Smart Freight

Procurement Guidelines
September 2019
 Disclaimer About WBCSD
Smart Freight Centre and the World Business Council for Sustainable Development authored this WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the
publication. The views expressed in this publication are those of Smart Freight Centre (SFC), World transition to a sustainable world. We help make our member companies more successful and sustainable by
Business Council for Sustainable Development (WBCSD) and staff, consultants and management, focusing on the maximum positive impact for shareholders, the environment and societies.
and do not necessarily reflect the views of the SFC Board of Trustees or WBCSD member companies.
SFC and WBCSD do not guarantee the accuracy of the data included in this publication and do not accept Our member companies come from all business sectors and all major economies, representing a combined
responsibility for the consequence of their use. revenue of more than USD $8.5 trillion and 19 million employees. Our global network of almost 70 national
business councils gives our members unparalleled reach across the globe. WBCSD is uniquely positioned to
work with member companies along and across value chains to deliver impactful business solutions to the
Acknowledgements most challenging sustainability issues.

Smart Freight Centre has developed the Smart Freight Procurement Guidelines as part of WBCSD’s Together, we are the leading voice of business for sustainability: united by our vision of a world where more
Transforming Heavy Transport project, co-financed by We Mean Business. The document is based on than 9 billion people are all living well and within the boundaries of our planet, by 2050.
existing guidelines and practices and input from individual companies and organizations, as well as the
Global Logistics Emissions Council (GLEC) led by SFC. Its inspiration stems from the New Zealand www.wbcsd.org
Sustainable Business Council, which developed sustainable procurement guidelines with its member
businesses in 2016. We would like to thank all companies and BSR who contributed to this publication. Follow us on:

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@wbcsd
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emission global freight sector. We bring the global logistics community together to drive transparency
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and mobilize multinational companies and their logistics partners to take action. This is done through global
www.linkedin.com/company/smart-freight-centre
industry guidelines and solutions for emissions calculations, reporting and reductions, the first
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of which is the Global Logistics Emissions Council (GLEC) Framework, and by recognizing Smart Freight
Leaders. To scale our impact, we are present in Europe, the Americas and Asia; and we collaborate with
existing initiatives, partner organizations and experts worldwide.

Contact
Smart Freight Centre World Business Council
Keizersgracht 560, 1017 EM Amsterdam, Netherlands for Sustainable Development
P.O. Box 11772, 1001 GT Amsterdam, Netherlands Maison de la Paix, Chemin Eugène-Rigot 2B
Suggested citation: Authors:
Tel office: +31 6 4695 4405 CP 2075 1211 Geneva 1, Switzerland
Smart Freight Centre and WBCSD. Chiara Lepori, Sophie Punte and
www.smartfreightcentre.org Tel office: +41 (0)22 839 31 71
Smart Freight Procurement Guidelines (2019). Eszter Toth-Weedon of Smart Freight Centre
[email protected] www.wbcsd.org
ISBN 978-90-82-68790-3. Mariana Heinrich of WBCSD

2 3
 Summary
The Smart Freight Procurement (SFP) Guidelines provide professionals engaged in logistics
procurement, supply chain and logistics management, and logistics emissions management with an List of abbreviations and acronyms
action-based guideline on how to reduce greenhouse gas (GHG) emissions and air pollutants from their
freight transport and logistics procurement practices. The SFP Guidelines lead organizations in their
practical journey to low-carbon freight logistics and procurement. GHG greenhouse gas
GLEC Global Logistics Emissions Council
The SFP Guidelines outline several actions that companies can take in four procurement phases: planning,
tendering, contracting and contract-based supplier management. A preliminary phase intended to set KPI key performance indicator
an organization’s internal environment and ensure its readiness to undertake the actions to achieve the
low-carbon procurement of smart freight and logistics services precedes the four operational phases. LCTPi Low Carbon Technology Partnerships initiative
In particular, top management support is critical to making the significant changes required to shift from LSP logistics service provider
a cost-focused procurement approach to a procurement process that also prioritizes reductions in GHG and
air pollutant emissions. RFP request for proposal
RFQ request for quotation
An overview table displays all actions, allowing organizations to efficiently identify the detailed actions for
implementation relevant to them. Specific toolboxes enable organizations to immediately understand the SFC Smart Freight Centre
actions identified. When possible, examples from company experiences and best practices illustrate the
SFL Smart Freight Leadership
actions, highlighting how the action can contribute to GHG emissions reductions. The example’s description
also outlines the impacts/lessons learned. SFP Guidelines Smart Freight Procurement Guidelines

