1. 1
Sustainable Supply Chain Overview
What’s the Issue?
• Stakeholder pressure for companies to measure
and reduce greenhouse gas emissions across
supply and value chains
• Increasing Government focus on sustainable
procurement – placing pressure on suppliers and
service providers
• Changing consumer trends and expectations
• Investment analysts increasingly incorporating
environmental, social and governance (ESG)
factors
• Increasing focus on resource efficiency and waste
minimization as key drivers of innovation and
business value
• Evidence that poor management of sustainability
risks can result in significant costs, depressed
sales and broader reputational harm.

2. 2
Sustainable Supply Chain
What Does it Really Mean?
Supply Chain experts have, for many years, balanced conflicting priorities of quality, cost, and risk. In today’s world,
decisions often need to incorporate environmental, social, and economic considerations.
A major British department store estimated that they have a direct influence on less than 10 percent of the life cycle of their
products. Sustainable supply chain is about ‘managing the impact’ of the remaining 90 percent.
CostCostQuality/
performance
Quality/
performance
SUPPLY CHAIN
VALUE
EQUATION
SUPPLY CHAIN
VALUE
EQUATION
=Risk
profile
Risk
profile
+ + +
Environmental: reduce overall consumption of goods and services; understand the carbon footprint of your supply
chain; encourage product re-usage and resale; reduce waste and water pollution.
Social: understand human rights impact within your supply chain; manage the labor issues within your supply chain;
work against corruption in all its forms.
Economic: seek to offset potential increased pricing through lower consumption; consider increases in revenue by
taking sustainable option; build disposal into the total life cost model.
Environmental: reduce overall consumption of goods and services; understand the carbon footprint of your supply
chain; encourage product re-usage and resale; reduce waste and water pollution.
Social: understand human rights impact within your supply chain; manage the labor issues within your supply chain;
work against corruption in all its forms.
Economic: seek to offset potential increased pricing through lower consumption; consider increases in revenue by
taking sustainable option; build disposal into the total life cost model.
HOLISTIC APPROACH
TRADITIONAL APPROACH
Sustainability
considerations
Sustainability
considerations
Sustainability considerations – management of key risks and opportunitiesSustainability considerations – management of key risks and opportunities

3. 3
Sustainable Supply Chain Overview
Triggers for an Organization’s Supply Chain Sustainability Response
Product improvement
or consolidation
Process redesign/
transformation
Competitive
positioning
(e.g. low carbon
products, fair
trade, organics)
NGOs* pressure
and campaigns
(e.g. child labor,
farming practices,
certified wood
products)
Legislative
change
(e.g. greenhouse
gas emissions
reporting)
Customer
attraction and
retention
(e.g. ‘green’
purchasing
criteria)
Resource price,
availability &
substitution
(e.g. rise of bio-
plastics/alternative
feed stocks)
Investor
pressure and
reporting
expectations
(e.g. Carbon
Disclosure Project
(CDP))
Corporate
sustainability
targets
(e.g. contribution
towards internal
targets)
Risk
management
(e.g. improved
management of
potential supply
chain events)
Resource
efficiency
(e.g. reduced
waste production,
reduced input
costs)
Value creation
(e.g. improvement
and introduction of
new products and
services)
Contract review
Development of a low
cost country
sourcing strategy
Typical triggers for organization’s supply chain sustainability response
* Non-Government Organizations

4. 4
Sustainable Supply Chain Overview
Where is the Value to an Organization?
The value proposition of sustainable supply chain management:
Other potential benefits to be gained:
• Improved communication with shareholders on material sustainability risks and opportunities
• Improved management of issues associated with resource scarcity and/or resource substitution
• Improved confidence and knowledge to respond positively to critical media reporting.
Cost
reduction
Revenue
growth
Reputation
enhancement
Risk
management
Increased resource efficiency; rationalization of assets and suppliers; reduction in waste;
reduction in packaging; reduction in disposal costs from removing hazardous materials from
design; compliance with regulatory requirements can remove potential cost of non-compliance.
Introduction of environmentally or socially responsible products and services; penetration of
new ‘responsible’ consumer markets.
Protection and enhancement of corporate reputation as a socially and environmentally
responsible enterprise; improve employee morale and retention. Create collaborative
relationships with supply chain partners.
Improved transparency in identifying and managing supply chain events and risks; respond to
regulatory changes appropriately; protect brand and reputation.

