partnering with suppliers for a competitive edge · 2018. 10. 24. · tfs strives to drive and...
TRANSCRIPT
covestro.com
Partnering with Suppliers
for a Competitive Edge
Kathy Limper
Procurement Sustainability Lead – NAFTA
Covestro LLCOctober 24, 2018
Agenda
2
• Covestro – at a glance
• Sustainability impacts
• Why we do it
• United Nations Sustainable Development Goals / Covestro goals
• Approach to sustainability
• Together for Sustainability
• What we do
• How we do it
• Our approach to engaging suppliers
• Summary
• Q&A
October 24, 2018
Covestro – leading in the world of plastics
October 18 │ Corporate Profile3
Highly innovative
• 1,000 employees
in research and
development
• 80 years of ideas
and inventions
Global player
• 30 sites
worldwide
• Close to
markets,
customers and
suppliers
Large portfolio
• Products and
solutions for
many
industries
• €14 bn in sales
• 16,200
employees1
• Listed on the DAX
stock exchange
Financial year 20171calculated as full-time equivalent (FTE)
Portfolio
October 18 │ Corporate profile
At a glance
+
Polyurethanes Polycarbonates Basic ChemicalsCoatings, Adhesives
& Specialties
Raw materials
for rigid and
flexible foams
Granules and
sheets for a
wide variety of
applications
Raw materials
for coatings,
adhesives and
specialties
4
Environmental, social and ethical problems require solutions from
many industries …
October 2017 │ Sustainability in Procurement
Environmental, social and ethical problems require solutions from
many industries …
Sustainability
performance
&
Business
development
CO2 Emissions
and
Burning Coal
Plastics
in Ocean
Using CO2 as Raw
Material
Zero-Pallets
Loss Initiative
October 24, 20186
• Our suppliers directly influence Covestro’s
quality and reputation for sustainability
• With our partners along the supply chain we can
have a much bigger positive impact on
sustainability topics
• Jointly we have the moral obligation to solve
environmental, social and ethical challenges in
the industry across the world
• Together, we have the responsibility for moving
from ‘do no harm’ to ‘do well’
October 24, 20187
Using our extensive network of
suppliers is a great opportunity to
serve PEOPLE, reduce impact on
the PLANET and enhance PROFIT
Sustainability is more than
an ambitious target to us
Sustainability cannot be achieved by Covestro in isolation, but
requires collaboration across the supply chain.
Covestro sustainability goals 2025
Aligned with UN SDGs
Research & Development
Procurement
Production
Our R&D project portfolio aligned with UN Sustainable
Development Goals
100 % of suppliers compliant with our sustainability
requirements
Reduce specific CO2 emissions by 50%
Products on the market
10 million people in underserved markets reached through
our business solutions
We aim to get the most value out of the carbon employed
Across the value chain
8October 24, 2018
Covestro Policies
Sustainability is integrated in all Covestro policies and specified in its own policy
We believe in the principle of the “three Ps”: “People, Planet and
Prosperity”
We always consider the product life cycle in its entirety
We are committed to finding ways of contributing towards reaching the United
Nations Sustainable Development Goals (SDGs)
We develop and foster collaborations with external partners
We set high standards that are applicable globally
Value creation Sustainability Innovation People HSEQ Compliance
9
http://covestro.net/sites/BMSON/news/news/Pages/29689456_EN.aspx
http://corporate-policy.covestro.net/view.aspx?id=09e2en011003ed22
October 24, 2018
Sustainability requirements of any company derive from
international and national standards…..
Content of any sustainability request is always the same or similar
ENVIRONMENT
HEALTH & SAFETY
• Emissions
• Energy
• Land use
• Water
• Hazardous materials
• …
LABOR & HUMAN RIGHTS
• Child Labor
• Forced Labor
• Working Conditions
• Occupational Health &
Safety
• …
COMPLIANCE
• Business Integrity
• Corruption & Bribery
• Responsible Marketing
• Intellectual property
• Fair competition
• …
SUPPLY CHAIN
• Sustainable Procurement
Processes
• Conflict Minerals
• Sustainable Material
Sourcing
• …
Customers request Covestro to sign their “Supplier Code of Conduct”, fill out a questionnaire or undergo
an on-site audit. Those requests always include e.g.
National LawsUN Global
Compact
Industry specific
Standards e.g.
Responsible Care
Initiative
International
Labor
Organization (ILO)
International
Organization for
Standardization
(ISO)
Others
October 24, 201810
We use TfS to meet the requirement for supplier evaluation to ensure we do business with like
minded companies.
This was cited as a best practice during our certification audit.
Responsible Care metrics include sustainability aspects such as GHG, energy intensity, and
waste reuse/recycle.
Sites that have certified to RCMS or RC14001 receive credit for this during a TfS audit, reducing
the latter audit time by up to 75%.
We sponsor new Responsible Care Partners and advise them on how to embed these principles
into their operations.
Responsible Care and Sustainability Intersect
Together for Sustainability Metrics
Audits Supply Chain11
Overview Together for
Sustainability (TfS)
12
What we do from internal Operations to including the Supply Chain
Sustainability
The Chemical Initiative for Sustainable Supply Chains
in own operations,
own business,
solutions and products,... Complex global supply chains and global interdependency
Multiple challenges in the supply chain e.g.:
- Social issues
- Environmental issues
- Governance practices
Sustainability
in the Supply Chain
Multiple Risks for customers e.g.:
- Supply security
- Reputational risk
- Regulatory risk
Sustainability
13 October 24, 2018
October 24, 201814
How we do it: Together we have already started to lay the
foundation of sustainable success in our business…
Strategic Commodities
Intermediates & Additives
Inorganics & Energy
Technical Goods &
Engineering
Site Services
Business Services
Logistics & Packaging
Contribution to…
Covestro wide
sustainability
projects in close
collaboration with
our suppliers!
