Sustainable development is all about ensuring a better quality of life for everyone, now and for generations to come. This can be achieved through the three strands of social equity which recognizes the needs of everyone, maintenance of stable levels of economic growth and employment, and using natural resources prudently, whilst protecting, and if possible enhancing, the environment. This can be shown diagrammatically as follows:
Supply chain processes are significant contributors to a product’s overall environmental footprint. Generally, 90% of Wal-Mart’s carbon emissions were generated from its suppliers, with only 10% generated from its own transportation, store, and staff.
Every company is simultaneously a buyer and a supplier. It is in the best interest of all companies to improve their environmental and social impacts because it can have benefits upstream and downstream within the supply chain, as well as benefitting the environment (and community) as a whole.
The supply chain presents an enormous opportunity for companies that are on the sustainability journey because of the size of environmental impact. However, there are also some direct benefits that can be derived from supply chain sustainability efforts, including:Mitigation of risk posed by climate change, natural resource scarcity, and extreme weather eventsEfficiencies gained as a result of implementing changes to reduce environmental impact (a significant number of companies that report to CDP year-over-year report these efficiencies, which, in many cases, result in bottom line savings)Innovative product design, development, and manufacturing processes that can, in some cases, result in new opportunities for companiesCompetitive advantage as a result of complying with customer requests, committing to environmental stewardship, and enhancing brand image for savvy consumers
The original 15 Questions measured supplier impacts in the areas of 1) Energy and Climate, 2) Material Efficiency, 3) Nature and Resources, and 4) People and Community. The questions were primarily qualitative in nature (e.g. have you taken steps to measure your carbon footprint?) and were intended to set suppliers on the course. Suppliers were not required to comply, but were encouraged to take leadership.
With the launch of the Sustainability Index, Walmart has taken their commitment to sustainability to the next level. The Index, which measures impacts across 100 product categories, was developed in conjunction with The Sustainability Consortium (TSC) and is administered by icix. In the Sustainability Index, Walmart uses a set of Key Performance Indicators (KPI) in the form of questions to assess and track performance towards addressing the critical sustainability issues for consumer goods. The KPIs focus on the relevant environmental and social issues for a single product category, or family of consumer goods.While suppliers are not required to respond, they are strongly encouraged. Walmart has taken steps to embed sustainability leadership into its evaluation criteria for suppliers and buyers, and has publicly stated that it intends to source 70% of its good from Index-compliant suppliers by 2017.
Sustainability is a continuous improvement process of measuring, disclosing, and reducing.
Training with all suppliers: completed by end of May, 2013Data collection period: concurrent with training; to be completed by end of June, 2013CDP Supply Chain Program reporting window: April 1-July 31, 2013
CDP is an independent, non-profit organization that houses the largest database of corporate climate change information in the world. More than 3,000 companies from around the globe report their environmental impacts to CDP on an annual basis, and the group represents the interests of 722 signatory investors with combined net assets of $87 trillion. CDP’s Supply Chain Program was launched in 2009. The program’s 62 member companies, which include Walmart and PepsiCo, among others, utilize the CDP to gather environmental impact and carbon emission data from their global suppliers. In 2012, more than 6,000 suppliers were asked to respond.
Supplier sustainability training spring 2013 - final
Summit BrandsSupplier Sustainability Initiative Training 4/15/13
Today’s purpose• Help suppliers understand the benefits of sustainability.• Provide tools to begin environmental data collection initiative.• Comply with Summit and their customers’ expectations.
