Sharing Responsibility along Supply Chains

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The Corporate Responsibility Research Conference
2006 4-5 September 2006, Trinity College Dublin,
Ireland
Sharing Responsibility along Supply Chains A New
Life-Cycle Approach and Software Tool for
Triple-Bottom-Line Accounting
Dr Thomas Wiedmann
Dr Manfred Lenzen
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SD Reporting TBL Accounting
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Corporate sustainability reports and
sustainability ratings are increasingly used as
key information for investment and lending
decisions.
There is a growing awareness that shareholders
value is enhanced by increased corporate social
and environmental responsibility.
World Business Council for Sustainable
Development (2002)
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Challenges remain

• There is little comparability among the various
  sustainability rating questionnaires sent to
  companies.
• A key challenge remains reporting on the links
  between sustainability and the bottom line.

World Business Council for Sustainable
Development (2002)
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Extend reporting boundaries

• Business will increasingly be expected to report
  across the value-chain, i.e. on supplier- and
  consumer-related impacts of activities, products
  and services.

World Business Council for Sustainable
Development (2002)
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Trucost Defra (May 2006)
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Reporting on direct and indirect KPIs

• The Government expects businesses to report on
  their significant environmental impacts whether
  they are direct or indirect.
• Businesses are likely to derive benefit from
  positively influencing their indirect
  environmental impacts.

Trucost Defra (May 2006)
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Indirect (environmental) impacts
Supply Chain Impacts (upstream)
Direct Company Impacts (on-site)
Downstream Impacts
Energy Water Raw materials Logistics
Boiler emissions Car fleet emissions Manufacturi
ng emissions Landfill waste Recycling rate
Products in use Product disposal
Trucost Defra (May 2006)
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The problem of quantification

• there is still a lack of quantification in
  most reporting. the majority of reports lack
  depth, rigour or quantification.
• Most business will have supply chain impacts
  that they should understand and consider
  reporting. There is no single, quantifiable
  measure that companies can use as a Key
  Performance Indicator for the effect of their
  upstream supply chain on the environment.

Trucost Defra (May 2006)
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SD Reporting Principles

• Principle 1 quantitative
• Principle 2 relevant reliable
• Principle 3 comparable
• Principle 4 complete

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TBL Accounting without boundaries
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Where to draw the boundary?
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e.g. total emissions (direct plus indirect)
e.g. direct (on-site) emissions
e.g. purchases of a company
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How to allocate indirect impacts along a supply
chain?
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Full (100) Producer Responsibility gtgt only
on-site impacts!
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Full (100) Consumer Responsibility gtgt all
upstream impacts with the consumer
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Sharing responsibility
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Sharing responsibility
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Sharing responsibility
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Sharing responsibility
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Sharing responsibility
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shared responsibility
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BottomLine3 A new TBL software tool
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Two data inputs

• Financial accounts
• On-site impacts

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Outputs

• gt 100 TBL indicators
• Quantification of total (direct and indirect)
  impacts
• Sector benchmarking
• Quantification of shared responsibility
• Structural path analysis
• Production layer analysis

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Main TBL indicators
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Benchmark spider diagram (TBL)
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Benchmark spider diagram (Footprint)
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Quantification of shared responsibility(GHG
emissions in t CO2-eq.)
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Structural Path Analysis
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Structural path analysis (particulate matter)
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THANK YOU www.bottomline3.com
www.isa-research.co.uk