Sourcing

GRI disclosure 102–9

Supply chain

Swatch Group works with carefully selected suppliers primarily from Switzerland, Europe and East Asia to source raw materials and certain components.

Low-emission modes of transport are used for distribution as far as possible; see comments in the chapter on the environment under Scope 3 emissions. Audits of suppliers are carried out based on risk, and a separate organization has been set up in East Asia for this purpose. The supplier risk assessment is currently being revised, and it is being considered whether systematic audits will also be carried out at selected Swiss and European suppliers in the future.

The key figures for the supply chain are also being revised in order to be able to report even more comprehensively and transparently in the future.

 

GRI disclosure 204–1

Local suppliers

Since being founded, Swatch Group has been committed  to Swissness throughout the Swiss watch industry and  has pursued the goal of being 100% Swiss made since the launch of the Swatch brand in 1983. This dedicated commitment to local sourcing contributes significantly to the preservation and further development of the Swiss watchmaking tradition and art.

↗ For more information, see chapter on p. 66 of the latest Sustainability Report.

 

In addition, the short distances between the individual production sites mean that comparatively few GHG emissions are generated through transport in the supply chain. This is not only true of the classic watch components: batteries and microchips, which in most other industries are now imported by air freight from Asia, can also be manufactured locally in Switzerland thanks to the company’s own production sites. The many years of investment in Swiss development and production facilities have also enabled Swatch Group to launch the Swiss smartwatch TISSOT T-TOUCH CONNECT SOLAR, for which the SwAlps operating system was also developed entirely in house in Switzerland.

For watches, the percentage of Swissness (local sourcing) is well above the 60% stipulated by law.

In order to avoid unnecessary transport emissions and support local suppliers worldwide, and to enable the most efficient sourcing process possible, the country subsidiaries and distribution companies source products from producers in the region wherever possible.

Thanks to the worldwide network of service centers, watches can be repaired by local employees in a customer-friendly manner and without long transport routes. 

Precious metal sourcing

Swatch Group uses different precious metals, particularly gold, silver, palladium and platinum, with gold accounting for the largest proportion by far. Primary gold is sourced exclusively from industrial mines in the US, Canada and Australia. In addition, the Group has an in-house closed-loop gold processing system with a Group-owned foundry to reuse production residues internally. A small part of the gold used is sourced from certified Swiss gold foundries or as components from suppliers.

The use of recycled gold from external sources is avoided as traceability back to the mine is not given. Full traceability can be achieved with the Swatch Group sourcing strategy, which involves direct delivery from the mine to the refinery and on to the Group’s own gold processing facility, as well as the use of recycled gold from internal processes. 

Gold origine 2021

Gold origin
According to volume, reporting year 2021

Primary gold

Traceable primary gold is sourced exclusively from industrial mines in the US, Canada and Australia, where the highest legal standards apply and where the mines are operated under extremely strict conditions set by the authorities and continuously monitored by them. The supply chain is kept as short as possible, through direct delivery from the mine to the refinery and then on to the in-house gold processing by Swatch Group. Sourcing gold from artisanal mines and/or other regions where lower standards apply or where there are residual risks that non-traceable gold could enter the supply chain is not an option for Swatch Group. This clear and simple sourcing policy has proved to be very effective.

Countries of origin for primary gold in the year under review

  2021 2020 2019
Australia 88% 0% 0%
US 12% 100% 71%
Canada 0% 0% 0%
other countries 0% 0% 29% 1

 

Sourcing period: October 1–September 30.
1. Orders made in 2018. Since January 2019, no gold has been sourced from other countries.

 

Internal gold recycling

The investments made in recent years in the Group’s foundry and refining facilities have fully internalized precious metals processing, allowing alloys to be produced and recycled in house. After preparing the alloys, extruded profiles and raw ingots are manufactured and then turned into semi-finished products or finished components, again using in-house production processes. Swatch Group therefore controls the complete gold processing chain internally according to a clearly defined process. Nivarox-FAR plays a key role in this respect, as it processes all of Swatch Group’s gold production stocks in a closed and controlled cycle. Production chips and scrap can therefore be completely reused in the Group’s own foundry. Nivarox-FAR has the necessary federal authorization both as a foundry and as a commercial assayer (sworn assayer) and is certified according to the Responsible Jewellery Council Code of Practice and Chain of Custody (RJC CoP and CoC). Compared to primary gold, recycled gold also has lower GHG emissions.

↗ Further details can be found in the section on Scope 3 emissions, p. 44 of the Sustainability Report 2021.

Nivarox Processing Cycle