Nachhaltigkeit in der Wertschöpfungskette verankern – Wie ... · 12/16/2014 · Nachhaltigkeit...

Nachhaltigkeit in der Wertschöpfungskette verankern –Wie kommt das Thema CR in die Kernprozesse?

Andreas Streubig, Division Manager CR, Otto Group, Hamburg

Corporate Responsibility (CR) – Sustainability as a basic principle for business action, Frankfurt, 16 December 2014

The Otto Group - 123 major companies in more than 20 countries

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Corporate Responsibility (CR) means to operatecompanies in a sustainable manner


• Corporate Responsibility (CR): SocialResponsibility and Protection of Climate,Diversity and the Environment areharmonized with economic success

• The starting point is the business modelland ist influence on human beings andnature along the value chain

• CR is not a separate topic, but influencesas a cross-divisional function into all relevant divisions of a business

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In a nutshell: Why do we believe in sustainability?


• There is an obvious objective worsening of global challenges (such as resource depletion, global climate change, increasing prosperity gap) that needs to be dealt with

• Rising expectations regarding transparency and prevention of negative impacts from civil society and other stakeholders

• Increasing legal regulation (EU Timber Regulation, reporting on non-financials, etc.)

• Creating a positive environment for our own business to maintain a prosperous future of the company, a. o.− Permanently sufficient resources− Intact ecosystems− Stable, the trade-promoting societies

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1. Materiality analysis and strategic grading

2. Develop measures and assess according to cost/benefit

3. Implement under umbrella of CR Strategy

impACT enables effective and efficient CR management along the whole value chainOverview of the impACT management process in three steps


CR Strategy 2020

- 50% CO2

50% FSC® Paper

100% Social Programme

100% FSC® Furniture

100% Sustainable cotton

+ … …

Control measuresReduce negative impacts

qualitative evaluation

quan

titat

ive

eval

uatio

n

Innovation Priority

Stop Base

The biggest challenge to effective and efficient sustainability management at Otto Group is the high degree of complexity

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Production

Fabric

Machines

Buttons

Power

Transport

Services

...

Production

Chemicals

Yarn

Machines

Power

Transport

Services

...

Real estate

Computers

Paper

...

Lubricant

Steel

Machines

...

Production

Production

• > 1 million products offered• > 70 manufacturing countries

Example: complexity demonstrated by textile manufacturing


4 Customers

Disposal and recyclingUse

3 Retail

TransportWarehousingSalesDistribution

2 Finishing

Finishing and packagingSewing

1Raw materials and processing

Raw material extractionSpinning yarnWeaving and knittingRefinement

To make complexity controllable we currently use a simplified and clustered value chain structure

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Sample value chain for textiles


First, environmental impacts and social risks are evaluated using a modelling tool called estell

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Key data sources and features of calculation system

Corporate data

Use of quality-assured data and scientifically recognised methods

Coverage for the whole value chain

Consider essential sustainability topics

Comparability of sustainability impacts

• Greenhouse gases• Pollutants• Water consumption

• Land use• Social standards

Exiobase, ILO, World Bank, UNexpanded input-output calculation as per Leontief

Company financial data

Raw materials/production Finishing Retail Customers

Materiality mass:• € external costs

(environment)• h risk hours (social

standards)

1 impACT step


Environmental impact is given in €


Calculation system for environmental impact

External costs of environmental costs in the value chain

Purchasing data Clothing from China for 1 mn€

For clothing from China:1.05 kg CO2/€0.384 g PM2.5/€0.09 m3 water/€

On average89 €/t CO255,400 €/t PM2.50.86 €/m3 water

192 k€ (for CO2, PM2.5 and water)

International interrelation of added value (monetised)

Key environmental figures for whole value chain

External costs of environmental resources

Physical environmental effects of whole value chain(e.g. in x kg/€ or y ha/€)

Region-specific impact assessment with external costs(e.g. in x €/kg or y €/ha)

1 impACT step

The results of the quantitative assessment show sustainability hotspots in the business model

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Biggest impacts: supply chain and consumers

Raw materials and production Finishing Retail Customers

28%56%9% 7%

Environmental impacts [external costs in €]Social risks [risk man-hours]

Pollutants

Water consumption

Greenhouse gases

Land use

61% 38%1%


1 impACT step

The quantified evaluation is combined with a qualitatively assessed relevance for action

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Stakeholder feedback determines the x-axis of the materiality matrix


Basis

PriorityInnovation

Stop

qualitative evaluation

x

Business relevanceRegulationReputation

Internal stakeholdersExternal stakeholders

1. impACT step

quan

titat

ive

eval

uatio

n

y

estell

Base

PriorityInnovation

Stop

12

Evaluation and strategic ranking of external impactslo

whi

gh

quan

titat

ive

asse

ssm

ent

[in €

and/

or ri

sk m

an-h

ours

]

highlow

Social standards

Greenhouse gases

Pollutants

Greenhouse gasesWater consumption

Land use

Pollutants

Greenhouse gasesPollutants

Water consumption Social standards

Greenhouse gases

Pollutants

Water consumption

Social standards

Raw material and production

Finishing

Retail

Customers

Value-adding steps

qualitative assessment*[external and internal action relevance]

