GREENING THE SUPPLY CHAIN in E&P

Transcription

1 GREENING THE SUPPLY CHAIN in E&P PETROTECH JULY 3, 2013 Dr. SATISH CHAND CM&SG, ONGC

2 Greening the vendor chain Agenda q The concept- a bird s eye view q Who sparked the interest? q What is it? q Why is it? q How can it be done? q Who benefits? q ONGC actions & plans

3 Concept (Bird s eye view) Environment management Adopt green practices Green supply chain Focus on material content Supply chain management 3

4 Who sparked the interest

5 What Is It Suppliers Purchaser Procurement for Reduce, Reuse, Recycle & replenish Cost Effectiveness over Life Cycle Toxic Use Reduction Efficient use of natural resources Enhanced use of renewable energy Increase process and product efficiency Stronger Compliance Unbiased Verification

6 Why is it Global outlook Emerging national trends National policy & progamme 6

7 Global Outlook q Climate change negotiations outcome KP2 continues up to 2017, discussion continued till 2015 and implementation till 2020 q Governments, public sector and the private sector are increasingly adopting environmentally preferred purchasing practices q Companies are actively promoting environmental purchasing q GHG mitigation is important for energy intensive companies Greening the vendor chain will continue to expand

8 Imperatives & Emerging Trends: National q PM s NAPCC - 8 missions q Voluntary reduction of emission intensity by 20-25% by 2020 w.r.t q NMEEE and PAT scheme q RPO and REC q 12th Five year Plan 04 July

9 National policy & programs q Guidelines on sustainable development for CPSE s - Department of Public Enterprises (DPE) q National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (NVG) q SEBI mandate q BSE GREENEX qgreen Public Procurement (GPP) EU-India Action Plan Support Facility(APSF) Project 04 July

10 Greening Vendor chain in E & P industry The drivers q E & P companies qoil & gas have very narrow product quality differentiation qsuppliers and contractors to the oil & gas industry, improve their environmental performance and increase their competitiveness. qraise awareness of the benefits achieved through greening the supply chain, to other oil and gas companies. q E & P business focus to coordinate activities to create the most value for customers 04 July

11 How to initiate Greening the vendor chain? Establish action plan and guidelines for instituting changes on pilot scale and to be rolled out across enterprise in phased manner. Identify the values-based criteria in the corporation such as, green values (less resource use, ability of the material to be reused and / recycled, environmental practices to be followed by the supplier etc.) and decide the metrics to be used to assess and measure suppliers against these values. Review environmental reports of bidders/vendors (they might produce) to see if and how they are improving their environmental performance. Encouraging broad end user adoption - The success of the green vendor s chain heavily depends on end user adoption. Needs to be tailored to the vendor relationship, type of supplies and environmental objectives

12 How to Approach: 1) Partner with vendors 2) Environmental procurement and product specifications 3) Set vendor standards and evaluation protocols 4) Evaluate vendors for environmental management and business practices 5) Outreach and assistance to vendors working to meet customer s environmental standards 6) Implement vendor service strategies

13 Efficient vendor chain strategies

14 Greening vendor s chain: Guidelines for vendors Achieving environmental efficiency by Saving resources and use of renewable & sufficiently available resources Design for product increased durability, reuse & recycle Minimizing use of harmful substances & environmental impact of product in use Implementing environmental friendly packaging &logistics Environmental friendly disposal of non-recyclable material Vendors should aim to demonstrate leadership by joining national/global platforms and publicizing the evidence of reduction in greenhouse gas emissions and sustainable development initiative

15 Government Role Increased support for the early stages of innovation Closing the financing gap for growing low carbon companies Greater co-ordination on low carbon innovation Measures to encourage organizations to take advantage of greater resource efficiency and energy savings Facilitating the low carbon transition through a transformation of infrastructure, Equipping the workforce with the skills that will allow them to seize the opportunities of the low carbon economy Driving demand for low carbon products through procurement and by providing consumers with information and incentives to encourage them to choose lower carbon options Forward Commitment Procurement Development of standards Introduction of consumer incentives Creating a climate resilient economy

16 Expected Benefits Tangible Intangible Others Profitability Asset utilization Service level Customer satisfaction Alliance technology Reputation Continuity Improve agility Increase adaptability Promote alignment 16

17 ONGC Perspective Vision: To be global leader in integrated energy business through sustainable growth, knowledge excellence and exemplary governance practices. Mission to be Carbon Neutral ONGC will continually strive to reduce CO2 emissions across its activity chain with the objective of achieving carbon neutrality A Structured Approach Formation of Carbon Management & Sustainability Group Corporate policies on Climate change and sustainability Greening of vendor chain Water management Sustainable development Internalizing the concept in Management System All ONGC installations are 100% QHSE certified - All future project & procurement shall have carbon footprint embedded

18 ONGC Initiatives Corporate wide GHG accounting Develop Green House Gases (GHG) inventory, accounting and information system of ONGC Identify and develop GHG programs and projects Monitor the existing/ ongoing registered CDM Projects Develop climate protection strategy and policy Strategic management of Climate Change and business opportunity thereof Develop sustainability reporting

19 Green projects: ONGC q GFR Projects qcorporate policy towards zero flaring qinterventions adopted: qpipelines networking, Using compressors, Using ejectors qadopting innovative measures as GTW (Gas to Wire) q Global Methane Initiative Projects q CDM Projects qten UNFCCC registered projects two under registration q Green Buildings qfour green buildings- Delhi, Mumbai, Kolkata and Dehradun q Renewable energy q51 MW wind turbine project in the state of Gujarat (India s largest CDM project on renewable energy CER pa for 21 years) q102 MW wind turbine project in the state of Rajasthan under commissioning

20 Greening the vendor chain ONGC efforts Phase 1 Implemented: q Support & promote e-tendering, communication & e-payments. q ONGC Policy was displayed on tender website for awareness and compliance. q ONGC policy was circulated to vendors as part of instructions. q Presented concept on Climate Change & Sustainability and Greening the vendor chain in 9 th Vendors meet on July 24, 2010 in Mumbai. q Displayed background paper on ONGC tender website. q Conducted awareness workshops for vendors and MM personnel

21 ONGC s Plan hase II : (indicative..) Bidder to attach his Climate Change and Sustainability Policy along with bid and confirm in matrix. This will not be a rejection criterion. Focused approach based identification of the select performance indicators / parameters and enhanced indirect parameters (to be discussed ) and approval of EPC along with format for bidders to fill in (for six months). Seek information from bidders in the bid in the format approved by the EPC and then circulated by PMC. Select performance indicator parameters and enhanced indirect parameters for creating information base (for a period of next six months). All these parameters shall be such that they are verifiable and certified. Introduction of Greening specifications in bid documents as mandatory information though not part of BEC (for a period of next six months). Introducing Greening specifications as part of BEC

22 Way Forward Actions Strengthen vendor relation Share information & priorities Balance commitment and competition Build long term partnership Understand your vendors business too Negotiate to win-win agreement Come together on value 04 July

23 Conclusions qcarbon management is the key qexpectations from vendors: Joining goal on SD qmodest beginning but long way to go qalignment of thinking process necessary qreorganization of business processes important

24 THE OPPORTUNITY TO MAKE A DIFFERENCE HAS NEVER BEEN GREATER