5. 5
Sustainable Supply Chain Overview
Alignment Between SCO and the SSC
Supply Chain Optimization
This SCO methodology describes the business changes that are required to enhance an organization’s supply chain
model from the perspective of a number of often-interrelated perspectives (lenses). Sustainability is one of the eight
lenses.
The methodology starts by assessing the existing supply chain model in terms of its support for the business strategy and
taking into account the business environment, products, services and markets, and enterprise core competencies and
capabilities. This leads to the development of a series of improvement hypotheses. The subsequent diagnostic is driven
and scoped by the hypotheses and analysis is conducted to verify the hypotheses using the various lenses. This results
in identification of a series of improvement projects organized into a program.
Short-term improvement opportunities are identified and implemented as a means of achieving early potential business
benefit and as a means of funding the broader redesign of the supply chain model.

6. 6
Sustainable Supply Chain Overview
SCO model

7. 7
Sustainable Supply Chain Overview
Applying the Sustainability Lens within a SCO opportunity
• Sustainability
Positioning Review
• Sustainability
Positioning
Assessment
• Materiality
Assessment
• Develop sustainable
supply chain
hypotheses
• High-level mapping
and analysis of the
supply chain
• Diagnose enterprise
positioning within the
SSC model
• Diagnose specific
elements of the SSC
model
• Refine hypotheses
• Consider lens
alignment
• No additional
guidance
• No additional
guidance
• No additional
guidance
DesignDesign MonitorMonitorImplementImplementPlanPlan DiagnosticDiagnostic
PlanPlan DesignDesign MonitorMonitorImplementImplementDiagnosticDiagnosticPlanPlan DiagnosticDiagnostic
Help develop future
state design and
implementation plan
Help implement the
design
Help monitor and
implement lessons
learned
Help diagnose
opportunities
Enterprise strategy
review and
assessment
SUPPLY CHAIN OPTIMIZATION METHODOLOGY
SUSTAINABILITY LENS

8. 8
Sustainable Supply Chain Overview
Sustainable Supply Chain Model
Two additional supply chain-related components have been included in relation to ‘Design’ and ‘Service and End of
Life’.
Information on each component within the SSC model is provided within this section.
SUSTAINABLE SUPPLY CHAIN MODEL
SourceSource OperateOperate DeliverDeliver
Service & End of lifeService & End of life
SuppliersSuppliers CustomersCustomers
Coordination and collaboration with channel partnersCoordination and collaboration with channel partners
Plan and ManagePlan and Manage
DesignDesign

9. 9
Appendix
Scope 1, 2, and 3 GHG Emissions
The GHG Protocol has classified GHG emissions into three key categories. It is important to understand the
difference between the 3 scope categories as they underpin all legislation in this area.
Scope 1: Direct GHG emissions
Direct GHG emissions occur from sources that are owned or controlled by the company. For example: emissions from
combustion in owned or controlled boilers, furnaces, vehicles, etc., emissions from chemical production in owned or
controlled process equipment.
Scope 2: Electricity indirect GHG emissions
Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased
electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company.
Scope 2 emissions physically occur at the facility where electricity is generated as Scope 1 emissions but are also counted by
the consumer as Scope 2 emissions.
Scope 3: Other indirect GHG emissions
Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a
consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some
examples of Scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels, and
use of sold products and services.

10. 9
Appendix
Scope 1, 2, and 3 GHG Emissions
The GHG Protocol has classified GHG emissions into three key categories. It is important to understand the
difference between the 3 scope categories as they underpin all legislation in this area.
Scope 1: Direct GHG emissions
Direct GHG emissions occur from sources that are owned or controlled by the company. For example: emissions from
combustion in owned or controlled boilers, furnaces, vehicles, etc., emissions from chemical production in owned or
controlled process equipment.
Scope 2: Electricity indirect GHG emissions
Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased
electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company.
Scope 2 emissions physically occur at the facility where electricity is generated as Scope 1 emissions but are also counted by
the consumer as Scope 2 emissions.
Scope 3: Other indirect GHG emissions
Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a
consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some
examples of Scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels, and
use of sold products and services.