Sustainability at Henkel: Our Experience with Supply Chain Standards and Carbon Footprinting
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1 Sustainability at Henkel: Our Experience with Supply Chain Standards and Carbon Footprinting Uwe Bergmann OECD Workshop and Policy Dialogue on TBT Paris, October 5 th, 2009
2 Three Areas of Competence Laundry & Home Care Cosmetics/ Toiletries Adhesive Technologies Quality with Brands & Technologies 2
3 Sustainability a Focus for the total Company Corporate Vision Focal Areas Corporate Values 3
4 A sustainable Business Model has to focus on the entire Value Chain Disposal Raw materials Use phase Transportation Distribution Manufacturing of products and packaging Manufacturing of ingredients 4
5 Continuous Improvements 40 percent reduction of energy use per ton of product from Over 50 years of expertise in water management 90 percent renewable raw materials Reduction of occupational accidents by 86 percent since 1998 Commitment to diversity: managers from about 80 different countries 5
6 Recognition by Experts & Partners German Sustainability Award Wal*Mart Sustainability Award 6
7 Broad Range of Information Requests, Vendor Codes & Questionnaires 7
8 Henkel s Approach to Suppliers and other Business Partners Further development Audits and risk assessment Self-assessment Supplier codes Focus on Global Compact as common denominator Strategically important suppliers All suppliers Supplier self-assessment: Based on Global Compact Principles & systems Communication of requirements Risk assessment Supplier selection Supplier codes Decison to use BME* code based on Global Compact Principles *Bundesverband Materialwirtschaft Einkauf und Logistik (3500 members) 8
9 Multitude of Communication Activities on Product Carbon Footprints 9
10 Calculation of Carbon Footprint: 1. Identification of Sources Identification of Emission Sources Stationary Combustion Bought-In Energy Mobile Combustion??? Boundaries? Definition of boundaries Indirect emissions, e.g. land use change 10
11 Calculation of Carbon Footprint : 2. Selection of Calculation Method Activity Data x Emission Factor = Emitted GHG Identification of Emission Sources Identification of Method for Calculation Stationary Combustion Bought-In Energy Mobile Combustion g CO 2 / kwh g CO 2 / kwh g CO 2 / l g CO 2 / tkm Varying accuracy of calculation methods: Consideration of truck model Accuracy level of route planning 11
12 Calculation of Carbon Footprint : 3. Data Collection & Emission Factors Identification of Emission Sources Identification of Method for Calculation Data Collection and Definition of Emission Factors Differences in quality with regard to Activity Data Differences in topicality with regard to emission factors Differences in accuracy with regard to emission factors 12
13 Calculation of Carbon Footprint : 4. Calculation & Aggregation Identification of Emission Sources Identification of Method for Calculation Data Collection and Definition of Emission Factors Calculation of Greenhouse Gas Emissions Aggregation of results and weighting via GWP (Global Warming Potential) to obtain carbon footprint 13
14 Basis to Identify Desirable Improvement Options & suitable Approach(es) Energy Source Washing Machine Product Design Consumer behavior 14
15 Product Life Cylce Focus: Use Phase Top cleaning performance at just 20 degrees Celsius Compared with laundry washing programs at 30 degrees Celsius, washing at 20 degrees Celsius can cut the energy consumption of washing machines by up to 40 percent. Contributes to the focal areas: 15
16 Providing Relevant Guidance: A.I.S.E. WashRight Campaign Website with Tips and Information Product logos for detergents and cleaning products
17 Providing Relevant Guidance: Persil TV Spot
18 Providing Relevant Guidance: Detailed Consumer Information
19 Progress requires Time & Continuity: Persil Advert 1982
20 Sustainability in Laundry Washing: Progress from 1979 to 2008 Dosage (Grams per Wash Cycle) Water (Liters per Wash Cycle) Energy per Wash Cycle (1978=100)
21 Henkel Learnings & Positions: Product Carbon Footprinting The PCF of a product can make the issue of climate change tangible. The life cycle approach identifies the right levers to reduce CO 2 and helps to define the right communication focus It offers the possibility to enable companies as well as consumers to find the right starting point for their individual contributions. Communication should enable consumers to reduce their carbon footprint, provide reliable guidance on purchase and/or use of products A product label with one aggregated figure generally is not meaningful to consumers, difficult to put into context and easily misleading PCF calculations only estimates due to inherent methodological limitations International harmonization of PCF calculation methods is necessary 21
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