Responsible Supply Chain

Responsible supply chain - what is it about ? ›Responsible supply chain management refers to the integration of corporate responsibility (CR) issues into procurement practices of an organisation. ›It can take the form of:  Integration of SEE (social, environmental and economic) criteria across each step of the procurement process  Fair relations with suppliers © 2008 BITC - All rights reserved

The issues – general overview ›Social issues in the supply chain refer to social conditions in which procured goods and services are produced ›Economic issues in the supply chain means in this context taking into consideration the economic impacts of procurement strategy on the supply market ›Environmental issues in the supply chain refer both to  environmental conditions in which goods and services are produced  preferment for eco-friendly goods and services Preference for eco-friendly goods and services (paper) Suppliers’ performance: consumption of non-renewable, greenhouse gas & other emissions, waste etc. (events) Compliance w/ Human Rights incl. wages (cleaning services) Suppliers’ excellence on H&S (couriers) Other social issues (e.g. migrant workers, skills, diversity) Fair treatment of suppliers incl. payment terms (all) Local sourcing (catering) Suppliers development (all) Bribery & Corruption (all) © 2008 BITC - All rights reserved

The business case Business casesExamples Exposure to reputation risksLiving wages issues in the supply chain Exposure to legal risks Non compliance with standards related to bribery & corruption Exposure to operational risks Supplier’s failure to comply with quality standards Definition of business needs Select more efficient product / reduce consumption Supplier loyalty Become your strategic suppliers’ best customer Attract & retain talent A CR approach can make a difference in the recruitment of experienced staff Competitive advantages Both public & private sector assess suppliers on CR, incl. supply chain issues Internal cohesion Encouraging & fostering collaborative actions in the company © 2008 BITC - All rights reserved

2007 Global performance on green supply chain Office based companies L S A ? © 2008 BITC - All rights reserved

Responsible Supply chain management model ›Start at Companies’ overall strategic level to ensure consistent objectives and targets are set ›CR issues should feed strategic sourcing analysis (processes, spend, supply base etc.) ›Fully integrate CR in existing tools and processes in order to target comprehensively purchasing categories © 2008 BITC - All rights reserved

How to get started? › Undertake a simple spend analysis and define the current baseline › Identify key issues on your main categories › These initiatives are extremely useful to build the big picture … › …an ideal way to get started ! The baseline and the spend analysis results should help you to prioritise future action Baseline (ongoing initiatives) Detailed spend analysis Opportunities & risks mapping Prioritised actions in a dedicated action plan Implementation of prioritised action © 2008 BITC - All rights reserved

How to get started? Generate ideas Initiate projects Develop case & execute Develop global strategy › To be successful… › Focus on easy initiatives first (i.e. Quick wins on ‘obvious’ categories) › Set achievable targets › Liaise with internal stakeholders and meet your top suppliers › Manage lessons and then, increase the scope of the project © 2008 BITC - All rights reserved

Quick win: example on fleet ›Extend selection criteria: -environmental: CO2, particles, NOx -social (free external safety ratings based on crash tests ) ›Choose most competitive vehicles ›Work with suppliers on a long term basis to improve data collection on vehicles ›Results expected:  Total cost  Environmental impacts  Safety Fuel consumption & CO2 emissions By sub-category of vehicles © 2008 BITC - All rights reserved

Towards a collaborative approach © 2008 BITC - All rights reserved

Towards a collaborative approach ›Opportunities of collaboration might be in the following area  Leadership: agree on the issues and common standards  Implementation: share knowledge and tools  Continuous improvement: monitor progress and benchmark against peer companies ›Limits - where you can not collaborate (examples)  Exchange detailed information on price & costs  Any perceived anti-competitive initiative LEADERSHIP IMPLEMENTATION CONTINUOUS IMPROVEMENT © 2008 BITC - All rights reserved

Towards a collaborative approach ›Our indirect impacts are the most significant ›Tension between upstream and downstream impacts (perceived client demands) ›What is a realistic scope – environmental and social impacts – given the focus of international reporting tools and indices? ›Sustainable procurement must be embedded in decision making throughout the supply chain: from defining need to supplier management ›Are different models required for small vs larger firms? ›How can we tap into the key drivers for suppliers: certainty and economies of scale? ›Engagement vs exclusion Applying sustainable procurement concepts to legal services firms

Towards a collaborative approach Key issues/challenges faced by legal services firms Identification, measurement & verification of environmental and social impacts Contractual requirements Responsibility / Accountability Scope for influencing standards of supplier conduct Engagement with suppliers / knowledge of sustainable procurement Encouraging competition between firms on sustainability  Understanding the issues  Lack of existing systems to measure performance  Tracking & measurement is difficult  Ability to choose a lower environmental / social impact product  Decentralised procurement functions  Perceived insufficient leverage to set minimum environmental / social standards  Reluctance to undermine relationships with existing suppliers  Suppliers need strong consumer signals  Both law firms & suppliers are often inexperienced in relation to sustainable procurement  Awareness of the ways in which their suppliers are able to assist in relation to improving environmental / social performance & the process for engagement  A perception that law firms' purchasing decisions are driven entirely by individual client demands, rather than by cultural and other factors  Fear of public embarrassment if a firm performs poorly

Towards a collaborative approach LEADERSHIP IMPLEMENTATION CONTINUOUS IMPROVEMENT  Scope: from carbon to broader sustainability objectives, including social issues?  Collaborating with other industries / lobbying for regulations / education?  A common vision on sustainability for the legal services industry: what signals do we need to send to suppliers and clients?  Guidance on understanding the supply chain and its most significant impacts?  Developing best practice guides for sustainable procurement in law firms / policies and tools to measure supplier performance?  Raising team capacity through workshops and seminars by leaders in sustainable procurement?  Building a baseline: at what level is the legal services industry performing? Is an index tailored to the particular characteristics of law firms required?  Monitoring progress by setting short and long term targets  Engaging with major corporate clients as to how to improve sustainability and client service Some ideas for discussion in your workshop groups