Tools for Transforming Risk into Opportunity · affects food quality and ... “Beef” products. Sodexo loses $1.2 billion Marine contract. Document Classification: EcoVadis Public

Tools for Transforming Risk into Opportunity:

What to Look for in Supplier Rating and Monitoring to Enable Engagement and Unlock Value

EcoVadis

Sean BarrSenior Account Executive

Document Classification: EcoVadis Public

Tools for Transforming Risk into Opportunity What to Look for In Supplier Rating & Monitoring to Enable Engagement & Unlock Value

Sean Barr, EcoVadis | SIG Summit, March 20182


Agenda

• Procurement Evolution

• New Risks & Challenges

• Vision & Best Practices

• Success Stories

Document Classification: EcoVadis Public4

Poll Question #1

What are you doing today and planning to do about evaluating CSR performance in your supply chain?

• Not a priority now

• Have started recently and are planning to do more in 2017

• Already have a structured program for monitoring suppliers CSR risks

• Beyond risks management we are also rewarding suppliers for CSR improvements or performance

• The State of Global Supply Chain Sustainability


The Power of Procurement

Price

Quality

On-Time Delivery

Sustainability


Why Sustainable Procurement?

• Brand protection

• Supply chain disruptions

• Fines & litigations

Manage Risks

7

• Reduced administration

• Vendor rationalization

• Total Cost of Ownership

Reduce Costs

• Product/Service differentiation

• Access to new markets

• Drive innovation

Increase Revenue


International Regulations Increasing

Transparency ActCalifornia

2010

FCPAUS

2010

ESG DisclosureEU

2014START

Devoir de VigilanceFrance

2017

Modern SlaveryAustralia

2014 2015

Environmental LawChina

2018+

Modern SlaveryUK


State and Private Sector Pressures

9

Federal

2010 Dodd-Frank Act: Section 1502

2015 Anti-human trafficking requirements for U.S. government contractors

1977 Foreign Corrupt Practices Act

State & Local

2012 California TransparencyIn Supply Chains Act

2015 California Fair Pay Act

2013-Present Minimum wage laws

2017 “We are Still In” Campaign for ParisClimate Agreement

2015 Clean Energy and Pollution Reduction Act 2015 American Business Act on Climate Pledge


Stock performance evolution of USD $1

invested in companiesadopting/not adopting

environmental and social policies and

practices

Sustainability Means Good Business & Investor Pressure Is Rising


Rana Plaza – 04/20131129 p killedRISK: Audits are not enough


Sept 3, 2013:Fire in Hynix China Factory.

Sept 6, 2013: DDRAM price jumps 25%.

Sept 15, 2013: 10M PCs & 11M Smartphones impacted.

RISK: Far reaching, unforeseen consequences


RISK: “Tier-2” Indirect Procurement Risk

“Race to the Bottom” affects food quality and food safety.

Horsemeat found in “Beef” products.

Sodexo loses $1.2 billion Marine contract


Activism RenaissanceMillennials

Human Rights Risks Climate Risks

New External Forces & Trends


Lever for Value Creation

15

Value Creation

CostRisk


From Pressure to Growth Opportunities

16

17

Trends & Insights in Sustainable Procurement

2017 Sustainable Procurement Barometer survey of 125 senior procurement & responsible sourcing leaders in Global 500 companies.


Exec support, but lacking internal resources


Supplier perceptions and engagement

“ I believe that supplier engagement and awareness

campaigns can only be successful if all parts of the business that interact with

suppliers are aligned, otherwise you are destined to send mixed

messages that will put your level of commitment in question.”

- 10 Medical Equipment Company


Poll Question #2

Are you using or planning to use any external tool to assess the CSR performance of your supply chain?

• No, I don’t perceive the value

• Yes, used for specific purchasing categories

• Yes, used for big spend suppliers

• Yes, only used with Tier 1 suppliers

• Vision & Best Practices


What to Look For in a Monitoring Solution?