Agenda1. Sustainability at Summit Brands2. Supply chain initiative3. Data collection process4. About CDP
What is Sustainability?“Development that meets the needs of the presentwithout compromising the ability of future generationsto meet their own needs". PLANET Brundtland Commission of the PEOPLE PROFIT United Nations - March 20, 1987
Benefits of Sustainability Dr. David Shy, President of Furman University “Sustainability is no longer the right thing to do, it is the SMART thing to do” Benefits of Sustainability: • Cut risks and costs (P&G saved $600M at 200 plants) • Increase profits • Create competitive advantages (marketing) • Drives innovation and efficiency • Improves economic communities • Benefits communities & environment
SUSTAINABILITY: Where did we start? Developed a sustainability initiative in 2010 Formed a “Green Team” ISO 14001 Certification • Manage sustainability Efforts through use of a formal & organized EMS • Drive continuous improvement Focused on Walmart Scorecard & other customer req. • Began measuring GHGs (2010, 2011, 2012) – set goal • Measure Water Usage & Waste Generation – set goals Develop sustainability flyers Get employees involved (AIM Program) Joined NISBC – Get Bright Green Certified (2 Star) Started recycling Started integrating green chemistry using DfE
Sustainable AIM Ideas 30% of total AIM ideas Since July 2010: Saved $84,156 EXAMPLES: • Use paper shredding service – saves time, $, confidentiality, & recycles ($1,323) • Eliminate hardcopy AR Registers – go electronic – save paper, time, storage fees ($8,440) • Set all computer default print to B&W ($960) • Reconfigure Production Line ($20,000) • Print all high-quality mock up labels in-house ($4,500)
Green Chemistry Initiative - DfE Rigorous review process by EPA to ensure products are safe for environment & consumers. http://www.epa.gov/dfe/ 2011: Began with 3 products • Dishwasher Magic (disinfectant) – DfE Certified • Washer Magic – DfE Certified • Disposer Care 2013: • Complete Disposer Care • Dry Cleaner’s Secret 2014: • New sustainable drain line formulations
Sustainable Packaging (DWM Club Pack Display) Clamshell Tray Shrink Wrap Sleeve CAD# Square Feet Qty/Pallet Total Sq Ft CAD# Square Feet Qty/Pallet Total Sq Ft G7860A4 15.58 30 467.4 G8639M1 17.45 2 34.9 Layer Pad 11.61 1 11.61 G8639J2 12.87 2 25.74 TOTAL SQ FT (EACH PALLET) 479.01 TOTAL SQ FT (EACH PALLET) 60.64 TOTAL SQ FT (250 PALLETS) 119,753 TOTAL SQ FT (250 PALLETS) 15,160The Dishwasher Magic twin pack was originally packaged in a Clamshell tray (as shown inthe first image above). By switching to the new Shrink Wrap sleeve, we saved roughly418.37 sq. ft. of cardboard & $175 / pallet.
Sustainable Packaging – Washer Magic 50% reduction in packaging, while maintaining safe formulation (2X concentrated)
SUMMIT SUSTAINABILITY GOALS 2013 Score 72% on Walmart scorecard by Dec. 31, 2013 (currently 41%)Walmart TASK Target KPI Date 3&4 Expand supplier engagement program Jul 2013 • Calculate total energy use for Summit & 8 suppliers • Establish energy reduction and renewable energy purchasing goals to offset energy use and publish goals on website • 8 suppliers to Calculate 2012 GHG emissions & submit to CDP 8 Implement a program to ensure that all fragrances comply with IFRA - International Sept 2013 Fragrance Association12 & 14 Sign up for American Cleaning Institute SmartBrief notifications to monitor the most Oct 2013 recent developments in ingredient safety research and integrate into our own documented assessment process 13 Safe / Green Chemistry – Identify and reduce Chemicals of Concern by developing and Nov 2013 implementing formal documented risk assessment process (begin using safety and sustainability scoring process), make general process publicly available 7 Publicly disclose ingredients through website or toll-free number (KPI 7) similar to what Dec 2013 we already to for DfE Certified products
SUMMIT SUSTAINABILITY GOALS 2013 DfE Certifications – 2013 1. DCS – finding a new compostable cloth 2. Disposer Care – ON HOLD Meet public GHG, waste, and water reduction goals Air Waste Water Reduce normalized Reduce absolute solid Reduce absolute water Greenhouse Gas Emissions waste to landfill 10% by usage 15% by the end of 10% by the end of 2013 the end of 2013 2013ACTION PLAN: ACTION PLAN: ACTION PLAN: Reduced Unipak shipments to DC by Increase recycling – Focus on modifications ½ (52 down to 26/year) new ACE Contract on Corporate sprinkler Elimination of FL WH Reduce # of dumpster system (accounts for 52% Conestoga will reduce / eliminate trips of PC, DC and Corp. water facility transfers STATUS: On track to usage) Addition of Dry Cleaner’s Secret reduce by 40% by the STATUS: On track to (lightweight and higher cost item) – end of the year surpass goal by modifying reduce emissions & benefit sprinkler system summer normalization calculation(s). of 2013. STATUS: 2012 calculations will be available in April to evaluate progress.
