1. Sharing Responsibility along Supply Chains A New Life-Cycle Approach and Software Tool for Triple-Bottom-Line Accounting The Corporate Responsibility Research Conference 2006 4-5 September 2006, Trinity College Dublin, Ireland Dr Thomas Wiedmann Dr Manfred Lenzen

2. SD Reporting & TBL Accounting

4. World Business Council for Sustainable Development (2002) “There is a growing awareness that shareholders’ value is enhanced by increased corporate social and environmental responsibility.” “Corporate sustainability reports and sustainability ratings are increasingly used as key information for investment and lending decisions.”

5. Challenges remain… World Business Council for Sustainable Development (2002)  “There is little comparability among the various sustainability rating questionnaires sent to companies.”  “A key challenge remains reporting on the links between sustainability and the bottom line.”

6. Extend reporting boundaries World Business Council for Sustainable Development (2002)  “Business will increasingly be expected to report across the value-chain, i.e. on supplier- and consumer-related impacts of activities, products and services.”

7. Trucost & Defra (May 2006)

8. Reporting on direct and indirect KPIs  “The Government expects businesses to report on their significant environmental impacts whether they are direct or indirect.”  “Businesses are likely to derive benefit from positively influencing their indirect environmental impacts.” Trucost & Defra (May 2006)

9. Indirect (environmental) impacts Supply Chain Impacts (upstream) Direct Company Impacts (on-site) Downstream Impacts Energy Water Raw materials Logistics Product s in use Product disposal Boiler emissions Car fleet emissions Manufacturing emissions Landfill waste Recycling rate

10.  “… there is still a lack of quantification in most reporting. … the majority of reports lack depth, rigour or quantification.”  “Most business will have supply chain impacts that they should understand and consider reporting. There is no single, quantifiable measure that companies can use as a Key Performance Indicator for the effect of their upstream supply chain on the environment.” Trucost & Defra (May 2006) The problem of quantification

11.  Principle 1: quantitative  Principle 2: relevant & reliable  Principle 3: comparable  Principle 4: complete SD Reporting Principles

12. TBL Accounting without boundaries

13. Where to draw the boundary?

14. e.g. total emissions (direct plus indirect) e.g. direct (on-site) emissions e.g. purchases of a company

15. How to allocate indirect impacts along a supply chain?

16. Full (100%) Producer Responsibility >> only on-site impacts!

17. Full (100%) Consumer Responsibility >> all upstream impacts with the consumer

19. value added / net output

20. Sharing responsibility …

25. … shared responsibility

26. BottomLine 3 A new TBL software tool

28. Two data inputs  Financial accounts  On-site impacts

29. Outputs  > 100 TBL indicators  Quantification of total (direct and indirect) impacts  Sector benchmarking  Quantification of shared responsibility  Structural path analysis  Production layer analysis

30. Indicator My Bakery absolute impacts My Bakery total intensities Total Sector intensities GDP120,509 $8.69 ¢/$46.6 ¢/$ Gross operating surplus244,853 $17.7 ¢/$17.2 ¢/$ Employment13.5 emp-y1.12 emp-min/$1.27 emp-min/$ Businesses0.550.0000004 /$0.0000009 /$ Greenhouse gas emissions343 t CO2-e247 g CO2-e/$465 g CO2-e/$ Energy consumption1,090 GJ786 kJ/$2,640 kJ/$ Water use30.5 ML22.0 L/$20.1 L/$ Ecological Footprint99.9 gha0.72 g-m2/$1.18 g-m2/$ Land use534 ha3.85 m2/$6.99 m2/$ Particulate Matter <2,5mm0.014 t0.010 g/$0.016 g/$ Main TBL indicators

31. Benchmark spider diagram (TBL)

32. Benchmark spider diagram (Footprint)

33. Quantification of shared responsibility (GHG emissions in t CO2-eq.)

34. Structural Path Analysis

35. Structural path analysis (particulate matter) RankPath Description Path Value Path Order Percentage in total impact 1Refined sugar > My Bakery0.008 t258.5 % 2Raw sugar > Refined sugar > My Bakery0.0011 t37.56 % 3Animal food > Poultry > My Bakery0.0010 t36.79 % 4Paper products > My Bakery0.0006 t24.14 % 5Paper containers > My Bakery0.0005 t23.35 % 6Electricity supply > My Bakery0.0003 t22.28 % 7Electricity supply > Fresh meat > My Bakery0.00016 t31.14 % 8Raw sugar > Animal food > Poultry > My Bakery0.00014 t41.02 % 9Raw sugar > Plain flour > My Bakery0.00012 t30.84 % 10Raw sugar > Raw sugar > Refined sugar > My Bakery0.00010 t40.69 % 11Electricity supply > Plain flour > My Bakery0.00007 t30.52 % 12 Animal food > Untreated milk > Dairy products > My Bakery 0.00007 t40.49 % 13Confectionery > Plain flour > My Bakery0.00006 t30.44 % 14Animal food > Untreated milk > Cheese > My Bakery0.00005 t40.38 % 15Fresh meat > My Bakery0.00005 t20.38 % 16Animal food > Pigs > Fresh meat > My Bakery0.00005 t40.38 % 17Animal food > Untreated milk > Butter > My Bakery0.00004 t40.32 %

36. THANK YOU www.bottomline3.com www.isa-research.co.uk