Impact categoriesGreenhouse gasesPollutantsWater consumptionLand use

Social standards

Land use

The result of the quantitative and qualitative assessment is the new Otto Group Materiality Matrix


1 impACT step

Specific measures are derived and evaluated from the strategic ranking to achieve highest positive impact


Example illustration of the cost-benefit analysis for measures

2 impACT step

Measures Benefit* [€]/ qualitativeCost [€]

Estimated capital expenditure………………………………[€]

Estimated personnel cost ………................................[€]

Quantitative benefit …………………..[€]

Qualitative benefit ...................................... qualitative

* Benefit here means a reduction in environmental impacts, in social risks and/or in action relevance

for the Otto Group Benefit

Ben

efit

The most efficient measures are mandatory for implementation under the roof of the CR Strategy 2020


The CR Strategy has five sub-strategies, each with one overarching objective

CR Strategy 2020

Climate StrategySocial ProgrammeTextile Strategy

Paper Strategy

Durable Goods Strat.

Raw mat./production Finishing Retail Customers

3 impACT step

CR incentivising: from 2014/15 achievement of CR Strategy objectives influences performance-related pay for Group Executive Board Members

Decentralised measures in Group

companies

50% FSC® catalogue

100% inclusion

100% FSC® furniture

100% sust. cotton -50% CO2

Currently five sub-strategies…

…each with one overarching objective

Full Executive Board or CR Board of the Otto Group take CR-decisions with relevance for the Otto Group


Accomplishes pilot projects and tries implementation

Decides or prepares the decision for the full executive board

Sets strategic impulse, controls, consults and prepares decisions

Are responsible for implementation

Coordinates the implementation

Decides

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Within the climate strategy of the Otto Group the CO2 emission are to be cut in half until 2020


Climate Strategy

Premisses

Reducing CO2 emissions will be:

1.as efficient and cheap as possible

2.achieved primarily through increasing energy efficiency

3. implemented through decentralized responsibilities

Examples of measures• Transport: reducing air freight, utilizing new economical

vehicles and alternative engines, optimizing loads and route planning

• Facilities: increasing efficiency in distribution processes, lighting, IT, heating and air-conditioning, use of solar, geothermal and biomass power

• Mobility: fleet guidelines (max. 200 g CO2 /km)

Otto Group: 296.000 Tonnen CO2im Basisjahr 2006/07

Facilities (34%) Transport (62%)

Mobility (4%)

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The goal for our textile is to work against the biggest threats of conventional textile production


Sustainable textil strategy

The first goal we set is to source 100% sustainable cotton (currently: Bio-Cotton and Cotton made in Africa) for all own brands 2020

Cotton made in Africa (CmiA) is an initiative of the Aid by Trade Foundation that helps people help themselves through trade. Its aim is to improve the social, economical and ecological living conditions of smallholder, cotton farmers and their families in Sub-Saharan Africa.

Einsparung 100%*

EinsparungØ 60%

0

1

2

3

4

5

CmiA conventional cotton 0

1

2

3

4

5

6

CmiA conventional cotton

m3 water / kg raw cotton kg CO2-eg/ kg raw cotton

CO2

* Due to rainfed agriculture17

How we cansave waterand CO2 by using CmiA

Development of the sustainable assortmentfor durable goodsDurable Goods Strategy

In addition to the sustainable textile strategy a strategy forhardgoods also exists. Essential activities are already takingplace for furniture and electrical equipment.

Electrical appliances

For electrical equipment the Otto Group is concentrating onenergy savings.

Wooden furniture

The goal of the Durable Goods Strategy is to only sell furniture and home accessories made from FSC®-certified sources by 2020.

• FSC is a global, not-for-profit organization dedicated to the promotion of responsible forest management worldwide.

• Accepted by all major NGOs, the FSC promotes environmentally appropriate, socially beneficial, and economically viable management of the world's forests.


We do not accept bad working conditions in our factoriesSocial Programme Strategy

Our long-term goal is to accomblish sustainable and fair workingconditions in all factories.

Control of compliance ofsocial standards/ breach of

Code of Conduct

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Extensive offer of qualitymanagement programmes

We do have factories in risk countries. Riskcountries means that there could be childlabour, discrimination, excessive overtime and forced labour still exist.

To implement social standards the Otto Group focuses on qualification, control and alliance to reach its long term goals.


Gaining transparency of current working conditions in factories


Social Programme Strategy

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Thank you for your [email protected]


Nachhaltigkeit in der Wertschöpfungskette verankern – Wie ... · 12/16/2014 · Nachhaltigkeit...

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