1 Green Supply Chain Anna Deshko

2 We can help our customers in becoming “greener” to satisfy stakeholders’ requirements and reveal potential for increasing efficiency of their supply chains

3 Global warming is the result of increasing CO 2 concentration in the atmosphere Global warming is and will be one of the largest challenges of this century Transportation activities are one of the main contributors to global warming Carbon Emissions – a Global Challenge With global warming being recognised as one of the largest challenges of this century, carbon emissions are increasingly becoming the centre of attention

4 Some examples of the carbon footprints when transporting goods Transport of tuna from Spain to Japan SpainJapan 7500 kg CO2 Transport of 1 pair of shoes China North Europe 372 g CO2 450 kg CO2 20 KM0 KM 3700 g CO2

5 Transport Energy industries Residential Average Other (non-energy) Services Industrial processes Agriculture Industry (energy) Waste Fugitive emissions Transportation - An important source of CO 2 Due to globalization and increased outsourced trends, transportation is the only sector that has increased CO 2 emissions in the last two decades Source: European Logistics Users Providers and Enablers Group ( ELUPEG) EU

6 Our response – SupplyChain CarbonCheck™ Maersk Logistics’ consulting service aimed at identifying carbon reduction potentials in supply chains mounting pressure from stakeholders ambitious CO 2 reduction targets untapped potentials in global supply chains

7 SupplyChain CarbonCheck™ - comprehensive scope The scope can cover supply chain activities from the pick-up at the vendor’s factory until delivery to the point of sale Load port CFS facilities Factory Truck/ Rail/ Barge Ocean/ Air Discharge port Truck/ Rail/ Barge DC Point of sale  Truck

Estimate current supply chain carbon footprint & costs Simulate carbon footprint & costs of alternative scenarios Implement solutions Evaluate CO 2 emission & cost reduction potential SupplyChain CarbonCheck™ - a standardised approach 4-step methodology based on internationally recognized emission standards

9 Step 1: Estimate Current Carbon Footprint As a first step, we map your current carbon emissions and provide you with a snap-shot of the carbon footprint of your supply chain Carbon mapping of current supply chain with Maersk Carbon Footprint Calculator Result: Snap-shot of the supply chain’s current carbon footprint – the ‘AS IS’ scenario Carbon Footprint Calculator Global supply chain scope Internationally recognised emission standards & calculation methodology EstimateSimulateEvaluateImplement ‘AS IS’

10 Simulation of alternative supply chain set- ups – ‘TO BE’ scenarios Calculation of carbon emissions and total supply chain costs for each scenario Comparison of ‘TO BE’ scenario with ‘AS IS’ scenarios Identification of CO 2 reduction potentials Step 2: Simulate Alternative Scenarios We then estimate carbon emissions for alternative configurations of the supply chain and compare the results with the current footprint AS IS TO BE 2 TO BE 1 TO BE 3 EstimateSimulateEvaluateImplement

11 Evaluate carbon reduction potentials based on: Step 3: Evaluate CO 2 Reduction Potentials Reduction potentials are evaluated under various aspects Strategic fit Impact on carbon footprint Impact on total supply chain costs Ease of implementation Concrete recommendations for implementation ? EstimateSimulateEvaluateImplement

12 Preparation of roadmap for implementation Maersk Logistics assists in putting agreed solutions into practice Estimation of actual achievements in reducing carbon emissions after implementation phase Step 4: Implement Solutions Maersk Logistics assists in implementing the agreed solutions, thus helping you tap the full potential of carbon footprint reduction in your supply chain CO 2 Reduction Time Solution A Solution B Solution C EstimateSimulateEvaluateImplement

13 What have we done so far? Case Studies

14 What have we done so far? – case study 1 In this study, we have analyzed the environmental impact of alternative transportation modes The Project >An electronics company exporting goods from Barcelona to Denmark >Environmental impact analysis of two scenarios: Truck vs. Multimodal Results >The analysis reveals that trucking alternative represents more than 3 times more CO 2 emissions compared to multimodal transportation Total CO 2 (KGs) Truck Multimodal Savings

15 Alternative 1 – Truck Total CO 2 emissions: KGs Factory (Barcelona) Warehouse (Denmark) Alternative 2 – Multimodal Total CO 2 emissions: KGs Rail DC (Spain) Truck DC (Copenhagen) Truck Factory (Barcelona) Warehouse (Denmark)

16 What have we done so far? – case study 2 The aim of the study was to identify main drivers of carbon emissions in the supply chain and provide alternatives to reduce carbon footprint and costs The project >A leading health and beauty group – Alliance Boots >Exports from Asia to United Kingdom Load port CFS facilities Truck/ Rail/ Barge Ocean/ Air Discharge port Truck/ Rail DC Point of sale Truck The Scope Factory

17 What have we done? Estimated current carbon footprint & costs Simulated carbon footprint & costs for alternative scenarios Evaluated CO 2 emission & cost reduction potentials with Boots Helped Boots to implement solutions Results 29% reduction in CO 2 emissions 21% reduction in supply chain costs

18 Results – 29% CO 2 reduction The supply chain improvement initiatives led to 29% reduction in CO 2 (per cubic metre)

19 Results – 21% cost reduction Lower carbon emissions come along with lower logistics costs – a win-win situation for you and the environment!

20 What have we done so far? – case study 3 In this study we have estimated the carbon footprint from supply chain related activities The project >An American retailing brand >Global supply chain with imports to USA The Scope Load port CFS facilities Truck Ocean/ Air Discharge port Truck/ Rail DC Point of sale Truck Factory

21 Results – 57,59 million CO 2 for shipments in 2007 On average, each cubic meter shipped had a carbon footprint of 101 kg Rail Truck Air Ocean Port/Whs What does this mean?* 57,59 million KGs of CO 2 is equivalent to; >10,548 passenger cars not driven for one year >133,939 barrels of oil * :

22 Your guide to greener supply chains - SupplyChain CarbonCheck™

23 Typically, lower carbon emissions come along with lower overall logistics costs and maintained or improved service levels – a win-win situation for our clients and the environment!

24 Wal-Mart’s Green Ratings WSJ article, July 17, 2009 “Wal-Mart to Assign New ‘Green’ Ratings” Sustainability Consulting to Wal-Mart Suppliers

25 Additional Information How to Engage Suppliers in Sustainability

26 THANK YOU FOR YOUR TIME