Supply Chain Management Sustainability.pptx

Type you name here
Type your job title here
Date here if needed
 Click here to enter the title of your
slide deck
Presented by:
BSI
Courtney Soulsby, Global Director
November 2022
 Sustainable supply chains
Courtney Soulsby
Global Director, BSI
November 2022
 Sustainable Supply Chains

 Objectives of Webinar - Sustainable supply chains
Challenges and
Drivers
Systems-based
approach to
sustainable
supply chains
Data,
monitoring and
risk
management

Type you name here
Date here if needed
slide deck
Challenges and
Drivers to Sustainable
Supply Chains

What are challenges to managing a
sustainable supply chain?

I produce the end-product. There
is a huge increase in unskilled,
seasonal workers. I try to control
everything, and my middle
managers have few skills in H&S
I run a textile mill, with potential
environmental risks, but a small and
loyal workforce. My country was
average labor laws, but weak
enforcement.
I started my business 30 years
ago. I treat my workers like
family, which is why I try to
keep the unions out.
I have labor shortages, so I rely
on labor brokers to provide
foreign workers.
I speak a different language
than my workforce. That leads
to communication issues
sometimes.
I just started my business 6
months ago!
I promote my products as
handcrafted, artisanal one-of-a-
kind works; so I help rural
economies by relying on
homeworkers in local villages
to make them.
I am transitioning from a state-
owned business. I have an
aging workforce, and am
investing in new equipment and
technology.
I have 10,000 employees at
my smallest site! I have
difficulty forecasting, and
rarely say No to my clients, so
my employees work 80 hour
weeks, despite having 3
shifts.
 Variance in Suppliers – their Viewpoint

Copyright © 2022 BSI. All rights reserved
Social
• Human rights,
focus migrant
workers
• Labour:
• Living Wage
• Flexible
working time
• Equal
opportunities
• Women’s
empowerment
Environmental
• Responsible
consumption and
production:
• Incorporate sustainable
development into business
vision
• Developing circular models
for products
• Raising consumer
awareness
• Pollution, water and waste
management
• Doing more and better
with less
Economic
• Circular economy
• Engage low-
income
populations in the
value chains.
• Microfinance
• Green bonds
 Key Supply Chain Sustainability Areas Considered

11
Poll #1
What external drivers lead to increase in investment and focus in sustainable
supply chains for your organization?
1. Financial investment community
2. Regulations around supply chain due diligence
3. “the right thing to do” – culture
4. Already embedded in procurement for years

12
Who’s Interested – Driving Change ?

“ … climate risk is investment risk ...”
… making a profound reassessment
of risk and asset values.”
“…sustainability integral to portfolio
construction and risk management
…”
“ … we will exit investments that
present a high sustainability-related
risk.”
Levers Driving the Low Carbon Economy
Capital Markets
Pressure from Finance, Shareholders & Insurers
• Rise of ESG funds
• Increasing pressure from institutional
shareholders for companies to disclose
emissions, targets & progress
• TCFD – Taskforce for Climate-Related
Financial Disclosures
Cost Of Capital*
Fossil Fuels
20%
Clean Energy
3-5%

Example - Investor ESG guidance to Pharmaceutical Industry – Supply Chain
External Driver
The financial investment community has
produced a guidance to the biopharmaceutical
sector with the request to communicate and
report on key Sustainability and Environment,
Social, Governance (ESG) initiatives externally.
One of the key pillars of this ESG communication
requirement is focused on Supply Chain
Management and ESG Governance, in addition
to Climate Change, Environmental Impacts, and
AMR.
Used as evidence for Green Bonds from financial
investment community towards the
pharmaceutical sustainability program activity.

And increasing regulation environment
Regulations constantly being added: an increased urgency of
establishing sound practices to identify and mitigate the risks
associated with dynamic, large-scale supply chains
15
Modern
Slavery Act
- UK
2015
Law on the
Duty of
Vigilance -
FR
Child Labor
Due Diligence
Law - NL
European Conflict
Minerals Regulation
2017 2019 Jan 2021 Jun 2021
Germany Due
Diligence Act
Q4 2021
EU Directive-
Supply Chain
Act

Type you name here
Date here if needed
slide deck
Systems-based
approach to
sustainable supply
chains

ISO 14001
Environmental Management
Systems
BS 8001
Circular Economy
ISO 20400
Sustainable Procurement
ISO 14046
Water Footprint
ISO 26000
Social Responsibility
ISO 37101
Smart Cities & Community
Sustainable Development
ISO 50001
Energy Management
Systems
ISO 14064
GHG Reporting &
Measurement
ISO 45000
Health & Safety
Management Systems
BSI has worked across industries to
convene and define the world’s most
respected sustainability management
systems standards.
These standards enable our clients to
get the most value in applying
sustainable supply chain best
practices to the unique needs of their
organizations.
Standards to Support

Sustainable
Procurement
Priorities
Category
Issues
Practices
Supplier
Policy and
Strategy
Processes
Governance End to End
Procurement
Process
A sustainable procurement function – ISO 20400
People and
Communication
Skills and
Training
Risk
management &
Measurement

