Global Logistics and Supply Chain Strategies - March 2008 - (Page 32)

part of their bid package questions about our emissions footprint and what we are doing to mitigate it,” Damman says. Matt Menner, senior vice president for sales at Transplace, a 3PL based in Plano, Texas, agrees. “We are being called on by our customers to effectively state our strategy around sustainability,” he says. “They are using that as a building block within their own organizations to develop green strategies and to potentially create a green message.” As the Supply Chain Collaboration Project (see sidebar) rolls out and more major companies like Wal-Mart apply environmental scorecards to their suppliers, these pressures will only increase, experts say. One program that brings shippers and carriers together in support of these goals is the EPA SmartWay Transport Partnership. SmartWay is a voluntary partnership between various freight industry sectors and EPA that establishes incentives for improvements in fuel efficiency and GHG emissions. It also provides lots of information and tips on how to reduce emissions and fuel use. By 2012, SmartWay aims to eliminate from 33 million to 66 million metric tons of CO2 emissions and up to 200,000 tons of nitrogen oxide (NOx) emissions per year. At the same time, the initiative will result in fuel savings of up to 150 million barrels of oil annually. SmartWay members file plans each year indicating how they are working toward helping EPA achieve these goals. Names of participating carriers and much other information are available on the SmartWay web site (www.epa.gov/smartway). Increasingly, shippers are favoring these carriers when awarding business. “We definitely look for carriers that are in the SmartWay program,” says Brian Hancock, vice president-supply chain at appliance maker Whirlpool, Benton Harbor, Mich. “As a shipper, their participation in SmartWay allows us to know that they are working to lower their carbon footprint.” Transplace also is increasing its use of SmartWay carriers. In addition, the 3PL provider has made participation in the SmartWay program a criterion for being considered a favored, “platinum” carrier. “Starting in 2008, you have to be a SmartWay carrier and have an active plan on file with the EPA to be in our platinum program,” Menner says. “We feel strongly enough about this that we are willing to reduce our platinum carrier base by making SmartWay participation a requirement.” Menner hopes this action will drive more carrier participation in the program. “We are going to keep actively pushing our carrier base to become more involved and to be more environmentally conscious,” he says. No Idling One of SmartWay’s key focus areas is reduction of engine idling. An idling truck burns nearly one gallon of diesel fuel per hour, according to EPA. Reducing unnecessary idling could save nearly $3,000 in fuel Carbon Disclosure Project Focuses on Supply Chain The Carbon Disclosure Project (CDP) is an independent, nonprofit, U.K-based organization that provides information on how the world’s largest companies are responding to the risks and opportunities presented by climate change, including an accounting of those companies’ greenhouse gas (GHG) emissions and reduction efforts. By partnering with 315 institutional investment houses around the world, the CDP can claim to represent the shareholders of more than $41tr of investment assets. This leverage led 2,400 public companies in 2007 to voluntarily answer the CDP’s annual questionnaire. The 2008 questionnaire, the CDP’s sixth survey, was mailed in January to 3,000 corporations. Responses are published on the CDP web site (www.cdproject.net), which is the largest repository of corporate greenhouse gas emissions data in the world. After seven years of experience, the CDP also has become the gold standard for carbon disclosure methodology and process. An important milestone for the CDP occurred when WalMart, the world’s largest retailer, agreed to answer the 2005 survey, after having ignored the first three requests for information, says Nigel Topping, client partner at the CDP. Once committed, Wal-Mart quickly became a leader and is in the forefront of an initiative to use the CDP process to examine and measure the carbon footprint of corporate supply chains. “As Wal-Mart got into the numbers in its own operations, it realized that the supply chain is a major contributor to GHG,” says Topping. The retailer asked the CDP to work with it on a pilot project to engage its suppliers much more seriously on this issue. A pilot was conducted last summer in which WalMart asked a small number of suppliers to disclose their GHG information, using the CDP questionnaire, plus a few extra questions, Topping says. “We all learned a lot from that project and we continue to work with Wal-Mart on this issue,” he adds. Partly as a result of that work, CDP last October launched the Supply Chain Leadership Collaboration Project, which will more widely use the public survey process to obtain information specific to supply chains. So far, 12 companies have agreed to participate in a pilot survey during the first quarter of 2008 and to encourage up to 50 of their suppliers to do so as well. These companies are: Cadbury Schweppes, Dell, Hewlett-Packard, Imperial Tobacco, L’Oreal, Nestle, PepsiCo, Procter & Gamble, Reckitt Benckiser, Tesco, Unilever and Carrefour. Results of the pilot will help CDP refine the process in preparation for a roll-out in May or June. About 800 additional companies that already responded to the CDP corporate questionnaire will be asked to join the supply chain project. “It will be very interesting to see the kind of response we get,” Topping says. “It does seem like lot of people are thinking about how to engage with their suppliers on this issue. We won’t be right for everybody, but I think we provide a common denominator that will work for a lot of people. Using one standard questionnaire will be quicker and cheaper and certainly less of a burden on the suppliers.” Topping stresses that CDP and the project participants are interested in starting the process of reporting and will be careful not to make the survey too difficult. “We realize that this is very new to many companies,” he says. “We want people to respond, so we don’t want to make it frightening for them. Of course, it is an additional task—there is no way around that—and if a company has done no work in this area it will take some effort, but not an overwhelming one.” 32 MARCH 2008 http://www.epa.gov/smartway

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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