Sustainability cannot be achieved alone.
Its importance stretches beyond individuals or companies – there is no higher cost than preserving the planet.
And driving the sustainability agenda forward in procurement is Together for Sustainability (TfS) and The Sustainable Procurement Pledge (SPP).
Inside TfS
TfS is a member-driven initiative, raising CSR standards throughout the chemical industry. Its members are chemical companies committed to making sustainability improvements within their own and their suppliers’ operations. TfS is building the global standard for environmental, social and governance performance of chemical supply chains. Through TfS assessments and audits, its members measure the management, environmental, health and safety, labour and human rights, and governance performance of their suppliers. Areas requiring improvement are addressed through corrective action plans.
TfS members are chemical companies representing a global annual turnover of over €800 billion with a global spend of more than €500 billion in the chemical industry. The Chief Procurement Officer from each TfS member is part of the TfS General Assembly, determining the direction of TfS and ensuring that it continues to deliver ground-breaking and practical solutions to build sustainability within the chemical industry.
TfS was born in 2011 after six leaders joined forces to solve the problem of supplier bases being compliant with the environment and human rights. Bertrand Conquéret is the Co-Founder of Together for Sustainability and The Sustainable Procurement Pledge. “We had very open conversations and at the end of that we realised we couldn’t do it alone,” explains Conquéret. “We realised this could be the start of something different and loved the idea that an audit for one is an audit for all. After that, the plane took off.”
And so it did. Over the past 14 years, TfS has accelerated its growth significantly and today the movement packs quite the punch.
TfS’s tailored approach
Building a sustainable chemical industry doesn’t happen overnight. It requires engagement and willingness from every stakeholder involved within chemical supply chains to make it work. Members of TfS encourage their suppliers to be assessed or audited to track and improve their sustainability performance. For a TfS Assessment, a supplier completes an online questionnaire, providing supporting information about their environmental, social, ethical and supply chain practice. This is reviewed, evaluated, and supplemented with a 360° watch of external stakeholder opinion. The resulting assessment scorecard is made available to all TfS members and may be shared, by the supplier, to non-TfS buyers.
Audits provide a deeper look into sustainability practices at a supplier. A TfS Audit is conducted by an approved external auditor and can cover a single or combined business location. Sustainability performance is verified against a defined set of audit criteria on management, environment, health and safety, labour and human rights, and governance issues. The results are shared with the supplier company and all TfS members. All buyer/supplier information remains confidential. Although assessment and audit scorecards are shared throughout the TfS membership, buyer-supplier relationships are never disclosed.
Thomas Udesen is a Steering Committee Member for Together for Sustainability and a Co-Founder and Ambassador for The Sustainable Procurement Pledge. He explains there was a need but no solution which ultimately led to the birth of TfS. “The whole philosophy of making the assessments and audits didn’t exist because there was no established standard back then,” explains Udesen. “That was how we onboarded EcoVadis and created an audit protocol for TfS which was geared towards the chemical industry. We have 20,000 supplier assessments on the EcoVadis platform. It’s trillions of spend that these companies represented.”
TfS: Closer look
Product carbon footprint measures the total greenhouse gas emissions generated by a product, from extraction of raw materials to end-of-life. Udesen adds creating that the TfS standard followed a similar process. “We moved towards scope three and everyone was wondering how we captured that because the solution didn’t exist,” he explains. “We then collaboratively across 20 companies put our heads together and co-created the standard together with Siemens and built the TfS PCF Exchange. TfS is a vehicle to create something that serves the overall industry even when it doesn’t exist.”
The TfS PCF Exchange solution enables TfS members and suppliers to safely exchange upstream product carbon footprint data. Employing Siemens’ SiGREEN technology, it allows businesses to conduct cross-industry comparisons and compile and manage their emissions across all three scopes.
Quality First
A supplier assessed by TfS is a supplier that can go into the entire ecosystem of the chemical industry with all its potential customers and existing customers completing that assessment. An assessment of a supplier with TfS is also an assessment for all the customers where that company will operate. The scalability, effectiveness and efficiency of this model are huge. In total, the organisation of TfS is formed of 54 companies working collaboratively. As far as Conquéret is concerned, the primary mission is focused on quality first. “TfS is a continuous improvement agenda,” he reveals. “For example, we have reassessments every three years and we also measure the progress on assessments which we share. This is why it’s extremely quality management-oriented, quality first in assessments and audits, as well as methodologies and product carbon footprint.”
Another big part of the puzzle is talent management. Procurement cannot succeed without good people driving positive change at the helm. Conquéret explains that it is vital to equip tomorrow’s leaders with the right tools to push the sustainability agenda forward. “We are developing people and helping them to be aware of their responsibilities when it comes to sustainability,” he says. “This is a very strong element of development and collaboration, including suppliers enhancing that agenda.”
Sustainable Change
Indeed, industry and global change is already underway courtesy in part to the Paris Agreement which is a legally binding international treaty on climate change. Adopted by 196 parties at the UN Climate Change Conference in Paris in December 2015, the mission is to unite countries and stakeholders for people, planet and prosperity. Climate action sits among 17 Sustainable Development Goals with the aim by 2030 to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature to increase 1.5°C above pre-industrial levels.
“This is why that mobilisation is very, very important,” discusses Conquéret. “At the same time, many companies and countries have also committed to sustainable goals in 2025, 2030, 2040, etc. But the how is the challenge. We have very limited time so the how needs to be managed now. That’s why we have that scalability requirement. This is what we have learned through the TfS initiative that there is the possibility to enable change through that collaboration at scale. The power of collaboration through business sectors is visible through procurement. We have learned that in our companies when it comes to collaboration internally and with strategic relationship management with our suppliers. Together, we are stronger.”
