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Supply Chain Sustainability Panel 2013 Smart & Sustainable Conference April 15, 2013 Andrew Essreg Senior Manager East Central Region Leader.

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Presentation on theme: "Supply Chain Sustainability Panel 2013 Smart & Sustainable Conference April 15, 2013 Andrew Essreg Senior Manager East Central Region Leader."— Presentation transcript:

1 Supply Chain Sustainability Panel 2013 Smart & Sustainable Conference April 15, 2013 Andrew Essreg Senior Manager East Central Region Leader

2 EYs Global Sustainability Capability & Reach Globally integrated, multi-disciplinary network of approximately 700 professionals who combine our firms experience in assurance, tax, advisory and transactions with climate change and sustainability skills and industry knowledge. Most globally integrated of the Big Four, leveraging our experience from serving clients with similar business models. Our global network of professionals collaborate on international projects on a regular basis, constantly sharing leading practices, lessons learned, and knowledge around the world. Sustainability risk assessment, planning, management Sustainability strategy and management systems Performance goal setting, measurement, and reporting Assurance readiness Independent assurance Product environmental and financial performance improvements Stakeholder segmentation and engagement Energy cost reduction and operational performance improvements Environmental Health & Safety cost savings and process improvements Tax incentives Our sustainability services include:

3 Sustainability helps companies improve performance and capture value Embedding sustainability in the value chain We ask the question: Can you do more with less? Are you incorporating life cycle costs (including energy usage) in your capital expenditures (e.g., for PPE)? What are the potential risks of water scarcity and fuel price volatility to your operations and supply chain? Can you generate new revenue and avoid landfill fees from your operational waste? Where are there opportunities to reduce material usage in products and packaging? Do you have the information you need to manage energy, water, and materials? Are there sufficient controls in place to manage that information? Improve operating efficiency Create shared value upstream by managing supplier impacts and leveraging sustainable innovation opportunities Conserve resources in facility operations to decrease financial and enviornmental costs Reduce, recycle, reuse or sell waste Grow revenues Identify new revenue-generation opportunities through product or process innovation Drive revenue growth downstream through partnerships with customers Increase brand value through enhanced identity and positioning Manage enterprise and supply chain risk Evaluate impacts on operations from rising energy costs, water scarcity or regulatory compliance throughout the value chain Ernst & Young helps companies embed sustainability throughout the value chain to improve profitability and increase returns.

4 Supply Chain Sustainability Opportunities Some examples for value creation Environmentally preferable purchasing (EPP) Goals: Reduce waste generation volume, frequency, permitting fees and landfill disposal costs, and identify recycling opportunities that generate revenue. Action: Connect procurement and waste management professionals at enterprise/site-levels. Goal: Develop EPP policies, procurement criteria, purchasing guidance for material inputs and manufactured product goods. Action: Track 435+ internationally recognized eco-labels, sustainability certifications and standards, and down- select those that are credible and relevant to adding value to your specific line of business. Early supplier involvement and collaboration Goal: Engage key suppliers early (i.e. strategic importance, critical resource availability, annual spend) to develop mutually beneficial sustainability performance goals/initiatives. Action: Develop collaborative partnerships and identify opportunities to share data, knowledge, and resources.

5 Supply Chain Sustainability Risk 5 areas that impact your business opportunities Strategic – Linking supply chain risk management to enterprise strategic planning (e.g. supplier segmentation by critical resource inputs) presents opportunities to improve competitive advantage (e.g. waste and cost reduction). Compliance – Companies complying with supplier sustainability requirements must track data (e.g. energy/fuel use) and make the information available for audits. Conversely, a company implementing its own supplier sustainability program needs processes to track/monitor supplier compliance and can use the data to inform business decision-making. Financial - Supply chain issues can impact a companys financial strategy (e.g. cost cutting opportunities, cash management/liquidity implications of carbon markets, due diligence requirements for mergers/acquisitions. As companies increase public disclosures in non-financial and integrated reports, CFOs /audit committees are increasing oversight and controls. Reputational – To manage reputational risk and enhance brand, companies are increasingly implementing supplier segmentation and qualification programs to ensure they do business with suppliers with shared values, who meet social and environmental performance expectations. Periodic supplier review/audit can gauge collaboration opportunities (e.g. environmentally preferable purchasing) and potential risks (e.g. EH&S non-compliance). Operational – Improved operational efficiency of processes, systems, and resource utilization reduces risk and creates business opportunities (e.g. spare parts inventory management, manufacturing equipment utilization, maintenance planning, downtime, reduction, manufacturing waste recycling innovations, facility energy optimization).