Supply chain impactsIn general, 90% of Walmart’scarbon emissions aregenerated by suppliers.Suppliers have a considerablerole to play in reducingenvironmental impacts.
What’s your position in the chain? UPSTREAM DOWNSTREAM YOU
Reasons for supply chain sustainability Environmental Customer Risk mitigation impact requirement reduction Commitment Efficiency to Innovation responsibility Improved Competitive Enhanced bottom line advantage brand image
Walmart’s supply chain sustainability initiatives Stage 1 Launched supply chain program in 2009, AKA the Walmart Supplier Sustainability Assessment (SSA) or 15 Questions.
Walmart’s supply chain sustainability initiatives Stage 2Implemented WalmartSustainability Index in 2012. Impacts 100 product categories Partnered with The Sustainability Consortium
New Walmart expectations 2012 Previous Walmart Scorecard was replaced by the “Walmart Sustainability Index” Surface Cleaners More in depth Higher expectations for our suppliers & product development (green chemistry) 1 shot per year Our score will be used by buyers to rank us against our competitors & make decisions
New Walmart expectations 2012 (cont.) Examples of new expectations: All major suppliers complete a GHG inventory & report to CDP Public disclosure of our ingredients Fragrances comply with IFRA (International Fragrance Association) Ingredients meet the OECD 301 biodegradability criteria Must responsibly source palm oil Rigorous & documented product safety process Eliminate Materials of Concern & VOC’s from products
Supply chain sustainability process Report environmental impacts to Summit Set and implement Disclose to reduction CDP targets
Project timeline April May June July Training Data collection CDP reporting
Supplier sustainability assessment Annual data collection process Establish baseline measurements
Data collection tool Developed by our partners at Renewable Choice. Online access; easy to use. Each supplier will receive unique username and password. http://www.mosaic-client.com/summit/summit-login.html
Measurement categories Facility Energy Emissions Waste Water
EnergyWhat you’ll need:• Utility bills for previous 12 monthsWhat you’ll provide:• Electricity used• Steam purchased• Natural gas/diesel/propane used
Other informationWhat you’ll need:• Service records for HVAC system• Fleet vehicle recordsWhat you’ll provide:• HVAC information• Vehicle fuel type and total usage• Total distance traveled by each vehicle
WasteWhat you’ll need:• Waste management billing statements• Dimensions of waste bins, if applicable• Details of any waste reduction projects
WaterWhat you’ll need:• Water billing statements• Details of any water reduction projects
What is CDP?• Independent, not-for-profit organization.• Largest repository of corporate climate change information in the world.• Companies can request that their suppliers report to CDP.• In 2012, more than 6,000 suppliers worldwide were asked to respond.
CDP reporting processYou’ll need the details of your:• Responsible staff• Environmental projects• Sustainability goals• Climate risks & opportunities• Governance & engagement Enter CDP details under the Supplier Info tab in the data collection tool.
CDP reporting processSummit’s consulting partner,Renewable Choice, will assist you to:• Create your online CDP account.• Populate your CDP responses already provided to Summit.• Provide support during the reporting process if you have questions.