driving supply chain sustainability through industrial collaboration · 2020-01-24 · floods in...

The Chemical Initiative for Sustainable Supply Chains


Driving Supply Chain Sustainability

through Industrial Collaboration

Rüdiger Eberhard, President, Together for Sustainability

Dr. Gabriele Unger, General Manager, Together for Sustainability

TfS Brazil Conference

June 18, 2015


Why and How to Collaborate

as an Industry on Sustainability?

Slide 2

Rüdiger Eberhard,

President, Together for Sustainability


Sustainability in the Chemical Industry is

multidimensional and represents a challenge

• Sustainability has three dimensions, namely

economic, ecological, and social, which are

closely intertwined

• The TfS organization strives for sustainable

development and supports the principles of the

United Nations Global Compact and

Responsible Care

• TfS takes responsibility for our own operations

and in the sphere of our influence for our supply

chains

• We engage in open and constructive dialogue

with our suppliers and relevant stakeholders

with the aim to improve the working and

environmental conditions in the global supply

chains and to shape sustainable business

models

Slide 3


Sustainability is getting hot!

• More and more end consumers request

sustainable products and a carefully managed

supply chain

• The request for sustainable products is a

global trend that will not go away

• All industries face the demand for sustainable

products, the nearer to consumer products, the

stronger is this request raised by customers

• The chemical industry moving towards setting

up the benchmark in sustainability

• The management of sustainable supply chains

has become a critical and integral part of

procurement

Slide 4


Sustainable issues in global supply chains?

Examples from 2010 to 2015

Deforestation in Amazon for soy production

Child labor in cocoa production in Ivory Coast

Forced labor in mining of minerals in the DRC

Fires destroy a fifth of Russia‘s wheat production

Child labor in Uzbekistan cotton

production Worker safety & working hours

Floods in Thailand

Deforestation in

Indonesia for palm oil

Animal welfare incidents in pork and egg supply chains

Slide 5


Sustainability management is necessary

- but has become more complex!

• GeSI (Telecom) • AIM Progress (FMCG) • GSCP (Retail) • TfS (Chem)

• GRI G4 • EU directive on reporting (4/14) • Integrated Reporting (US) • Social Networks

• REACH, RoHS (EU, US, China) • Conflict Minerals (US, EU) • Human Trafficking (US, EU) • Corruption (UK Bribery Act)

Increased

Regulatory

Pressure

Increased

Transparency

& Reporting

Industry

Collaboration

Slide 6


Sustainable Procurement in the chemical industry

is a must - and offers opportunities and benefits!

3. Increase

Revenue

• Product/Service differentiation • Access new markets • Income from recycling projects

2. Reduce

Costs

• Improved TCO • Reduced over-specification • Reduced consumption • CSR compliance costs

1. Manage

Risks

• Brand protection • Supply chain disruptions costs • Remediation costs (« recalls ») • Fines + litigations

Source : Insead Business School – PwC – EcoVadis - 2010 Slide 7


TfS will be a benchmark for sustainable supply chains Partnership eases the life of members, users & suppliers

Slide 8

DO IT ONCE: avoid double CR-assessments or -audits by all TfS members, ratings/reports can be used for other customers

REDUCE COST: (one time payment for participation in assessment or audit, assessment rebate vs. normal conditions)

IMPROVE RELATIONSHIP: (between supplier and TfS-members, chances for optimization of CR-topics)

ATTRACT OTHER CUSTOMERS: (option to share CR-results within EcoVadis database, more than 100 industries!)

BENCHMARK YOURSELF: against all other companies of the specific industry sector present at the EcoVadis platform

COMMUNICATE: use audit reports or EcoVadis assessment report for own CR-reporting

IMPROVE YOURSELF CONTINUOSLY: (demonstrate your sustainability improvements, rising custom requirements)

“An audit for one is an audit for all”


TfS will be a benchmark for sustainable supply chains

We’re On a Joint Mission

To integrate standardized sustainability elements into our

commercial relationships in order to:

raise awareness

reduce risk

continuously improve the sustainability of our supply

chains

deliver on our promises

for the benefit of our customers, employees, shareholders,

environment and industry.