By implementing the SFP Guidelines, organizations can map their alignment with low emissions logistics and UN United Nations
freight procurement and identify and address existing gaps through the implementation of the US United States of America
suggested actions. This alignment can extend to your organization’s entire logistics procurement policies
and procedures. Alternatively, you may choose to only implement certain actions for a specific objective. US EPA United States Environmental Protection Agency
WBCSD World Business Council for Sustainable Development

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 Table of Contents
1 INTRODUCTION 8 3.3 Tendering phase-related actions 21

1.1 What are the SFP Guidelines 8 3.4 Contracting phase-related actions 22

1.2 Target audience 8 3.5 Contract-based supplier management-related actions 24

1.3 Scope of the document 8

1.4 Structure of the document 9 4 COMPANY EXAMPLES 26

1.5 Reference material and development process 9 4.1 Company examples – Overview 26

1.6 The guiding principles 10 4.2 Company-specific examples 27

4.3 Examples applicable to many companies 40

2 NAVIGATING THE SMART FREIGHT PROCUREMENT GUIDELINES 12

2.1 Freight procurement phases 12 ANNEXES 42

2.2 Action overview table 14 A. Smart Freight Leadership 42

2.3 How to use the SFP Guidelines 15 B. Sector initiatives 43

C. Sources 53

3 ACTION CARDS 16

3.1 Preliminary phase-related actions 16

3.2 Planning phase-related actions 18

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 1 Introduction
Smart Freight Centre (SFC) and WBCSD drafted the Smart Freight Procurement Guidelines (SFP Guidelines) The primary focus of this document is the reduction of GHG and air pollutant emissions. The Guidelines
as part of WBCSD’s Transforming Heavy Transport project.1 It is an innovative project aimed at reducing aim to support organizations in their transition to become a low-carbon business. They can achieve this
emissions from freight and logistics operations, including air, sea, land and transshipment centers. In by addressing freight and logistics procurement activities through the specific actions suggested in the
collaboration with Smart Freight Centre and the We Mean Business coalition, it is working to find solutions to SFP Guidelines.
increase demand for low-emissions heavy transport and achieve our vision of net-zero logistics emissions
globally by 2050.
1.4 Structure of the document
Transforming Heavy Transport is a key project of the Low Carbon Technology Partnerships initiative (LCTPi). We have organized the SFP Guidelines into four chapters:
Since its launch at the 21st Conference of the Parties (COP21) to the United Nations Framework Convention • Chapter 1 introduces the document, its scope and structure and the target audience. It also
on Climate Change (UNFCCC) in Paris, LCTPi has brought together more than 235 companies to bring climate defines keywords;
solutions to scale.2 • Chapter 2 explains how to navigate the document, facilitating its use in daily company activities
and operations;
This document is also a supporting element of Smart Freight Leadership 3 as part of the broader activities • Chapter 3 is the toolbox. It details the actions logistics procurement departments can take to embed
of SFC. The SFP Guidelines are one of SFC's global standardized guidelines for industry to calculate, report GHG emissions and air pollutant reduction objectives in a company’s freight procurement process.
and reduce emissions, developed together with the Global Logistics Emissions Council (GLEC). Action cards summarize their expected impact and link with SFP Guidelines guiding principles and
provide guidance for implementation. Furthermore, the action cards include references to examples
The SFP Guidelines also complement the ‘Sustainable Freight Procurement Framework’ developed by BSR from companies related to the implementation of those specific actions;
and members of the Clean Cargo and Sustainable Airfreight initiatives, to help companies evaluate, benchmark • Chapter 4 contains descriptions of examples referred to in the various actions in Chapter 3. One example
and improve their freight procurement practices. Together, SFC, WBCSD and BSR will continue to expand this can be relevant to more than one of the suggested actions.
practical toolbox to help business take climate action.
The annexes at the end of the document provide details on:
• How the SFP Guidelines link with SFC’s broader strategy (Annex A: Smart Freight Leadership);
1.1 What are the SFP Guidelines • Sector initiatives that organizations can join to work together with others to achieve sustainable freight
The SFP Guidelines aim to provide guidance on how organizations, big or small, can leverage their freight and logistics, including GHG emissions reductions 4 (Annex B: Sector initiatives);
transport and logistics procurement demands to make a positive impact on reducing GHG emissions and air • The main sources used to develop the SFP Guidelines (Annex C: Sources).
pollutants across their freight transport and logistics supply chains.

