Sourcing of materials
GRI disclosure 2–6
Swatch Group works with carefully selected suppliers primarily from Switzerland, Europe and East Asia to source raw materials and certain components.
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. In the future, systematic audits will also be carried out at selected Swiss and European suppliers. These will be based on the revised and updated Supplier Code of Conduct, which was sent to all suppliers in the year under review.
The Code is based on internationally recognized human rights and on the United Nations Guiding Principles on Business and Human Rights (UNGPs).
Supplier Code of Conduct (SCoC)
The Supplier Code of Conduct applies to Swatch Group, its companies, and suppliers to Swatch Group companies and their subsidiaries. It also applies to affiliated companies and subcontractors that supply goods or services to Swatch Group companies.
The SCoC is based on internationally recognized human rights as set out in the United Nations Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work.
The Code is based on internationally recognized principles that are accepted in the sector, such as the United Nations Guiding Principles on Business and Human Rights (UNGP), the International Labor Organization’s (ILO) international labor standards, the ILO’s code of practice for safety and health, the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the Responsible Jewellery Council’s (RJC) 2019 Code of Practices, the RJC’s 2017 Chain of Custody standard, the Social Accountability International SA 8000 standard, the OHSAS 18001 standard and anti-bribery guidance (ISO 37001).
The SCoC is periodically updated to take account of changes in legislation, regulations and Swatch Group guidelines.
↗ For more information about auditing suppliers, please see the "Supplier Audits" chapter, page 99 of the Sustainability Report.
If there are discrepancies between national legislation and international human rights standards, Swatch Group will follow whichever is more stringent as per the provisions of the UNGP. In addition, it will follow the stricter standard whenever national legislation differs from the Group’s high environmental and health and safety standards. Where there are inconsistencies between national legislation and Swatch Group’s strict standards, the Group will respect the law while endeavoring to meet the more stringent standards.
With the aim of protecting particularly at-risk groups of people, the Code of Conduct includes sections on combating discrimination, safeguarding people against bullying and abuse, preventing forced and compulsory labor, and preventing child labor, as well as on the rights of indigenous people.
All employees working in sustainability can access the Code of Conduct online. Sustainability officers are responsible for training and providing information to employees in the individual Group companies. All procurement departments received training in 2022, and they are responsible for providing information and ensuring compliance with the SCoC in the supply chains.
GRI disclosure 204–1
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 a production site in Switzerland and local sourcing contributes significantly to the preservation and further development of the Swiss watchmaking tradition and art.
↗ For more information, see chapter "Recovery and preservation of arts and artisanship" on p. 95 of the 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 an efficient sourcing process, 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.
↗ For more information on "Customer Service" see page 20 of the Sustainability Report.
Precious metal sourcing
Swatch Group uses different precious metals, primarily gold, silver, palladium and platinum, with gold accounting for the largest proportion by far. Primary gold is sourced exclusively from official and certified 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 relatively small part of the gold used is sourced from certified Swiss gold foundries or as components from suppliers.
Recycled gold from external sources is avoided as traceability back to the mine is not achievable. 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 gold from internal processes.
Traceable primary gold is sourced exclusively from official and certified 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 refineries and then on to the in-house gold processing by Swatch Group. Sourcing gold from other regions and/or small-scale and artisanal mines 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.
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
Sourcing period: October 1–September 30.
Internal gold recycling
The investments made in recent years in the Group’s foundry and refining facilities have fully internalized gold processing.
After their manufacture, alloys are turned into semi-finished products or finished components, and production residues from these processes are recycled internally. 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 residues 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).
|Proportion of gold from internal recycling
Analyzing gold origins
Traceability of raw materials and precious metals and the possibility of detecting any manipulations are key to validating the origins of gold.
The refinery in Switzerland carries out an WD-XRF analysis before the material is melted. The analysis results are saved in a database and the levels of elements and their interactions are checked.
In this way, raw materials from various regions can be identified. However, it is not possible to determine from which of two neighboring mines the material has been obtained, if these are supplied by the same vein, because the composition in this case is identical.
Each delivery of gold doré that will be used to produce primary gold bars for Swatch Group is analyzed to verify whether the country of origin is the US, Canada or Australia. No irregularities have been observed to date.