Sustainable Supply Management Introduction to EcoVadis

Sustainable Supply Management Introduction to EcoVadis

SUSTAINABLE SUPPLY MANAGEMENT
Introduction for Ecole Centrale de Paris
Executive Program « Entreprise Durable et Responsable »
Hélène Kadjar – Senior CSR Analyst
Sustainable Supply Management
• Why?
• What are companies doing?
• EcoVadis Suppliers Sustainability Ratings
INSEAD / PwC / EcoVadis
“Sustainable Procurement Value” Research
3. Innovation &
Growth
2. Cost
Reduction
1. Risk
Management
Risks?
Increasing Regulatory Pressure In Supply Chains
CSR REPORTING
SUPPLY CHAIN DUE DILIGENCE
•
2014 More?
•
2014: Conflict Minerals Europe ?
•
2013 EU Directive Proposal on CSR Reporting
•
2013 French Bill on Corporate Due Diligence
•
2011 Corruption: UK Bribery Act
•
2010 Conflict Minerals: Dodd-Franck Act
•
2010 Human Rights: California Supply Chains Act
•
2010 Wood: EU Timber Regulation
Climate Change & Supply Chain
Source: BBC & FT.com
PRESSURE FROM CSR ACTORS & STAKEHOLDERS…
Costs?
Walmart launch
Sustainability
Scorecard & cuts
packaging by 5%
0.6Mt CO2 savings
&
3,5Md$ savings!
Bovis Lend Lease (UK) assess
329 Suppliers on CSR
“We won that bid based on the
sustainability supply chain policies
because we had all of this in place and
could demonstrate it”
Nigel McKay CPO Bovis Lend Lease
Sustainable Procurement business case
Drivers
Case Studies
1. Manage
Risks
•
•
•
•
Brand protection
Supply chain disruptions costs
Remediation costs (ex « recalls »)
Fines + litigations
Mattel (Recalls), Nike,
Gap, Walmart (Child)
BP, Total (Fines),
Baxter (Heparin)
2. Reduce
Costs
•
•
•
•
Improved TCO
Reduced over-specification
Reduced consumption / demand
CSR compliance costs
Nokia, Walmart,
Baxter, Adobe, SNCF,
Accor Hotels, Puma,
UPS
•
•
•
Product/Service differentiation
Access new markets
Income from recycling projects
3. Increase
Revenue
Bovis, Danone,
Unilever, Grainger,
Walmart, SNCF
QUANTIFICATION OF
COST & BENEFITS
IS
DIFFICULT
BUT PRACTITIONERS AGREE THAT THE GOAL IS TO
BUILD A RESILIENT & INNOVATIVE SUPPLY CHAINS…
18
Source: HEC- EcoVadis 2013
Sustainable Supply Management
• Why?
• What are companies doing?
• EcoVadis Suppliers Sustainability Ratings
Sustainability integration in Procurement process
Procurement
category
strategy
Setting up of
specifications
Product/services
specification
Identification of environmental
and social risks linked to
Industry Sectors
Contrats
management
Operational
management
On demand management
Pre-Qualification &
Selection Process
Collaboration with production
and suppliers to identify
alternative solutions that could
lower environmental and social
impacts of purchased products
Categories analysis
Sourcing
and Selection
In daily purchasing, it is possible
to optimize the usage of what is
bought and thus minimize
consumption when possible.
Include« sustainable »
suppliers in call for
tender.
Supplier evaluation
Annual evaluation of suppliers
(questionnaires, on site audit…) is
essential to involve suppliers and
help them advance their
performance.
“Products /Services” axis – Buy what?
“Suppliers” axis – With who?
