The document discusses the importance of integrating sustainability into supply chain management to create a responsible and resilient system that can yield cost savings and improve efficiency. It highlights key challenges faced by companies, such as fragmented sustainability initiatives and a lack of cohesive strategies, while emphasizing the need for robust analytics to track and manage sustainability risks effectively. The proposed approach involves setting ESG goals, enhancing supplier management, and leveraging data analytics for continuous improvement across the supply chain.

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Transformation towards resilient & responsible supply
chain
Responsible and Resilient Supply Chain
Integration between sustainability insights &
procurement excellence yields additional value
Key internal
challenges of most
companies:
► Fragmented
approach to
sustainability
initiatives with
limited ROI
tracking
► Lack of integrated
approach in supply
chain management
► Increasing
pressures from
executive
management
Supply Chain Sustainability;
► A sustainable Supply Chain
designed in the right way has the
advantage of meeting this goal and
achieving significant cost savings
► Sustainability hierarchy;
► Reduce Emissions
► Switch to Renewables
► Carbon Offset if necessary
Integrated Supply Chain Sustainability
Strategy & Execution
► Underpinned with robust
analytics & systems – ability to
track end to end Supply Chain
► Set ESG goals, assess and
prioritize the supplier impacts and
valuation of current ESG risks and
mitigation activities
► Optimize the supplier
management process to increase
efficiencies and achieve cost
savings of compliance

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Achieving Resilient & Responsible Supply Chains Key Activities
(full service package)
Plan for transitioning
to resilient and
responsible supply
chain.
Assessment of supplier
impacts and valuation
of current program
activities
Address areas of systemic
risk and identify potential
opportunities for improved
efficiency.
Reduce operational cost
through streamlined
processes and data
management Improved supplier
management systems
Enhanced collaboration
and innovation.
Embedding of long
term resilience deep
into supply chains.
Objectives
Outputs
&
Outcomes Articulate drivers
including risks,
consumer demands
and leadership goals.
Identify and place value
on environmental and
social impacts from
supply chain.
Identify improvement
that increases program
efficiencies
Anticipate the regulatory
and business risks and
capture the opportunities
associated with a path to a
low-carbon economy
Identify where costs and
risks overlap
Integrate
management with all
BUs to address risks
and opportunities
management across
the supply chain.
1. Purpose
& goals
2. Measurement
and Valuation
5.Supply Chain
Management
Collaboration
3. Sustainability
Data Analytic
4. Sustainability
Risk Management
Design and implement
data platforms to address
risks and opportunities.
Prioritized heat maps of
where both costs and
risks can be reduced
and value added.
Valuation of current risks
and mitigation activities

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Achieving Resilient & Responsible Supply Chains Key Activities
(individual service)
1.
Sustainability
Risks
Management
and
Valuation
2.
Sustainability
Data
Analytics
3.
Outcome
Measurement
Work
stream
activity
summary
• Co-develop/tailor analytical tools and
enablers
• Co-develop analytical techniques using
available client data
• Define the goals and objectives of
programs/initiatives
• Identify key stakeholders to map the impact
pathway
• Conduct desktop review and identify the
secondary data
Readiness assessment Analysis To-be operating model
• Define the what business to be included
in the scope
• Map the supply chain (tier0 to tier 4)
• Assess organizational data requirements
and data collection processes
• Identify data gaps and areas for future
analysis
• Collect and analyze primary and secondary
data to draw risk insights
• Identify sustainability risks beyond regulatory
and physical risks
• prioritize the level of risks to business
operations with heat-map, scorecard etc.
• Conduct broad stakeholder engagement
using interviews, focus group, survey and
other methods
• Collect secondary data to finalize the
impact pathway and measurement
indicators
• Determine suitable financial proxies and
confidence range
• Design outcome model and populate model with
data collected
• Analyse data and calculate value of impact and
social or environmental benefit-cost ratio
• Sensitivity check to verify the results
• Determine the risk cost and calculate the impact
on business operation
• Develop formal or integrated risk management
framework
• Formulate recommendation plan to mitigate the
corresponding risk
• Leverage data to make the business case for
sustainability programs
• Develop dashboards and reports that assist
with decision-making and risk management
Phase 1 Phase 2 Phase 3