Management Systems Approach – End to End Governance
Skills & Training
Governance
Leadership buy-in &
oversight
Roles & Responsibilities
Incentives
Scope
Supply Chain Mapping
Supplier/Product Segmentation
Prioritization & Roadmap
Gap Assessment of Current State
Design
Policy / Supplier Requirements
Materiality & Impact
Process
Strategy
Strategy
Stakeholder engagement strategy
Executive Reporting
Incident response
Internal
Leadership
Buyers / Procurement
Legal
External
Suppliers / Vendors / Carriers
Customers and Requirements
Legal Requirements
Govt.
Policy & Process
Communication
Continuous
Improvement
Measurement
Internal
Program staff
Buyers
Leadership
External
Direct suppliers
Carriers/Warehousing
Strategic n-tier suppliers
Methods
Live/Online training
Corrective Action dialogue
Supplier Improvement
Onsite
Deep Dive Security audit
Root Cause Analysis
Post-Incident Investigation
Online
Supplier self-assessment
CAPA dialogue
Country Risk Intelligence
Strategy
KPIs / Annual goals
ROI / Business metrics
Audit results
Management Systems Approach – End to End Governance of Supply Chains

Engagement,
Training
Leadership
buy-in
Procurement
approach
Manage,
Monitor,
Reduce
Improve
Declare
claim/report
A journey towards mature supply chain, supported by sustainability standards
Commit
Understand
your focus
and
priorities
Set realistic
targets
ISO 20400
ISO 14064-1
ISO 14064-2
ISO 14067
EU ETS
ISO 14090
PAS 2050-1
PAS 2050-2
PAS 2070
PAS 2395
EN 15804
ISO 14001
ISO 50001
PAS 2080
PAS 2060
PAS 2060 PAS 2060
ISO 14020
ISO 14016
Assess

Global Trends – Supplier Scorecard Expansion
Historical Model
Supplier Scorecard
4
Sustainability
Quality Capacity /
Delivery
Cost
Future Model
Supplier Scorecard
Quality Capacity /
Delivery
Cost
How to transform supply chain strategy to begin to
incorporate Sustainability as new
Fourth Pillar of Supplier Scorecard?

How to Embed Sustainability into Procurement - Multiple Business Risks
22
Quality Operational
Efficiency
Cost
Still Missing – Total Risk of
Supplier
?
Quality Team
HSE Team
Sustainability Team
Ethics Team
Leadership
Cut
costs
ESG in
Supply
Chain!!
Safety is
critical in
suppliers
How do
suppliers
mitigate
bribery risk?
Eliminate all
quality
recalls from
suppliers!!

Poll #2
What internal divisions are you engaged with currently to drive sustainable
supply chain agenda?
1. Procurement
2. Sustainability
3. Manufacturing / operations
4. R&D
5. Supply chain
6. Commercial
7. All of the above?

Type you name here
Date here if needed
slide deck
Data, Monitoring,
Risk Management
and Improvement

Sustainable Supply Chain -End to End Procurement Process
25

Supplier Assessment on Key Sustainability Focus Areas
26

Supplier profiling & Risk scoring
27
Discussion focus: Sustainability risks by category. Calculating an overall risk rating.
 What are the risk levels represented by the supplier categories for key sustainability issues?
 Developing a methodology to determine an overall risk score (category risk, country risk, the other
factors specific) that will determine the subsequent risk mitigation actions (e.g. Annual audit plan,
specific engagement actions)
Raw Material API Components Packaging Logistics
Indirect
Materials
Labour practices H H H M L M
Health and safety H H H E M H
Resource efficiencies M H M L L H
Anti-bribery and corruption L M L L L L
Circular Economy M H H E L H
Conflict minerals M E L L L L
EXAMPLE

Scope 3 emissions
• Companies rapidly adopting Science-Based
Targets (SBTi)
• SBTi requires accounting & reporting of
Scope 3 (indirect, supplier, etc.)
• Most companies struggle with Scope 3 due
to the indirect nature
• Recent Scope 3 guidance advocates for
Supplier Engagement to gather
measurements and drive behavioral
changes
• Supply Chain understanding + GHG data
collection is a necessity for driving progress
in this area
Climate Change and the Supply Chain

Activity Level GHG Intensity
X = GHG Impact
X =
Identify the most significant sources of Scope 3 emissions
Determine which have the greatest activity or intensity
Develop Climate Footprint Management Plan in line with PAS
2060 to target highest priority opportunities to reduce those
emissions
Scope 3 sources (from GHG Protocol)
• Purchased goods and services
• Capitol Goods
• Fuel & Energy
• Upstream transport & distribution
• Emissions from waste
• Business travel
• Employee commuting
• Upstream leased assets
• Downstream transport & distribution
• Processing of sold products
• Use of sold products
• Product end-of-life
• Downstream leased assets
• Franchises
• Investments
• Capitol Goods
Supply Chain / Indirect Emissions - Scope 3
GHG Accounting & Reporting Case Study

30
PAS 2060 – Engage and Capacity Build with Suppliers
Engage with suppliers to enable
them to embrace the Scope 3
journey for your organization. A
course that explains the context
for carbon reduction, the
carbon reduction journey and
practical steps to achieve
carbon neutrality, including the
key decisions around
independent 3rd party
verification or validation to PAS
2060 or a similar standard

Poll #3
How do you currently gather information / manage risk within supply chain?
1. Self-assessment questionnaires
2. Data gathering surveys
3. On-site audits
4. Tenders / RFPs with suppliers
5. All of the above?

32
End to End - Supply Chain Sustainability Program

Supply Chain Management Sustainability.pptx

Recommended

Recommended

More Related Content

Similar to Supply Chain Management Sustainability.pptx

Similar to Supply Chain Management Sustainability.pptx (20)

More from anshikagoel52

More from anshikagoel52 (16)

Recently uploaded

Recently uploaded (20)

Supply Chain Management Sustainability.pptx