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Promoting Energy Savings and GHG Mitigation through Industrial Supply Chain Initiatives
This document profiles ten supply chain initiatives that aim to promote energy savings and greenhouse gas mitigation. It finds that such initiatives show promise in achieving environmental goals across international borders and among disparate businesses. Key approaches include mandatory performance requirements, procurement policies, reporting/monitoring, audits, capacity building, and forums. Case studies on GE, IKEA and Home Depot yield examples of energy and emissions reductions from 19% to 35%. Lessons include using procurement to encourage suppliers, internationally recognized tools, partnership/trust, and third-party involvement.
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Promoting Energy Savings and GHG Mitigation through Industrial Supply Chain Initiatives
- 1. PromoHng Energy Savings and GHG MiHgaHon through Industrial Supply Chain IniHaHves eceee Industrial Summer Study September 14, 2012, Arnhem Amélie Goldberg, Julia Reinaud, Emelia Holdaway, Siobhan O’Keeffe Sharing best pracHces for the low carbon future | iipnetwork.org
- 2. Purpose and IntroducHon Supply chain iniHaHves a promising means to achieve energy and climate goals among a number of disparate businesses and across naHonal borders Benefits for buyers • Can extend exisHng CSR/sustainability efforts if they are able to exert significant leverage with their industrial suppliers • Many are sHll not exploiHng opportuniHes fully Benefits for suppliers • Energy savings, producHvity improvements, co-‐benefits • Secure long-‐term contracts with buyers and aUract new buyers. Sharing best pracHces for the low carbon future | iipnetwork.org
- 3. Ten SCIs profiled … to explore a range of approaches, industrial sectors targeted and global reach 1. Walmart 2. Ford 3. Prorail 4. Suzhou Energy Efficiency Star scheme 5. IKEA 6. SKF 7. BriHsh Gypsum 8. General Electric 9. BASF 10. Home Depot and Intertek’s Think Green IniHaHve Sharing best pracHces for the low carbon future | iipnetwork.org iipnetwork.org/databases/supply-‐chain
- 4. Key Types of Supply Chain IniHaHves Type DescripHon ExisHng Examples Mandatory The buyer requires the supplier to comply with set criteria. Ford, SKF performance requirements Purchasing approaches Buyer develops procurement policies whereby suppliers score higher or ProRail CO2 Performance lower or are advantaged or disadvantaged in the procurement process Ladder Repor;ng and Suppliers must report their emissions or energy use to their buyers. BASF monitoring Subsidised audits On-‐site audits (full or parHally funded by the buyer) to determine a supplier's Walmart, IKEA GHG/energy performance. Capacity building and Training, workshops, implementaHon support and other measures to General Electric, Walmart implementa;on improve suppliers’ ability to implement energy efficiency projects and support improve their performance. Supplier forums or Conferences, meeHngs, webinars or online forums where buyers can Walmart, Intertek (Home coali;on communicate prioriHes, and suppliers can ask quesHons, receive feedback Depot) and share best pracHce amongst themselves. Labeling Labeling of energy performance as an informaHonal tool for buyers. Suzhou EE Star Program External facilita;on Plaiorms that help connect or match GHG/energy performance of suppliers Intertek (Home Depot) tools with buyers' interests or criteria. Sharing best pracHces for the low carbon future | iipnetwork.org
- 5. Examples of case studies General Electric • “Integrity Program”, onsite audits and “Treasure Hunts” • Local training programs and supplier summits in partnership w ISC, WBSCD, Guandong Academy IKEA • IWAY code of conduct for suppliers with regular on-‐site audits • WWF collaboraHon on a ‘Developing Climate PosiHve OpportuniHes for Suppliers’ The Home Depot • Works through Intertek’s TGI – on-‐site assessments, idenHficaHon and implementaHon of EE measures SKF • Supplier cerHficaHon of ISO 14001 (and recently ISO 50001 announced) • Energy Challenge and Energy Excellence awards Sharing best pracHces for the low carbon future | iipnetwork.org
- 6. Impacts of selected examples GE • Between 2009 and 2011, the supplier’s carbon emissions fell by 19%, through energy saving measures and facility upgrades following its audiHng and capacity building programme. IKEA • Under the IKEA-‐WWF partnership, supplier reduced GHG emissions by 35% between 2009 and 2010 through furnace upgrades and fuel switching. • Another texHle supplier in Bangladesh idenHfied and implemented a number of efficiency measures in 2011 that reduced energy consumpHon by 29% and cut CO2 emissions by 25%. Intertek (Home Depot) • TGI program cost US$43,500 (paid by the suppliers), and achieved overall cost savings of over $US3 million. Sharing best pracHces for the low carbon future | iipnetwork.org iipnetwork.org/databases/supply-‐chain
- 7. Some Lessons learnt Procurement and contractual arrangements can encourage suppliers more fully InternaHonally recognised tools Partnership, fostering trust and implementaHon support MulH-‐stakeholder collaboraHon including third party involvement QA, transparency and verificaHon – external plaiorms Sharing best pracHces for the low carbon future | iipnetwork.org
- 8. Success factors Sharing best pracHces for the low carbon future | iipnetwork.org
- 9. Conclusions and Discussion • Wide diversity of approaches and new models emerging • Many are in early stages and “learning by doing” • Varied transparency & verificaHon approaches • EnMS (e.g. ISO 50001) and other internaHonally recognised tools are emerging as promising tools • Ouen accompanied by MRV support to substanHate claims • How to promote ISO 50001 as a supply chain tool? • What role for governments? (e.g. Japan, Netherlands) • Extending obligaHons for large companies to take acHons across the supply chain Sharing best pracHces for the low carbon future | iipnetwork.org
- 10. Thank you Industrial Supply Chain IniHaHves Database: www.iipnetwork.org/databases/supply-‐chain In collaboraHon with Ecofys UK. Amelie Goldberg Amelie.goldberg@iipnetwork.org Julia Reinaud julia.reinaud@iipnetwork.org Emelia Holdaway (previously with Ecofys UK) Siobhan O’Keeffe (previously with Ecofys UK) Sharing best pracHces for the low carbon future | iipnetwork.org