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Articulate drivers including consumer demands and leadership goals
Internal and external engagement
Stakeholder
mapping
Voice of
the business
inquiry
Data
mapping
Targeted
stakeholder
engagement
Existing
activity
review
Market research
Benchmarking Industry reports Social media analysis
Environmental and social hotspots analysis
Identify
top suppliers to
assess
Use sector LCA and social
impact databases to identify
impacts
Analyze supplier
self-reported data
Material issues
Data gathering methods
Environmental
goals
• Water
consumption
• Energy
consumption
• Waste production
• GHG emission
• Chemical usage
Human Capital
• Occupational health
and safety
• Training and
development
• Worker
compensation and
benefit
• Labour compliance
Operational
Practices
• Renewable product
research and design
• Consumer right
protection
• Environmental and
social license
certification
• Integrity and anti-
corruption
Community
• Under-privileged
• Women
• Racial minority
• Disable
• Youth
• Elderly
Define Purpose and Goals

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Outcome measurement
Potential Supplier
SustainabilityImpacts
substances exposure
human trafficking safety
violations
gender discrimination
confidentiality bribery and corruption
payment and conditions dependency
competition and commerce
employment
resilient infrastructure community assistance
worker and consumer health
data protection
IP theft
depletion of natural resource
hazardous materials
emissions and pollution
packaging
Input/ Output
Life Cycle Assessment
Impact Assessment and Valuation
Impact Assessmentand ROI
working hours
Investment B
Who is materially affectedby
the environmental/ social
investment program?
What is the value of the inputs?
What are the outcomes of the
environmental/ social program for
each stakeholder group?
Input
InvestmentB
Output
Outcome
What indicators showthe change
occurred?
What data do we needto
use/collect?
What is the value of the
outcomes?
waste
Return on Investment (ROI):
Scope and identify stakeholders
1. Create the impact map
2. Evidence the outcome with data
3. Establish impact and calculate ROI
Companies are being held responsible for the environmental and social impacts of their suppliers across the entire
value chain. How companies deal with issues of sustainable certifications, labor practices and sustainable sourcing
strategies are critical to a company’s consumer perceptions and regulatorycompliance.

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Sustainability Risk Management
Identify risks in business operations
Six critical areas of supplier risk
Commercial Execution Information Regulatory Continuity Strategic
Risk
examples
► Commodity price volatility
► Exchange rate volatility
► Parallel trade
► Wage inflation
► Contract exposure
► Contract non-compliance
► Supplier’s market risk
(passed through pricing)
► Country specific
distribution channels
► Delivery
► Performance (SLAs)
► Quality
► Component or
service Integration
► Suppliers/partner
operating licensing
► Intellectual property
theft
► Customer data
► Competitive data
► Patient theft data
violations
► Data integration with
suppliers/partners
► Corruption
(FCPA, UK Bribery, etc.)
► Conflict minerals
(Dodd-Frank, etc.)
► Accountability and transparency
(FDA regulations, etc.)
► Trade sanctions (OFAC)
► Workplace practices (labor, EHS, etc.)
► Local government regulations/tax
► Marketing authorization requests
► Pharmacovigilance (compliance)
► Supply availability
► Supply disruption
► Supplier failure
► Product/support
discontinuation
► External operations
capacity(co-
manufacturing)
► Environmental
sustainability
► Customer returns
► Brand/reputation
► Supplier
dependency
(hostage taking,
etc.)
► Unplanned
obsolescence
► Counterfeiting
► Environmental
sustainability
Define variables for
desired outcomes
► Risk attributes
► Scope, geographies,
languages
► Keywords
Internal & External
data sources
Company A:
• Hazardous materials: gaps in material inspections
Company B:
• Lack of policy and procedures on child labour protection
• No measures on reducing air emission
Company C:
• Long working hours which violated the local regulations
• Inadequate wages less than minimum wage requirement
Insight Based Risk Analytic Tools