Collaboration with The Sustainable Procurement Pledge
Working hand in hand with TfS since 2019 is The Sustainable Procurement Pledge. The SPP is working to make the industry more sustainable by embedding all procurement practices with the UN Sustainable Development Goals and Science-Based Targets by 2030.
“I would say the underlying principle is that this is a challenge that we need to do together in an open, inclusive and collaborative manner,” explains Udesen. “That ideology is something we get from TfS because we have been living it now for the past 13 years. And it was also that spirit that triggered us to think that despite our company hats along with all the other CPOs in our day jobs, we have an industry dimension where we work within certain boundaries, but we also have a procurement community that we need to tap into. It’s really those three dimensions that we want to boost all the cylinders because at the core of this sits the same knowledge. It is about the likes of decarbonisation, a responsible inclusive economy, supplier diversity and water usage.
“What we have established is that in the community along the value chains, but also in our professional community, the gaps that we see where there is an asymmetry of knowledge are very consistent. In almost all cases, there’s somebody who knows how to do it or at least has a good idea, yet there are so many in the same vicinity who don’t know exactly how to do it. Our role at SPP is to close those gaps and make sure that we empower and equip all the practitioners along the value chains to do the same thing. The essence of what good practice looks like is universal and something that we can improve together.”
Sustainable procurement community
Conquéret adds that the SPP focuses on targeting individuals instead of companies. This is in order to mobilise procurement professionals to join forces and work together to introduce more environmentally friendly procurement operations into their respective organisations. “It is the power of collaboration that allows procurement professionals to act at scale which can have a huge impact,” says Conquéret. “We quickly arranged a survey and through this analysis we realised that empowerment and equipment of knowledge is the key. And the best part is that it’s not competitive, it’s just basic knowledge on how to deal with sustainability in procurement and how to act on it.”
And it had been made clear to both Conquéret and Udesen that procurement wanted this sustainable procurement community. Udesen explains the feeling of ‘goosebumps’ after the call for responsibility went live and the overwhelming response received in return. “It was clear to us there is a real passion for responsibility and understanding of the impact that we have,” he reveals. “People want to share knowledge. I think the sheer amount of volunteers that offered their time to share their knowledge was really remarkable. The first 1,000 days we had a team of volunteers that we met with all the time to help steer it. It shows that our procurement community is awesome and we are a really cool bunch of people who not only hold power, but we are conscious about sustainable procurement.”
SPP: Accelerated growth
After the SPP launched chapters across industries and topics, Udesen explains that the team believed they had reached capacity at a voluntary level. It was decided that the SPP needed to grow into a more formal infrastructure and become a nonprofit charity operating with full-time staff. However, in order to do this, Udesen and Conquéret needed to call on their community for help.
“We reached out to a lot of our friends who were CPOs across different organisations and told them we needed donations so that we could hire staff,” adds Udesen. “This league of champions, which now stands at about 35 or 40 CPOs, told us they wanted to support this as something for procurement by procurement. And so they donated and we started recruiting our first hires to drive this initiative forward. Today, we now have five people working for us full-time.”
Given the similar mission statements of The Sustainable Procurement Pledge and Together for Sustainability, SPP, has extracted a significant amount of value and learned vital lessons from TfS. “There are a lot of people involved in both entities so we are naturally looking at what we did with TfS and seeing how we can adopt similar with SPP,” explains Conquéret. “It’s not commercial at all and it’s super compliant. Having said that, then you can build up on academics and knowledge because that knowledge is what is step one of the change that you need to manage to conduct sustainable business and ensure the future for this planet and for business. It is amazing to unlock that potential which exists in procurement.”
Meeting antitrust guidelines
When entering into environmental sustainability agreements with other competing businesses, it is essential that competition laws are complied with at all times. There are rules in place that dictate how businesses can and can’t work together which are important to ensure effective competition that enables innovation. “I think the future of our children and the prosperity of our industry are dimensions that companies do not compete on,” explains Udesen.
“We compete in our products, services and everything towards the customers, which is really also the primary concern of the antitrust authorities. But where we see that we can make a systemic impact and raise the bar for the whole supply chain in a collaborative way is what we focus on. It’s fair to say the chemical industry were probably the first to do it at scale with TfS.
“What we see now, and we are making our knowledge available to multiple other industries is that they have observed TfS and they want to replicate what TfS has done. We made a lot of mistakes but we have learned a lot. We are saying there is no reason why other industries should go through the same learning curve. It has taken us 13 years to learn where we are. And if we can help other industries mature and get over the old bad habit of competing on everything, including our future, then we are happy to do that.”
Digital future
Procurement has never been in such an exciting, transformative period of time. In recent years, the function has been given a significant push to the top of the C-suite agenda amid an acceleration in digital tools. On the back of the likes of supply chain disruptions, geopolitical tensions and of course a global sustainability drive, a Chief Procurement Officer has never been so in demand. Indeed, Conquéret explains that advanced technologies are being leveraged to support the sustainability agenda. “Sustainability is primarily driven by transparency, trustability, and by getting complex inputs analysed,” he says.
“If you look at risk management and resilience it means that sustainability and digital transformation are married within companies. At SPP, we are facilitating the understanding of what the questions are that need to be solved. That helps everyone to elevate and develop a strategy to connect with other colleagues facing similar questions. It is about empowerment that you can bring back into your own companies to then shape the future. When it comes to a sustainable future, embedding technology into the equation is key.”
And with the likes of Conquéret, Udesen and a host of sustainability champions behind them driving positive change for the function, procurement looks in safe hands.
