Implementing Sustainability @ Alcan Packaging - OECD

Implementing Sustainability@ Alcan Packaging

© 2 0 0 8 A L C A N I N C.

OECD-UNEP Conference on Resource Efficiency, Paris

Gerald Rebitzer, April 24, 2008

Product Stewardship

A global leader in packaging

in 128 sites in 31 countries

30,000 employees

© 20 0 8 AL CAN I NC. Slide 2

in 128 sites in 31 countries

US$ 313 million capital expenditures 2007

US$ 6.2 billion 2007 revenues

Pharma PackagingPharma PackagingFood Flexible PackagingFood Flexible Packaging

►► US $ 3.9 Bn revenues & US $ 3.9 Bn revenues &

►► 63% of AP revenues in 200763% of AP revenues in 2007



Leadership position in our four main markets


Tobacco PackagingTobacco Packaging Cosmetics PackagingCosmetics Packaging



►► US $ 0.85 Bn revenues &US $ 0.85 Bn revenues &


Product Sustainability: The Developmenthas been Strongly Accelerating

Product Sustainability increasingly becoming a REAL Business Issue, driven by businesses(e.g. Wal-Mart, General Electric, etc.)

It is becoming a core competitive issue


It is becoming a core competitive issuedifferentiation of products and suppliers (brand value)

Demand globally accelerating with regional differences

Europe & Japan: steady development

North America: interest “exploding”

Other Regions: strongly emerging

Criteria covering the 3 pillars of Sustainability:

Environment

Social

Economic (long term)

Life Cycle Thinking: Integrating supply chain and downstream

Multi criteria sustainability assessment


End of Life (disposal)

Life Cycle Thinking: Integrating supply chain and downstream activities (suppliers, customers, consumers)

Raw materials/suppliers

AlcanProduction

DistributionUse by Alcan’s

customer

Final use(consumer)

Product Stewardship (Product Sustainability) = Sustainability aspects + life cycle thinking

Availability

Price

Product Stewardship⇒ Top-line growth

The Business Case: Product Stewardship as Emerging Issue just as Quality 40 years ago


Based on: U. Golüke, WBCSD

Product Stewardship:New opportunitiesfor differentiation

QualityMassCustomization

Key Challenges in ImplementingProduct Stewardship

Has to fit to the organizational structure(s): no “one size fits all”

Complexity vs. easy-to-use approaches

Too detailed/complex (e.g. detailed LCA): cost-benefit ratio??

Too simplistic: “perceived sustainability“ often misleading


Too simplistic: “perceived sustainability“ often misleading

Differentiation between management/improvement approaches(e.g. internal application) and reporting (e.g. Wal-Mart scorecard)

Product system vs. (traditional) material view

Product System AND Business Model needs to be taken into account

Don‘t reinvent the wheel

Reinventing the Wheel?


Example Alcan Packaging:Product Stewardship is a Key Business StrategyManagement/process approach (vs. project approach)

managing sustainability as quality is managedintegration into EXISTING business processes, no add-on

Getting ownership throughout the business functions, e.g.ManagementR&D


R&DProcurementSales and Marketing

”Mainstreaming“: Capacity building, aligning organization and tools

Overall improvements of product portfolio in the focus(incremental changes, no silver bullet)

(More) sustainable products are a strategic market focusinnovation, growth opportunities

Evolution of society

Hunter Farmer “Sustainability Specialist“


From local food supply for own demand to global mass consumption

Stone Age Middle Age Modern Society

Evolution of society =Evolution of packaging


Requirements for modern packaging


Packaging as an important cornerstone to meet human needs

Alcan Packaging Environmental Sust. Criteria

• Emissions to air (global warming gases / others)

