Supply Chain ManagementMeasurement & Metrics

Sustainability Balanced ScorecardMauricio Cavalieri Carreiro

Sustainability Balanced Scorecard

Motivation

• How to compare sustainable reports against multiple frameworks?

• Multiple understandings on sustainability;

• Different data metric and ways to report it;

Proposal

• A standard and flexible method should be developed in order to compare sustainability progress between different companies.

Procter and Gamble - Case Study

Company Profile

• Procter and Gamble was founded in 1837 as a soap and candle company;• Net sales of nearly $84 billion in 2012 and more than $10 billion in net earnings;• The company employs 126,000 people worldwide.

http://annualreport.pg.com/annualreport2012/files/PG_2012_AnnualReport.pdf

Case Study

Sustainability Balanced Scorecard (SBSC)

• Launched in 2010 by P&G with three main objectives: Improve key environmental indicators; Increase supply chain collaboration; Encourage the sharing of sustainable ideas.

• The scorecard will be used to track the company ways to its long term vision: Using 100% renewable or recycled materials for all of their products and

packaging; Designing products that delight consumers while maximizing conservation of

resources; Having zero consumer or manufacturing waste going to land fills; Powering all of their plants with 100% renewable energy.

1. (Electric) Energy Usage

2. (Fuel) Energy Usage

3. (Input / Withdrawal) Water Usage

4. (Output / Discharge) Water Usage

5. Hazardous Waste Disposal

6. Non-Hazardous Waste Disposal

7. Kyoto Greenhouse Gas Emissions Direct (Scope 1)

8. Kyoto Greenhouse Gas Emissions Indirect (Scope 2)

9. Annual Volume/Output

Case Study

Sustainability Balanced Scorecard (SBSC)

• The scorecard measures absolute or intensity improvements in nine key metrics:

Case StudySBSC Excel Tool

http://www.pgsupplier.com/en/current-suppliers/environmental-sustainability-scorecard.shtml

Case StudySBSC P&G Analysis Overview

http://www.pg.com/en_US/sustainability/performance/rw_summary.shtml

Case Study

SBSC P&G Analysis

Further Information

•P&G Sustainability Results:

•Sustainability Scorecard Excel Tool and Guides Download:

http://www.pg.com/en_US/sustainability/performance/rw_summary.shtml

http://www.pgsupplier.com/en/current-suppliers/environmental-sustainability-scorecard.shtml

Case Study

SBSC Suppliers Analysis P&G’s external business partners assessment

• The greatest improvements in the Company’s environmental footprint came with its logistics and chemicals suppliers.

• Suppliers from developing markets such as China, India and Brazil tended to show the most improvement with US suppliers not far behind.

• Nearly half of the companies earning the highest rating came from Europe.

• The two measurable areas with the greatest improvement across the board were Hazardous Waste and Water Usage (Discharge). Direct Greenhouse Gas Emissions and Fuel Energy were tied for third.

• Overall, when combining all suppliers and categories, there was an improvement in 55% of the measurable categories

• About 25% of the external business partners also offered innovation ideas where they could work with P&G to further improve the environmental footprint.

Case Study

SBSC Suppliers Analysis

These are some of P&G suppliers that earned the highest scores on the Sustainability Balanced Scorecard:

Case Study

Sharing good practices

• On April 2012, P&G made its Sustainability Scorecard Analysis Tool freely available for any company.

• Feedbacks received help developing the tool with insights from different markets. • Improving P&G image for costumers an other companies.

Major Brands Map

http://logoblink.com/wp-content/uploads/2012/04/major-brand-logos-map-2012.jpg

Conclusions

• Once measurement and analysis of Supply Chain environmental impact is not a well defined process among companies, initiatives like this come as a great opportunity to have not only companies’ suppliers involved but also a cooperative improvement between them.

• Further, besides the environment impact reduction, companies would also have a financial return, as we saw in P&G case.

• As a suggestion, the Sustainability Scorecard could now started be used with a wider approach going further than the Environment metrics only, but also approaching to the other aspects of sustainability, that are Social and Economic.

References

[1] Sharpe, D. - Supply Chain Management Lecture 13 - Measurement & Metrics;[2] Hussey, D.M.;Kirsop, P.L.;Meissen, R.E. - Global reporting initiative guidelines: An evaluation of sustainable development metrics for industry;[3] http://www.pgsupplier.com/en/current-suppliers/environmental-sustainability-scorecard.shtml[4] http://annualreport.pg.com/annualreport2012/files/PG_2012_AnnualReport.pdf[5] http://www.pg.com/en_US/sustainability/performance/rw_summary.shtml[6] http://www.pg.com/en_UK/news-views/Inside_PG-Quarterly_Newsletter/issue5/sustainability2.html[7] http://news.pg.com/press-release/pg-corporate-announcements/pg-shares-data-results-and-analysis-tool-supplier-scorecard

References

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