Many companies see the need and are now seeing the business case and profit results for environmental and social sustainability programs and initiatives. A typical progression is for organizations to look at internal initiatives (i.e., energy efficiency), followed by downstream usage of products or services and reuse, recycling and disposal of products. For maximum beneficial impact, organizations need to leverage the supply base. However, not everyone has the power of Wal-mart, GE or IBM to require suppliers to engage. This presentation is an overview of a practical roadmap for extension of sustainability programs upstream to suppliers that companies of various size and status can follow to make progress and move up the curve toward supply chain sustainability.

1. Do the Right Things
A Roadmap to Supply Chain
Sustainability

2. Agenda
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What Is Sustainability?
Why Pursue Sustainability?
Sustainability and Profitability
Why Extend to Suppliers?
The Supply Chain Sustainability Roadmap
Information Resources

3. What is Sustainability?
• Balancing short and long term interests
• The “Triple Bottom Line”
– Social
– Environment
– Economic
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“Sustainable development is development that meets the needs of the
present without compromising the ability of future generations to
meet their own needs.” - Brundtland Commission
Sustainability programs seek to establish
and maintain priorities for social and
environmental impacts on par with
economic or financial performance

4. What Is Sustainability?
• Social
– Human Rights
– Labor Practices
– Fair Operating Practices
– Consumer Issues
– Community Involvement and
Development
• Environment
– Regulatory Compliance
– Pollution Prevention
• Greenhouse Gas Emissions
• Waste Generation
• Incident Prevention &
Mitigation
– Biodiversity
• Economic
– Profitability
– Financial Risk Management
– Sustainable Resource Use
“Natural Capital”
• Water Usage
• Energy usage
• Raw Materials
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Diagram by: Johann Dréo
Also described at People, Planet and Profit

5. What is Sustainability?
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Upstream (Supply)
Suppliers & Distributors
Contract Manufacturers
Inbound Transportation
Raw Materials – selection and
utilization
Supplier operations
Freight optimization
Internal (Production)
Manufacturing/Assembly
Warehousing
Facilities & Equipment
Employees
Energy Efficiency
Pollution Prevention
Waste Reduction
Downstream (Sales)
Customers
Outbound Distribution
Product/Customer Support
Product Usage and Lifecycle
Reverse Logistics
Re-use, Recycling & Disposal
Supply Chain Scope
Sustain-
ability
Impacts
This presentation focuses on the upstream segment with
emphasis on environmental aspects

6. Agenda
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What Is Sustainability?
Why Pursue Sustainability?
Sustainability and Profitability
Why Extend to Suppliers?
The Supply Chain Sustainability Roadmap
Information Resources

7. Why Pursue Sustainability?
It’s the right thing to do for the environment
• Scientific data shows a strong historical relation
between GHG levels & surface temperatures
• As the global economy grows, especially in
developing countries, CO2 emissions grow rapidly
• CO2 levels are already believed to be the
highest in 450,000 years
• Scientists anticipate rising:
– Surface temperatures - as much as
3.6 ⁰C (6.5 ⁰ F) global average
– Sea levels
– Extreme weather episodes
• Even if you are unsure about the science, consider the potential impacts
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“No-one can predict the consequences of climate change with complete certainty; but
we now know enough to understand the risks... Our actions over the coming few decades could
create risks of major disruption to economic and social activity” – Sir Nicholas Stern, “Review on
the Economics of Climate Change”
Source: NOAA “Keeling Curve”
High in previous
warm periods was
300 ppm

8. Why Pursue Sustainability?
Perception is important
• U.S. news stories about major weather events frequently include commentary
about global warming or climate change
• It’s no wonder, since according to a September 2012 study by Yale and George
Mason University…
and
• Therefore, it’s understandable that a March 2012 Accenture survey of 250 global
executives finds:
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“A large and growing majority of Americans (74%, up 5 points since our
last national survey in March 2012) say ‘global warming is affecting
weather in the United States’.”
“Americans increasingly say weather in the U.S. has been getting worse
over the past several years (61%, up 9 percentage points since March).”
“Just over half think that customers are not currently demanding
sustainable products as much as they will in the future” and “over a third
say they can’t keep up with demand for sustainable products”

