A short PPT deck looking at how some companies engage suppliers in sustainability and the results. Taken from the course "Getting to Grips with CR". For more info contact Stefan.Jensen@stakeholderintel.com

1. Improving supplier business models
How is it done, and what are the
results?
Tobias Webb, Stakeholder Intelligence

2. Why help suppliers improve?
• Companies under increasing
pressure on supply chain ethics
• Horsemeat scandal, Bangladesh
factory fires, slavery disclosure
rules, Uzbek cotton campaign, all
driving business action
• Audits only have limited value
• Supplier engagement today has
much stronger business case

3. What do we mean by ‘improve’?
• Achieve goals by alternate
means. For example:
• To stop factory fires, teach
managers how to run a better
factory
• Brands using “lean” to achieve
ethical gains: Better
management = less accidents
Innovative factory engagement training

4. So what’s the business case?
• Factories with better
management have fewer ethical
breaches = less bad headlines
• Fields with better management
are more productive: More
units…
• Reputation with NGOs and Media
stakeholders improves
• Employees stick around! (China)
Dole Foods uses SA8000 to improve productivity

5. Golden Agri Resources
• Large controversial Indonesian Palm
Oil Company
• Campaigned against by NGOs
• Struck deal with pressure from
Nestle, Unilever, with Greenpeace
and TFT
• Committed to zero deforestation
footprint & RSPO membership by
2015. Won back customers.
• Share price rose as a result
“No deforestation” commitment:
Now extended to pulp & paper
Sister company APP in Feb 2013

6. Coca-Cola Enterprises
• EU bottling/distribution arm of
Coke.
• Engages suppliers, holds annual
awards, encourages eco-
innovation, offers support
• Shares results and best practice
• Reducing supply chain impact
year after year: Cutting carbon,
emissions and costs

7. Waitrose, UK supermarket
• Assisted vegetable supplier Barfoots
• Barfoots reduced waste by 30,000
tonnes, Removed 3000 tractor
journeys from local roads
• Anaerobic digestion plant offsets
3200 tonnes of carbon per annum
• Ultra violet light technology
eliminated the use of water during
sweetcorn cleaning

8. PepsiCo cuts carbon & water
• PepsiCo: Helped farmers with direct
rice seeding in India cut water by 30%
and carbon by 70%
• Engaging farmers in EU to reduce
carbon footprint
• Drip irrigation only 1% of global
irrigation, yet highly efficient
• Clear business case to improve roll-
out of drip irrigation: Cuts water use
Direct rice seeding saves resources

9. Conclusions
• The business case is slowly evolving
• Most companies still see suppliers as
a cost, not an opportunity
• Only a few understand that
engagement is better than audits
• Audits cheap: Engagement less so
• Precise financial results hard to find.
Ethical/environmental gains clearer
Audits have limited value

10. Conclusions
• Pilot projects/case studies have
delivered excellent results
• Scaling these and sharing
knowledge is a major brand
challenge
• Technology seen as major
solution: Better, smarter systems
• Innovation coming from emerging
markets: India, Turkey, China etc
Tesco: Funding supplier technical training

11. Conclusions: How can big business help?
1. Access to technical
knowledge
2. Best practice sharing
3. Financing
4. Longer term contracts
5. NGO partnership
brokering
PepsiCo’s Icrop technology helps farmers

12. Want to know more?
This presentation is part of the online CSR training course “Getting to Grips
with CR” which can be found at http://www.getting-to-grips-with-cr.com and
features more than 100 training videos and discussions on global CSR for
members.
The course is currently taking place with 70 managers around the world
taking part. The next version will begin in September 2013. For more info or
to sign up contact: Stefan.Jensen@stakeholderintel.com