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The Chemical Initiative for Sustainable Supply Chains11/7/2014Slide 1

Global Sustainability Challenges & Sustainable Supply Chain Solutions

TfS Event ShanghaiOct.22nd, 2014

Speaker: Hannah RouthDirector, Sustainability & Climate Change, PwC China

www.pwc.de

PwC

Content

1. Introduction to PwC Sustainability and Climate Change

2. Sustainability trends for business

3. Implementing Sustainable Supply Chain Management

3October 2014TfS Event China

PwC

Sustainability and Climate Change PwCPwC is a worldwide leader in sustainability services supported by a Network of Excellence

Corporate Responsiblity

Strategy & Management

Supply Chain Management

Climate Change & Water

Management

SustainabilityReporting

• 15+ years experience in Sustainable Business Solutions

• 40+ Offices worldwide

• 700+ Sustainability Experts worldwide

• More than 50% of Fortune100 & DAX30 companies are our customers

• Lived responsibility due to own CR-Program (e.g. PwC Sustainability Report)

• Secretariat for TfS programme


PwC

Sustainability trends in business


PwC

Sustainability Trends Global megatrends are shaping the way we do business


Demographicshifts

Shift in global economic power

Accelerating urbanisation

Climate change and resource scarcity

Technologicalbreakthroughs

Companies who recognise and understand these trends will have a competitive advantage in the long term

PwC

Sustainability Trends Companies are facing higher stakeholder expectations today

Companies are expected to identify their core sustainability issues, systematically tackle these issues and communicate their activities transparently to stakeholders


CO²

Energieverbrauch

KonsumentenAnforderungen

Reputation

Kosten

Supply Chain

Stakeholder Dialog

Human Capital Development

Nachhaltige Produktion

Negativer Einfluss durch Geschäftstätigkeit

Strategie-entscheidungen

Sustainable Supply Chain

Shareholder/InvestorenAnforderungen

Gesetzliche Anforderungen

Klimawandel Integrität Globalisierung Soziale ThemenRessourcen-knappheit

Unter-nehmen

Work life Balance

Frauenförderung

War for Talent

Arbeitssicherheit

Menschenrechte

Ökonomisch

Ressourcenverbrauch

Korruption

Demographic change

Globalisation Urbanisation IntegrityClimatechange

Technological change

CorruptionReputation

Strategic DecisionStrategic Decision

Legal Requirements

CostsEconomic

Stakeholder/Investor Requirements

Consumer Requirements

Stakeholder Dialogue

Human Rights

Occupational Safety

Community involvement

Sustainable Production

Resource consumption

Energy consumption

Negative Influences of Business Activities

Business

Case study - Bayer Materiality Matrix

Case study - Sinopec Materiality Matrix

PwC

Sustainability Trends Beyond regulatory compliance, Sustainable Supply Chain Management provides companies with new business opportunities

Sustainable Supply Chain Management supports risk management and provides new opportunities to realise competitive advantage


new products labelled for their sustainability performance over the

whole life cycle, supporting the sustainability requirements of our

customers.

PwC

Sustainability Trends Sustainable Supply Chain Management can secure long-term business benefits

Sustainable Supply Chain Management

Increase Efficiency Promote Innovation

• Comply with consumers‘ and business partners‘ expectations

• Introduce new products andprocesses

Manage Risks

• Reduce negative environmental and socialimpact of businessoperations

• Avoid damage to businessreputation

• Reduce costs for rawmaterials, energy, water, transport

• Increase productivity• Increase efficiency between

supply chain actors

Case study – BASF’s sustainable supply chain management practices

9

PwC

Sustainability TrendsA remarkable rise of voluntary sustainability standards and certification systems has emerged in the past twenty years

1990 1995 2000 2005 2010

EU Ecolabel - Non-

Food (1992)FSC - Timber (1993)

Fairtrade – Food/Non-

Food (1994) MSC- Fish

(1997)PEFC - Timber

(1997)ETP - Tea

(1997)