6 Snapshot: Supply Chain Sustainability Risk What are conflict minerals? Section 1502 of Dodd Frank requires certain public companies to provide disclosures about the use of conflict minerals from the Democratic Republic of the Congo (DRC) and 9 adjoining countries. Cassiterite: An ore of tin and commonly used in electronics (solder), plating and as a stabilizer in plastics. Columbite-Tantalite or coltan: An ore of the element tantalum that is commonly used in the manufacture of various electronics. Wolframite: An ore of tungsten that is commonly used in metal wire, electrical and welding applications. Gold: Common uses are in jewelry and electronics. Zambia Tanzania Rwanda C R Democratic Republicof the Congo (DRC) Uganda Central Africa Republic Burundi Angola ongo epublic South Sudan

7 © 2009 IBM Corporation IBM Overview Edan Dionne Director, Corporate Environmental Affairs IBM Corporation Smart and Sustainable Campuses Conference April 15 – 16, 2013 Bethesda, MD

8 8 IBM Profile IBMs businesses: services, software, systems Serving clients in over 170 countries 2012 revenue: $104.5 billion Number of employees at year-end 2012: 434,246

9 9 Longstanding Commitment to Corporate Responsibility Corporate Citizenship Steering Committee Comprises of senior executives from each functional Governance and Financial Accountability Corporate Community Relations Environmental Affairs and Product Safety Employee Well- Being Global Human Resources Supply ChainGovernmental Programs Sustainability – or corporate responsibility, as IBM refers to its applicability for the company – is a concept and commitment that has been an integral part of IBMs business model and global management system throughout the companys history. Then-CEO Thomas J. Watson, Jr., included the following commitment to being a good corporate citizen in IBM Principles in the 1960s: –… We accept our responsibilities as a good corporate citizen in community, national and world affairs; we serve our interests best when we serve the public interest. …. We acknowledge our obligation as a business institution to help improve the quality of the society we are part of. We want to be at the forefront of those companies which are working to make our world a better place.

10 10 Procurement Spend and Supply Chain 2012 procurement spend in support of IBM business: $35.3 billion Well over 20,000 first tier suppliers in 100 countries IBM is committed doing business with responsible suppliers –Social and environmental responsibility is a major facet of our corporate responsibility efforts. Supplier environmental requirements date back to 1972 and continue to be updated In 2004, IBM published its Supplier Conduct Principles to articulate the company's overall supply chain social and environmental requirements. In 2012, IBM established new management system requirements for suppliers to effectively manage their business intersections with social and environmental responsibilities Read our Corporate Responsibility Report for additional information

11 Who we are We operate our businesses in ways through which economies grow, societies benefit and the environment is protected. Some call it the triple bottom line. We call it the best thing for our business success. With over $22 billion in annual revenue, we are the worlds leading enterprise for business process and document management –Employees: 140,000 worldwide –History: Founded in 1906 as The Haloid Company; named Haloid Xerox in 1958 and Xerox Corporation in 1961; acquired Affiliated Computer Services in 2010 –Headquarters: Norwalk, CT –Chairman and CEO: Ursula M. Burns 16th Annual AWMA/NYWEA Joint Seminar February 13, 201311 FORTUNE magazine's annual ranking of the Worlds Most Admired Companies places Xerox # 3 position in the computer industry. Video

12 Xerox Focused on Environmental Sustainability Long Before It Was Popular Introduces first product to make two- sided copies 1969 Joins ENERGY STAR as Charter Partner 1993 Joins EPA Climate Leaders Paper supplier requirements launched 2003 Introduces Sustainability Calculator for Environmental Footprint Report 2008 Introduces recycled grade of cut-sheet paper 1973 Introduces Power Down mode 1982 Pioneering parts refuse and remanufacturing 1991 Waste Toner Recycling starts ISO 14001 for major manufacturing sites 1997 Achieves >10% reduction in greenhouse gas emissions; boosts goal to 25% by 2012 2007 introduces Solid Ink Multifunction Device ColorQube Introduces ConnectKey for Secure Cloud Commuting 2010 EPA SmartWays Transport Partnership Xerox Supplies and Parts Distribution Centers achieve ISO 140001 2009 2011 Achieves 31% reduction in Greenhouse Gas Emissions 2012-2013

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