Supply Chain Carbon Accounting & Reporting: Using SmartWay Benchmarking Tools

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1 Supply Chain Carbon Accounting & Reporting: Using SmartWay Benchmarking Tools Buddy Polovick Paul Campbell April 18, :00-3:00p.m. ET

2 About RILA The Retail Industry Leaders Association (RILA) is the trade association of the world s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad. Learn more at

3 Join us this year in Orlando! The 2013 Conference will continue 2012 s four track format: Environmental Compliance Marketing & Public Relations Real Estate & Facilities Management Merchandising & Sourcing Learn more at or erin.hiatt@rila.org Sponsored by:

4 During the presentation, please feel free to ask questions of the presenters using the Q&A tab at the top of your window. RILA will manage incoming questions, posing them to the speakers as appropriate and time permitting.

5 This webinar will begin shortly. Thank you for joining us.

6 Supply Chain Carbon Accounting and Reporting Paul Campbell, Sears Holdings Corporation Buddy Polovick, U.S. EPA April 18, 2013

7 Today s Discussion Why are Retailers focused on sustainability? What are key areas of sustainability focus and benefits? Why is carbon data so important? And to whom? Brief overview of SmartWay Measure, Manage and Report Carbon Data Using SmartWay Sears Holdings Sustainability Initiatives & SmartWay engagement Questions and Discussion 7

8 Drivers for Sustainability and Carbon Reporting 8

9 Why Focus on Sustainability? Business case for sustainability w/focus on carbon & climate Reduce costs from rising/volatile energy prices in supply chain Reduce climate risk and supply chain risk Compete globally, sustain operations Supply Chain sustainability efforts create real business value* New products, services and markets Premium pricing opportunities Enhanced corporate reputations Positions firms for evolving consumer attitudes and behaviors * CDP Supply Chain Report

10 What are Key Benefits of Sustainability? RILA 2013 Retail Sustainability Report 10

11 What are Key Areas of Concern? RILA 2013 Retail Sustainability Report 11

12 Why Focus on Carbon Data? Customers, clients, and shareholders demanding carbon transparency, accountability and disclosure Carbon is leading indicator of operational efficiency Address carbon to reduce costs Reduce climate risk and supply chain risk Carbon accounting and reporting growing rapidly Insurers evaluating climate risk Securities & Exchange Commission guidance on disclosure Carbon Disclosure Project findings (Supply Chain Report 2013) 90% of members report business risks from climate change 73% of members report $ savings from emission reduction activities Transportation ranked among greatest areas for efficiency gain potential with shortest payback period Performance measurement and data quality are keys to success 12

13 EPA SmartWay Overview 13

14 SmartWay = Continuous Improvement Measure Supply Chain Footprint Improve Efficiency Benchmark Performance Innovate Operations Report Results 14

Transportation Sustainability Strategies Tire monitoring/inflation, single wide tires, aerodynamics, alternative fuels, hybrids, idle reduction Driver training, speed control, load optimization, mode

15 Transportation Sustainability Strategies Tire monitoring/inflation, single wide tires, aerodynamics, alternative fuels, hybrids, idle reduction Driver training, speed control, load optimization, mode shift, enhanced routing, Encourage carriers to identify, prioritize, and mitigate environmental impacts, join partnerships SmartWay, Coalition for Responsible Transportation, BSR Clean Cargo, etc. RILA Sustainable Product Transport Brief 15

16 Measure, Manage and Report Carbon Data Using SmartWay 16

17 SmartWay Carrier Tool Generates Data 17

18 Carrier s Input Detailed Information Short Haul vs. Long Haul Fuel types and gallons used Particulate Matter Reduction (pre-2006) Cube Out Percentage Model year and truck class Miles (revenue and empty) Average Payload (Tons) Cargo Weight Only Average Capacity Volume (Cubic Feet) Percent Capacity Utilization (Excluding Empty Miles) Road Type / Speed Categories Average Annual Idle Hours per Truck 18

19 Carrier Report Showcases Key Data 19

20 How is Carrier data developed? Carrier s Actual Range Assigned Emission Factor Top 20% Reefer g/mile Top 20% Reefer 1600 g/mile Second 20% Reefer g/mile Second 20% Reefer 1700 g/mile Middle 20% Reefer g/mile Middle 20% Reefer 1800 g/mile Fourth 20% Reefer g/mile Fourth 20% Reefer 1900 g/mile Bottom 20% Reefer g/mile Bottom 20% Reefer 2000 g/mile Quintile Rankings (ex: Reefer CO 2 g/mile) 20

21 SmartWay Carrier Data Points SmartWay Carrier Rating Pollutant Specific Performance Levels 15 Carrier Categories (TL, LTL, Tanker, etc.) 8 Emission Metrics g/mile CO2 NOx PM10 PM2.5 g/ton-mile 21

