Corporate Carbon- and Carbon Management in supply chains a maritime supply chain as business case Priscilla Owosekun (Delegation of German Industry and Commerce in Nigeria)
1. Agenda 2 3 4 5 Agenda Introduction Relevance & Status Quo Business Case Cargill Inc. Recommendations 2
1 2. Introduction 3 4 5 Currently Cargill one Inc. of operates the largest 6 major privately platforms, owned which companies again are in the distributed United Cargill States, Inc. among is a Cargill global 75 declared operational player in revenues agribusiness. business of $134.9 units The (BUs). company billion The in sales emerged platforms and earnings as are: a major Animal of about international Nutrition, $1.87 billion trader Animal in FY and Protein 2014. processor Employing & Salt, of over Agricultural agricultural 152,000 food Supply employees ingredients Chain, on Biofuels, 5 and continents various Bio industrial and other products 67 & countries, Emerging and it Business, is responsible Energy, for Transportation 25 percent services. of & all Industrial of the United Goods, States Financial grain Services & Food exports Ingredients Systems 3
1 2 3. Relevance 4 5 The OECD Taking claims the that concepts almost of all sustainability of humankind s and impacts emission the environment management can into be account traced back play an to the increasingly way how central goods and role in services the are produced, supply chain transported and logistics and world consumed (OECD and 2009, IEA, IPCC 2009) 2014) 4
1 2 3. Relevance 4 5 Value Chain Assessment CO 2 Emissions Transport emissions Raw Material Extraction Manufacturing Distribution Consumer Use End Use 5
1 2 3. Relevance 4 5 Market/ Environment Legislation Consumers Transport sector is second largest Consumers EU emitter wide framework of tend GHGs to in take (MRV the more industrialized System): sustainable choices from world January and evaluate 2018, owners the carbon of large footprint of a ships good (over 5000 mt) using EU ports Market/ are CO2 obliged emissions to monitor are projected and report Legislation to increase their by Agribusiness Consumers verified nearly 50% emissions is by more 2030 to, exposed and from more and in terms than between 80% of image European by 2050 to climate ports change due to the impact of brands in consumer choice Energy European Efficiency Commission Design predict Index a (EEDI), rise sets Strategic compulsory of 87 % alignment for energy maritime of efficiency customer transport standards base for towards new increase ships sustainable by more than commodities 65 % of GHG emissions from 2010 to 2050 Source: (OECD and IEA, 2009; IMO, 2009; European Commission, 2013; Carbon Trust, 2006) 6
1 2 3 4. Business Case 5 Although carbon emission levels only reflect a part of an industry s ecological footprint, carbon assessment and mitigation is accounted as a key element in the cost and environmental impact assessment (Carbon Trust 2006) 7
1 2 3 4. Business Case 5 Cargill s Supply Chain Sea going vessel external storage Different modes of transportation Customer Barges Inbound Outbound 8
1 2 3 4. Business Case 5 Sources: a) Documentation about incoming vessels from 2009 till 2014 b) Documentation about discharge processes and ex-tank movements from 2009 till 2014 Parameters: 1) Sea going vessel s carbon footprint 2) Distances travelled from origin to discharge 3) Carbon levels per barge 4) Distances travelled within the port of Rotterdam RightShip.com Searates.com CO2 emissionfactoren Eco transit & Transport Guide Rotterdam 9
1 2 3 4. Business Case 5 Activity based approach Source: own Illustration 10
1 2 3 4. Business Case 5-20,3 % -26,47 % -33,97 % 99,89 % 0,11 % 11
1 2 3 4. Business Case 5 Cost savings through efficiency increase -20,44% CO2 delivery for ±185 000 mt vegetable oils in 2014 11805, 92 mt CO2 ± 132.650.827,2 km with a Toyota Prius more than 3310 times around the world 12
1 2 3 4. Business Case 5 Investments yield in CO2 profit? relative CO2 per incoming metric tone is constantly decreasing between 2009 and 2014 economies of scale CO2 intensity Sea going vessel 13
1 2 3 4. Business Case 5 Potentials for cost savings Companies rarely use the biggest barges in their fleet (possible loads up to 3600 mt DWT) CROE pays 60 /cent per litre, and the barging companies always charge for 500 litre per barge, irrespective the distance travelled within the port 14
1 2 3 4 5. Recommendations Firms critical engagement with their impact on the environment enhances their competitive advantage. The assessment of greenhouse gas levels are not only worth to aspire from the cost perspective but also counteract the effects of climate change (Boone, Jayaraman and Ganeshan, 2012; KPMG, 2013) 15
1 2 3 4 5. Recommendations Plan of Action for businesses in Nigeria 1) Ongoing and proactive documentation of appropriate data 2) Clear responsibilities and definition of targets and boundaries 3) Incorporation of sustainability strategy in every planning area 4) CO2 and other environmental performance indicator as KPI in Balance Score Card 16
Long-term Middle-term Short-term 1 2 3 4 5. Recommendations Business opportunties Environment Legislation Cost savings: Establish a sustainable mindset within the corporation Value chain: Broaden the view on environmental challenges and their influence on business activities Knowledge Management: Investigation on status of national& international environmental policies Strategic Alignment: Carbon Footprint and environmental assessment as additional pillar of a business activity Methodical toolkit Value Added: Incorporation of CO2 focus in Corporate Marketing Alliance formation: Collaboration with other market players to increase eco-efficiency gains High impact Stakeholder Dialouge Activly engage in the dialouge with governmental bodies Policy making Establish industry specific standards Involve established standards in reporting schemes Small impact 17
Thank you for your attention! Priscilla Owosekun Energy and Environment Desk Delegation of German Industry and Commerce in Nigeria (AHK Nigeria) Tel.: +234 (1) 2700746-115, Fax: +234 (1) 2700748 E-Mail: owosekun@lagos-ahk.de 18
Discussion 19
Back UP One subsidary in the Netherlands Strategy Purpose Why Time Frame When Source v Where Unit of Analysis What Content Analysis How? Value chain Identification Retrospectiv of assessment optimization assessment of & potential 6 years Supply chain Definition of an Efficiency movement individual increase (2009 till 2014) carbon strategy Disclosure of carbon performance CO2 emissions from maritime movements from seavessels and barges Gathering of relevant data Activity based approach Plan of action 20
Back UP 21