Environment Pillar Project

Project update – New York, November 2014

Project Objective: What?

1. Understand what environmental initiatives members currently have linked to sourcing and how they are using these links.

2. Review the relevance of the Agriculture Library to our members and include non-agriculture initiatives

3. Define common ways to support members in delivering the CGF commitments on zero-net deforestation by 2020 and HFC-free refrigeration

Key Deliverables: How?1. Map the key environmental initiatives

members are engaging suppliers on, sharing best practise.

2. Provide a repository of environmental certification schemes through ITC

3. Conduct check on non-agriculture environment schemes (e.g. packaging focused) in ITC

4. Review GSCP environmental reference tool and provide a summary to membership

5. CGF: Contribute to implementation – through dissemination of the relevant CGF tools to the AIM-PROGRESS membership. Explore opportunities to tailor the existing GSCP environmental reference tool to support members in delivering the CGF commitments

Key Milestones: When?

1. Issue Member Env Initiatives Tracker to membership for completion and return by end July 2014.

2. Key insights pulled out and presented at November 2014 meeting.

3. Present summary of GSCP environment reference tool incorporating CGF resolutions at November meeting.

4. Refresh Library to incorporate non-ag initiatives. Made available to members March 2015.

5. Provide guidance on CGF commitments linked with members activities and the GSCP env ref tool – June 15

Key Issues: Why?1. To leverage existing links to further the

environmental pillar and support AIM-PROGRESS objective of ‘going beyond compliance’.

2. Provide overview and insight of relevant environmental certification schemes to enable members to determine suitability for their programmes.

3. To enhance the environmental pillar of SAQ/Audit to ensure it’s fit for purpose and meets the evolving needs of the membership.

Project Team: Monthly conf callsDavid Howson - BACARDIJoe Maguire – DIAGEOIeva Vilimaviciute – AIM-PROGRESSMaro Van Andel – GIVAUDANPenelope Lambropoulos – KEURIG GREEN MOUNTAINWouter De Groot - CARLSBERGGerald Rebitzer –AMCORKaitlin Hooper – MCDONALDSAmy Braun – KELLOGG

Key Interlinkages/stakeholders:

• ITC Standards Benchmarking tool

• GSCP Environmental reference tool

• Consumer Goods Forum (CGF)

• SCB Workstream – Env compliance training and awareness and common non-conformances

KPIs/Measures of success: • Feedback from 80% of membership

Inside the team's scope:

• Focus on supporting members’ management of the environment pillar within their RS programs

Outside the team’s scope• Technical environmental advice

• Establishing environmental standards

Environment, PROJECT CHARTER UPDATED Sept 2014

GSCP Environment Module - SummaryEnvironmental Reference Requirements and Environmental Implementation Guidelines

The reference requirements were developed as a best practices tool for production sites across the whole supply chain. The requirements reflect a common understanding of good environmental practice and are applicable to all raw material processing, agricultural, manufacturing and logistics sites in the supply chain.This reference tool provides a model for continuous improvement in environmental performance from basic compliance to leading-edge performance.● This model is based on three levels:

Level 1 - Compliance and AwarenessLevel 2 - Proactive Management and Performance Improvement andLevel 3 - Leading Practice

NB: A further document developed by the GSCP; Reference tools on Environmental Audit Process and Methodology, is not covered here. This approach covers Scope 1, 2 and 3 impacts.

Environmental Reference Requirements – 24 page document

The document is for use by all raw material processing, agricultural, manufacturing and logistics sites in the supply chain.

A site can use the document to assess its status against current level requirements and/or what it is required to do to progress to the next ‘level’ of performance.

Environmental Reference Requirements

Environmental Reference Requirements – Performance areas covered:-

1. Environmental Management System2. Energy Use, Transport and Greenhouse Gases (GHGs)3. Water use4. Wastewater effluent5. Emissions to air• 5.1 General• 5.2 Ozone Depleting Substances (ODS)6. Waste management 7. Pollution Prevention/Hazardous and Potentially Hazardous Substances8. Major incident prevention and management9. Contaminated land/Soil and groundwater pollution prevention10. Land use and biodiversity11. Nuisances

Environmental Reference Requirements - Example:- Water use

This structure is followed for each performance area.