Through an action-driven approach, the SFP Guidelines provide organizations with a pathway to achieve
low-carbon procurement of freight transport and logistics services.
1.5 Reference material and development process
We have developed the SFP Guidelines based on a review of business practices and theory on logistics
procurement from July 2018 to October 2018:
1.2 Target audience • The analysis of smart freight procurement-related business processes through interviews with more
We have developed the SFP Guidelines for any type of company or organization, irrespective of size, that is than 10 multinational companies;
interested in embedding GHG emission and air pollutant reductions in its freight procurement procedures. • The review of 11 smart freight procurement guidelines and initiatives worldwide;
• The review of relevant professional and academic literature and company practices related to green
The target audience of the guidelines comprises professionals engaged in the management or execution of freight procurement.
logistics and/or environmental management, including functions and responsibilities such as:
• Logistics procurement; We shared the first working draft of the SFP Guidelines with a working group composed of experts and
• Supply chain and logistics management; and business practitioners, among them the business community comprising WBCSD’s Transforming Heavy
• Logistics emissions management. Transport project and the Global Logistics Emissions Council (GLEC). We used the feedback collected to
prepare a second version submitted for a second review.

1.3 Scope of the document

The SFP Guidelines cover all transport modes and logistics sites across the global logistics supply chain. We
have taken a general approach while recognizing that in its practical application there will be specific
challenges for different modalities. Future expansions of the SFP Guidelines may elaborate on different
modalities and application contexts.

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 1.6 The guiding principles Figure 1: Guiding principles of the SFP Guidelines

The SFP Guidelines are based on relevant principles identified during the review of existing sustainable
procurement guidance and initiatives and from interviews conducted with multinational companies (see
section 1.5). We identify three guiding principles that address the needs of organizations and embed the
recommendations received and elaborated during the SFP Guidelines drafting process itself: transparency, Transparency Collaboration Leadership &
collaboration, and leadership and innovation.
Innovation
A strong smart freight procurement process should include at least these three guiding principles to reach
a complete approach. Whereas each principle is important by itself, focusing on only one or two will not be
as effective in reaching maximum impact. (see Figure 1).

Transparency on emission reporting, the way shippers use the data they receive from the handling of their
products by their logistics service providers, and sharing best practices are among the actions that can
improve the understanding of practices along the entire logistics operations value chain and help to set
targets. Such transparency drives understanding of how to improve the journey to low-carbon freight.

Collaboration between the different parties procuring or supplying logistics services is fundamental to
achieving measurable and impactful supply chain emissions reductions. It can have a real and positive impact
on the long-term sustainability of business relationships among supply chain partners as it has the power to
enable cost savings through the establishment of standardized processes.

Innovation and leadership help organizations break away from business as usual and accelerate the
incorporation of improved solutions within the logistics procurement process to meet new requirements and
the potentially unarticulated needs of climate-conscious organizations.

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 2 Navigating the Smart Freight
Procurement Guidelines
This chapter helps companies navigate the SFP Guidelines and efficiently determine appropriate actions for Figure 2: Preliminary phase followed by the four phases of the procurement process
a specific activity in their organization. A summary table (section 2.2) lists the actions according to the four
phases of the procurement process.

2.1 Freight procurement phases

The companies interviewed (see section 1.5) described their logistics procurement process using different
1 Planning

terminologies; they also ordered and grouped actions and procurement steps in different ways. We have

2
organized these varying company inputs under common denominations. We subsequently determined four
main freight procurement phases: Tendering
1. Planning: the preparatory phase, which includes the identification of needs, budget definition, a project
management plan, the identification of responsibilities, and a general supplier assessment – in line with

0
the organization’s business and procurement strategy;

3
2. Tendering: tender definition (including procedure, award criteria, technical specifications, bidder- Preliminary
related aspects, environmental and social aspects, financial information, formal aspects), public Contracting
tendering (where applicable) and the evaluation of the tenders;
3. Contracting: the specification of the contract terms, supplier selection and contract negotiations,
agreement on qualitative and quantitative key performance indicators (KPIs) and monitoring activities;

4
the planning phase should include early stages of this phase; Contract-based
4. Contract-based supplier management: monitoring of supplier performance using qualitative and
quantitative KPIs. Identifying future improvement areas and best practices.
Supplier Management

While individual companies may have different numbers or types of phases, these SFP Guidelines use the
four phases to provide a coherent approach.

