Greening the Supply Chain

Report
Supply Chain Sustainability Panel
2013 Smart & Sustainable Conference
April 15, 2013
Andrew Essreg
Senior Manager
East Central Region Leader
EY’s Global Sustainability Capability & Reach
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Globally integrated, multi-disciplinary network of approximately
700 professionals who combine our firm’s experience in
assurance, tax, advisory and transactions with climate change
and sustainability skills and industry knowledge.
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Most globally integrated of the Big Four, leveraging our
experience from serving clients with similar business models.
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Our global network of professionals collaborate on international
projects on a regular basis, constantly sharing leading practices,
lessons learned, and knowledge around the world.
Our sustainability services include:
• Sustainability risk assessment, planning, management
• Product environmental and financial performance improvements
• Sustainability strategy and management systems
• Stakeholder segmentation and engagement
• Performance goal setting, measurement, and reporting
• Energy cost reduction and operational performance improvements
• Assurance readiness
• Environmental Health & Safety cost savings and process improvements
• Independent assurance
• Tax incentives
Embedding sustainability in the value chain
Ernst & Young helps companies embed sustainability throughout the value chain to improve profitability and increase returns.
Sustainability helps companies improve performance and capture value
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Improve operating efficiency
We ask the question:
Can you do more with less?
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Create shared value upstream by managing supplier impacts and leveraging
sustainable innovation opportunities
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Conserve resources in facility operations to decrease financial and
enviornmental costs
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Are you incorporating life cycle costs (including energy usage) in your
capital expenditures (e.g., for PPE)?
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Reduce, recycle, reuse or sell waste
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What are the potential risks of water scarcity and fuel price volatility to
your operations and supply chain?
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Can you generate new revenue and avoid landfill fees from your
operational waste?
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Where are there opportunities to reduce material usage in products and
packaging?
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Do you have the information you need to manage energy, water, and
materials?
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Are there sufficient controls in place to manage that information?
Grow revenues
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Identify new revenue-generation opportunities through product or process
innovation
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Drive revenue growth downstream through partnerships with customers
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Increase brand value through enhanced identity and positioning
Manage enterprise and supply chain risk
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Evaluate impacts on operations from rising energy costs, water scarcity or
regulatory compliance throughout the value chain
Supply Chain Sustainability Opportunities
Some examples for value creation
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Environmentally preferable purchasing (EPP)
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Goals: Reduce waste generation volume, frequency, permitting fees and landfill disposal
costs, and identify recycling opportunities that generate revenue.
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Action: Connect procurement and waste management professionals at enterprise/sitelevels.
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Goal: Develop EPP policies, procurement criteria, purchasing guidance for material
inputs and manufactured product goods.
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Action: Track 435+ internationally recognized eco-labels, sustainability certifications and
standards, and down-select those that are credible and relevant to adding value to your
specific line of business.
Early supplier involvement and collaboration
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Goal: Engage key suppliers early (i.e. strategic importance, critical resource availability,
annual spend) to develop mutually beneficial sustainability performance goals/initiatives.
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Action: Develop collaborative partnerships and identify opportunities to share data,
knowledge, and resources.
Supply Chain Sustainability Risk
5 areas that impact your business opportunities
Strategic – Linking supply chain risk management to enterprise strategic planning (e.g. supplier segmentation by critical resource inputs)
presents opportunities to improve competitive advantage (e.g. waste and cost reduction).
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Compliance – Companies complying with supplier sustainability requirements must track data (e.g. energy/fuel use) and make the information
available for audits. Conversely, a company implementing its own supplier sustainability program needs processes to track/monitor supplier
compliance and can use the data to inform business decision-making.
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Financial - Supply chain issues can impact a company’s financial strategy (e.g. cost cutting opportunities, cash management/liquidity
implications of carbon markets, due diligence requirements for mergers/acquisitions. As companies increase public disclosures in non-financial and
integrated reports, CFOs /audit committees are increasing oversight and controls.
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Reputational – To manage reputational risk and enhance brand, companies are increasingly implementing supplier segmentation and
qualification programs to ensure they do business with suppliers with shared values, who meet social and environmental performance expectations.
Periodic supplier review/audit can gauge collaboration opportunities (e.g. environmentally preferable purchasing) and potential risks (e.g. EH&S
non-compliance).
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Operational – Improved operational efficiency of processes , systems, and resource utilization reduces risk and creates business opportunities
(e.g. spare parts inventory management, manufacturing equipment utilization, maintenance planning, downtime, reduction, manufacturing waste
recycling innovations, facility energy optimization).
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Snapshot: Supply Chain Sustainability Risk
What are conflict minerals?
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Section 1502 of Dodd Frank requires certain public companies to
provide disclosures about the use of “conflict minerals” from the
Democratic Republic of the Congo (DRC) and 9 adjoining
countries.