• Impact on biosphere / Use of non-energy resources

• Use (depletion) of energy resources

• Emissions to water / Emissions to ground


• Emissions to water / Emissions to ground

• Impacts from waste treatment

• Quality of environment management system

• Good international practices regarding environment

• Risks of severe environmental accidents

Alcan Packaging Social Sustainability Criteria

• Good international practices regarding Safety & Health

• Quality of Safety & Health management systems

• Safety & Health impacts

• Risk of severe safety or health accident


• Risk of severe safety or health accident

• Adherence to Labor Rights

• Quality of Labor Rights management system

• Social Differentiation

• Impact on surrounding communities

Alcan Packaging Economic Sustainability Criteria

• Assets needed

• Availability of raw materials

• Adherence to existing or anticipated regulations

• Market differentiation


• Market differentiation

• Performance of quality management system

• Human capital factors

• Technical quality factors

• Governance / Transparency and accountability

• Performance of CI management system

Think broadly about issues, opportunities, and impacts

ASSET™*: Making Product Stewardship Operational

nkin

gASSET™


Engage and partner w/customers, suppliers, end consumers, …

Make connections,integrate sustainability into our businesses

Lif

e C

ycl

e T

hin

Supply Chain coop.Product

Stewardship

*ASSET (Alcan Sustainability Stewardship Evaluation Tool)is a trademark of Alcan Inc. and/or its affiliates, patent pending

Defining the product and its use (life cycle): input/outputs, plant, markets

Calculationof LCA results according toISO 14040

Environmental life cycle assessment (LCA) in ASSETTM


opportunities

Giving a holistic view of hot-spots and opportunities


Identification ofhot spots (--), weaknesses (-), strengths (+), opportunities (++)

hot-spots

2

1.2

0.25

1

0

0.5

1

1.5

2

Developing sustainability profiles of our products

Environment

Social

Economic

Differences in criteria for specific assessment


-0.25-0.4

-0.8

-2

-1.5

-1

-0.5

Normalized sustainability index

Roles of key departments/functions 1/2

ManagementIntegrate sustainability aspects into strategic decision making for products and investments ( continuous improvement)

Product DevelopmentAnticipate risks and opportunities as well as improvement


Anticipate risks and opportunities as well as improvement options for new productsIdentify options for resource reductions, smarter solutionsUses ASSET™ as standard screening for product portfolio(routine part of product development process)

ProcurementGeneral standards for suppliers (code of conduct, social responsibility and EHS audits)Specific cooperation on improvement projects

Sales & Marketing

Help our customers to better satisfy their own customers

Support our customers to prepare for existing and upcomingsustainability frameworks and other regulations

Communicate responsible on sustainability issues

Roles of key departments/functions 2/2


Communicate responsible on sustainability issues

Sustainability Functions

Provide guidance, tools, training, etc.

Provide objective elements on sustainable aspects of packaging(internally/externally)

Resist to misleading “green” statements and topopular short term trends fact-based

How to consider sustainability of packaging ?

Consideration of

life cycle of packaging

economy

pp

ly c

hai

n


life cycle of packaged good

role of the consumer

Evaluation of sustainability performance needs more than just looking into packaging

environmentsocial

aspects

Su

pp

consumer

Integrated approach – life cycle of food supply


Coffee supply system – CO2 equivalents

Coffee Supply System (MJ/cup of coffee)

0,12

0,16

Milk

Hotwater (Brewing)

Transport (Roastery tohousehold)

Cup of coffee from 500 g bag (PET12/alu7/PE100)

Cup of coffee from 500 g bag (PET12/alu7/PE100)

Cup of coffee from 2 g stick (PET12/alu7/PE55)

Cup of coffee from 2 g stick (PET12/alu7/PE55)

kg CO2-equ. per cup of coffee


Espresso Black White InstantBlack

InstantWhite

A project of

0

0,04

0,08

household)Retail Packaging

Coffee Production

Preliminary results,mainly based on study of ESU-services

Success Factors for ImplementingProduct Sustainabilty in Industry

View Product Stewardship as a process (similar) to quality management

Focus on business value and core business functions

Sales & Marketing as well as R&D/innovation can be powerful drivers


powerful drivers

Cooperate along the supply chain

Develop tools and organization TOGETHER with other business functions

Better be roughly correct than exactly wrong

Sustainability is not only about environment, don‘t forget other pillars

© 2 0 0 8 A L C A N I N C.

Contact:Dr. Gerald RebitzerDirector Product StewardshipAlcan Packagingc/o Alcan Technology & ManagementBadische Bahnhofstr. 168212 NeuhausenSwitzerland

[email protected]

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