Sustainability Drives Competition Phil Davidson: HGS European - - PowerPoint PPT Presentation

Sustainability Drives Competition

Phil Davidson: HGS European Sustainability Manager

Agenda

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Introduction to HAVI Global Solutions Sustainability in Packaging: Future Insights Competitive Advantage Through Sustainable Forestry

HAVI Global Solutions

Idea to End-of-Life

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Design Planning / Analytics Sourcing Warehousing & Transportation End-of-life Recovery

HAVI Group

The Future of Packaging Future Insight Survey

HGS-led programme of events leveraging a futurist thinking approach to envision likely outlooks for packaging, projecting a 10-year view

• f the industry and the influences most

likely to affect it. Research output key to strategy moving forward.

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Customization

Packaging technologies that enable customization for consumers and retailers will drive developed market

• pportunities

The Future of Packaging Future Insight Survey

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42

In Europe

107

Respondents Areas of Opportunity

Cost pressures, sustainability, communicating the value of packaging, and supply chain collaboration

Critical Issues

Technology integration of packaging with consumers, retailers, & value chain members, and the collection of “big data”.

Transparency

Transparency throughout the value chain – including material health – will be a large risk area for packaging to address in the upcoming decade

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36% Consultant

22% Brand Owner

10% Converter

10% Raw Material Supplier 7% Academia 5% Futurist 4% Trade Assn.

3% Retailer

4% Other

• Data is largely influenced by consultant & brand owner perspective,

though both interface with much of the value chain

• Majority of consultants are packaging thought leaders with global roles

Top Opportunity Areas

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Sustainability continues to stand out as top

• pportunity area (as it did

in 2010), with supply chain collaboration (also largely sustainability driven) moving up significantly from 2010, as does customization. Emerging markets remain growth engine. 20 40 60 # of Responses Sustainability / Sourcing (General) Supply Chain Collaboration Emerging Market Entry Customization Authentication / Anti- Counterfeit / Safety

Sustainability – Will It Be More Or Less Important In The Next Decade?

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Sustainability is expected to grow in importance – rated by ¾

• f respondents – and will

play an important role in emerging market

• packaging. Indicates a

need for clear sustainable packaging strategies and long-term planning.

9% 13% 78%

0% 20% 40% 60% 80% 100%

Same Less More

% of Respondents

Top Science & Technology Developments For Packaging’s Future

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10 20 30 40 Mobile Enables Tech Reduce Food Waste / Extend Shelf Life Recyclability / End of Life Renewably Sourced Active / Intelligent Pkg # of Respondents

*Note – open ended outside thought leaders

• nly responded to this question. Respondents

asked for top 3 science and technology development areas.

Sustainability elements are highlighted in 3 of the top 4 responses (and many of the

• ther responses) —

indicating a continued push for investment in sustainability technologies

Top Broad Issues / Challenges For Packaging In The Next Decade

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10 20 30 40 Value Chain Collaboration Regulation Traceability / Safety Sustainability / Sourcing Cost Pressures # of Respondents The top 4 issues / challenges are the exact same 4 as in 2010 (just with cost replacing sustainability at the top) Companies need to avoid thinking about cost pressures from a purely material cost standpoint and consider value that packaging brings to a brand / product

* Open-ended question. Respondent asked for top 3 issues.

(Value = Benefits / Cost vs Competition)

SUSTAINABILITY

BIGGEST PACKAGING OPPORTUNITY

Summary of Findings

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Good technical base, adapt to change, ask questions, and global knowledge

TRAINING FOR THE FUTURE

Cost, sustainability, safety, and regulation

BIGGEST PACKAGING CHALLENGE

Material cost & resource availability

TOP AREA OF RISK

Good technical base, adapt to change, ask questions, and global knowledge

TRAINING FOR THE FUTURE

Material cost & resource availability

TOP AREA OF RISK

With sustainability as a top issue & opportunity, there is a clear need to define what that means for your organization

Strategic Level Sustainability Options

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For Fibre

• Implementation of Chain of

Custody for all primary packaging

• Demonstrating all fibre is

sourced responsibly and sustainably

For Resin

• Progressively transitioning

to renewable materials

• Improve recycling, reduce

waste and building brand trust

For Coatings

• Delivering renewable,

repulpable and compostable products

End of Life

Competitive Advantage Through Sustainable Forestry

What Is Sustainable Forestry?

