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Responsible Supply Chain

Responsible Supply Chain. Responsible supply chain - what is it about ?. Responsible supply chain management refers to the integration of corporate responsibility (CR) issues into procurement practices of an organisation. It can take the form of:

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Responsible Supply Chain

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  1. Responsible Supply Chain

  2. Responsible supply chain - what is it about ? • Responsible supply chain management refers to the integration of corporate responsibility (CR) issues into procurement practices of an organisation. • It can take the form of: • Integration of SEE (social, environmental and economic) criteria across each step of the procurement process • Fair relations with suppliers © 2008 BITC - All rights reserved

  3. The issues – general overview • Social issues in the supply chain refer to social conditions in which procured goods and services are produced • Economic issues in the supply chain means in this context taking into consideration the economic impacts of procurement strategy on the supply market • Environmental issues in the supply chain refer both to • environmental conditions in which goods and services are produced • preferment for eco-friendly goods and services • Compliance w/ Human Rights incl. wages (cleaning services) • Suppliers’ excellence on H&S (couriers) • Other social issues (e.g. • migrant workers, skills, diversity) • Fair treatment of suppliers incl. payment terms (all) • Local sourcing (catering) • Suppliers development (all) • Bribery & Corruption (all) • Preference for eco-friendly goods and services (paper) • Suppliers’ performance: consumption of non-renewable, greenhouse gas & other emissions, waste etc. (events) © 2008 BITC - All rights reserved

  4. The business case © 2008 BITC - All rights reserved

  5. 2007 Global performance on green supply chain Office based companies L S A ? © 2008 BITC - All rights reserved

  6. Responsible Supply chain management model • Start at Companies’ overall strategic level to ensure consistent objectives and targets are set • CR issues should feed strategic sourcing analysis (processes, spend, supply base etc.) • Fully integrate CR in existing tools and processes in order to target comprehensively purchasing categories © 2008 BITC - All rights reserved

  7. How to get started? • Undertake a simple spend analysis and define the current baseline • Identify key issues on your main categories • These initiatives are extremely useful to build the big picture … • …an ideal way to get started ! The baseline and the spend analysis results should help you to prioritise future action Baseline (ongoing initiatives) Detailed spend analysis Opportunities & risks mapping Prioritised actions in a dedicated action plan Implementation of prioritised action © 2008 BITC - All rights reserved

  8. How to get started? • To be successful… • Focus on easy initiatives first (i.e. Quick wins on ‘obvious’ categories) • Set achievable targets • Liaise with internal stakeholders and meet your top suppliers • Manage lessons and then, increase the scope of the project Develop global strategy Develop case & execute Initiate projects Generate ideas © 2008 BITC - All rights reserved

  9. Quick win: example on fleet ILLUSTRATION • Extend selection criteria: -environmental: CO2, particles, NOx -social (free external safety ratings based on crash tests ) • Choose most competitive vehicles • Work with suppliers on a long term basis to improve data collection on vehicles • Results expected: • Total cost • Environmental impacts • Safety Fuel consumption & CO2 emissions By sub-category of vehicles © 2008 BITC - All rights reserved

  10. Towards a collaborative approach © 2008 BITC - All rights reserved

  11. Towards a collaborative approach • Opportunities of collaboration might be in the following area • Leadership: agree on the issues and common standards • Implementation: share knowledge and tools • Continuous improvement: monitor progress and benchmark against peer companies • Limits - where you can not collaborate (examples) • Exchange detailed information on price & costs • Any perceived anti-competitive initiative LEADERSHIP IMPLEMENTATION CONTINUOUS IMPROVEMENT © 2008 BITC - All rights reserved

  12. Towards a collaborative approach Applying sustainable procurement concepts to legal services firms • Our indirect impacts are the most significant • Tension between upstream and downstream impacts (perceived client demands) • What is a realistic scope – environmental andsocial impacts – given the focus of international reporting tools and indices? • Sustainable procurement must be embedded in decision making throughout the supply chain: from defining need to supplier management • Are different models required for small vs larger firms? • How can we tap into the key drivers for suppliers: certainty and economies of scale? • Engagement vs exclusion

  13. Towards a collaborative approach Key issues/challenges faced by legal services firms Identification, measurement & verification of environmental and social impacts Responsibility / Accountability • Understanding the issues • Lack of existing systems to measure performance • Tracking & measurement is difficult • Decentralised procurement functions Engagement with suppliers / knowledge of sustainable procurement Contractual requirements • Both law firms & suppliers are often inexperienced in relation to sustainable procurement • Awareness of the ways in which their suppliers are able to assist in relation to improving environmental / social performance & the process for engagement • Ability to choose a lower environmental / social impact product Scope for influencing standards of supplier conduct Encouraging competition between firms on sustainability • Perceived insufficient leverage to set minimum environmental / social standards • Reluctance to undermine relationships with existing suppliers • Suppliers need strong consumer signals • A perception that law firms' purchasing decisions are driven entirely by individual client demands, rather than by cultural and other factors • Fear of public embarrassment if a firm performs poorly

  14. Towards a collaborative approach Some ideas for discussion in your workshop groups • Scope: from carbon to broader sustainability objectives, including social issues? • Collaborating with other industries / lobbying for regulations / education? • A common vision on sustainability for the legal services industry: what signals do we need to send to suppliers and clients? LEADERSHIP • Guidance on understanding the supply chain and its most significant impacts? • Developing best practice guides for sustainable procurement in law firms / policies and tools to measure supplier performance? • Raising team capacity through workshops and seminars by leaders in sustainable procurement? IMPLEMENTATION • Building a baseline: at what level is the legal services industry performing? Is an index tailored to the particular characteristics of law firms required? • Monitoring progress by setting short and long term targets • Engaging with major corporate clients as to how to improve sustainability and client service CONTINUOUS IMPROVEMENT

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