"Why? Drivers for Greening the Supply Chain" - from 8/18 Business & Environment Session, Greening the Supply Chain: Drivers, Challenges and Strategies

1. Greening Your Supply Chain Georjean L. Adams EHS Strategies, Inc. Environmental Initiative BES 8/18/2011 ©2011 EHS Strategies, Inc.

2. Ideal Supply Chain Life Cycle Make Use Supply Recycle 8/18/2011 ©2011 EHS Strategies, Inc.

3. Real Life Emissions, discharges and exposures Make Raw Materials and Energy use LIFE CYCLE IMPACTS Supply Use Recycle Inefficient yield and transfer Safety and toxicity hazard 8/18/2011 ©2011 EHS Strategies, Inc.

4. Why Green Your Supply Chain? dollar savings through energy, materials and waste reduction avoid regulatory costs and liabilities enhanced reputation - brand and employee loyalty customer demand for environmentally preferred/green Reduced impact on the environment 8/18/2011 ©2011 EHS Strategies, Inc.

5. Real Life $ Emissions, discharges and exposures Make $ Raw Materials and Energy use LIFE CYCLE IMPACTS $ $ Supply Use Recycle Inefficient yield and transfer Safety and toxicity hazard $ 8/18/2011 ©2011 EHS Strategies, Inc.

6. Inputs Outputs Energy Product Raw Materials Emissions Solid & Liquid wastes Wastewater waste 8/18/2011 ©2011 EHS Strategies, Inc.

7. Green Inputs Green Outputs energy product RAW MATERIALS wastes 8/18/2011 ©2011 EHS Strategies, Inc.

8. Greener Resources Renewable Low “embedded” energy Low GHG/carbon footprint Low toxicity Biodegradable Recycled content Recyclable 8/18/2011 ©2011 EHS Strategies, Inc.

9. Green and Lean Reduce Inputs/Waste Recycle/Reuse Wastes energy PRODUCTS Raw materials Wastes 8/18/2011 ©2011 EHS Strategies, Inc.

11. Inventory

12. Transportation

13. Defects

14. Over processing

15. Waiting

16. Energy [GHG, nonrenewable fuels]

17. Materials and water consumption

18. Waste - hazardous and solid

19. Air pollution

20. Water pollution8/18/2011 ©2011 EHS Strategies, Inc.

21. Why Green Your Supply Chain? dollar savings through energy, materials and waste reduction avoid regulatory costs and liabilities enhanced reputation - brand and employee loyalty customer demand for environmentally preferred/green reduced impact on the environment 8/18/2011 ©2011 EHS Strategies, Inc.

22. Why Green Your Supply Chain? dollar savings through energy, materials and waste reduction avoid regulatory costs and liabilities enhanced reputation - brand and employee loyalty customer demand for environmentally preferred/green reduced impact on the environment 8/18/2011 ©2011 EHS Strategies, Inc.

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24. Why Green Your Supply Chain? dollar savings through energy, materials and waste reduction avoid regulatory costs and liabilities enhanced reputation - brand and employee loyalty customer demand for environmentally preferred/green products (esp. B2B) Reduced impact on the environment 8/18/2011 ©2011 EHS Strategies, Inc.

25. Customers Want to be Green B2B, Government and Consumers Environmentally preferred purchasing Bio-based Renewable Recycled content Recyclable Low energy Less toxic Reduced packaging 8/18/2011 ©2011 EHS Strategies, Inc.

26. B2B Demands for Information Regulatory Compliance Declarations RoHS, REACH SVHC Inventories Conflict Minerals Customer Black Lists Regulatory + company “hit” list OEM data bases – IMDS (auto), BOMcheck (electronics) Full Material Declaration Rapid response to new listings Life cycle assessment 8/18/2011 ©2011 EHS Strategies, Inc.

27. Sustainability Index Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions Material Efficiency: Reducing Waste and Enhancing Quality, Packaging Natural Resources: Responsibly Sourced Raw Materials People and Community: Ensuring Responsible and Ethical Production Sustainability Consortium with 30 other firms 8/18/2011 ©2011 EHS Strategies, Inc.

28. Sustainable Apparel Coalition http://www.apparelcoalition.org/http://ecoindexbeta.org/ Adidas …Environmental Defense Fund…Gap Inc., HanesBrands…JC Penney, Kohl’s Department Stores… Levi Strauss & Co… L.L.Bean, Marks & Spencer … Nike, Nordstroms… Patagonia… PUMA, REI … Target, Timberland, USA DuPont, EPA … Walmart Engage upstream suppliers to collect data for index Minimal level of specified best practices Share best practices to improve whole industry supply chain 8/18/2011 ©2011 EHS Strategies, Inc.

29. Supplier Scorecard Energy Usage – electric, fuel, renewable Water Usage – input/withdrawal, output/discharge Waste Disposal – hazardous and nonhazardous, recycled Kyoto gases – direct and indirect Annual output used to calculate intensity of above P&G Sustainability Ideas & Initiatives Fines & Sanctions Environmental Management System 8/18/2011 ©2011 EHS Strategies, Inc.

30. Kaiser Permanente Supplier Scorecard Corporate: sustainable policy, reporting, ISO, local food, waste, recycling, GHG, EPEAT, Energy Star, materials composition SKU: BPA, RoHS, halogens, phthalates, Prop 65, antimicrobials, hazardous waste, reusable, recycled content, composition 8/18/2011 ©2011 EHS Strategies, Inc.

31. Life cycle assessment of their products Cradle to cradle two-hour tour of suppliers' facilities documentation of the supplier's environmental policies and performance follow-up done every 12 to 18 months 8/18/2011 ©2011 EHS Strategies, Inc.

32. Suppliers shall commit to reducing the environmental impact of their designs, manufacturing processes, and waste emissions. 8/18/2011 ©2011 EHS Strategies, Inc.

33. Roadmap to Sustainability: Companies will ensure that suppliers meet the same environmental and social standards as the company has set for its internal operations - including disclosure of goals and performance metrics 8/18/2011 ©2011 EHS Strategies, Inc.

34. Why Green Your Supply Chain? dollar savings through energy, materials and waste reduction avoid regulatory costs and liabilities customer demand for environmentally preferred/green enhanced reputation - brand and employee loyalty reduced impact on the environment Sustainability (green + economics + social) 8/18/2011 ©2011 EHS Strategies, Inc.

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36. Ask Yourself Do you understand the environmental/health impacts associated with your products throughout their life cycle? Who your suppliers are? What is in your raw materials and products? What happens downstream - distributors, users and disposal? What do your customers want? 8/18/2011 ©2011 EHS Strategies, Inc.

37. Benchmark Standards: Global Reporting Initiative, ISO 14000, Ceres, Natural Step, Responsible Care Relevant business leadership groups Identify your strengths and weaknesses 8/18/2011 ©2011 EHS Strategies, Inc.

38. Communicate with Supply Chain Develop shared goals and targets Measure Evaluate and improve 8/18/2011 ©2011 EHS Strategies, Inc. Get comfortable with TRANSPARENCY

39. Resources Case Studies: http://www.pprc.org/pubs/grnchain/casestud.cfm Green Suppliers Network: http://www.greensuppliers.gov/ EPA Lean: http://epa.gov/lean MnTAP: http://www.mntap.umn.edu Network for Business Sustainability http://nbs.net/knowledge/supply-chain/ http://Ehsstrategies.com 8/18/2011 ©2011 EHS Strategies, Inc.