Greening Supply Chains - JOC Events business activity in more than 125 countries . Insert department name via ‘View/Header and Footer

Greening Supply Chains TPM 2015

Nate Springer, BSR

Blair Chikasuye, HP

Sarah Flagg, DAMCO

Lee Kindberg, Maersk

BSR (Business for Social Responsibility) A global nonprofit organization that works with its network of more

than 250 member companies to build a just and sustainable world.

BSR develops sustainable business strategies and solutions

through consulting, research and cross-sector

collaboration.

Clean Cargo Working Group A leading global carrier-shipper initiative dedicated to

environmental performance improvement in marine container transport

through measurement, evaluation and reporting

Create practical tools for measuring, evaluating and

reporting the environmental impacts of global goods

transportation

Help ocean freight carriers track and benchmark

their performance and easily report to customers in a

standard format

Allow shipping customers to review and compare

carriers’ environmental performance when

reporting and making informed buying decisions

CCWG | Our Mission

© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 5

HP Global Logistics Environment Program

Blair Chikasuye



HP’s Greenhouse Gas Reduction Goals…

105 PCs

7 Servers

880 Ink/Toner Cartridges

Every 60 Seconds HP

ships… 88

Printers

20% 20% 40%


HP Logistics Environmental Opportunities…

Logistics CO2 Reduction

Programs

Increase the efficiency of our product

transportation network

• Minimize size/weight of shipments

• Decrease distance products travel -

consolidate shipments

• Shift toward environmentally friendly

transport modes

- Air to Ocean, Truck to Rail, etc.

• Influence our logistics services providers

(LSPs) to decrease emissions

• Redesign product packaging to optimize

product transportation

Environmental Criteria

Utilize environmental factors in the LSP

selection process

Total

Cost of

Business

Cost Savings CO2

Reductions

Network Enhancement and Optimization

Programs Drive CO2 Reductions

Weight/Distance/Mode of Transport CO2 Factor


Industry Leadership - Logistics Environment

Associations

Trucking Air

Freight

Ocean

Freight

US EPA

SmartWay

Global Logistics

Emissions Council Climate and Clean

Air Coalition (UN)

Clean Cargo

Working Group

Green Freight

Europe

Green Freight

Asia

International Air

Transport Assoc.

Green Freight

Latin America **

China Green

Freight Initiative

Industry Leadership

Green Freight

India **

** In development

GreenHouse Gas Protocol

(World Resource Institute)

Damco Sustainable Logistics

9 February 27, 2015

End-to-End Visibility Tools

Strategy and KPI Development

Logistics Efficiency Improvements

MIT-validated Carbon Methodology

Carbon Impacts of Logistics Operations

Network Optimisation Equipment Utilisation Carrier Selection Packaging Transport Mode

Air

Truck

Ocean 6

16

47

560

Rail

25 Barge

CO2 per Transport Mode (g/ton-km)

Logistics Sustainability = Efficiency

Improved Container Utilization Modal Shift: Air to Sea-Air

Air Ocean

Operational Impact: modal shift from 100% air to 50% air, 50% ocean

Cost Impact: 50% savings potential identified

Carbon impact: 69% reduction in CO2

10%

25%

30%

35%

To-Be

12%

23%

28%

37%

20 Dry

40 Dry

40 High

45 High

As-Is

Operational Impact: 15% reduction in container volume

Cost Impact: 14% savings potential identified

Carbon impact: 16% reduction in CO2

Insert department name via

‘View/Header and Footer…’

Sustainability - Maersk Line



• Maersk Line is an enabler of global trade, connecting goods and services to people and economies around the globe

• Shipping affects the lives of billions of people, with 90% of the world’s international trade travelling by sea

• With our global presence, we create local employment and stimulate business activity in more than 125 countries



Container shipping is the most energy-efficient means to move high volumes of goods across long distances. However, in absolute terms, the environmental impacts of the industry are significant :

Our environmental impacts, end 2013:

1. CO2 emissions: 27.7 million tonnes

2. 488,000 tonnes SOx emissions

702,000 tonnes NOx emissions

3. 272,000 tonnes of waste

4. Ballast water, risk of discharges or spills

5. Use of paint and chemicals

It Starts With Transparency


‘View/Header and Footer…’ CO2 is measured in grams per TEU-kilometer using the Clean Cargo Working Group Methodology,

and independently verified by Lloyd’s Register.