Slide 9


Joined forces for sustainable supply chains Vision of Together for Sustainability (TfS)

TfS is to drive and foster resilience, efficiency, and sustainability of global

supply chains in the chemical industry.

Such supply chains build upon strong partnerships and commitment of its

participants to protect the environment and the safety and health of workers,

provide fair working conditions, contribute positively to the livelihoods of workers

and communities, and operate in full compliance with applicable laws.

Slide 10

Founded in 2011 by six multinational chemical companies

TfS members have since been engaging with more than 6000 suppliers in this program

With currently twelve members, onboarding candidates are Brenntag, DuPont, Eastman;

TfS plans to grow a global membership base over time

TfS is a CEFIC partner and builds up cooperations with stakeholders like CPCIF and VCI

founding members

new members

designated members

//upload.wikimedia.org/wikipedia/commons/9/97/Logo_Arkema.svg


Together for Sustainability A dynamic and collaborative initiative

Slide 11

Beyond 2015

Jul 2013-Jun 2015

Jul 2012 – Jun 2013

Jan 2012 – Jun 2012

Jun 2011 – Dec 2011 Initiation Phase

Cross-company Alignment, Questionnaire and

Business Case, 6 founding members &

membership principles

Build Phase

Design of Audit Program, Select Platform

Partner, Legal Review

Pilot Phase

Implementation of TfS Program for audits and

assessments, Online Training Tools & Helpdesk,

Marketing Materials

Growth Phase: Partner with CEFIC

Broadening of Membership Base and

Development of TfS to become a Standard for

the Industry

Expansion Phase

Further Sourcing Markets,

Structured & supported onboarding of

New Members

Stages of development:

https://www.google.de/url?q=http://www.presidioedu.org/academics/experiential-learning/partner-organizations/ecovadis&sa=U&ei=RbBfU4PvG8i70QWfv4HADA&ved=0CC4Q9QEwAA&usg=AFQjCNHQLoQiMNrs_KCM8W-PXY_qIQy_3g

http://1.bp.blogspot.com/-1g35EZzSALA/Tyv5tsv5IuI/AAAAAAAAuv8/GEiEJNUybjA/s1600/AkzoNobel-Logo.jpg


“An audit for one is an audit for all”

The purpose of the TfS Initiative is to develop

and implement a global supplier engagement

program to assess and improve sustainability

practices within the supply chains of the

Chemical Industry.

Together for Sustainability Purpose and Objectives

Slide 12

Join forces to

create standards

for sustainable

supply chains

Share

sustainability

assessments and

audit results

Raise awareness

and initiate

continuous

improvements

Exchange and

promote best

practices


Sustainable sourcing:

Suppliers are no longer assessed purely on the basis of price, quality and on-time delivery

Sustainability topics such as health & safety, labor and environmental issues are additional business criteria

Slide 13

Product Quality

On-time Delivery

Price

Management

Environment

Health & Safety

Labor & Human

Rights

Governance

Supply Chain focus from...

Sustain-ability

Product Quality

On-time Delivery

Price

…to

Together for Sustainability complements the focus of

supply chain organizations with sustainable sourcing

The Chemical Initiative for Sustainable Supply Chains Slide 14

Management

Environment

Health & Safety

Labor & Human

Rights

Governance

National Law

UN Global Compact

Responsible Care

Initiative

International Labor

Organization

International

Organization for

Standardization

Supplier Code of

Conduct

A supplier's sustainability performance is verified against a pre-defined set of

criteria, based upon internationally recognized frameworks and tailored to the

requirements of the Chemical Industry.

