have not led to deforestation and forest degradation, and there are penalties for non-compliance. Such regulation can increase the costs of raw materials and/or the administrative costs of sourcing and distribution.
E5: Resource use and circular economy
Material use, sustainable materials, circularity and end-of-life tires
Nokian Tyres is committed to safeguarding natural resources and promoting circular economy. The company can reduce the environmental impact of its material use through product development and by sourcing recycled and renewable materials and by replacing fossil raw materials.
Nokian Tyres’ goal is to increase the share of renewable and recycled raw materials in tires to 50% by 2030. To achieve this goal, the company is in close cooperation with different raw material manufacturers and encourages innovations from different stakeholders. Nokian Tyres also promotes the recycling of end-of-life tires together with its stakeholders, as improper management of end-of-life tires can contribute to environmental pollution. Nokian Tyres can also contribute to the topic by developing circular tire solutions.
The increasing regulation on e.g. ensuring the origins of raw materials can lead to increasing costs of raw materials and sourcing.
S1: Own workforce
Secure and fair working conditions, health, safety, well-being, motivation, diversity and inclusion, skills and career development
Nokian Tyres respects human rights and treats all individuals equally. The company advances an inclusive working culture and wants to empower the employees to actively participate and collaborate, to take both ownership of their work and responsibility for everyone’s safety.
The goal is to minimize the number of occupational accidents and promote occupational health and well-being. Nokian Tyres is working toward a workplace with zero accidents, and the actions, such as safety inspections, audits, and safety observations, are followed monthly in the Group Management Team meetings. The company follows the well-being at work with global surveys conducted at least annually. The results are analyzed in team meetings and action plans are drawn based on the findings. Nokian Tyres’ occupational health care is based on local legislation and the company’s Environmental, Safety, and Quality Policy.
Proactive measures to increase employee health and wellbeing, as well as a supportive and inclusive working environment, offer an opportunity to improve talent attraction and retention. Highly competent and trained employees can support securing Nokian Tyres' business in the long-term. Any materialized safety-related breaches, or product defects or poor quality due to competence issues could lead to decreased revenue and/or increased operating costs.
S2: Workers in the value chain
Human rights
Natural rubber is the livelihood of hundreds of thousands of families living in countries where the local legislation and working conditions have not been fully developed. The supply chain is both complex and fragmented, and the procurement of natural rubber in a sustainable way is considered the most critical area in a tire company’s supply chain. Yet, at the same time, if natural rubber is cultivated, produced and processed in a sustainable way, it has the potential to bring positive social, environmental and economic impacts.
Nokian Tyres’ principles in all operations are fairness and respecting human rights. Nokian Tyres aims to prevent and mitigate human rights violations in its supply chain through strengthening the due diligence processes, and the company has conducted sustainability audits of suppliers since 2016 to be able to address potential problems and drive improvements. In 2021, Nokian Tyres published its Sustainable Natural Rubber Policy to tackle issues associated with the natural rubber supply chain. As part of Nokian Tyres’ commitment towards a more sustainable business, the company has been a supporting member of the United Nations Global Compact (UNGC) initiative since 2015, and the company follows the initiative’s ten principles that cover the areas of human rights, labor, the environment, and anti-corruption. Nokian Tyres is further committed to acting in the manner required by the UN Guiding Principles on Business and Human Rights.
S4: Consumers and end users
Product safety, end user guidance and awareness, responsible communications and marketing, customer privacy
Nokian Tyres creates high-quality, safe tires for all conditions. As a tire manufacturer, the company must ensure that its tires are verifiably safe to use, and that they meet the quality requirements as well as expectations of customers and end users. Premium quality means premium safety: Nokian Tyres has not had a significant recall in over 20 years. In Central Europe, wet and snow grip are crucial for winter driving safety, while in the Nordics ice grip is more important.
Nokian Tyres improves the safety of the products through continuous product development and testing. The company’s leadership and product development are guided by the Code of Conduct, the Environmental, Safety and Quality policy, and testing policies. Additionally, Nokian Tyres complies with several requirements concerning noise, studs, chemicals, testing, and tire markings, among other things. Nokian Tyres’ vision is to lead the world to drive smarter, also by educating drivers on how to select and maintain tires and how to get the best out of them by driving responsibly. The company also aims to ensure that there are adequate cybersecurity and privacy measures in place to prevent data breaches and misuse of customer and consumer data.
Fact-based and innovative sustainability communications and marketing offers opportunities to improve Nokian Tyres' brand and reputation, thus generating more revenues.
G1: Business conduct
Ethical business conduct, sustainable sourcing, responsible political engagement
Nokian Tyres aims to have a positive impact with a company culture guided by respect, openness, and sustainability, along with high ethical values that guide decision-making on every level of the company. Requiring a commitment to ethical business and sustainability from suppliers promotes sustainability in the supply chain.
At the heart of the corporate culture at Nokian Tyres are the key policies that are defined within the company’s compliance framework and annually reviewed by The Board of Directors and the management of Nokian Tyres. These policies include financial policies, such as tax Policy and Risk Management Policy, as well as policies targeting for good corporate ethics, such as Code of Conduct, Anti-Bribery and Conflict of Interest Code of Conduct, Data Protection Policy, and the Supplier Code of Conduct, among the others. Nokian Tyres does not provide monetary support to political parties or groups or individual politicians.
Good and fair supplier relationship management offers an opportunity for long term, mutually beneficial supplier relationships enabling long term development of cooperation and efficiency improvements. Lobbying in a responsible and transparent manner, the company can help shape legislation that is both effective in reducing the potential negative impacts while not causing disproportionate costs.
Previous material topics from 2021:
1. Environmentally sustainable raw materials
2. Actions to mitigate climate change
3. Safety and well-being at Nokian Tyres
4. Promoting human rights in all operations
5. Safety properties of tires