Prior to starting with the four phases, it is important to understand the organization’s structure to establish
if the procurement department can take responsibility for and has the capacity and the capability to apply the
actions provided in these guidelines. This is the Preliminary phase.

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 2.2 Action overview table 2.3 How to use the SFP Guidelines
The overview table below summarizes the actions suggested in the SFP Guidelines, grouping them into the The action overview table in the previous chapter allows you to identify the actions your organization should
Preliminary phase and the four freight procurement phases as identified previously. take in its journey to achieving low-emissions freight transport and logistics procurement.

Each action reports the expected impact and the complexity of implementation. The last column shows the guiding The classification of implementation complexity allows your organization to prioritize the actions to take –
principles (see section 1.6) attributed to each action. The complexity of the implementation is on a scale of 1 to 5.5 progressively moving up in complexity to fulfill the set commitments. This is particularly helpful for
organizations that have not yet started their low-carbon procurement journey. By starting with simpler
Table 1: Action overview table actions, organizations can plan their own implementation path in line with their maturity level. Maturity
Procurement Action SFP refers to the level of implementation of existing activities for low-carbon freight and logistics procurement
for a specific organization.
phase Guidelines
ID Name ID Name Impact Complexity principles Depending on your organization’s current approach to sustainable procurement and its maturity level,
there are two main ways to use the SFP Guidelines:
0.1 Top management Gain top management support Collaboration 1. To structurally improve your organization’s existing procedures and policies for low-carbon
engagement in implementing the SFP Leadership &
Guidelines, including the Innovation procurement;
possibility for the procurement 2. To use certain suggested actions, verifying your organization’s existing low-emissions procurement
department to choose higher strategy and/or identifying areas for improvement.
prices if this would help reduce
the organization’s GHG foot-
0 Preliminary print, thus avoiding having In both cases, it is possible to implement the SFP Guidelines as follows:
costs overrule activities in • Map how the suggested SFP actions outlined in Table 1 (section 2.2) are aligned with your organization’s
the following phases
practices and process;
0.2 Award scheme Include low-carbon criteria Transparency • Using the action cards (chapter 3), identify the gaps between current practices and suggested actions;
establishment in rewarding staff and • Analyze how to address the gaps identified and what your company needs to enable low-emissions
management performance,
thus boosting real behavior logistics and freight procurement;
change • Draft or review your organization’s current logistics procurement policies and procedures based on the
1.1 Set up support for Achieve organization-wide Leadership & gaps identified, including a comparison and evaluation of alignment of the current guiding principles
low-carbon freight support for the procurement Innovation with the SFP Guidelines (see section 1.6).
procurement strategy, aiming to reduce
GHG emissions
1.2 Build low-carbon Prepare the organization Leadership &
supply chain capacity to establish a low-carbon Innovation
1 Planning supply chain
1.3 Focus your network on Establish reduced carbon Leadership &
low-carbon emissions footprint supply chain Innovation
1.4 Engage with Establish two-way Transparency
suppliers communication with Collaboration
suppliers to achieve GHG
emissions reductions
2.1 Revise qualification Establish capacity to select Collaboration
procedure to include suppliers matching its Leadership &
low-carbon criteria low-carbon criteria Innovation
2.2 Categorize the Increase supplier Transparency
2 Tendering suppliers awareness of carbon Leadership &
emissions reductions Innovation
2.3 Share incentives Improve supplier behavior to Collaboration
for low-carbon achieve carbon emissions Leadership &
behaviors reductions Innovation