Nokia – From audit to remediation
Siemens – Sutainable Procurement Organisation
P&G - Suppliers Sustainability Scorecards
Walmart
Sustainability Index
- 100,000 Suppliers
- 15 CSR Questions
- 4 on Supply Chain
HP – Supply Chain Transparency
2002 – 1st Electronic company to
publish Supplier Code of
Conduct
2004 – Led development of EICC
Sustainable Supply Chain
Standard
2008 – Published Suppliers list on
95% of spend and
transparency on
performance
2009 – Publish CO2 emissions of
top suppliers
Source: HEC- EcoVadis 2013
Value & Rewards to ensure Supplier
Adoption
Example of rules used by leaders
Company
(CSR <3) -> (Implement “Corrective Actions”)
(CSR >7) -> (Increase Business)
Energy
CSR = 10% of overall RFP evaluation
Finance
CSR = 25% of annual Supplier appraisal process
Telecom
Suppliers with CSR>6 elligible for “Gold”/”Silver” awards
Pharma
Source: HEC- EcoVadis 2013
From « Basic Social Compliance » to
« Sustainability rating »
Sustainability
Performance
(Look at CSR
Management System)
Compliance
with
Law /
International
Standards
Value
Creation
Basic Social
Compliance
Risk
Management
From Rating to Monitoring
Weekly monitoring of
working hours covering
1,000,000 supplier’s
workers
Vertical Initiatives
« Global Social
Compliance Program »
• Major Global Retailers
(WalMart, Carrefour, Tesco,
HP, IKEA,…)
• Joining forces to define
common Sustainable
Procurement code + Audit
Protocol +…
Vertical Initiatives
Sustainable Supply Management
• Why?
• What are companies doing?
• EcoVadis Suppliers Sustainability Ratings
EcoVadis Benefits : change from Current Situation…
CSR Rating?
For Buyers
For Suppliers
 High costs
 Audit / Questionnaire fatigue
 No reliable data
 No personalized feedback
 No internal adoption
 No focus on improvements
… to EcoVadis global model
Dynamic Questionnaires
+
Data verification
+
360° Watch
=
Reliable CSR Ratings
For Buyers
For Suppliers
 Reliable indicator
 Identify improvement areas
 Actionable scorecards
 Competition benchmark
 Leverage on suppliers
 Reduce admin. burden
#1 Suppliers Sustainability Rating platform
Buyers
Suppliers
100 Customers
1200 bn€ spend
15,000+ per year
400bn€ spend
≈ 50,000 Sites
70% SME’s
150 Categories
95 Countries
About EcoVadis
EcoVadis operates the 1st collaborative platform allowing companies to assess the environmental and
social performance of their suppliers on a global basis. EcoVadis combines technology and Corporate
Social Responsibility (CSR) expertise to deliver simple and reliable Supplier Scorecards.
International
Recognition
Worldwide
presence
International
Scientific
Committee
Leading
Partnerships &
membership
“Companies should use databases such as EcoVadis that collect supplier
audit data and provide buyers with a one-stop tool for evaluating suppliers
against a set of sustainability criteria”
United Nation report « Unchaining Value »
• Suppliers rated in 95 countries
• 120p team – Paris, NYC, Port Louis – 20 nationalities
• With members of DJSI, GRI, INSEAD, HEC…
working with EcoVadis to improve the methodology
Why a good CSR Management System is important?
