IEMA Practitioner Volume 14 Supporting Information

Transcription

1 IEMA Practitiner Vlume 14 Supprting Infrmatin Title: Engaging and Re-engineering the Supply Chain Authr: Sam Balch Organisatin: Glbal Actin Plan There are a number f reasns why rganisatins may chse t reduce emissins within their supply chain. These include: Identifying and reducing the risks assciated with climate change and resurce cnsumptin within yur supply chain 1 ; Imprving relatinships with key suppliers by helping them t identify and realise cst savings and envirnmental imprvements; Measuring emissins that yur rganisatin is respnsible fr and identifying ptential reductin pprtunities; Preparedness fr existing and future regulatins n greenhuse gas emissins disclsure fr bth yu and yur supply chain; Greater ptential fr cst-effective emissin reductins within yur supply chain rather than thrugh imprving internal efficiencies even further; Imprving saleability f gds and services in terms f energy efficiency and carbn savings. Supply chain greenhuse gas reductin initiatives can be carried ut in tw main ways. These are: A) Supplier emissin reductin initiatives; and B) Smart prcurement. The key staff t engage in any supply chain initiatives will be: Prcurement Team; Operatins Team; Marketing; and Prduct / Service Develpment Team (if applicable). In advance f wrking t reduce emissins within yur supply chain, yu will first need t quantify the carbn emissins assciated with these gds and services. There are a number f ways t identify yur mst significant emitters within yur supply chain. Organisatins may chse t use ne, r a number f methds tgether (smetimes called a hybrid apprach ) t d this: a. Requesting greenhuse gas emissins disclsure frm suppliers. In reality, rganisatins are ften limited t requesting this infrmatin frm Tier 1 suppliers and therefre the ttal impact f upstream materials is nt accunted fr. Hwever this allws rganisatins t establish a baseline fr their supply chain emissins which they can use t assess the impact f any supply chain reductin activities. There are a number f rganisatins that wrk in partnership with prcuring rganisatins t identify the emissins frm their suppliers. Examples include the Carbn Disclsure Prject s Supply Chain and Public Prcurement initiatives.

2 IEMA Practitiner Vlume 14 Supprting Infrmatin b. Applicatin f lifecycle emissin factrs t an rganisatin s supply chain gds and services available thrugh a number f surces. Fr example, the EU ELCD cre database which cmprises f Life Cycle Inventry (LCI) data frm leading EU-level business assciatins and ther surces fr key materials, energy carriers, transprt and waste management 2 c. Applicatin f input-utput emissin factrs available in the 2009 Defra / DECC GHG cnversin factrs t yur rganisatin s prcurement spend as allcated t the apprpriate Prduct Categries 3. A) Supplier emissin reductin initiatives Once the impact f suppliers has been assessed as set ut abve, rganisatins can save carbn by wrking with their existing suppliers. This invlves: 1. Identifying partners within the supply chain. In practice, it may be easier t wrk with rganisatins in yur supply chain that yu have a clser relatinship with. This is likely t be Tier 1 suppliers with which there is a direct cntractual relatinship. Within Tier 1 suppliers, rganisatins may have lnger term and larger cntracts in place with certain suppliers. These cntracts are likely t be based n mre than just cst and instead reflect relatinships f value and service quality. Fr example, this culd be with suppliers that prvide utsurced services (e.g. back ffice functins such as IT services, HR & Finance) n behalf f yur rganisatin. It will be easier t engage these suppliers initially t measure and reduce their emissins. Suppliers that trade n cst alne may be mre difficult t engage. Organisatins shuld use infrmatin gathered n the carbn intensity f their supply chain t select suppliers wh will be mre receptive t engagement and thse wh prvide gds and services that are mre carbn intensive. Organisatins with existing supplier engagement initiatives tend t be mre effective at engaging their suppliers in these carbn reductin prgrammes. 2. Prvide supprt and training n carbn management t key suppliers. This can either be dne thrugh: Face-t-face envirnmental business mentring advice. This engagement prcess may invlve: site audits f suppliers, prvisin f mnitring tls, %20A%20practical%20guide%20fr%20suppliers.pdf