3.1 Define the low- Ensure supplier behavior aims Collaboration

carbon-oriented to reduce carbon emissions Leadership
contractors Innovation
3 Contracting Transparency
3.2 Allow exceptions Enable and support suppliers' Collaboration
to achieve innovative behavior to reduce Leadership &
innovation carbon emissions Innovation
4.1 Monitor & report Enhance supply chain Transparency
transparency
4 Contract-
based 4.2 Support suppliers Encourage suppliers to Leadership &
and expert maintain and improve Innovation
Supplier leadership emissions reductions efforts
Management 4.3 Collaborate Implement concrete actions Collaboration
to achieve performance-
based improvements

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 3 Action cards
This is the SFP Guidelines toolbox. Here we detail the actions needed to embed GHG emissions reductions
within your organization’s freight transport procurement process. The actions listed below follow the four • Involve top management in the development or review of sustainable procurement principles and
freight procurement phases described in section 2.1. processes. In both cases, you should involve top management in the implementation of the SFP
Guidelines following the identification of the organization’s needs. You should also keep them informed
Such actions are presented in tabular form (as cards), which include a title for each action followed by throughout the implementation of the steps suggested in section 2.3, meaning:
the estimated implementation complexity on a scale 1 to 5 (see sections 2.2 and 2.3) shown as circles, • Mapping of the suggested SFP Guidelines actions versus your organization’s existing practices
the expected impact, and the guidance for its implementation. The cards include references to company and processes;
examples related to the implementation of the specific action. Chapter 4 details the examples. • Identifying gaps between your organization’s current practices and the suggested actions;
• Analyzing how to address the gaps identified and what your company needs to enable low-
emissions logistics and freight procurement;
3.1 Preliminary phase-related actions • Drafting or reviewing your organization’s current logistics procurement policies and procedures
based on the gaps identified using the SFP Guidelines, including comparison and alignment of the
current procurement principles with those proposed in the SFP Guidelines.
Action 0.1 – Top management engagement
Examples
A.P. Moller-Maersk Group Responsible Procurement Programme
Impact: Gain top management support in implementing the SFP Guidelines, including the possibility IKEA IWAY Standard on Purchasing Products, Materials and Services
for the procurement department to not prioritize cost as the most important decision criteria. This Nike Sustainable Manufacturing & Sourcing Index
will help avoid having costs overrule activities in the following phases. Philips SPLC Guidance for Leadership in Sustainable Purchasing
Unilever Responsible Sourcing Policy
Toolbox
• Define a clear business case to justify the actions undertaken to achieve low-carbon procurement
for freight and logistics services based on expected commercial and reputational benefits. It is
necessary to identify relevant key performance indicators to support the business case definition (see Action 0.2 – Award scheme establishment
Action 0.2 – Award scheme establishment). Furthermore, when formulating the business case, consider:
• Linking a smart freight procurement plan to the organization’s overall business and
sustainability plan; Impact: Include low-carbon criteria in rewarding internal staff and supplier performance, thus boosting real
• Demonstrating positive return on investment related to logistics investments (e.g., behavior change.
reduced fuel consumption should lead to lower costs);
• Demonstrating improved brand reputation and competitive advantage, including improved Toolbox
customer satisfaction; • Make low-carbon criteria relevant to your company’s logistics staff and establish individual KPIs
• The increased possibility of attracting and retaining a talented workforce in logistics and and performance tracking. Your company can track and measure the r elevant key performance
supply chain functions; indicators internally or hire third party evaluators.
• Highlighting improved supply chain risk management capabilities; • Introduce incentives, bonuses and clear recognition for logistics and sustainability staff and
• The cost of carbon where logistics emissions are likely to be relevant in the future (e.g., management involved in logistics procurement and sustainability improvements.
investments in new warehouse and distribution locations, suppliers and carbon pricing); • Establish an award scheme for suppliers to recognize low-carbon behavior: Consider adopting a
• Demonstrating enhanced shareholder and investor satisfaction through voluntary reporting theory-based approach to stimulate low-carbon freight and logistics. The theory-based approach could
and disclosure (see the bullet point for investor initiatives below). be a mix of economics and behavioral science, taking into account unaligned goals among the company
and its suppliers (agency theory8). Under such an approach, it is possible to classify logistics service
• Provide top management with information and materials to support their decision- providers (LSPs) based on their responsiveness to awards offered by their clients (shipper stimuli9).
making process and ensure their engagement. Useful sources are:
• Case studies describing companies that have successfully introduced sustainable Examples
procurement practices and the benefits they have obtained; DHL Global Forwarding GoGreen rating scheme to evaluate air & ocean freight carriers
• An overview of sustainability requirements from Investor Initiatives 6 and relevant sector HEINEKEN Boosting internal initiatives to achieve supply chain
initiatives7 that are applicable to the organization; sustainability
• An overview of competitors’ actions to demonstrate the need to catch up to or use sustainable Port of Rotterdam Discounts on port dues for sustainable vessels
logistics procurement to stay ahead of the competition. Van der Stelt The CO2 Performance Ladder