Developing benchmarks for sustainable supply chains TfS set of sustainability criteria

Scope of a TfS assessments or audits:


TfS members want key sourcing markets to know that they:

Care about supplier‘s sustainability performance

Aim to identify and mitigate sustainability risks in their supply chains

Engage with suppliers to focus on a process of continuous improvement

Together for Sustainability focuses on environmental,

social and governance issues in sustainable sourcing

Slide 15


How does Together for Sustainability

work?

Slide 16

Dr. Gabriele Unger,

TfS General Manager,

TfS Office Brussels


The TfS Approach Consists of Two Key

Processes…..

Online CSR Assessments by Ecovadis

On-site Audits by 3rd Party Audit Companies

Slide 17


3rd Party Assessments

A single online monitoring platform to

assess CSR performance and measure

improvement

Slide 18


Sustainability assessments today:

Multiple requests, multiple formats, multiple rating

systems, multiple scopes

High costs

No reliable data

No internal adoption

For Buyers

Audit / Questionnaire fatigue

No personalized feedback

No focus on improvements

For Suppliers

Slide 19


Standardized Approach

Reliable, objective indicator

Actionable scorecards

Measurable supplier differentiation

For Buyers

Improvement areas identified

Competition benchmark

Administrative burden reduced

Best practice learned / adopted

For Suppliers

Dynamic Questionnaires

Data verification

360° Watch

+

+

= Reliable CSR Ratings

The supplier scorecard will automatically be visible to all TfS member companies.

Suppliers are able to reuse it for other client's requests they receive.

EcoVadis : Our single point approach to CSR

assessment and monitoring.


EcoVadis Score Card

CSR Performance

Rating by theme of your CSR performance

(Environment, Social, Ethics, Suppliers) on

a scoring scale out of 100

Slide 21


EcoVadis Score Card

Benchmark

Allows you to compare your performance

with other companies in your industry

sector

Slide 22


EcoVadis Score Card

Strengths and Improvement Areas

Detailed presentation of your strong CSR

practices and your improvement areas.

They are divided into 4 categories that are

the four themes used in the CSR rating

(Environment, Social, Suppliers, and

Ethics)

Slide 23


EcoVadis Score Card

360° Watch

Keep an eye on information from up to

500 stakeholders (NGOs, Trade Unions…)

concerning your company

Slide 24


TfS and EcoVadis assessments are successful Geographical distribution of suppliers who have improved (percentage of improved suppliers)

Brazil

4%

18%

China 22%

14%

Europe 43%

Asia

Pa

cific

(w/o

Chin

a)

Am

erica

s

(w/o

Bra

zil)

Asia Pacific

(w/o China)

Americas

(w/o Brazil)

77% 53% 57% 64% 56%

Distribution of TfS scorecards Reassessments by region

Total number of scorecards: 3033 (as of April 2015)

7

123

45

100

263

4

65

25

64

203

Bra

zil

Chin

a

Eu

rop

e

# of reassessed suppliers with improved score

Total # of reassessed suppliers

Slide 25


TfS Assessments and Audits

TfS Assessment TfS Audit

Definition

Online evaluation of the management system

(policies, actions, results) under sustainability

criteria

Onsite two man-day spot-check of one

production site against the TfS sustainability

audit criteria

Service

Provider

Analysts from company EcoVadis, who has

developed a recognized online sustainability

supplier rating methodology and platform

Qualified, pre-approved auditors from the audit

companies SGS, Intertek, ERM, DQS

Key

document

Suppliers fill the EcoVadis online & modular

questionnaire which fits to industry, size, country

and - most important - provide proof documents.

Auditors fill the TfS Audit Questionnaire based

on the suppliers’ answers (by site management,

employees), proof documents, impressions

which they gather during the site visit.

Slide 26


3rd Party On-site Audits

Pre-approved global auditors administer a single,

standardized sustainability audit on-site.

“An audit for

one is an audit

for all”

Slide 27

Reach more stakeholders with less efforts


TfS Supplier Audits

At a more detailed level, the TfS audits are based on 32 audit criteria.