3 IEMA Practitiner Vlume 14 Supprting Infrmatin tailred reprts n ptential savings and payback perids, and n-ging supprt in implementing measures. This is a narrw and deep engagement prcess and is cst intensive althugh actual savings are mre likely t be achieved amngst participants due t the intensity f supprt. Wrkshps and training curses fr key suppliers. Training and wrkshps can be delivered t clusters f suppliers either at the hst rganisatin r lcally. Wrkshps may cver carbn ftprinting, energy management and brader resurce efficiency and training n running emplyee awareness and behaviur change prgrammes. This is a less cst-intensive prcess hwever it is mre difficult t determine the actual level f resulting actin and implementatin f measures. Carbn management tlkits and guidance. Organisatins may chse t prduce guidance dcuments and tlkits fr their suppliers t assist them in carbn management. Guidance dcuments in their nature are a brad and shallw engagement technique. The Supplier Supprt and Infrmatin Initiative has used this apprach t engage suppliers thrugh their Carbn Management: A Practical Guide fr Suppliers dcument 4. Alternatives t guidance culd include nline carbn measurement and reductin tls made available t suppliers t enable them t accurately and cnsistently measure their emissins and help them t determine viable carbn reductin ptins. Infrm suppliers f new envirnmental standards criteria that yur rganisatin intends t incrprate int all supplier cntracts in the future. This will help yur suppliers t prepare fr frthcming prcurement requirements and will help t build strnger relatinships with them. In practice, a hybrid apprach t supplier engagement using a range f engagement methds utlined abve will ensure cmplete cverage f all suppliers and allw mre specific targeting f key significant emitters. 3. Mnitr and evaluate the impact f supplier engagement initiatives. In rder t determine whether an rganisatin s engagement prcess is having an impact n suppliers, it is crucial that apprpriate mnitring and evaluatin prcesses are established. This shuld include carrying ut an initial baseline assessment f supplier perfrmance, as well as n-ging mnitring and evaluatin t determine the impact f the interventin is having 4. Amend yur tendering criteria. Organisatins can psitively influence suppliers thrugh incrprating assessment n greenhuse gas emissins within their tendering and retendering prcess. This culd include: Asking specific questins n carbn management within the Invitatin t Tender. Questins culd include: Whether the rganisatin quantifies and reprts n their greenhuse gas emissins, and if s, what is the standard / prtcl used t d this? (Defra / DECC Guidance n hw t measure and reprt yur greenhuse

4 IEMA Practitiner Vlume 14 Supprting Infrmatin gas emissins, GHG Prtcl, ISO Part 1) Whether the prcured gd r service has a carbn ftprint, and if s, what is the standard / prtcl used t determine this? (e.g. ISO 14040, PAS 2050) Whether the rganisatin has targets in place t reduce its greenhuse gas emissins, and if s what these are? (e.g. intensity r abslute reductin targets) Whether the rganisatin is cvered by a mandatry cap and trade scheme? (e.g. EU ETS, CRC Energy Efficiency Scheme) What is the emissins intensity f the rganisatin? Wrking with the Prcurement teams t determine the scring and weighting system fr greenhuse gas and brader envirnmental perfrmance criteria within the tender assessment prcess. Setting peratinal parameters fr suppliers t perate within. In practice, this culd mean that rganisatins specify that gds r services are delivered with a ceiling n the level f carbn dixide assciated with them. Fr example, cntracts with curier firms culd specify target emissin levels t encurage suppliers t cnsider ptimal ruting, cllectin cnditins and vehicle chice that they used in their service. B) Smart Prcurement Supply chain re-engineering Supply chain re-engineering is the analysis and redesign f supply and lgistics netwrks. Where pssible, rganisatins can incrprate infrmatin n the embdied carbn in varius gds and services int the analysis and redesign f their existing supply and lgistics netwrks. This infrmatin can be used t influence supplier management practices t imprve the carbn efficiency f these supply netwrks. In rder t d this, envirnmental practitiners will need t wrk clsely with prcurement and peratins staff t ensure that they have the necessary tls / infrmatin t incrprate the carbn intensity f gds and services int their future prcurement decisins and tendering practices. Organisatins will need t quantify the embdied greenhuse gas emissins assciated with different materials and prcesses that they use and thse f alternatives. They will need t d this carefully and cnsistently t ensure that these alternatives ffer genuine lwer carbn slutins. At a simple level, a Lcal Authrity may identify that greenhuse gas emissins frm rad resurfacing and repairs in its Lcal Authrity area is a significant surce f emissins within its supply chain. The lcal authrity identifies a suitable dataset f embdied carbn t enable them t cmpare the carbn impact f varius materials. In this instance, they use the Inventry f Carbn & Energy (ICE) database 5 prduced by the University f Bath. They then use this infrmatin, in cnjunctin with ther data such as relative csts, availability and life expectancy f different materials, t infrm decisins n the materials they specify in invitatins t tender. At a mre sphisticated level, buyers and suppliers can wrk cllabratively t rethink

5 IEMA Practitiner Vlume 14 Supprting Infrmatin prduct fferings within a carbn emissins framewrk. By ding this, they can begin t think abut whle life slutins rather than end-f-pipe prducts where waste is generated. This will ultimately lead t reductins in carbn within their supply chain. Fr example, InterfaceFLOR 6 aims t prvide a flring service rather than simply carpet tiles. This has significant benefits as flring tiles can be brught back fr remanufacture at the end-f-life, therefre greatly reducing the amunt f virgin resurces used, waste generated and the carbn intensity f the flring ver its full lifecycle. Ttal cst f wnership (TCO) Ttal cst f wnership is a financial estimate that helps rganisatins t determine direct and indirect csts f a prduct r a system. It is a management accunting cncept that can be used in full cst accunting. Ttal cst f wnership (TCO) appraches can be applied in a greenhuse gas management perspective t help rganisatins t understand financial decisins frm a carbn perspective. At what pint des it becme wrthwhile - bth financially and envirnmentally - t replace r update equipment and machinery as part f a refresh prgramme. Fr example, is it better t cntinue t use lder and less efficient PCs r t update them with new nes that use less energy? A TCO analysis includes the Ttal Cst f Acquisitin and Operating Csts f a capital asset. In this way, running, maintenance and end-f-life csts can be included in the accunting apprach. This leads t a mre cmplete and cnsidered decisin n when t replace r upgrade capital assets.