22

Depth of Criteria, Adapted to

Supplier Profile

Coverage (Geo, Size)

Indicators, Benchmarks,

Feedback

Change Management &

Program Support

Supplier Onboarding &

Support


Performance Monitoring for Improvement

23


Integrating CSR in the Procurement Process

Onboarding SRMRFP OrderingAnalysis ContractAwarding

Include CSR performance for all new suppliers as a

prerequisite

Inform about CSR performance in RFP

(pre-) invitation so that suppliers can prepare

Define weighting of CSR performance

in general RFP

Awarding based on weighting rules

Include CSR requirements in general supplier

scorecard, jointly review annually

Block high CSR risk suppliers from Ordering tool

Include CSR performance as

contract condition

Risk

Continuously monitor CSR performance

between assessments & use Corrective Action Plans to mitigate risk

“Working with EcoVadis

was one of our best decisions”

David Spacey – CPO, Heineken

25

Case Studies


Scaling Up to the Global Level

• Fines and litigation for bribery and corruption in China

• Less suppliers, less risk. Consolidate number of suppliers by using EV scorecards

• EcoVadis assessment considered as cost of doing business


Scaling Up to the Global Level

• Formalized process, from signing Code of Conduct to monitoring and supplier evaluation

• Significant savings from fewer onsite audits

• Stopped working with 324 suppliers due to lack of commitment to Supplier Code of Conduct


And Across Multiple Industries

Chemical Sector collaborative initiative

• Pre-competitive Collaboration

• 19 current members(6 founding members)

• 10,000 shared supplier portfolio

• 70% Suppliers improve upon reassessment

http://www.tfs-initiative.com/


Impact at the Supplier Level

• xxx

29

“Our next step is to achieve EcoVadis Gold Level by 2018” - Tony Hambali Managing Director Dynapack Asia

"... I really didn't know what I was doing five years ago... But, failing their survey

was one of best things to EVER happen to our company." - Cindy Bush, Tessy Plastics


500+ ECOVADIANS, 40+ NATIONALITIES

A Trusted Partner – 10+ Years in Supply Chain Sustainability

Rated #1 by the SPLC Committee on Supplier

Ratings (COSR)

Awarded highest score and largest coverage among all

sustainability rating providers.

Paris ● New York ● London ● Hong Kong ● Toronto ● Mauritius ● Warsaw ● Tunis

Featured for three consecutive years in the Spend Matters Almanac

Thank you!

Sean BarrSenior Account Executive, [email protected]

31


A Complex Challenge…

CO2 footprints

Buyers Suppliers

● Time-consuming ● No reliable indicators ● Not scalable ● Duplicate efforts ● No standards ● Little feedback

32


EcoVadis: Global, Reliable Ratings

33

Buyers Suppliers


Analysis of Multiple Data Sources for Reliability

1. Supplier & Stakeholder Inputs 2. Analysis by CSR experts 3. Scorecards

“Just-Right” Questionnaire

Document Collection

360° Watch


Actionable Scorecards

Identify Best Practices

Benchmark Suppliers’ Performance

Prioritize Improvement Areas

Supplier Score Overview


Reporting Dashboard: Performance

36

Evaluation How-to:

▪ Your feedback drives

SIG Event content

▪ By signing and

submitting your

evaluation, you are

automatically entered

into a prize drawing

Why?

From the App

1. Select Sessions

2. Select Day

3. Select Session S13

4. Click on Clipboard Icon

How?

COMPLETE &

SUBMIT EVAL

Session # 13

EcoVadis

Sean Barr

[email protected]

Tweet: #SIGspring18

Download the App: sig.org/app

Tools for Transforming Risk into Opportunity:

What to Look for in Supplier Rating and

Monitoring to Enable Engagement and

Unlock Value

https://twitter.com/hashtag/SIGSpring16?src=hash

http://bit.ly/SIGOrlando

Thoughtonomy

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Documents

Tools for Transforming Risk into Opportunity · affects food quality and ... “Beef” products. Sodexo loses $1.2 billion Marine contract. Document Classification: EcoVadis Public