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Cassiterite: An ore of tin and commonly
used in electronics (solder), plating and as
a stabilizer in plastics.
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Columbite-Tantalite or “coltan”: An ore of
the element tantalum that is commonly used
in the manufacture of various electronics.
C e n t ral Afri ca
R epublic
C ongo
R epublic
South
Sudan
Uganda
Democ ratic
R epublic o f the
C ongo (D R C)
T an z ania
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Wolframite: An ore of tungsten that is commonly used in metal
wire, electrical
and welding applications.
Gold: Common uses are in jewelry and electronics.
Angola
Z ambia
R w anda
B urundi
Smart and Sustainable Campuses Conference
April 15 – 16, 2013 Bethesda, MD
IBM Overview
Edan Dionne
Director, Corporate Environmental Affairs
IBM Corporation
© 2009 IBM Corporation
IBM Profile
 IBM’s businesses: services, software, systems
 Serving clients in over 170 countries
 2012 revenue: $104.5 billion
 Number of employees at year-end 2012: 434,246
2012 Revenue Segmentation by Business
2012 Revenue Segmentation by Geography
1.90%
25.40%
17.00%
43.60%
56.60%
24.50%
31.00%
Services
Systems
8
Software
Global Financing & Other
Americas
EMEA
Asia Pacific
Longstanding Commitment to Corporate Responsibility
 Sustainability – or corporate responsibility, as IBM refers to its applicability for the
company – is a concept and commitment that has been an integral part of IBM’s
business model and global management system throughout the company’s history.
 Then-CEO Thomas J. Watson, Jr., included the following commitment to being a
good corporate citizen in IBM Principles in the 1960s:
– “… We accept our responsibilities as a good corporate citizen in community, national and world
affairs; we serve our interests best when we serve the public interest. …. We acknowledge our
obligation as a business institution to help improve the quality of the society we are part of. We
want to be at the forefront of those companies which are working to make our world a better place.”
Corporate Citizenship Steering Committee
Comprises of senior executives from each functional
Governance
and
Financial
Accountability
9
Corporate Environmental Employee
Community Affairs and
WellRelations
Product
Being
Safety
Global
Human
Resources
Supply Chain Governmental
Programs
Procurement Spend and Supply Chain
 2012 procurement spend in support of IBM business: $35.3 billion
 Well over 20,000 first tier suppliers in 100 countries
 IBM is committed doing business with responsible suppliers
– Social and environmental responsibility is a major facet of our corporate responsibility
efforts.
 Supplier environmental requirements date back to 1972 and continue to be
updated
 In 2004, IBM published its Supplier Conduct Principles to articulate the
company's overall supply chain social and environmental requirements.
 In 2012, IBM established new management system requirements for
suppliers to effectively manage their business intersections with social and
environmental responsibilities
 Read our Corporate Responsibility Report for additional information
10
http://www.ibm.com/ibm/responsibility/2011/supply-chain/index.html
Who we are
•
•
With over $22 billion in annual
revenue, we are the world’s leading
enterprise for business process and
document management
– Employees: 140,000 worldwide
– History: Founded in 1906 as The
Haloid Company; named Haloid
Xerox in 1958 and Xerox
Corporation in 1961; acquired
Affiliated Computer Services in
2010
– Headquarters: Norwalk, CT
– Chairman and CEO: Ursula M.
Burns
“We operate our businesses in ways through
which economies grow, societies benefit and
the environment is protected. Some call it the
triple bottom line. We call it the best thing for
our business success.”
FORTUNE magazine's annual ranking of the
World’s Most Admired Companies places
Xerox # 3 position in the computer industry.
Video
16th Annual AWMA/NYWEA
Joint Seminar
February 13, 2013
11
Xerox Focused on Environmental Sustainability
Long Before It Was Popular
Waste Toner
Recycling starts
Introduces
recycled grade
of cut-sheet
paper
Pioneering parts
refuse and
remanufacturing
1991
1973
ISO 14001
for major
manufacturing
sites
Achieves >10%
reduction in
greenhouse gas
emissions; boosts
goal to 25% by
2012
2007
1997
1969
1982
1993
Introduces
first product to
make twosided copies
Introduces
“Power
Down” mode
Joins ENERGY
STAR as Charter
Partner
2003
Joins EPA Climate
Leaders
Paper supplier
requirements
launched
introduces
Solid Ink
Multifunction
Device —
ColorQube
Introduces ConnectKey
for Secure Cloud
Commuting
2009
2008
Introduces
Sustainability
Calculator for
Environmental
Footprint Report
2012-2013
2010
EPA
SmartWays
Transport
Partnership
Xerox
Supplies and
Parts
Distribution
Centers
achieve ISO
140001
2011
Achieves
31%
reduction in
Greenhouse
Gas
Emissions

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