Making supply chains more sustainable – Environmental Scorecard
Dr Peter White, Global Sustainability Director, P&G
Based on P&G’s belief that you can make a better product with an abundance of input and insights, our global sustainability group has been working hard at developing, improving and sharing its supply chain environmental scorecard.
Using scorecards to measure business performance isn’t a new idea. But there has been a recent trend among companies to measure the environmental impact of their supply chain. For example, the way a product’s raw materials are sourced, transported and manufactured can have a significant impact on its total environmental footprint.
As part of our commitment to improve the environmental footprint of our products and operations, we wanted to deeply understand the upstream impact of our supply chain. We also wanted to hear our suppliers’ sustainability innovation ideas and encourage them to help other suppliers who might need assistance with their own environmental improvements.
The Scorecard Analysis Tool is the latest publicly available component of P&G’s Supply Chain Environmental Sustainability Scorecard (supplier scorecard), which was designed to improve the environmental footprint of P&G’s supply chain, fuel innovation, and encourage suppliers to make environmental improvements in their own supply chains.
The scorecard measures absolute or intensity improvements in nine key metrics including energy use, water use, waste disposal and greenhouse gas emissions on a year-to-year basis. It also assesses P&G’s external business partners’ sustainability innovation ideas and promotes collaboration. Its results affect a supplier’s rating, which can impact future business with P&G.
The scorecard is just one aspect of a robust, productivity-driving sustainability effort across P&G that the Company estimates has led to nearly $1 billion in bottom-line operational savings from reductions in energy, water, waste and CO2 at its own facilities over the past ten years.
What makes our scorecard unique?
It took us more than two years to develop our supply chain scorecard, which measures absolute or intensity improvements in nine key metrics including energy use, water use, waste disposal and greenhouse gas emissions on a year-to-year basis. We knew we couldn’t (and didn’t want to) develop it all on our own. So we created a board of suppliers from a variety of industries to join us on our journey. They shared their experiences and what process would work best for them. We shared ours.
Western Europe based external business partners comprised 117 of the 482 partners participating in the 2011 P&G environmental sustainability scorecard program. Europe distinguished itself by reporting at the highest percentages of any region, averaging 78% reporting across all eight key sustainability measures- as compared to 71% for the rest of the world.
This superior performance was seen across every key measure; for example 67% of WE partners reported Hazardous Waste results versus only 51% for the rest of world- indicating more developed systems and approaches. Further evidence of their greater focus on environmental sustainability is the significant improvement reported in renewable energy: 15.2% on average- versus just 6.6% for the rest of the world. On the other hand, these more developed markets did not show as much overall improvement as the rest of the world: actually showing an increase of 1.0% averagely across all measures- versus the rest of the world’s 2.5% reduction.
In the end, the scorecard was a surprisingly versatile tool. We quickly realized that it wasn’t just relevant to us, but to ANY company that wanted to measure and improve the sustainability of its supply chain. So rather than keeping it all for ourselves, we decided to share the Excel-based analysis tool, which makes it easy for any company to aggregate, sort and summarize the scorecard data from their suppliers for free.
Since then, other companies like General Mills have adopted or adapted our scorecard for their needs. By sharing, we’ve received more feedback on how to improve it and have incorporated those insights into subsequent iterations. As more companies use the tool, their insights will help make it even better- which makes it a better product for all who use it and a more sustainable world for everyone.
Dr Peter White
Global Sustainability Director, P&G
“We’re taking every step we can to help others make their supply chain more sustainable. We believe we have a useful process and tools, and we want others to benefit from that.”
Larry Loftus, Director of Purchases Capability & Strategy, P&G
Our Long-term Product End-points
- Using 100% renewable or recyclable materials for all products and packaging
- Having zero consumer waste go to landfills
- Designing products to delight consumers while maximizing the conservation of resources
Our Long-term Operational End-points
- Powering our plants with 100% renewable energy
- Emitting no fossil-based CO2 or toxic emissions
- Having zero manufacturing waste go to landfills
Images (Click to enlarge)
- Dr Peter White, Global Sustainability Director, P&G
- P&G has publicly shared its Supplier Environmental Sustainability Scorecard for any company to use
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