TUHH Hamburg University of Technology Christof Hertel
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1 The Green International Supply Chain How do German Companies Report on Transport in the Green Supply Chain? Christof Hertel Session: Transport and Logistics Hidden Damage or Opportunity CSR Asia Summit 2007 Hong Kong November (15) Christof Hertel c.hertel@tuhh.de
2 Introduction: What Means The Green Supply Chain? Airplane Truck Train Ship Pipeline Bike Resources Traffic = Physical Process Substitution through Internet Emission Green Logistics or Sustainable freight transport is not possible but steps towards sustainable freight transport are possible. Immission The Sustainability of Freight Transport Depends Mainly on: Transport volume (weight, volume) Transport distance Used mode(s) Used actual vessels Degree of utilisation (load factor) Source: Flämig, Heike; Hertel, Christof: What does sustainability mean in freight transport and how can we measure it beyond balancing carbon dioxide? Presentation held at: RGS- IBG Annual International Conference, London (15) Christof Hertel c.hertel@tuhh.de
3 Who are the Drivers Behind the Necessity of a Green Supply Chain? 1.) Non-Governmental Organisations: The Global Reporting Initiative (GRI) Development of the sustainability reporting framework with principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. Sustainability Reporting Guidelines and additional Sector Supplements e.g. Logistics & Transportation Supplement. 2.) Investors: Carbon Disclosure Project 3.) Multinational Enterprises (MNE) Wal-Mart s carbon footprint is 19.8 million metric tons. A Wal-Mart Manager estimates the carbon footprint of Wal- Mart s supply chain at about 200 million metric tons, a much bigger pool to go fishing in. Source: 3 (15) Christof Hertel c.hertel@tuhh.de
4 82% Of All Companies Do Report On The Environment Enviro nmental o r CSR Report of biggest subsidary 8% Annual Repo rt only 14 % No Reporting at all 4% Enviro nmental o r CSR chapter as e xplic it part o f the Annual Repo rt 14 % Enviro nmental Report 8% CSR Report 52% (n = 50) Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
5 44 % Of All Companies Do Have Indicators In The Area Of Transport, But Yes 44% No 56% (n = 50) Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
6 Only Five Companies Have Two Or More (Annual) Transport Indicators Two or more indicators 12% Zero to one indicator 88% Mailorder Companies 2% Logistical Companies 10% (only companies with environmental/csr report/chapter included, n=41) Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
7 44 % Of All Companies Do Have Sustainable Measures in the Supply Chain, But Yes 44% No 56% (n = 50) Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
8 If measures in transport were described, how widely were they implemented? Overall 10% Singular Case 26% Mostly 41% Partly 23% (n = 31) Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
9 To What Geographical Extent Is Supply Transport Part Of The Reports? Unknown or non existent 19 Site only 7 National European Global Source: Figure and Research conducted by Christof Hertel, (15) (n = 50) Christof Hertel c.hertel@tuhh.de
10 Widening the Scope of Reporting! The six greenhouse gases covered by the Kyoto Protocol are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). Source: WBCSD, WRI (2004): The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. Revised Edition. p.2ff 10 (15) Christof Hertel c.hertel@tuhh.de
11 The Supply Chain Elements: Current System Borders in Sustainable Reporting CSR Report: Social Dimension. Transport 2. Zulieferer 3. ul eferun 4. Hersteller Component 2. Zulieferer. erun 4. Hersteller Transport Supplier Supplier Transport Transport Consolidation Transport (Air)-Port F O B Main Haul (Air)-Port Transport Goods Receiving Empty container Empty trips Business Travel CSR Report: Ecological Dimension At present, most of the elements of a supply chain are not included in CSR reporting! Source: Figure and Research conducted by Christof Hertel, (15) Christof Hertel c.hertel@tuhh.de
12 Examples of Measures Local Sourcing/ Supplier Cities/Business Malls/Supply-in-Line-Centers and Transplants (VW, ThyssenSteel, Opel) (economic aspect) Design of Production and Packaging (VW) Modal Shift e.g. container barge (VW), sea-air (Otto), train (Opel) Global e-sustainability Initiative (G esi)/supply Chain Working Group (SCWG) (Telekom) Reusable packaging (Bosch, VW, Opel) Route optimisation (Bosch, Linde) Location optimisation (ThyssenSteel) Remote Control of Stock (Linde) On-Site Micro-Productions instead of Gas-transport (Linde) Safety and Quality Assessment -System (BASF), Truck Check at Gate (Boehringer Ingelheim) Double-Deck Trucks (Heraeus) Higher Load Factor (DaimlerChrysler) BUT: The measures are not always invented for transport reasons, but for other reasons. Source: Research conducted by Christof Hertel, (15) Christof Hertel
13 Conclusion: Integrating China into a Responsible Global Supply Chain What are minimum standards for measures? Show that you adopt the ILO-Standards in your company and in subcontractors (logistical) companies. Start your own CSR report (see GRI-Guidelines). Implement a Environmental Management System (ISO ). Account your carbon footprint (see CDP and GHG). After that, what else can you do? Tell it to your customers, use it actively in your communication strategy! Start reducing your carbon footprint with measures! Optimise your whole chain socially and ecologically it will be a win-win-situation! 13 (15) Christof Hertel c.hertel@tuhh.de
14 Contact Information Dipl.-Geogr. Christof Hertel () (B9) European Centre for Transportation and Logistics (ECTL) D Hamburg Tel: (+49) Fax: (+49) (15) Christof Hertel
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