The document discusses the role of procurement and supply chain in fostering sustainability, emphasizing regulatory compliance, risk mitigation, and stakeholder engagement. It outlines key processes, impact areas, and action strategies to enhance sustainability throughout the supply chain, highlighting the importance of supplier relationships and the integration of sustainability in sourcing decisions. The focus is on creating transparency, managing supplier risks, and ensuring a shared commitment to sustainable practices.

1. Sustainability:
Spotlight on
Procurement &
Supply Chain
October 21st, 2020
Virtual Roundtable

2. Motivation
for fostering
sustainability
Regulatory
compliance
Leveraging
opportunities
Conviction
Risk
mitigation

3. C O R P O R AT E
G O V E R N A N C E
E N V I R O N M E N TA L
S O C I A L
Pollution/waste
Compliance &
business ethics
Supply chain
governance
Transparency
Natural resources
Energy efficiency
Employee
treatment
Human rights
Emissions
Diversity &
opportunities
Society &
community
Compensation policy
Product liability
Structure & oversight
Innovation/
environmental
opportunities
What is
sustainability?

4. C O R P O R AT E
G O V E R N A N C E
E N V I R O N M E N TA L
S O C I A L
Pollution/waste
Compliance &
business ethics
Supply chain
governance
Transparency
Natural resources
Energy efficiency
Employee
treatment
Human rights
Emissions
Diversity &
opportunities
Society &
community
Compensation policy
Product liability
Structure & oversight
Innovation/
environmental
opportunities
What is
sustainability?
Main impact areas of Procurement and Supply Chain
IMPACT OF PROCUREMENT
AND SUPPLY CHAIN
Procurement & SC play
a leading role in the
governance dimension
1
Spill-over effect into all
ESG sub-dimensions
through impact rings
2
Customer
Suppliers
Company
Product
Impact rings
Supplier code of
conduct
Reduction of CO2 in
the supply chain
(Scope-3)
Digital supply chain
traceability, e.g.
through block chain
Human rights in the
supply chain

5. Manage
contracts &
catalogues
Manage
performance
Manage
systems & tools
Manage
supplier risk
Develop purchasing
strategy
Design organization &
core processes
Manage
employees
Manage supplier
Purchase-to-pay (P2P)
Plan-to-strategy
(P2S)
Manage project portfolio
Source-to-contract (S2C)
Sustainability
in Procurement
and Supply
Chain
Process type Landscape
Support
processes
Management
process
Core
process
Manage
supplier risk
Manage supplier
Source-to-contract
(S2C)
Plan-to-strategy
(P2S)
Develop purchasing
strategy
Main impact areas of procurement

6. Manage suppliers
3
> Annual supplier performance
evaluations
> Supplier development plans with
concrete sustainability targets
(e.g., CO2 reduction target)
> Criteria for phase-out
> Focus on collaboration and
qualification
Plan-to-Strategy
1
> Focus on high-risk materials
> Evolution of categories:
– Sustainable materials
– Recycled materials
> Sustainability as an integral
part of category strategies
and business cases
Manager supplier risks
4
> Risk transparency to identify
sustainability violations in the
supply chain – special focus
on high risk materials and
human rights violations
> Traceability of threats by
leveraging technologies such
as blockchain
Source-to-Contract
2
> Sustainability as criteria
in sourcing decisions
> Integration of
sustainability in supplier
contracts
Four main action
areas

7. Evolution of
sustainability in
the supply chain
> Protection against misconduct in the
supply chain through policies, norms
and standards, e.g. supplier code of
conduct
> No or only limited amount of
supplier audits
> Focus on selected high-risk
material groups or specific
sustainability risks relevant due
to stakeholder or public
interest (e.g. GHG emissions,
MICA)
> Lasting responsibility of sustainability
along the entire supply chain including
social and governance aspects of
sustainability
> Supplier relationship based on
common understanding of values
The way forward
Responsibility
Time
Handing down
responsibility
Assuming responsibility
along ESG criteria
Driving focused
engagement

8. STATUS QUO
VISION: Multiplying all
aspects of sustainability –
Environmental, Social and
corporate Governance –
through the power of our
supply chains