WRAP - Textile

(2000)4C –Coffee

(2002)RSP – Palm Oil

(2004)CmiA - Cotton

(2005)

RJC - Jewellery (2009)

ICTI -Toys (1975)

ISO 9000– Quality Management System

(1987)

ISO 14001 –Environmental

Management System (1996)

GRI – CR-Reporting

Standard (1997)SA8000 – Social

Management System

(1997)OHSAS –

Occupational Health & Safety Standard

(1997)

ISAE 3000 – Reporting Standard (2000)

ISO 26000 – CR-

Management Guidance

(2010)ISO 50001 – Energy

Management System

(2011)

Product Standards

Management- /Reporting Standards


PwC

Sustainability TrendsIn parallel, a large number of initiatives have evolved and developed their own Supply Chain Standards - TfS is one of them

Responsible Care: Chemicals Industry(1984)

ETI: Ethical TradingInitiative (1998)

BSCI: Business SocialCompliance Initiative

(2002)

ICMM: International Council on Mining andMetals (2001)

Equator Principles : Banking Sector(2003)

CSI: CementSustainability Initiative

(2001)

1990 1995 2000 2005 2010

Business Intiatives

MultistakeholderCooperations

FLA: Fair Labor Association (1999)

TfS: Together forSustainability (2011)

GSCP: Global SocialCompliance Program

(2006)

RTRS: Roundtable on Responsible Soy

(2006)

RSB: Roundtable on Sustainable Biofuels

(2006)

PCSI: PharmaceuticalSupply Chain Initiative

(2006)

EITI: ExtractiveIndustries TransparencyInitiative (2002)

EICC: Electronic Industry Citizenship

Coalition (2004)

GeSI: Global e-Sustinability Initiative

(2001)

RSPO: Roundtable on Sustainable Palm Oil

(2004)


PwC

Implementing Sustainable Supply Chain Management


PwC

Implementing Sustainable Supply Chain ManagementEvolution of key Supply Chain Instruments, including sector solutions

• Stakeholder opinion gains increasing importance

• Codes of Conduct

• SelfAssessments

• Internal audits

• Multistake-holder-approaches

• External Audits

• Cooperation with suppliers/ competitors

• Investment in supplier days/ training/im-provement measures

• Transparency& Traceablity

• Cradle-to-CradleApproaches

• SectorSolutions

1990 … … … 2014


PwC

Retail & Consumer

“How can we offer sustainable products at a price that customers are willing to pay? Whichsuppliers offer a good product quality and comply with key labour and environmental standards?“

1

Chemical Industry

“We have more than 80.000 suppliers worldwide. Based on which criteria can we best identifyhigh risk suppliers? How can we influence the sustainability performance of our strategicsuppliers?“

2

Automotive Sector“Our stakeholders are concerned since some raw materials are sourced from crisis regions. How can we transparently prove where these raw materials come from? How can we integrate sustainability standards into our traditional procurement criteria such as price and quality?“

3

Implementing Sustainable Supply Chain ManagementSector specific challenges


PwC

Implementing Sustainable Supply Chain ManagementMajor elements to consider

Sustainable Business

Sustainability Strategy

Integration at Management

Level

ManagementSystems

Reporting Stakeholder

Management

MaterialityProcess

SupplierManagement


PwC

Implementing Sustainable Supply Chain ManagementAn internal risk management system supports in fulfilling client and regulatorydemands

Source: OECD Due Diligence Guidance, December 2010.

1. Building an internal management system

2. Identifying and assessing risks

3. Defining a risk reduction strategy

4. Implementing independent audits /

measures for improved supplier performance

5. Reporting on management system and

due diligence


PwC

Thank you for your attention!

Hannah RouthDirector, Sustainability & Climate Change, PwC China

Phone: +85 2 2289 2968 E-Mail: [email protected]

Michael WernerPartner, Sustainability Services, PwC Germany

Phone: +49 30 2636 4378E-Mail: [email protected]


PwC Contact Sustainability Services

slide 1 11/7/2014 the chemical initiative for sustainable ... · demographic shifts shift in global...

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