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 3.2 Planning phase-related actions
Action 1.2 – Build low-carbon supply chain capacity
Action 1.1 – Set up support for low-carbon freight procurement
Impact: Prepare the organization to establish a low-carbon supply chain.

Impact: Achieve organization-wide support for the procurement strategy, aiming to reduce Toolbox
GHG emissions. • Model the integrated logistics network with the objective of maximizing suppliers’ low-carbon
scores, if possible, using operational research techniques:14
Toolbox • Check your organization’s capability to model such networks or supply chains according to
• Define your organization’s goals: the business’ low-carbon freight and logistics goals articulated through Action 1.1 – Set up
• Create an internal team to lead low-carbon freight and logistics actions, including procurement. support for low-carbon freight procurement.
• Run an initial session with procurement/supply chain/logistics teams to understand the • If necessary, get external support to model the network or ensure internal capability.
organization’s current priorities and processes the and clearly articulate low-carbon freight
transport and logistics goals. • Check that your supply chain’s current capacity (infrastructure) fits the desired model.
If necessary, run a capacity building stage and an engineering phase to identify and implement
• Align freight and logistics procurement objectives throughout the organization: new and innovative logistics solutions.
• Decide on overarching requirements for low-carbon logistics procurement that are key to
improving logistics performance (e.g., the provision of key and verified supplier data to allow • Integrate the strategic selection of logistics partners with operational flow planning decisions.15
the company to calculate and track logistics KPIs). Annex B: Sector initiatives offers an
extensive list of relevant requirements. Examples
• Align logistics procurement with broader procurement and organizational objectives by Home Depot Supply chain restructuring, bidding process rethinking, carrier rating,
translating high-level objectives into specific ones for logistics procurement. collaboration
• Set the values for KPIs and targets of the key management functions10 involved in logistics Johnson & Johnson Using sustainability to strengthen carrier relationships
procurement.

• Adopt low-carbon selection criteria for LSPs and carriers:

• Conduct LSP evaluation using multi-criteria decision-making, considering various c riteria to
push them to incorporate environmental best practices (e.g., evaluate the l evel of cooperation
Action 1.3 – Focus your network on low-carbon emissions
with the carrier, require carriers to establish an environmental management system,
a sustainable process design, and/or an efficient network design, and progressively reduce Impact: Establish reduced carbon footprint supply chain.
their energy consumption).
• Organize the selection of LSPs from an environmental sustainability perspective by using Toolbox
advanced models,11 possibly collaborating with universities and research centers. • Identify the fields of LSP and carrier activity in your network that you want to influence (e.g., reduce
transport intensity and emissions, carrier selection criteria). Determine:
• Establish contracting terms for suppliers: • Possibilities to enable logistics providers to adopt sustainable practices, such as allowing grouping
• Translate low-carbon freight and logistics goals into applicable contracting terms; also consider of your freight;
potential misalignment of contractual arrangements among parties (agency theory12). • Possibilities to exert direct influence on a logistics provider's activity, such as ensuring carrier
• Embed KPIs and their preliminary benchmark values in contracts with suppliers according to certification or training.16
the award scheme established through Action 0.2 – Award scheme establishment.13
Give preference to simple, transparent and widely known KPIs to facilitate replication for • Customize your supply chain: Consider the adoption of the proper Incoterms (International Commercial
suppliers who serve several shippers. Terms)17 in the purchase and sale of goods, based on the amount of leverage that the organization aims to
exert on “carbon-sensitive” decisions.
Examples
Dow Chemical Global Emissions Inventory (GEI) Examples
IKEA IWAY Standard on Purchasing Products, Materials and Services Home Depot Supply chain restructuring, bidding process rethinking, carrier rating,
Johnson & Johnson Using sustainability to strengthen carrier relationships collaboration
Van der Stelt The CO2 Performance Ladder IKEA IWAY Standard on Purchasing Products, Materials and Services
Walmart Ambitious fleet efficiency targets result in considerable savings Johnson & Johnson Using sustainability to strengthen carrier relationships
Jumbo Collaboration between retailer, product suppliers and LSPs
Multinational Shippers (China) Smart Transport Manager Training