9. Why Pursue Sustainability?
It’s the right thing to do
for your business
• Improve company image/branding
– Customer loyalty
– Community support
– Attract and retain top talent
• Accelerate product and process innovation
• Meet customer requirements
– Consumer demands for sustainable
products
– “Trickle down” requirements - large, visible
companies pushing requirements upstream
• Reduce likelihood or impact of new regulatory
requirements
– Sustainability leader status may provide opportunities to influence regulations
– Better preparation for compliance under a controlled, lower cost implementation effort
• Increase competitiveness and profitability - many sustainability initiatives also improve
efficiency and reduce costs
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“getting an A-plus from the Global Reporting Initiative, the only
company in our sector, being ranked the No. 3 greenest company in
America by Newsweek, being the only telecom company selected
to the Dow Jones Sustainability Index -- these are the kinds of
things we try to assign a brand value to.” – Dan Hesse, Sprint CEO
“I’m proud to announce a series of steps
and commitments that will make Walmart’s
supply chain, in the United States, here in
China, and around the world, more
sustainable,” Mike Duke, President and
CEO, Wal-Mart Stores, Inc.
“GE’s healthymagination and ecomagination strategies
are aimed at developing and highlighting new
solutions; this thinking is extending throughout our
product development pipeline.” –
www.gecitizenship.com

10. 5/28/2013 10
What Is Sustainability?
Why Pursue Sustainability?
Sustainability and Profitability
Why Extend to Suppliers?
The Supply Chain Sustainability Roadmap
Information Resources
Agenda

11. Sustainability and Profitability
• Financial viability is a critical element to make sustainability
programs sustainable themselves
• If done well, business and sustainability gains go hand in hand
• According to MIT Sloan Management Review in their 2012
research report “Sustainability Nears a Tipping Point”:
– 67% say sustainability related strategies are necessary to be
competitive
– 31% say that sustainability-related actions and decisions added to
their profitability (the “Harvesters”)
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“Harvesters are looking at sustainability as a source of innovation,
increased market share and improved profitability.” - MIT SMR

12. Sustainability and Profitability
Dual Gains are Achievable
• Walmart announced it will add $150 million to it’s bottom line
in FY13 due to sustainability initiatives, additive to $231
million saved in FY12
• GE’s ecomagination program
is generating major revenues
through product innovation
• The Container Store cut transportation costs by 20% on
average, reduced fuel surcharges by half and carbon footprint
by 40% by switching from truck to rail – Wall Street Journal article
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With 34 new products and services
generating $21 billion –ecomagination
revenue continues to grow at twice the
rate of total company revenues.

13. Agenda
5/28/2013 13
What Is Sustainability?
Why Pursue Sustainability?
Sustainability and Profitability
Why Extend to Suppliers?
The Supply Chain Sustainability Roadmap
Information Resources

14. Why Extend to Suppliers?
• Increase leverage for greater environmental benefits
– Multiply your beneficial impacts
• Business gains can be realized through better management
– Collaboration with suppliers to accelerate product innovation
– Focus and discipline yield direct and indirect benefits - similar to
quality management
– Product lifecycle improvements increase reliability and reduce costs
– Supplier efficiency gains may yield cost reductions
• Win * Win * Win – suppliers, your company and the environment
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“If you’re going to focus your strategy on carbon reduction or
environmental impact or social impact you need to engage your
suppliers. Without them you cannot succeed.” - Edgar Blanco , MIT Sloan
“We want to stimulate innovation over the whole lifecycle of our products. And clearly, if our
suppliers can bring innovation into the supply chain, that will help us on a lifecycle basis improve
the performance of our products.” – Peter White, Proctor & Gamble

15. Agenda
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What Is Sustainability?
Why Pursue Sustainability?
Why Extend to Suppliers?
Sustainability and Profitability
•The Critical Foundation
•Planning and Strategy
•Supply Implementation Framework
The Supply Chain Sustainability Roadmap
Information Resources

