BT's Supply Chain Sustainability Strategy - Tony Roy Head of sustainability & governance BT Group Procurement May 2018
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BT’s Supply Chain Sustainability Strategy
Tony Roy
Head of sustainability & governance
BT Group Procurement
May 2018
1 © British Telecommunications plc 2017
Introduction
What I will cover:
• BT Background
• BT’s Sustainability Targets
• Better Future Supplier Forum & Benefits
• Contract Clause Case study
• The Future – Science Based Targets
2
Complexity of supply chain
3
Our climate action journey
Measure BT products have Launch BT Launch BT Home Hub Announce Reach 8 Launch new
corporate carbon footprint Better climate new design 100% consecutive 1.5 degree
carbon published to GHG Future policy for helps cut renewable years of C Science
footprint & Protocol Product Supplier suppliers product energy energy Based
set first Standard Forum footprint worldwide reduction in Target
target ambition our operations
1992 2008 2011 2012 2013 2014 2015 2016 2017
Announce goal Publish footprint Launch 3:1 Design Become Launch web- Maintain
to cut net global of BT’s London Net Good checklist for founder based UK
carbon intensity by 2012 Olympic goal & our products member Sustainability emissions
80% compared to a Games ICT methodology introduced of RE100 Assessor Tool 80%
1996/97 (achieved solution for suppliers lower
2016) than
1996/97
baseline
© British Telecommunications plc 2017 4
We are a recognised leader on climate action – 2017/18 highlights
8th greenest company in the world 2nd of FTSE100 companies for carbon CDP global climate and Top 2% for supplier
measurement and reporting supply chain A-lists engagement
5
© British Telecommunications plc 2017
BT’s supply chain target – the “tone from the top”
• 18,000+ suppliers with a global spend of £14.1 bn
• The biggest share of Carbon emissions comes from the Supply Chain
• BT has a 3:1 Goal, and Suppliers are a key part of meeting that goal
67.6%
Our supply chain
67.6%
BT’s end-to-end 6.7%
3: 1
We will help
customers reduce
carbon emissions
As at 31 March
2017
6.7%
Our own operations
carbon
We by three …BT’s end-to-end carbon
will help
times… emissions 25.7%
customers reduce
carbon by three Customer use and
times… 25.7%
disposal of
our products
All competitive tenders must have at least 10% of the adjudication criteria in Sustainability factors
6
The “Better Future Supplier Forum”
The BFSF uses a sustainability
benchmarking model which enables
a company to compare themselves
against global best practice, identify
improvement opportunities, set
goals and a clear plan for
development
The BFSF has been successfully used by several of BT’s strategic suppliers to make significant and demonstrable
gains in the area of Sustainability
7
Making the Case to Buyers: Benefits To BFSF suppliers
Bottom line savings
Typical payback
< 3 years
Electricity Raw materials Water & effluent
-20% -10% -15%
Product innovation
In 2015, 3 suppliers saved 250,000 tones CO2 and $13m through sustainability initiatives
8
Making the Case to Buyers: Sustainability & Commercial Benefits
£ ££
£
£
Price
£
Materials Labour Overhead Profit Total
Applying the principles of the BFSF Methodology helps reduce costs in Materials, Labour and
Overheads
9
The sustainability assessor tool – for all suppliers
10The SAT self-assessment questionnaire … supported by QuEST Forum
A user-friendly Tool that accurately identifies a company’s current state of Sustainability
11Innovation through Sustainability
12The “Sustainability Contract Clause”- a World First !
• BT incorporated a Clause in its Network contract with a supplier
1. Define • The clause required the supplier to review its supply chain climate change performance, and deliver
carbon and cost savings through out the contract life
13The “Sustainability Contract Clause” – Step 2
• The supplier baselined the emissions associated with network products, using the IPMVP*)
Protocol
2. Implement
• They identified significant opportunities to reduce emissions, using these methods
14The “Sustainability Contract Clause” - Step 3
• Savings were identified not just within the supplier’s own operation, but also in the supply
chain.
3. Deliver
• Overall, 131,000 Tonnes of carbon will be saved over the next 3 years – equivalent to
nearly 6,000 cars off the road !
15Game Changing Challenge
BT supplier development BT provide guidance on Supplier develops BT socialise with key
plans options to develop ideas stakeholders
Gate 1: Show
Idea generation Fit with BT Idea development
stoppers?
Explain sustainability:
identify long list of ideas
Decision
& Award Gate 2: Pitch to BT Prepare pitch Investigations BT
Supplier
Supplier prepares Supplier investigates
Supplier pitches to BT
pitch show stoppers
seniors: Yes/No decision
16The Future
17SBT1: How to reduce our carbon emissions intensity by 87% by 2030?
• Move to 100% renewable energy globally by 2020 – up from 82% in 2016/17
• Convert of our fleet of 33,000 vehicles to zero carbon vehicles
» improvements in the cost and performance of electric commercial vehicles
» EV charging infrastructure
• Reduce the carbon intensity of our building heating systems by procuring biogas and
replacing oil-fired systems with electric, gas or heat pump technology
18SBT 2: How to reduce our supply chain carbon emissions by 29% by 2030?
Two underpinning targets and decarbonisation of the wider economy
What’s the target? How we measure? How we do it?
To have 125 of our suppliers Joint campaign with
The number of BT suppliers responding to CDP
purchase and/or use renewable npower to target
energy by 2020 reporting on renewable energy suppliers
We have invited 1000 of
By 2020, we aim to have 250 of our The number of BT suppliers disclosing to CDP – drives
our top suppliers to
top suppliers disclose to CDP climate action and carbon reduction report to CDP
© British Telecommunications plc 2017 19BT has developed opportunities to help both our suppliers and our customers to reduce their carbon footprints.
Npower - Affinity supply chain Good Energy – Home move Offer
Goal: Brand awareness & contributes to BT Sustainable Goal: Support BT Consumer initiative to reduce churn as
Business 2030 target of 87% reduction on carbon customers move home.
emissions.
A 100% renewable electricity and/ or gas contracts
A 100% renewable electricity contract targeted at BT’s targeted at BT’s Home move market in Great Britain,
key suppliers with offices in Great Britain. offering a £130 off the energy bill.
www.npower.com/BT
© British Telecommunications plc 2017 20Challenges and solutions in setting a science based target
• Challenges • Solutions
• Complicated stuff! • Working with experts – the Carbon
Trust, CDP, Mike Berners-Lee and
• Approvals – SBTi and internal
scenario planning
• Uncertainty over future market
• Having a well-established
conditions
methodology for Scope 3 calculations
• Scope 3 complex and lack of definition
• Long standing supply chain
of SBTi “ambitious” Scope 3 target
engagement programme
• Having met previous challenging
targets amid uncertainty
• Market developments, e.g. electric
vehicle announcements
• Team commitment
21Supplier Engagement – lessons learned
• Use Step by step approach
• Not all suppliers will be at the same readiness level – tailor programmes accordingly
• Try and test an initiative – then go wide
• Collaboration – Group strategy, Group Procurement: strategy, contract management, buyers
• Celebrate success
• Keep track of and capture commercial benefits
• Go for some easy wins, and share them across the organisation
• Training and development really helps
22Benefits To BT
Saving and Reduce Build a sustainable
Competitiveness risks business
Helping
Growth Help our the
planet
customers
23Thank you Tony.roy@bt.com
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