Sustainable forest management, as a dynamic and evolving concept, aims to maintain and enhance the economic, social and environmental value of all types of forests, for the benefit of present and future generations” (UN, 2007)

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Responsible Sourcing Of Forest Products

• Forest certification

– Ensures that the forest is managed to high standards covering social, environmental and economic issues. This results in certified fibre.

• Chain of custody certification

– Traces wood from those forests through all stages of processing and distribution to the customer

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Forest Certification

• A sustainable forest management

certification scheme:

– Requires compliance with the principles of legality, environmental and social sustainability – Is able to provide independent, third party verification that timber is sourced from sustainably managed forests – Includes mechanisms for tracing products from the forest of origin through the supply chain, to the end consumers called Chain

• f Custody (CoC)

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Chain of Custody

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A Chain of Custody (CoC) management system should be designed to ensure that the product purchased, manufactured and supplied to the customer comes from a legal and sustainable source; this can be met by FSC and PEFC chain of custody certification

Chain of Custody

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Demonstrating where raw material (paper) was purchased What happened to the raw material during processing To whom was the finished product sold How was the above recorded and documented

Chain of Custody means:

Benefits of Chain of Custody

Increasing consumer demand for products from responsibly managed sources has increased interest in CoC certification. But what are the benefits: 2 fundamentals to protecting the brand

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Confidence

CoC certification permits businesses to be confident about the sourcing of their wood- based products; their customers can share this confidence.

Risk Management

CoC certification includes a due diligence system to ensure exclusion of wood-based products from unknown, illegal or controversial sources.

1 2

Benefits of Chain of Custody

That confidence then derives 3 additional benefits

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Competitive advantage

Offers companies access to markets demanding eco-friendly products and competitive advantage over companies with uncertified products.

Business leadership on sustainability

CoC certification significantly enhances brand value by demonstrating a company’s commitment to sustainable business practices.

4 5

A clear and transparent message

Being able to include the FSC or PEFC logo on a product-line or marketing material communicates to the customer that products have been responsibly sourced.

3

The Certification Schemes

Forest Stewardship Council (FSC) & Programme for the Endorsement of Forest Certification (PEFC)

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There are 16 million forest owners in Europe alone!

Forest Certification By Scheme

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In 2013 topped the 10% mark as a proportion of total forest area

CoC Certification By Scheme

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Relative growth rate of 11.8%

Implementation Approaches

Chain of Custody Implementation Process

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Start

Implementation Implement procedures, ensure effectiveness, measure inputs / outputs Certification Audit Third party certification audit by elected CB On-Going Maintenance Annual monitoring and recertification Training (High / Low Level) Develop awareness of procedural requirements Approve Procedures Gain approval and establish buy-in Develop Procedures for Key Functions and nominate COC Manager(s) Identify Key Activities Key processes and process owners Build Awareness Develop basic understanding of requirements Identify Subcontract Activities Set up subcontract agreements Confirm Availability of COC Cert Fibre Identify availability and any on-cost Identify Fibre Supplies Material type, cert status

• f suppliers

Identify Scope Sites, activities and products to be included

Key Elements Of A Management System

Core Activities

• Purchasing
• Goods Receipt, Segregation & Storage
• Production
• Sales & Delivery
• Training
• Record Keeping

Supplementary Activities

• Marketing & logos
• Internal reviews

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Approaches To Certified Claims

Within each Standard there are also three broadly comparable approaches, for the implementation of CoC, applicable to the size and complexity of the

• peration:
• Transfer System (FSC) and Physical

Separation Method (PEFC)

• Percentage System and Percentage Method
• Credit System and Volume Credit Method

These approaches are important for ensuring certified product claims. Approach should be geared to the raw material inputs available, the process and claim structure required by the customer.

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Learnings from the Implementation Process

A Layered Approach To Implementation Within A Global Supply Chain

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A Simple Example Of Chain of Custody Scorecard

HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 31 Wraps (4 sites) Napkins (10 sites) Cartons (21 sites) Cups (12 sites) Bags (8 sites) Straw paper (6 sites) Stirrers (3 sites) Cup Carriers (5 sites)

100 100 100 100 100 100 95 66 50 80 90 92 62 66 100 80

Site Certification Prod Certification Product Category (Number of Sites)

Final Learnings

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RULE NUMBER 1: Check the supply chain first Chain of Custody Managers: Go for the willing volunteers Keep it simple! Work with the CB, don’t fight them Group and multi-site schemes can ease some of the pain Engage, train and educate Top management commitment…

• bviously!

Manage the output claims…or risk appearing incompetent! It’s certification…not accreditation

THANK YOU