2008 Goal

2012 Result

New Goal

Reduce CO2 25% per

TEU km by 2020 vs.

2007 Goal achieved 8 years

early

40% reduction by 2020

40% reduction CO2 2014 Result

The CCWG methods

strengthen our

internal metrics.

New Goal

60% reduction

by 2020!



Since 2007, Maersk Line has managed to grow our business and at the same time reduce the impacts on the environment

• Maersk Line reduced CO2 emissions by 8% per container during 2014 alone

• Since 2007, we have reduced CO2 emissions by 40% per container transported (g CO2/TEU km)

• Maersk Line’s new goal is to reduce our CO2 emissions by 60% per container transported by 2020.

Big impact, big responsibility, big progress

Decoupling growth from resource consumption



Comparing Routes for CO2 Emissions Example: Central America to Atlanta

Routing via… Total

Distance CO2 per

FFE

Miami 2574 km 1.47 kg

Savannah 2601 km 0.82 kg

Difference 1% -44%

Nate Springer – BSR Advisory Services

Blair Chikasuye – HP Global Logistics Environment

Program

Sarah Flagg – DAMCO Sustainable Logistics

Lee Kindberg – Maersk Line Environment and

Sustainability

18

CCWG | Thank You!

Annex

19

*Changes in carrier representation or global trade conditions likely explain a portion of these results

CCWG | Our Resources

CCWG Tools, Blogs, Reports

Guide: How to Calculate and

Manage CO2 Emissions from

Ocean Transport

Report: Global Maritime Trade

Lane Emissions Factors 2014

Report: CCWG Progress

Report 2013

Guide: How CCWG Shippers

Use, Integrate, and Benefit

from Ocean Transport

Emissions Data

Blog: How BSR’s CCWG

Helps Shippers Improve

Environmental Performance

Continue delivering best practice sharing, tool

development and cross-modal harmonization efforts that

enhances shipper capacity for performance

improvement leadership.

Continue to drive market clarity and enhanced capacity

for impact on our goals via the creation of one

global maritime initiative with CSI.

CCWG | 2015 Activities

CCWG | Our Members

Cargo Carriers Cargo Owners (Shippers) and LSP’s

We provide reliable year-on-year emissions

performance data from 23 of the world's leading ocean

carriers that represent over 85% of global ocean

container capacity

95% cargo transport buyers in CCWG use CCWG

data and tools in procurement decisions and in supplier

relationships with cargo carriers

CCWG’s annual emissions factors report indicates carriers

have reduced CO2 emissions per TEU-km by nearly 8%

from 2011 to 2012 and by over 22% since 2009*

CCWG | Our Accomplishments

*Changes in carrier representation or global trade conditions likely explain a portion of these results


GHG Reductions

Alternative fuels

CO2 Footprint

Living Progress

Industry Leadership

Awards / Communications

External Awards and Accolades

Drive CO2 standards and methodologies by

modes of transport on a global basis

Annual report highlighting HP’s commitment

to global citizenship, including Product

Transport programs and initiatives

Partner with our Logistics Service Providers to

calculate the CO2 emissions for the shipments they

transport on behalf of HP.

Convert shipments to more

environmental friendly vehicles / fuel

types (CNG / LNG, hybrid, dual fuel,

etc.)