16. The Critical Foundation
Practicing Sustainability
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Senior
Management
Commitment/
Promotion
Impact
Assessment
(Scopes 1 & 2)
Business Case
Measurement
& Trending
Goals and
Initiatives
Initial Impact
Reduction
Environmental
Management
System
Public
Reporting &
Goals
ISO 14001
Product
Lifecycle
Analysis
Design for
Sustainability
Sustainability
Leadership
Significant
Impact
Reduction
A solid internal sustainability program is essential for:
1) Credibility to encourage and influence supplier sustainability
2) Readiness to assess & support supplier-initiated changes
SuggestedMinimum
InternalProgram

17. The Critical Foundation
Why is the Business Case Important?
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Identify all costs and benefits
• Necessary to get and keep support for the program
effort and costs
Guide areas of focus
• Product innovation, market share, brand image, cost
reduction, risk mitigation, compliance
Drive value capture
• “Companies realizing profits from sustainability
activites are three times more likely to have a
business case than others” – MIT SMR

18. Executive
Leadership
Committed
People
Capable
Processes
Goals &
Objectives
Resource
Allocation
Measurement
& Review
Corrective
Action /
Continuous
Improvement
Individual Improvements Are Valuable…
But it takes a systematic approach to optimize and
maintain performance
Planning & Strategy
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Individual
Initiatives
Sustainable
Change

19. Planning & Strategy
Confirm status of internal program and assess
supply base
Understand your intended scope and leverage
Decide what you expect suppliers to do
Update the business case
Decide how hard you will push
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20. Supply Implementation Framework
Phase 1
Getting
Started
Phase 2
Progress
Phase 3
Maturity
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Focus=Supplier Communication,
Engagement &Initiative Kickoff
Organization=Single Coordinator or
Small Team
Approach=Promotional
Supplier Participation=Voluntary
Key Developments= Program
Documentation, Investigation &
Learning, Initial Successes
Focus=Information & Org/Process
Development
Organization=Business Unit Staffing
Approach=Persistence
Supplier Participation=Necessary
Key Developments=Expansion, Refinement,
Growing Benefits
Focus=Institutionalization & Leadership
Organization=Chief Sustainability Officer
Approach=Sourcing Impacts
Supplier Participation=Required
Key Developments=Organization,
Integration, Performance Leadership
Internal
Sustainability
Foundation

21. Conclusions
You don’t have to be a huge international corporation
• Smaller organizations can have significant impact by leveraging the
supply chain
Progress is feasible without committing major resources
• You don’t have to take on the whole challenge at once
You can and should get started
• Then decide how fast and how far to progress
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22. References
• World Resources Institute – www.wri.org
• Global Reporting Initiative – www.globalreporting.org
• United Nations Global Compact - www.unglobalcompact.org
• US EPA - www.epa.gov/sustainability
• GHG Protocol – www.ghgprotocol.org
• International Standards Organization – www.iso.org (26000 & 14000 standards)
• National Oceanic and Atmospheric Administration – www.noaa.gov, www.climate.gov
• Iternational Panel on Climate Change – www.ipcc.ch
• International Energy Agency - www.iea.org
• MIT Sloan Management Review – “Sustainability Nears a Tipping Point” sloanreview.mit.edu/reports/sustainability
• Dow Jones Sustainability Index - www.sustainability-index.com
• Carbon Disclosure Project - www.cdproject.net
• The Climate Registry - www.theclimateregistry.org
• World Business Council for Sustainable Development - www.wbcsd.org
• C2ES Center for Climate and Energy Solutions (former Pew Center on Global Climate Change) - www.c2es.org
• The Sustainability Consortium - www.sustainabilityconsortium.org
• Green Suppliers Network - www.greensuppliers.gov
• “Long-Term Growth, Short-Term Differentiation and Profits from Sustainable Products and Services” – March 2012,
Accenture
• “Extreme weather and climate change in the american mind” – September 2012, Yale Project on Climate Change
Communication & George Mason University Center for Climate Change Communication
5/28/2013 22

23. Contact Us For More Information
Supply Chain Consulting
Assess – Decide - Deliver
www.transcelerate.com
5/28/2013 23
This presentation is based on a TransCelerate project to develop a
supply sustainability program roadmap for a nationally recognized
sustainability leader and Climate Leadership Award winner