Mastering Supply Chain Sustainability: Where Does ESG Fit In?

Mastering Supply Chain
Sustainability:
Where Does ESG Fit In?
moderated by
August 31, 2023
9:30am PDT, 12:30pm EDT, 5:30pm BST
Tara Dwyer
Webinar Manager,
Supply Chain Brief
featuring
Hortense Grouvel, ESG Expert
& Sean Whelan, Senior Manager Business Controls

IntegrityNext is a leading solution for supply chain sustainability
management that empowers companies to improve supply chain
sustainability and meet regulatory ESG requirements.
The cloud-based platform enables companies to quickly and cost-
effectively check their supplier base against sustainability-related
regulations, and voluntary commitments. IntegrityNext helps its
clients identify and manage ESG risks along the value chain, reducing
reputational and financial risks and improving sustainability
performance.
Learn more at integritynext.com

TO USE YOUR TELEPHONE:
United States: +1 312 626 6799
Webinar ID: 830 1894 2487
Passcode: 504364
You can find this Information In your
confirmation email from Zoom.
Click on the Q&A Panel to
engage with the speakers!

Hortense Grouvel,
ESG Expert
Sean Whelan,
Senior Manager Business
Controls
Mastering Supply Chain Sustainability:
Where Does ESG Fit In?

Copyright © 2023 Integrity Next GmbH. Alle Rechte vorbehalten. Vertrauliche Informationen.
Why we need to focus on
Environmental, Social and
Governance
Introduction to ESG in theSupplyChain

Copyright © 2023 Integrity Next GmbH. Alle Rechte vorbehalten. Vertrauliche Informationen
Regulation
Tightening regulatory
framework
Risk
Why we need to act
Stakeholder demands
Raised awareness
for ESG
Impact
Supply chains are
powerful levers
ESG risks are
material risks

Copyright © 2023 Integrity Next GmbH. Alle Rechte vorbehalten. Vertrauliche Informationen. 8
ESG regulation is mounting
Norwegian Supply Chain
Transparency Act
Dutch Child Labor
Due Diligence Act
Swiss Supply
Chain Act
EU Green Deal
EU Conflict
Minerals Regulation
German Supply
Chain Due
Diligence Law
Kunming-Montreal
Global Biodiversity Fr
amework
Sustainable Finance Dis
closure Regulation
(SFDR)
Paris Agreement
Non-Financial
Reporting
Directive (EU)
UK Bribery Act
US Dodd
Frank Act
California Transparency in
Supply Chains Act
UK Modern
Slavery Act
French Duty of
Vigilance Law
Australian Modern
Slavery Act
Uyghur Forced Labor
Prevention Act (UFLPA)
Corporate Sustainability
Reporting Directive (CSRD)
Californian Climate
Disclosure Rules
UN Treaty
on Plastic Pollution
EU Regulation on
Deforestation-Free Products
Canadian Supply Chain Act
Corporate Sustainability Due
Diligence Directive (CSDDD)
Carbon Border Adjustment
Mechanism (CBAM)
Green Claims Directive (EU)
International Sustainability
Reporting Standards (ISSB)
SEC Climate
Disclosure Rules
2010
2018
2028
*Not yet passed

ILO Core Conventions UN Global Compact
Stockholm Convention OECD Guidelines for
Multinational Enterprises
Kunming-Montreal
Global Biodiversity Framework International Bill of Human Rights
UN Guiding Principles on
Business and Human Rights
Paris Agreement
International Sustainability
Reporting Standards (ISSB)
Global
USA
Uyghur Forced Labor
Prevention Act (UFLPA)
SEC Climate
Disclosure Rules*
Californian Climate
Disclosure Rules*
Inflation Reduction Act (IRA)
US Dodd
Frank Act
California Transparency
in Supply Chains Act
EU
Green Deal
EU Taxonomy Regulation
Sustainable Finance
Disclosure Regulation (SFDR)
German Supply
Chain Act
French Duty
of Vigilance
Child Labor Due Diligence
Act, Netherlands
Transparency Act
Swiss Supply
Chain Act
UK Modern
Slavery Act
EU Conflict
Minerals Regulation
Green Claims Directive*
Carbon Border Adjustment
Mechanism (CBAM)*
Corporate
Sustainability
Reporting
Directive (CSRD)
Due Diligence Directive (CSDDD)*
EU Regulation on
Deforestation-free products
Toxic Substances
Control Act (TSCA)
*Not yet passed
ESG regulations and standards

National and international ESG
regulation requires companies to
perform due diligence in the supply
chain and mitigate human rights and
environmental risks.

• B2B customers conduct supplier audits to ensure alignment with
their own sustainability goals
• Consumers choose products from companies that uphold ethical
sourcing, fair labor practices, and environmentally friendly
production
• Investors prioritize firms with ESG-integrated supply chains, risk
management against climate shifts, transparency, and positive
social-environmental impact
 Sustainability has become a business imperative.
Stakeholders increasingly demand sustainable
supply chain practices

Not managing ESG issues in the supply chain can result in material risks for your
company:
• Financial penalties
• Loss of revenue
• Reputational damage – loss of trust
• Supply chain disruptions
 ESG needs to be a part of holistic risk management.
Know your supply chain – know your risks

When ESG is managed correctly within the supply chain, you have the opportunity to create
value within the entire organization and beyond:
• Increased resilience
• Competitive advantages
• Innovation
• Accelerate ESG goals
• Positive environmental and social impact
 Missed opportunities if not addressed proactively.
Know your supply chain – reap the benefits