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Sustainability Risk Management
Prioritize the risk level and monetarize the business impacts
Example
Findings
Supplier risk has a cost that can be measured and
managed resulting in financial improvement
Quantified costs of risk
Cost of supplier replacement
Product
cost
Cost of GHG and air emission
Cost of damage on reputation
Cost of labour and community disputes
i
Regulatory/compliance expense
Increasing sourcing cost due to climate
change
Total
product
cost
Countries
Categories
Direct/ Indirect
Workforce
Spend
Brand proximity
Dependency
Issues/ Materiality
RISK
Typically a phased multi-year program
RISK
Inherent
risk
APPLY ACROSS THE VALUE CHAIN
RAWS FACTORIES
INFLUENCE
VENDORS DISTRIBUTION
INFLUENCE
Company-specific
CATEGORIES
Low Medium High
Strategic Suppliers
Low Medium High
Core Suppliers
Low Medium High
Transactional Suppliers
Sphere of influence
SEGMENTATION INFORMS PROGRAM STRATEGY

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Integrated Supply Chain Risk Management
► Structured cross functional approach
► Analytics used to enable on-going comprehensive risk assessment &
management
► Clear cross functional intervention & response standards developed
Technology
&
Analytics
People &
Organizational
Design
Oversight
&
Governance
2. Gain sponsorship, strategic
direction, and funding
► Accountability and clear escalation
path
► Agile response to new risks
3. Define roles and
responsibilities for risk
program
► Bring focus and reduced
complexity
► Effective decision
making and
communication
1. Operationalize the
supplier risk strategy
► Create clear process to manage
portfolio of suppliers
► Integrate and mobilize stakeholders
around execution
► Compliment business processes
4. Implement systems
to aggregate data,
support analysis, and
report key risks
► Enable
comprehensive view
of risk
► Convert data into
actionable insight
Framework for integrated supply chain risk management
Process
Sustainability Risk Management
Formulate efficient and integrated risk management system
Supplier Risk Management Framework

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Sustainability Data Analytics
Develop an EHS strategy to improve organizational performance
Effective risk management
Cost minimization
Revenue generation
Ongoing effectiveness
assessment can address areas
of systemic risk and identify
potential opportunities for
improved efficiency.
Data management can
streamline processes and
reduce operational costs.
Applied analytics can identify
revenue generating opportunities
and operating efficiencies.
Committing to an EHS data analytics and performance management process
can provide significant financial and operational returns.
1 2 3 4 5 6
Summarization
High-level summary
statistics and KPls
Spatial
Maps, statistics and visual
analytics that incorporate
geospatial information
Visualization
Charts, graphs
and displays for trends and
anomalies
Statistical
Regression or Monte
Carlo simulations
Algorithmic
Machine-assisted, routinized
assessment; automated data
collection, red flags
Heuristic
integrate artificial intelligence and
robotics to perform novel analytics
A relationship model (figure 1) between the
potential business benefit and analytical
capabilities that go from basic data
collection and summarization of KPIs to
automated data collection (robotics) and
artificial intelligence (heuristics).
Efficient data management, insightful analytics and ongoing effectiveness assessments can drive robust data
and broader business benefits.

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Sustainability Chain Management Collaboration
Develop integrated supply chain management
Integrated Supply Chain Sustainability Strategy & Execution
► Move away from point interventions to Integrated Sustainability change strategy
► Leverage all areas of value - Operations, Tax, Renewables, Suppliers, Customers
► Underpinned with robust analytics & systems – ability to track end to end supply chain
Operate
Plan
Source
Make
Deliver
Operate
Make Deliver Service
Source
Deliver
Store
Dispose
Service
Design
► Energy Efficiency
equipment/technology
► Waste management
► Efficient facility
configuration
► Efficient workplace
systems
► Employee
communication/training
► Upgrade infrastructure
► Increase forecast accuracy
to minimize waste
► Carbon dimension in
planning algorithms
► CMO/supplier
conformance
► Supplier environmental
assessment and audit
► Low carbon clauses in
supplier contracts
► Eco-product specification
► Material substitution/
reduction/elimination
► Minimizing packaging
► Promoting self installation
► Efficient servicing and
maintenance
► Green reverse logistics
► Eco-strategic sourcing
processes
► Environmental certification
► Sustainable procurement
► Packaging optimization
► Optimal vehicle utilization
► Assess network costs vs
carbon miles
► Aggregate deliveries
► Product/packages
recovery / disposal
► Online buying
► Efficient backhauling
► Product eco-labels
supply chain
Your customers’
supply chain
Your suppliers’
supply chain