Environmental Implementation Guidelines – 92 page document The Implementation Guidelines complement the GSCP environmental Reference Requirements by giving guidance to sites as to how to reach the required level. It is designed for sites to support improvement in their environmental performance and gradually progress from Level 1 through to Level 3 by meeting the requirements described at each level.

The implementation guidelines’ structure follows that of the GSCP environmental reference requirements i.e. are structured by level and, for each level, by performance area.

This document comprises 4 sections: • Section 1 -Starting out -How to work towards Level 1; • Section 2 -How to reach Level 1 requirements. It also provides explanation for each of the topic areas, some benefits of improving environmental performance, and some ideas around ‘where to start’; • Section 3 -How to reach Level 2 requirements; • Section 4 -How to reach Level 3 requirements.

Our recommendation:-These are useful tools to reference. We should store both documents in the AIM-Progress Environment Pillar page for access by members.

Consumer Goods Forum resolutions:-

1.      As the Board of the Consumer Goods Forum we pledge to mobilise resources within our respective businesses to help achieve zero net deforestation by 2020. We will develop specific, time bound, and cost effective action plans for the different challenges in sourcing commodities like palm oil, soy, beef, paper and board in a sustainable fashion.

2.      As the Board of the Consumer Goods Forum, we recognise the major and increasing contribution to total greenhouse gas emissions of HFCs and derivative chemical refrigerants. We are therefore taking action to mobilize resources within our respective businesses to begin phasing-out HFC refrigerants as of 2015 and replace them with non-HFC refrigerants (natural refrigerant alternatives) where these are legally allowed and available for new purchases of point-of-sale units and large refrigeration installations.

Action:-

Environment Pillar project team will link these resolutions to the member activities and the GSCP env reference tool for the June 2015 meeting.

Environment and sourcing – Members’ activities insights● We requested members to submit details of their sourcing activities in the

following environment categories:-► GHG emissions► Water Use► Waste► Agriculture based► Other

● In each category we asked for the following:-► Supplier commodity/ material category► Project scope/overview & targets► Specific activities undertaken (related to sourcing)► Benefits / desired outcomes of project/activity► Challenges / obstacles faced► Environmental / Sustainability Certificate target► External platforms engaged► Level of industry influence

GHG themes● 16 companies responded● 30 different activities● Summary of focus areas:-

► Eco-Friendly Coolers / refrigeration► Logistics► Packaging (most material types) and consumables► Raw Materials/Agriculture, e.g:-

• Rice• Corn• Hazelnuts• Cocoa• Fiber (pulp)• Bakery, beef, pork, poultry, potato• Fragrances and flavours

► Promo items► Internal company wide GHG focus► Manufacturing equipment

● Examples of approaches:-► Internal LCA analysis► Use of GHG calculators► Supplier outreach (training, workshops, projects)► Environmental SAQs

● Common challenges faced► Internal costs of analysis► Obtaining accurate data► Choosing the right metrics► Variations in crop N demand► Low supplier knowledge► Transparency of supplier ► Sheer number of trader & smallholders► Commitment of suppliers’ time to support data

● Platforms engaged► Aluminum Stewardship Initiative► CDP► DJSI► SEDEX► UN Climate Smart Agriculture► Field to Market► Cool Farm Tool (IRTA)► Consumer Goods Forum► EPA► GRI► Ecoinvent► UNFCCC Methodology

● Level of industry Influence (of respondents)► Low = 40%► Medium = 40%► High = 20%

Water use themes● 8 companies responded● 13 different activities● Summary of focus areas:-

► Water use in packaging (most material types) ► Water use in Raw Materials/Agriculture, e.g:-