Management

Environment

Health & Safety

Labor &

Human Rights

Governance

Management

• Management in Charge

• Policy & Continuous Improvement

Environment

• Environmental Compliance

• Waste

• Emissions to Air and

Climate Change

Health and Safety Criteria

• Product Safety

• Transportation Safety

• Process Safety and Storage

• Occupational Health and Safety

Labor & Human Rights

• Child labor

• Forced and Compulsory Labor

• Working Hours

• Minimum Wages

Governance

• Business Integrity

• Privacy and Intellectual Property

• Risk Area: Conflict Minerals

• Training

• Business Partners

• Risk Area: Animal Care

• Fair Competition

• Disciplinary and Complaint Procedures

• Water and Wastewater

• Energy

• Land Use and Biodiversity

• Soil and Groundwater

• Emergency Preparedness

• Medical Care

• Security

• Freedom of Association • Discrimination • Special Work Contracts • Facilities & Dormitories

Slide 28


Is the industry participating?

6/17/2015 Slide 29

Progress to Date


Together for Sustainability Achievements until 2015 are impressive …

Slide 30

7800+ assessments initiated

Status: June 2015

290+ Auditors qualified

8 service providers engaged

300+ third party audits conducted *=initial & follow-up audits

Brand protected in EU, US, CN, BR, IN

32 main audit criteria defined


TfS intends to build a strong partnership with regional associations…

Slide 31

CPCIF

CEFIC

ABIQUIM

ACC


Benefits

What are

suppliers and

customers

saying?

Slide 32


Quotes from assessed / audited TfS

suppliers

Slide 33

“Our people at our factory in France were very pleased that one of our largest

customers is showing interest in our sustainability journey. Our employees felt proud to

show the job they are doing. This was very rewarding and motivational for the plant

team. Thank you for having given us this opportunity“.

“We were surprised at the results. It was kind of tough to see the gaps that were

identified in our current processes. This program is helping us to know what to

focus on to make us a better, long term and sustainable supplier to multiple

global companies at one time!”

“We were glad that we had the opportunity to demonstrate to the TfS membership our

efforts done in the past on sustainability and our commitment to do so in the future.

We are convinced that this will make a difference in the future and make us a

better company….”

“The meeting was an eye opener for me. The question for me now after this

experience will always be: are our activities, products and services fully supporting you

in the most sustainable way?


Quotes from assessed / audited TfS

suppliers

Slide 34

“The Ecovadis and TfS audit process defines priorities and insures we are working on

the right things.”

“It was very good to have our customer’s team along side for the audit. It is always

better to have the customer involved, rather than doing the audit only with a third party.

This should be also done for future audits, in my opinion.”

“I do not want to simply tick off the box that we have done the audit. What do we now

need to do together to make this meaningful? What do we need to concentrate on?...

There were many points discussed that we need to tackle together and to use to

our mutual benefit. I´m happy to join the team and to get it done.“

“This process…assists our company in understanding what’s important and aligning

our resources against common goals.”


TfS is new and emerges fast…

…and the TfS members create a lot of value!

• Global Turnover of TfS companies

in the chemical industry: over 200 billion Euro

• Regional Turnover in BRAZIL: over 10 billion Euro

• Global Spend of TfS companies

in the chemical industry: over 120 billion Euro

• Regional Spend in BRAZIL: around 5 billion Euro

• Expected average Growth Rate for the Brazilian Business estimated

by individual TfS companies: up to 20% all figures 2014

Did you know this about TfS?

founding members

new members

designated members

//upload.wikimedia.org/wikipedia/commons/9/97/Logo_Arkema.svg


All suppliers impact the long term success and

sustainability of our industry.

This is a journey. Join us!


Thank You! Remember to visit us @ http://www.tfs-initiative.com/

Slide 37

driving supply chain sustainability through industrial collaboration · 2020-01-24 · floods in...

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