Who Put the “S” in RL&SC? Using Sustainability to Optimize Reverse Logistics & Making Reverse Logistics part of your Sustainability Strategy Carol Baroudi Reverse Logistics & Sustainability Council 2016 Conference – Dallas, TX

2 The Issue: Silos Make Strangers of Would-be Allies Returns / Customer Service Corporate Communications Facilities Product Design Supply Chain

3 Common Goals for Reverse Logistics Reduce loss from returned product –Restock or remarket Reduce risk of counterfeit Increased customer satisfaction Increase profit

4 Common Goals for Sustainability Eliminate Waste –Reuse, recycle, avoid landfill and incineration Reduce Emissions –Reduced energy spend –Reduce transportation Green the Supply Chain Engage all Stakeholders Improve Product Design Protect the Brand

5 What Your Company is Saying about Sustainability and What Reverse Logistics has to say about it “We're constantly looking for ways to further reduce our environmental impact.” –Reverse Logistics can improve waste reduction, energy consumption, and stakeholder engagement “We’re careful about our recycling and disposal practices for electronic waste as well as merchandise and materials we use in our supply chain.” –Reverse Logistics can keep hazardous materials out of landfill and even find a new life for many electronics.

6 What Your Company is Saying about Sustainability and What Reverse Logistics has to say about it “Product Innovation to reduce environmental impacts” –Reverse Logistics can provide valuable feedback to product design for better products with less environmental impact. “Recycle/Reuse to reduce impacts” –Reverse Logistics can all but eliminate waste finding new life through refurbishment and repair, recycling commodities that can be used in new products.

7 What Your Company is Saying about Sustainability and What Reverse Logistics has to say about it “Upstream transportation and distribution of freight are reported as Scope 3 emissions” –Making transportation more efficient is a sustainability win “More than ever, we are aligning our citizenship goals with our business goals to create the most far-reaching, impactful programs possible. –Reverse Logistics can make citizenship promises real – real waste reduction, real energy and emissions reductions

8 Greater efficiencies save money and the environment –Transportation is a key target Better product design can mean fewer returns and improved product stewardship –Design without toxics makes for much easier/cleaner disposition and improved worker safety Improved customer satisfaction –Sustainability’s responsibility to people –Strong returns policy and practice improves customer satisfaction Goals Common to Reverse Logistics and Sustainability

Reverse Logistics & the Circular Economy

10 Reverse Logistics: The Key to the Circular Economy “Disposition management is the key to maximizing the value of assets flowing through an organization’s reverse logistics pipeline.” – Curtis Greve / Jerry Davis You can’t return what you don’t control What you do with what you get determines: –Your ultimate profitability –Your environmental outcomes –Your brand impact

11 From Linear to Circular From Take/Make/Toss to Make/Use/Reuse/Upcycle/Recycle

Mark Buckley VP Environmental Affairs Staples “Staples aspires to become our customers sustainable business solutions partner by offering a wide range of products and services that help them meet their sustainability goals and objectives and responsibly lessen their impact on the planet. We do this by thinking about these impacts throughout a product life cycle and our relationships with our customers as a part of an interdependent global supply chain.”

Ink and Toner Recovery Utilizing Reverse Logistics Staples has recycled 500 million ink and toner cartridges throughout our system since 2005 The majority of this recovery was via Staples Contract deliver trucks picking old cartridges from businesses while making deliveries and backhauling them for remanufacture or recycle Cartridges collected at Retail were also backhauled and consolidated on empty retail delivery trucks to Staples Distribution Centers.

Ink and Toner Recovery

Remanufacture, Recycle and “Downcycle” Sort empty cartridges Disassemble non-usable Grind plastic Step 1:Step 2: Ship recycled plastic pellets to manufacturer Step 3:Step 4: Recycled plastic pellets used to injection mold new parts New product is assembled and ultimately sold at Staples

Arrow Value Recovery – Global Reverse Logistics and the Circular Economy

17 Standard Product Recovery Process - Configurable to Customer requirements

18 What Arrow Value Recovery does for Electronics Test, repair, refurbish, redeploy, repurpose, resell Harvest usable parts, demanufacture, reclaim all that’s reclaimable

19 Back into the Flow of the Circular Economy

Finding your Allies

21 Where do you Start? Who leads –Corporate social responsibility? –Sustainability? –Corporate communications? –Product design? If it’s not obvious inside your organization –Check your website –Check LinkedIn –Call me

22 And Bring This… “Sustainability executives will find this…very helpful because … sustainability efforts will become financially viable when coupled with a quality reverse logistics solution.”

Arrow Value Recovery Carol Baroudi Global Sustainability and Compliance