26000
POLICIES
ACTIONS
DUAL
OBJECTIVES
Go beyond strict
legal
requirements
(e.g. energy
reduction,
accident rates,
CO2
emissions,…)
GOOD TO
AVOID
LEGAL
ISSUES
Minimize and
prevent getting
into legal issues
(e.g. corruption,
discrimination,
labor disputes)
RESULTS
VOLUNTARY
CSR Mgt. System
GOOD
FOR
BUSINESS
LEGAL
REACTIVE
LAWS
14001
EV Assessment
PROACTIVE
Overarching Norm
ECOVADIS METHODOLOGY APPROACH: RECAP
WHAT
HOW
POLICIES
• Policies
• Endorsement of CSR
initiatives
RESULTS
• Reporting / KPI’s
• 360°
26 000
INPUTS
EcoVadis Scorecard
Social
Audit
GHG Data
360°
(NGOs,
Unions)
• Measures/Actions
• Implementation coverage
• Certificates/Labels
OUTPUT
Public
Information
Supporting
Documents
Questionnaire
ACTIONS
EcoVadis
Analysts
END & Q/A
Echelle de Notation EcoVadis
LEADERS
ENGAGEMENT
RSE
85 - 100
Opportunité
Elevée
•
•
•
Idem (65-84)) +
Reporting RSE détaillé
Pratiques innovantes et reconnaissance externe
Approche RSE structurée
Engagements quantifiés et actions tangibles sur tous les enjeux
Informations détaillées sur la mise en oeuvre
Reporting RSE sur les actions / indicateurs de performance
65 - 84
AVANCE
Opportunité
Moyenne
•
•
•
•
45 - 64
CONFIRME
Sous
Contrôle
•
•
•
Approche RSE structurée
Engagements et actions tangibles sur les enjeux principaux
Reporting élémentaire sur mise en oeuvre / indicateurs
25 - 44
PARTIEL
Risques
Moyens
•
•
•
Pas d’approche RSE structurée
Quelques engagements ou actions tangibles
Certifications partielles et/ou quelques produits labellisés
AUCUN
Risques
Elevés
•
•
•
Pas de déclaration d’engagement ni de sensibilisation RSE
Pas d’action tangible en lien avec la RSE
Preuve dans certains cas de mauvaise conduite (ex. pollution,
corruption)
0 - 24
RISQUES
CROISSANTS
EXCEPTIONNEL
RESULTATS
POSSIBLES
Distribution des scores
Statistiques réalisées sur 434 fournisseurs évalués
Distribution des scores globaux (Crédit Agricole)
Meilleure performance que
pour l’ensemble des
fournisseurs évalués par
EcoVadis
Distribution des scores globaux (EcoVadis)
Pourquoi?
Note 33% de réutilisation des évaluations sur
l’ensemble des campagnes
 le principe de mutualisation fonctionne et facilite la
démarche pour les fournisseurs.
Distribution des fournisseurs sous suivi RSE
Statistiques à partir d’un échantillon de 9,000 évaluations – Mai 2013
Origine géographique du siège social
Présence dans des pays à risque
Risque =
Présence
significative
dans des pays
à risque
Taille
Small moins de 50 employés
Medium entre 50 et 999
Large > 1 000 employés
Methodology is adapted to 150 Spend Categories
Metals
Castings
Forgings
Stampings
Machinings
Raw Metal
Electronics
Consumer Elec.
Cables
Batteries
Transformers
PCB’s/PCA’s
Facilities
Transport
Security Services
Cleaning Services
Waste Management
Food Services
MRO
Working Clothes
Air
Road Freight
Sea Freight
Courrier Services
Warehousing
Construction
Constr. Services
Eng. Materials
Engineering
Marketing
Agencies
Promotional Items
Promotional Print
Plastics
Plastics
Foam
Resins
Rubber
IT
Telecom & Network
Cell Phones
PC’s
Peripherals
IT Consulting
Hosting
Software
Telecom
Fixed & Mobile
Call Centers
Data
Packaging
Paperboard Pack.
Plastic Packaging
Containers
Pallets
Labels
Food
Perennial Crops
Meat processing
Fruit processing
Dairy products
Sugar
Farinaceous
Spirits
Travel
Airlines
Vehicle Leasing
Hotels
Paints
Paints
Coatings
Inks
Coatings
Core
Electricity
Fuel
Glass
Specialty Chemical
Industrial Gases
Wood
HR
Temp Labor
Consulting
Training
Exemple de scorecard
Résultats quantitatifs
Poids 2
Poids 4
Poids 1
Poids 2
Résultats qualitatifs
Global coverage of EcoVadis ratings
Key Facts
• Suppliers in 93 countries
• 139 Countries in database
• Buyers in 25 countries
• 5 languages (service)
• 3 languages (software)
CSR Risks