22 Shipper Tool uses Carrier Data 22

23 Shipper Tool Snapshot of Carrier Data 23

24 Shipper Report and Benchmarking Data Data can be used in: Performance Benchmarking Environmental Reporting Carbon Disclosure Project Submittals Shareholder Resolution Response 24

25 SmartWay Used in CDP Reporting 25

26 SmartWay Used in GRI Index Reporting 26

27 Sears Holdings Sustainability Initiatives SmartWay Engagement 27

28 SUSTAINABILITY IN RETAIL 1 a great divide no more Findings: Retailers are working across sectors to achieve sustainability goals. Sustainability has turned from a risk mitigation and cost center into an opportunity for business growth. Developing systems for continuous improvement. Fostering transparency in operations and in the supply chain. Opportunities: Reducing waste means financial savings. Actively mitigate risks and enhance reputation with all stakeholders. Discover new innovations. Recruit and retain top talent. 1 Adapted from the 2012 RILA Retail Sustainability Report

29 SUSTAINABILITY AT SHC A New Journey Q1 2012: Green Leadership merged with Sustainability within the Supply Chain business unit, the new objectives for this combined team are as follows: Increase education/awareness Oversee initiatives/successes for our members/customers/associates at every touch point Optimize strategic partnerships with industry leaders and solidify our market leadership Translate successful program attributes across all SHC formats Provide platform for launching emerging technology initiatives Protect and enhance SHC and partners brands Risk mitigation/compliance/reduce Costs

30 Related Efforts Within the last 18 months: Completed numerous retrofits at distribution centers Installed electric vehicle charging stations at 10 locations, including 2 at Hoffman Estates Successfully implemented a pilot program using propane to fuel 27 home services vans 2012 EPA ENERGY STAR Corporate Commitment and Energy Management Partners of the Year Awards Internal partnerships with: Packaging, Energy Management, Real Estate, Facilities, Community Engagement, Environmental Affairs, Communications and so on. Within the last month: Press release re: EV charging stations, Sustainable Brands article and Edelman Green Chicago Report

31 Green Leadership: Positive Impact Across SHC Home Appliances 2013 Team Priorities Co-branded marketing SYW/Online /Social Media Home Services Field event collaboration In store resource centers KCD Brands Consumer Electronics/ Lighting Consumer electronics plug load Commercial applications Supply Chain Energy Managemen t Home Improvement applications Maintain 60+ strategic agreements

32 2013 Priority Sustainability team recommends SHC develop a formalized Sustainability Report using the GRI framework GRI has been the sustainability reporting framework of choice among our competitors and continues to gain traction SHC already has a significant reporting structure in place across multiple BU s. Lands End is about to publish their first Sustainability Report based upon the GRI guidelines Self certification is possible for a GRI Report - with minimal financial requirement

Industry Recognition EPA ENERGY STAR Sustained Excellence: Retail/Energy Mgmt EPA ENERGY STAR Retail Partner of the Year: 2010/11/12 EPA ENERGY STAR 2012 Corporate Commitment Award EPA SmartWay 2012

33 Industry Recognition EPA ENERGY STAR Sustained Excellence: Retail/Energy Mgmt EPA ENERGY STAR Retail Partner of the Year: 2010/11/12 EPA ENERGY STAR 2012 Corporate Commitment Award EPA SmartWay 2012 Excellence Award EPA WasteWise 2012/3 Honorable Mention: Avg. 73% total waste diversion EPA Energy Leaders: Kmart 2012 Award Winner, >10% energy reduction across all buildings EPA Battle of the Buildings 2012: 57 properties competing (6 in top 50 at mid point out of 3100 total) Launched 27 Propane Fueled Home Service Vans In Seattle Market Pacific Gas & Electric: 2012 SHC Partners In Transformation Retail Excellence Award 2012 Newsweek Green Ranking: 104/500, Top Ten for retailers (9/42)

34 SHC and SmartWay All SHC Carriers SmartWay registered Ongoing collaborative review of sustainability value: Alternative Fuels/Routing Optimization/Rail vs. OTR/Cube-outs Exploring benefits of SmartWay Carrier Tool and metrics Alignment to GRI/CDP reporting structure RILA Benchmarking Integral part of initial CSR

35 Questions and Discussion 35

36 For more information: SmartWay Helpline

SmartWay 2.0 February 9, 2009 Buddy Polovick USEPA

LOGISTICS 2009 February 8-11, 2009 Gaylord Texan Dallas, Texas SmartWay 2.0 February 9, 2009 Buddy Polovick USEPA Outline Energy, Environment, Economy SmartWay Transport Partnership SmartWay 2.0 U.S. Transportation