Eco Friendly Packaging
…”Make the world a
brighter place.”
FSC Certified Paper
Renewable Resources
Recycled Materials
Renewable Energy
RECS Certificates
Sustainable IT
Bio-Based
Green Fleet
Green Travel
Full Truckload
Warehouse Safety
Alternative Energy
Logistics Footprint
Recycled Packaging
Transp. Distrib. Safety
…
TfS adds sustainability to supply chains’ focus
TfS strives to drive and foster resilience, efficiency,
and sustainability of global supply chains in the
chemical industry.
TfS aims to build the industry’s standard for
sustainable supply chains.
Sustainable supply chains build upon strong
partnerships and commitment of its participants
to protect the environment and the safety and health
of workers, provide fair working conditions,
contribute positively to the livelihoods of workers and
communities, and operate in full compliance with
applicable laws.
15 The Chemical Initiative for Sustainable Supply Chains
Price
Product
Quality
On-time
Delivery
Sustainability
► Management
► Environment
► Health & Safety
► Labor & Human Rights
► Governance
Our approach to engaging suppliers…..
Joint Vision
To improve sustainability
practices in the supply
chain
Key Success Factors for improving Sustainability in the Supply Chain
Key factors to engaging suppliers…..
The Chemical Initiative for Sustainable Supply Chains
Standardized Processes
System designed to manage
multiple challenges and
complexity
Cooperation
Strong partnerships and
commitment of participants
The purpose of
TOGETHER FOR
SUSTAINABILITYis to develop and
implement a global
assessment and audit
program to assess and
improve sustainability
practices within the supply
chains of the
chemical industry.
Cross company
cooperation on
Sustainability in the
Supply Chain of the
Chemical Industry
16 October 24, 2018
TfS is steadily growing
• 21 members as of June 2018
• Global Turnover of TfS companies
in the chemical industry1: € 320 billion
• Global Spend of TfS companies
in the chemical industry2: € 231 billion
1 According to companies’ published financial reports2 Estimated figures
Members
17 October 24, 2018
Summary
18
Moving forward in sustainability leads to substantial benefits for
our suppliers and us.
October 24, 201819
Value
Time
Stay in business today
• Maintain “license to operate”
• Safeguard sustainable
standards for People, Planet
and Profit
• Protect reputation
Lay solid foundation
Advance sustainability
performance further
Ensure competitiveness tomorrow
• Continuously integrate
sustainability in operations
• Continuously improve
sustainable business practices
• Readiness and continuous
anticipation of upcoming
sustainability challenges
Build a competitive edge
Increase profits and
competitiveness
Foster revenue, growth, and
profitability by:
• Collaborating to develop new
business models, products and
services
• Entering new markets
• Anticipating and preparing for future
sustainable requirements
material scarcity, emerging
legislation etc.
Covestro’s approach
Full life-cycle thinking
Our
operations
Our
logistics
Customer
operations
Use of
product
End-of-life
Our raw
materials
PEOPLE
PLANET
PROFIT
Reduce impact from …
Reduce impact from …
Enable our partners
Reduce impact from …
CO2
CO2
Foster Life Cycle Thinking
Drive development of PPP product
solutions (People, Planet, Profit)
20 October 24, 2018
October 24, 201821
Our ambition is to push sustainability performance further
and to develop sustainable solutions by doing business
with our partners along the supply chain.
Building a competitive edge with sustainability.
Backup
22
10,000+ TfS
Assessment
by
TfS
Assessment
Corrective
Action Plan
450+ TfS
Audit
by auditor
TfS Audit Corrective
Action Plan
TfS
Follow-up
Assessment or
Audit
Supplier
Code of
Conduct
Spend &
Risk
Analysis
Follow-up and
manage
business
relationship
Sharing of sustainability assessment and audit reports with all other TfS
members
TfS Member TfS Member
Industries started collaboration to harmonize their sustainability supplier
assessments and audits….
October 24, 201823
Together for Sustainability (TfS) is the Industry Initiative of the chemical industry with today
officially 21 chemical companies as members
It remains each TfS
member’s individual
responsibility to embed
expectations in business
relationships
TfS offers the infrastructure that supports a high quality of third party
sustainability assessments and audits as well as efficient and web-based data
sharing of audit and assessment results.
Sustainability Rating
used as criterion for
individual purchasing
decisions
More information: 1 Pager on TfS or TfS Website
A holistic approach
│ Corporate Profile24
Covestro looks at value creation cycles in their entirety – keeping sustainability in mind at all times.
Especially important to us is to:
▪ Enable improvements for our
partners
▪ Enable savings and increase
benefit
▪ Increase reusability
Focusing on the whole cycle
October 18
PEOPLE
PLANET
PROFIT
Increasing reusability
Enabling improvements for
our partners
Our logistics
Our operations
Our raw materials
End-of-life
Utilization phase
Customer operations
Enabling savings and increasing benefit
… in order to
• mitigate the negative impact
of our actions on the
environment,
• advance society
• and at the same time create
value
Together we can make an impact!
• Contribute to UN Sustainable Development Goals
• Ensure future economic growth
• Enhance durability of products
October 24, 201825