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Product Sustainability Realized Intro to SAP Product Stewardship Network and The Sustainability Consortium

28th May 2015

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•  253,500 companies and organizations

•  400 of the Global Fortune 500 run SAP

•  80% are small to midsize businesses

•  79% of the world’s chocolate production

•  77% of the world’s beer production

•  86% of the world’s athletic footwear

About SAP

About SAP Product Stewardship Network PSN is a global network. It is a cloud-based solution with web-browser access, allowing anyone to participate. It is available in multiple languages. In consumer products industry over 50% of the top 100 global brands are already registered and have participated in one or more surveys.

Some of those top 100 companies include: •  Nestle SA •  The Procter & Gamble Company •  The Unilever Group •  PepsiCo Inc. •  Mondelez International •  Tyson Foods Inc. •  L'Oreal SA •  3M •  Groupe Danone

•  Henkel •  Kimberley Clark Corporation •  Kraft Foods Groups Inc. •  Diageo PLC •  Colgate-Palmolive Company •  General Mills Corporation •  Reckitt Benckiser •  Johnson & Johnson (consumer segment) •  Kellogg Company •  ConAgra Foods Inc.

•  Smithfield Foods Inc. •  Dean Foods Co •  Beiersdorf •  Campbell Soup Company •  Mattel Inc. •  The J.M. Smucker Company •  The Clorox Company •  Maple Leaf Foods •  Energizer Holdings Inc. •  Dole Food Company Inc. •  Hasbro

PSN allows you to create a many-to-many private network from its company directory…

…and deliver out-of-the-box or customized surveys then…

…report the results

©"2015"Arizona"State"University"and"University"of"Arkansas"

Deforesta)on+!  Worldwide, 1.6 billion

people rely on forest products for all or part of

their livelihoods. !  The net loss of the world’s

forests is estimated at 7.3 million hectares (18

million acres) per year.

The need: Measure and communicate product sustainability using a standardized and practical approach

As"the"sustainability"leader,"you"are"responsible"for"making"key"decisions"concerning"your"organizaAon’s"supply"chain"sustainability"amid"a"world"facing"abundant"environmental,"economical,"and"social"challenges."""

!  Even though about 70% of Earth’s surface is covered by water, less than 1% is available for human use.

!  Globally •  70% of freshwater use is for agriculture, •  22% for industry, and •  8% for domestic activities,

Water+

Waste+!  Food+loss+and+waste+are+associated+with+

approximately++!  173+billion+cubic+meters+of+water+

consump)on+per+year,+which+is+24%+of+all+water+used+for+agriculture.++

!  198+million+hectares+of+cropland+used+per+year.+

!  28+million+tons+of+fer)lizer+

Worker+Health+&+Safety+

!  Workplaces+claim+more+than+2.3+million+deaths+per+year—350,000+are+fatal+accidents+and+close+to+2+

million+are+workNrelated+diseases.+

!  The+economic+burden+of+poor+occupa)onal+safety+and+health+prac)ces+is+around+4+per+cent+of+

global+GDP+each+year.++++

Sources:""

•  World"Resources"InsAtute"and"Food"and"Agriculture"OrganizaAon"of"the"United"NaAons"

•  Forestry"Department"Food"and"Agriculture"OrganizaAon"of"the"United"NaAons"

"•  EPA"•  ILO"•  OECD"

©"2015"Arizona"State"University"and"University"of"Arkansas"

About+The+Sustainability+Consor)um+(TSC)+Enabling(the(consumer(goods(industry(to(provide(more(sustainable(products(

•  A multi-stakeholder, cross-sector, non-profit organization that translates scientific information into business practice

•  Mission: to design and implement credible, transparent, scalable, science-based measurement and reporting systems accessible for all producers, retailers, and users of consumer products

•  A global organization, with offices in the United States, Europe and China

•  >100 Members and 1000s of users worldwide

©"2015"Arizona"State"University"and"University"of"Arkansas"

Alignment with Key Initiatives

Cross Sector Food, Beverage, and Agriculture Electronics Textiles Packaging Toys

General Merchandise

Paper, Pulp, and Forestry

Home and Personal Care

©"2015"Arizona"State"University"and"University"of"Arkansas"

TSC Product Sustainability Toolkits are science-based and stakeholder-informed, including input by companies, academics, civil society organizations, and government agencies.

TSC Product Sustainability Toolkits

TSC+Research+Database:+One"of"the"world’s"largest"collecAon"of"scienAfic"evidence"on"environmental"and"social"hotspots"and"improvement"opportuniAes"within"a"product’s"life"cycle."

110"TSC"Product"Sustainability"Toolkits"available!"

A summary of the best available, credible, and actionable knowledge about the sustainability aspects related to a product category over its entire life. Each CSP represents the culmination of a significant body of scientific research and expert opinion. This document also contains key performance indicators.

A one-page summary of relevant issues, hotspots, and improvement opportunities for a product category in an accessible overview. A Snapshot pulls information from the Category Sustainability Profile.

Questions that companies and organizations can use to assess and track the performance of suppliers on critical sustainability issues. The KPI questions focus on the relevant environmental and social issues to a single product category or family of consumer goods.

Impacts, issues, practices, key performance indicators

©  2014 SAP SE or an SAP affiliate company. All rights reserved. 8 Customer

Benefits/Lessons Learned from an Index-based Approach

Benefits •  Comprehensive •  Scientific •  Standardized (but Configurable) •  Available & Cost-Effective •  Useful to ID Both Risk and Top Performers

Lessons Learned •  Corporate/Institutional Commitment •  Long-Term Vision & Short-Term Goals •  Master Data Matters •  Reach the Right Supplier •  Balance Carrots, Sticks, & Harness Competition •  Make it Easy!!

© 2015 Arizona State University and University of Arkansas

Many-to-many reporting

TSC"

Retail"

Manufacturers"Reporting Platform SAP PSN

Other"reporAng""systems"

MulAple""Aers"of"suppliers"

Other"content"providers"

MulAple""Aers"of"suppliers"MulAple""Aers"of"suppliers"

Use market forces to drive and harmonize supply network measurement & reporting

Single Response

Single Request

10-15 product cate- gory specific indicators

©"2015"Arizona"State"University"and"University"of"Arkansas"

Buyers Communicate efficiently and effectively with suppliers: •  Ask category-specific questions •  Track supplier performance using KPIs

Suppliers Address product sustainability more effectively and efficiently: •  Use a single reporting tool across buyers •  Enhance product development •  Reduce spending on sustainability

research and reporting •  Evaluate performance of their suppliers

v v

v v

Improved product sustainability and cost efficiency

•  Hotspots

•  Improvement opportunities

•  Key Performance Indicators

•  Category Sustainability Profiles

TSC® provides

v v v v v v v v v

Hotspot: Sustainability focused social and environmental high impact areas

TSC metrics are available and being used by buyers, procurement teams, and suppliers to address product sustainability in a cost efficient way.

©  2014 SAP SE or an SAP affiliate company. All rights reserved.

Thank you!

For further information: Jim Sullivan, SAP Sarah Elaine Lewis, TSC j.sullivan@sap.com SLewis@walton.uark.edu 202-631-8324 479.263.2087

©  2014 SAP SE or an SAP affiliate company. All rights reserved. 12 Customer

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