Decrease CO2 emissions by reducing the size/weight

of our shipments, minimizing the distance travelled

and converting to more environmental friendly modes

of transport

#1

SmartWay Excellence Award winner 2014,

2012, and 2008

Green Freight Asia “Green Supply Chain”

Award for 2014

1st High Tech company to announce Product

Transportation GHG reduction goal

1st High Tech Company to maintain GHG

Reduction Goals for all phases of our Value

Chain

6/2/15 Living Progress Release

Date Global Movements converted

since Jan 2014 (CNG/LNG,

Dual Fuel, etc.)

20% Goal: Reduction in transport-related GHG

emissions by 2020 using 2010 as a

baseline

(Tracking our product transportation GHG

reductions on an annual basis)


Leadership Innovation

Communication

1.6M FY13 Product Transport CO2

Footprint (in metric tones) 9

Worldwide number of Logistics enviornmental

associations / initiatives HP is engaged

(EPA SmartWay, Green Freight Asia, Green

Freight Europe, Green Freight Latin America,

Clean Cargo, International Air Transportation

Association, Global Logistics Emissions Council,

UN Climate & Clean Air Coalition, China Green

Freight Initiative)

>1.5K


“Green Label” Programs – Asia Pacific/EMEA

• Leverage US EPA SmartWay methodologies

• Different criteria for Shippers / Carriers

Shippers:

- Commitment, Data, Use in RFQs, Transparency in CO2 emissions / goals

Carriers:

- Commitment, Data, Vehicle technologies, Transparency in CO2 emissions /

goals

• Leaf 1 for both Green Freight Asia* / Green

Freight Europe

Commitment Improvement Validation/Enforcement Visibility

* HP on Board of Directors


HP’s New Logistics Gateways…

Trans-Eurasian Rail -Chongqing, China to Western Europe

Port of Piraeus (Greece) -Asia to Europe, Middle East and Africa

Panama Canal -Expansion program completed by end

of 2015

Benefits:

• Simplify Global Network

• Improve End to End Transit Times

• Reduce Inventory Costs

• Decrease CO2 emissions

Mode Conversion Decrease Distance



Better energy efficiency cuts CO2 and makes great business sense.

We optimise our network and vessels operation

Our new vessels – such as Triple-E – set new standards on energy efficiency

Our existing fleet is being retrofitted with new technologies

We partner with charter owners to improve energy efficiency – including vessel retrofits

We are involved in the development of potential alternative energy for shipping



Opportunities for supply chain impact reduction:

Source: World Economic Forum – Supply Chain Decarbonization – the Role of Logistics and Transport in Reducing Supply Chain Carbon Emissions

ABATEMENT POTENTIAL

FEA

SIB

ILITY

IN

DEX

De-speeding

the Supply

Chain

(18%)

Clean Vehicle

Technologies

(18%)

Optimized

Networks

(13%) Low Carbon

Sourcing &

Manufacturing

(16%) Near

Shoring

(?%)

Packaging

Reduction

(14%)

Modal

Switches

(12%)

Reverse

Logistics

(9%)

Energy

Efficient

Buildings

(<5%)

28



Transportation Emissions can be reduced.

Part of supply chain Driver of emissions Ways to reduce emissions (examples)

Ocean transportation

Air transportation

Port moves

Domestic

distribution

Warehousing

• Volume moved

• km covered

• kg moved

• km covered

• Number of containers

• Transportation mode

(truck vs. rail)

• km covered

• Volume moved

• Number of days in

warehouse

• Number of CBM

• Higher container utilisation

• Use of more eco-friendly

carriers

• Air to Sea-Air conversion

• Higher container utilisation

• 20’ to 40’ conversion

• CFS-CY conversion

• Higher utilisation of delivery trucks/vans

• Double-decker trailers

• Increased use of rail

• Use of bio-fuel

• Reduce safety stock

• DC bypassing



1. Consistent calculator

2. Celebrate successes

3. See the big picture

4. Focus on improvements

5. Opportunity: work together

What we’ve learned about supply chain calculations:

Documents

Greening Supply Chains - JOC Events business activity in more than 125 countries . Insert department name via ‘View/Header and Footer