• Barley• Beef• Pork • Poultry• Potato

► Internal company water use

● Examples of approaches:-► Analysis of irrigation systems► Internal water use analysis► Strategic supplier engagement to calculate upstream

water footprint► Supplier environment scorecard questionnaires► Gathering primary data from farm-level usage► Projects to deliver public water use reduction

commitments

● Common challenges faced► Irrigation systems and soil types vary► Choosing the right metrics► Differing water use of crops► Lack of supplier data collection systems► Availability and complexity of data► Farm level data► Commitment of suppliers’ time to support data

collection

● Platforms engaged► Water Footprint Network► ISO 14046 Water Footprint Standard► ENVIFOOD Protocol► Alliance for Water Stewardship; ► WRI Aqueduct Tool► Ecodesk► BIER► CEO Water Mandate► SAI Platform► Various NGOs

● Level of industry Influence (of respondents)► Low = 37.5%► Medium = 37.5%► High = 25%

Waste themes● 14 companies responded● 18 different activities● Summary of focus areas:-

► Production packaging waste► Post consumer waste (fibre)► Food waste► Raw Materials/Agriculture► Hazelnut byproducts► Internal manufacturing waste (owned sites)► Zero waste to landfill targets

● Examples of approaches:-► Supplier collaboration► Packaging innovation with suppliers aimed at reducing

product packaging weight► Closed loop recycling systems (e.g. glass)► Sustainable Packaging guidelines with suppliers► Internal re-use programs► Up-cycling► Waste to energy conversion► Composting► Bio-mass projects

● Common challenges faced► Internal costs of analysis► Obtaining accurate data► Choosing the right metrics► Variations in crop N demand► Low supplier knowledge► Transparency of supplier ► Sheer number of smallholders► Commitment of suppliers’ time to support data

● Platforms engaged► BSR► CDP► DJSI► EPEA Internationale Umweltforschung GmbH► Closed Loop Fund► The Nature Conservancy► CEMPRE (Compromisso Empresarial para Reciclagem)► Ciudad Saludable and GAIA Social► FoodDrinkEurope► OECD Food Chain Analysis Network► Ecodesk► GMA Food Waste Opportunities and Challenges

initiative

● Level of industry Influence (of respondents)► Low = 40%► Medium = 40%► High = 20%

Agriculture themes● 13 companies responded● 39 different activities● Summary of focus areas:-

► Coffee & Cocoa► Palm oil & Soy► Sugar – cane & beet► Fish, beef, chicken► Vanilla► Wheat, corn, oats► Vetiver, Ylang-Ylang, Lavender, Benzoin, Tonka,

Sandelwood► Oranges and bananas► Hazelnuts► Rice & Potatoes► Timber► Dairy / Milk / Eggs

● Examples of approaches:-► Supplier outreach – explaining benefits of sustainability► Supplier surveys► Sustainable sourcing guidelines and policies► Specialist Ethical Sourcing Team set up for some

commodities► Commodity based collaboration (RSPO, Bonsucro)► Regional grower engagements► Supply chain mapping to assess origins and risks► New variety innovation► Model farms set up► Rural development framework

● Common challenges faced► Scaling up ► Lack of certification schemes for certain ag products► Climate change affecting geography / quality► Effort needed to engage farm-level► Lack of visibility of origin► Low scale of certification schemes► Huge complexity of some ag supply chains► Aging farm workforce► Commitment / ability of suppliers to support data

collection

● Platforms engaged► Rainforest Alliance► SAI Platform► Sustainable Fisheries Partnership► Fair Trade► Roundtable on Sustainable Palm Oil (RSPO)► Marine Stewardship Council (MSC)► Innovation Center for US Dairy► Global Roundtable on Sustainable Beef (GRSB)► The Nature Conservancy► Bonsucro Chain of Custody Standard► European Food Sustainable Consumption and Production

Round Table► Field to Market► Consumer Goods Forum► FSC, SFI & PEFC

● Level of industry Influence (of respondents)► Low = 11%► Medium = 54%► High = 35%

Summary

● Environmental impacts deeply embedded in a number of members supply chain activity

● Common challenges of difficulty in data collection quality and accessibility, supplier commitment of resources and supply chain complexity

● Unclear as to what customers do with this data – is it always relevant?

● Strong focus in agriculture in environment space (89% medium or high industry influence of projects)

► Multiple public commitments for sustainable ag sourcing► Multiple platforms available

● Excellent examples of projects or approaches to share across membership to reduce duplication of effort

● Are there opportunities that appeal to your company?