Scope 3 emissions
can account for up to 90% of
your carbon footprint.
An Example:Carbon Footprint

The majority of Apple's CO2 emissions fall
into Scope 3.
And within Scope 3, most emissions come
from suppliers in the value chain.
 By addressing supply chain emissions, companies
can multiply their impact many times over.
<1% 0%
3% <1%
5%
14%
76%
25.1M
Scope 1 Scope 2 Scope 3
tonsCO2e
Emissions in product life cycle
Emissions of the company
Suppliers play a key role in achieving NetZero
targets
Direct emissions Emissions from
electricity
Business travel & employee
commute
Material recovery
Product transport
Product use
Product
manufacturing

How to include Environmental,
Social and Governance in Supply
Chain Operations
How to set up sustainable supply chains

Collect
Collaborate with
suppliers to reduce risks
& improve performance
Report on supply chain
sustainability to internal
and external
stakeholders
4 steps to success
Analyze Report
Act
Analyze supplier ESG
performance to identify
risks and areas for
improvement
Collect supplier data on
relevant ESG topics
How do we communicate
with our suppliers and
ensure we have mutual
goals?
What level of
transparency can we
provide about our
supply chain practices?
Who are our high-risk
suppliers to focus on?
What ESG topics are
relevant to our
business, suppliers
and industry?

02
03
04
05 CSR Report
Preventive &Corrective Measures
ImpactAnalysis
ESG RiskAnalysis
ESG Risk Management
Risk ExposureAnalysis
01
Country Risk Industry Risk
Assessments Validation Probability of occurence
Standard Measures
GRI
Severity Influence
CSRD/ESRS
Critical News
Spend-to-Sales Ratio
Prioritization
SupplierCommunication
Annual
Process

Sustainability should not be viewed as
a silo.
 Integrate sustainability criteria into existing
processes and systems:
– Supplier Prequalification
– Contracting
– Supplier Onboarding
– ERP System
Integration is key

Halliburton Overview
Halliburton is one of the world's leading providers of
products and services to the energy industry. Founded in
1919, we create innovative technologies, products, and
services that help our customers maximize their value
throughout the life cycle of an asset and advance a
sustainable energy future.
Source: Halliburton 2022 Annual Sustainability Report

Developing your Supply Chain Sustainability Strategy
• What is the legislative environment?
• Stakeholder expectations
• What goods and services are you sourcing and from where?
• What categories of goods and services are you sourcing?
• Are there any known risks related to these categories?
• What visibility do you have beyond your 1st tier?
• What are other companies doing? Peers, customers, suppliers etc.
• What are the long term outcomes you want to achieve
• What are the key breakthrough objectives that will help you achieve long term goals
• What systems, tools and processes do you currently have?
Understand Current and Future Landscape
Inherent Supply Chain Risk Analysis
Current Capabilities
Benchmarking
Establish Vision and Strategy

Understand the legislative environment
Transparency Act
Uyghur Forced
Labor Prevention
Act
German Supply
Chain Due Diligence
Act
Modern Slavery Act
Swiss Conflict Minerals and
Child Labor Due Diligence
Legislation
Dutch bill on
Responsible and
Sustainable
International Business
Conduct
Corporate
Responsibility to
Protect Human Rights
and Due Diligence Directive
2015 2016 2017 2018 2019 2020 2021 2022 2023
Modern Slavery
Act
Corporate Duty
of Vigilance
2024 2025
Forced Labor
Regulation
2026+
Reporting Directive
Modern Slavery Act
Planned legislation –
implementation date
may change
International Guidelines and Conventions
 UN Guiding Principles on Business and Human Rights
 OECD (Organisation for Economic Co-operation and Development)
Guidelines for Multinational Enterprises on Responsible Business
Conduct
 UN Global Compact
 International Labour Organization Standards
 UN Universal Declaration of Human Rights
Human Rights Legislation

Supply Chain Prioritization
Human Rights
 Geographic risk - vendor country,
• Prevalence of slavery, government response, vulnerability
 Categories of product of services being sourced
• Competitiveness, vulnerable workers, potential for migrant
labor, seasonal work, supply chain transparency
Environment
 Geographic risk - vendor country,
• Local risk factors, deforestation, water stress, government
policy
 Categories of product of services being sourced
• Impact on environment, CO2 generated, hazardous material
Spend/leverage
 Identify highest impact categories for carbon footprint, water etc
 Identify key supply chains where you can have the greatest
influence for social aspects
Useful Sources of Information:
 Walk Free Global Slavery Index
 World Bank Worldwide Governance
Indicator
 Responsible Sourcing Tool
 International Labour Organization
 US Dept. of Labor
 US Customs & Border Protection
 US Department of State Country
Reports
 Organisation for Economic Co-
operation and Development
(OECD)
 UN Water
 UN Environment Programme
Assess inherent risk

Q&A
TARA DWYER
/in/taradwyer
Webinar Manager, Supply Chain Brief
supplychainbrief.com
HORTENSE GROUVEL
/in/hortense-grouvel
integritynext.com
ESG Expert
SEAN WHELAN
Senior Manager, Business Controls
/in/sean-whelan-a34794a2
halliburton.com

Mastering Supply Chain Sustainability: Where Does ESG Fit In?

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