promoting energy savings and ghg mitigation through industrial supply chain initiatives

| iipnetwork.org

eceee Industrial Summer Study September 14, 2012, Arnhem Amélie Goldberg, Julia Reinaud, Emelia Holdaway, Siobhan O’Keeffe

PromoHng Energy Savings and GHG MiHgaHon through Industrial Supply Chain IniHaHves

Sharing best pracHces for the low carbon future

| iipnetwork.org

Purpose and IntroducHon


Supply chain iniHaHves a promising means to achieve energy and climate goals among a number of disparate businesses and across naHonal borders

Benefits for buyers •  Can extend exisHng CSR/sustainability efforts if they are able to exert significant leverage with their industrial suppliers

•  Many are sHll not exploiHng opportuniHes fully

Benefits for suppliers

•  Energy savings, producHvity improvements, co-‐benefits

•  Secure long-‐term contracts with buyers and aUract new buyers.

| iipnetwork.org

Ten SCIs profiled


… to explore a range of approaches, industrial sectors targeted and global reach

1.  Walmart

2.  Ford 3.  Prorail 4.  Suzhou Energy Efficiency Star scheme

5.  IKEA 6.  SKF 7.  BriHsh Gypsum

8.  General Electric 9.  BASF 10. Home Depot and Intertek’s Think Green IniHaHve

iipnetwork.org/databases/supply-‐chain

| iipnetwork.org

Key Types of Supply Chain IniHaHves


Type DescripHon ExisHng Examples

Mandatory performance requirements

The buyer requires the supplier to comply with set criteria. Ford, SKF

Purchasing approaches Buyer develops procurement policies whereby suppliers score higher or lower or are advantaged or disadvantaged in the procurement process

ProRail CO2 Performance Ladder

Repor;ng and monitoring

Suppliers must report their emissions or energy use to their buyers. BASF

Subsidised audits On-‐site audits (full or parHally funded by the buyer) to determine a supplier's GHG/energy performance.

Walmart, IKEA

Capacity building and implementa;on support

Training, workshops, implementaHon support and other measures to improve suppliers’ ability to implement energy efficiency projects and improve their performance.

General Electric, Walmart

Supplier forums or coali;on

Conferences, meeHngs, webinars or online forums where buyers can communicate prioriHes, and suppliers can ask quesHons, receive feedback and share best pracHce amongst themselves.

Walmart, Intertek (Home Depot)

Labeling Labeling of energy performance as an informaHonal tool for buyers. Suzhou EE Star Program

External facilita;on tools

Plaiorms that help connect or match GHG/energy performance of suppliers with buyers' interests or criteria.

Intertek (Home Depot)

| iipnetwork.org

Examples of case studies


General Electric •  “Integrity Program”, onsite audits and “Treasure Hunts”

•  Local training programs and supplier summits in partnership w ISC, WBSCD, Guandong Academy

IKEA •  IWAY code of conduct for suppliers with regular on-‐site audits

•  WWF collaboraHon on a ‘Developing Climate PosiHve OpportuniHes for Suppliers’

The Home Depot •  Works through Intertek’s TGI – on-‐site assessments, idenHficaHon and implementaHon of EE measures

SKF •  Supplier cerHficaHon of ISO 14001 (and recently ISO 50001 announced) •  Energy Challenge and Energy Excellence awards

| iipnetwork.org

Impacts of selected examples


GE •  Between 2009 and 2011, the supplier’s carbon emissions fell by 19%, through energy saving measures and facility upgrades following its audiHng and capacity building programme.

IKEA •  Under the IKEA-‐WWF partnership, supplier reduced GHG emissions by 35% between 2009 and 2010 through furnace upgrades and fuel switching.

•  Another texHle supplier in Bangladesh idenHfied and implemented a number of efficiency measures in 2011 that reduced energy consumpHon by 29% and cut CO2 emissions by 25%.

Intertek (Home Depot) •  TGI program cost US$43,500 (paid by the suppliers), and achieved overall cost savings of over $US3 million.

iipnetwork.org/databases/supply-‐chain

| iipnetwork.org

Some Lessons learnt


Procurement and contractual arrangements can encourage suppliers more fully

InternaHonally recognised tools Partnership, fostering trust and implementaHon support

MulH-‐stakeholder collaboraHon including third party involvement

QA, transparency and verificaHon – external plaiorms

| iipnetwork.org Sharing best pracHces for the low carbon future

Success factors

| iipnetwork.org

Conclusions and Discussion


•  Wide diversity of approaches and new models emerging •  Many are in early stages and “learning by doing”

•  Varied transparency & verificaHon approaches

•  EnMS (e.g. ISO 50001) and other internaHonally recognised tools are emerging as promising tools

•  Ouen accompanied by MRV support to substanHate claims

•  How to promote ISO 50001 as a supply chain tool?

•  What role for governments? (e.g. Japan, Netherlands) •  Extending obligaHons for large companies to take acHons across the supply chain

| iipnetwork.org

Thank you

Industrial Supply Chain IniHaHves Database: www.iipnetwork.org/databases/supply-‐chain

In collaboraHon with Ecofys UK. Amelie Goldberg [email protected] Julia Reinaud [email protected] Emelia Holdaway (previously with Ecofys UK) Siobhan O’Keeffe (previously with Ecofys UK)


promoting energy savings and ghg mitigation through industrial supply chain initiatives

Investor Relations