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Accommodating differing conditions. Building local capacity. Sustainable supply
Supply chains often cross multiple political and chains depend on the collaboration of many
regulatory boundaries. The economic, environ- players. To develop metrics, for example, all key
mental, and social conditions across the chain players must have a common understanding of
can also vary widely. For example, impacts from WHUPLQRORJ\ GHÀQLWLRQV DQG UHVSRQVLELOLWLHV DV
climate change have global implications. Water well as possess credible data collection and anal-
usage, on the other hand, is mainly a regional ysis systems. Reporting systems must also be
issue. A level of water use may be acceptable in compatible, which requires strong relationships
one part of the chain, but not another. and collaborative technological platforms.
There are a number of multi-stakeholder For many issues, building local capacity may
initiatives that provide guidance on how to be beyond the power of any one company alone.
address thresholds at different scales. For Companies should consider collaborating with
example, the rapidly growing Science Based others, including their competition, on issues
Targets Initiative (SBTi) provides guidance that are not competitive differentiators. For
and support to companies on setting GHG example, a number of industry-led initiatives
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targets in line with climate science. The SBTi have focussed on improving working condi-
requires signatories to consider their value chain tions deep in the supply chain. The Electronic
emissions. The CEO Water Mandate is devel- Industry Citizenship Coalition’s Code of
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oping context-based water targets, taking into Conduct is a prime example.
account hydro-ecological conditions at the water
basin level. Other examples will likely emerge. Best Practice Examples
Setting boundaries. The boundaries for Many companies have begun the long process
measurement must be clear, but this can be of addressing these challenges. While none have
GLIÀFXOW LQ ODUJH VXSSO\ FKDLQV 1R NH\ SOD\HUV perfectly addressed all of their supply chain sustain-
should be excluded to ensure all key impacts ability challenges, many have taken commendable
are captured. A fundamental decision is deter- action. Consider three recent examples, each with
mining how many tiers of suppliers to consider, a major focus on GHG emissions.
particularly given that risks often exist deep in In September 2017, Mars announced a $1
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the chain. Product traceability will be a factor billion USD investment in its Sustainable in a
in determining the number of tiers to consider. Generation Plan, which includes a focus on
Guidelines on setting boundaries are avail- both the company’s direct operations and its
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able for some issues, such as measuring GHG value chain. One key commitment is to reduce
emissions. The GHG Protocol, for example, the company’s GHG emissions in line with
provides guidelines to quantify GHG emissions. climate science. Mars has worked with the World
Its main reporting standard contains a supple- Resources Institute to develop science-based
ment on determining emissions throughout a targets and metrics for GHGs, as well as for land
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company’s value chain. Other support is avail- and water. Mars has committed to reducing
able, including an online calculator for value GHG emissions across its value chain by 27%
chain emissions. In any case, companies must be by 2025 and 67% by 2050. 19
clear on the boundaries used to determine and Earlier in 2017, in May, HPE announced that
develop their impacts and metrics. it would establish science-based goals to reduce
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GHG emissions in its supply chain. The goal
is to reduce HPE’s supply chain emissions from
To develop metrics, all key players must have manufacturing by 15% by 2025. Notably, HPE
also committed to provide its suppliers with
a common understanding of terminology, support to help build their local capabilities.
definitions, and responsibilities, as well as possess The company expects that 80% of its manufac-
turing suppliers will set their own science-based
credible data collection and analysis systems. targets by 2025.
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