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 3.3 Tendering phase-related actions
Action 1.4 – Engage with suppliers
Action 2.1 – Revise qualification procedure to include
Impact: Establish two-way communication with suppliers to achieve carbon emissions reductions.
low-carbon criteria
Toolbox
• Communicate emissions calculations and reporting requirements to LSPs and freight operators in a Impact: Company has the capacity to select suppliers that match its low-carbon criteria.
standardized way:
• Provide guidance on what data to collect and how to report them; Toolbox
• Explain to your suppliers how you will use the data collected and how can they incorporate actions • Define a standardized qualification procedure that prioritizes carriers and LSPs that adopt
to reduce emissions and improve their decision-making. low-carbon freight and logistics considerations following the low-carbon selection criteria
identified under Action 1.1 – Set up support for low-carbon freight procurement:
• Differentiate supplier engagement formats: • Include standardized request for proposal (RFP)/request for quotation (RFQ) wording in
• Customize the engagement formats based on supplier size, location and maturity (e.g., supplier tendering documents, possibly through a checklist. The wording has to align with the proposed
summits, smaller sector forums, or possibly online portals for sharing best practices, education set of KPIs (Action 1.1 – Set up support for low-carbon freight procurement) and the data to provide.
and training);
• In the customization of the engagement format, consider the different levels of sophistication of • Apply relevant low-carbon assessment criteria adopted by the organization as per Action 1.1
LSPs and carriers, which impacts their internal and external behavior because supply chain – Set up support for low-carbon freight procurement:
operators have different levels of sophistication around the world; tailor the engagement • Compare LSPs and carriers on their reported emissions, overall performance and
approach/strategy accordingly. improvement actions;
• Assess suppliers not only on their service delivery performance but also on their c orporate
• Demonstrate corporate leadership by supporting your suppliers: GHG reduction strategy and on their capacity to identify and implement i nnovative solutions to
• Provide clear information to suppliers about your (shippers’) GHG emissions reductions expectations reduce emissions.
and the resulting expectations for their supply chain in turn;
• Foster collaboration and enable progress on achieving sustainability by providing your suppliers • Include in the qualification procedure an analysis of strengths and weaknesses of the potential
with self-assessment tools and checklists; logistics partners. Decision-makers in the contracting organization can the use this information to
• Provide clear business cases that could enable your suppliers to approach GHG emissions identify the most suitable suppliers with whom to establish and maintain a long-term partnership.
reductions as a business development and investment opportunity;
• Clarify your intention when forming strategic partnerships with sustainable logistics providers, • Engage your sector initiatives (Annex B: Sector initiatives) and use their tools and questionnaires
thereby enabling business operation improvements by focusing on the company’s core to assess your suppliers.
competencies;
• Provide freight and logistics service providers with guidance on their internal communication and Examples
collaboration between procurement, supply chain and sustainability departments; Home Depot Supply chain restructuring, bidding process rethinking,
• Consider helping any existing suppliers who are underperforming in GHG emission activities to carrier rating, collaboration
match your organization’s ambitions (e.g., support training on improving the fuel efficiency Schneider How to create an effective transportation RFP
of their fleet). Van der Stelt The CO2 Performance Ladder
Applicable to all companies SmartWay's RFP specification
Examples
Braskem A vertical approach to supplier engagement
Ford Motor Company Applying GEMI’s Quick Guide to Strategic Buyer/Supplier
Collaboration on Sustainability
Action 2.2 – Categorize suppliers
Johnson & Johnson Using sustainability to strengthen carrier relationships
Multinational Shippers (China) Smart Transport Manager Training
Nike Sustainable Manufacturing & Sourcing Index Impact: Increase supplier awareness of carbon emissions reductions.
Unilever Responsible Sourcing Policy
Applicable to all companies GLEC Declaration Toolbox
Applicable to all companies Shippers and LSPs using SmartWay data to inform • Categorize LSPs by their low-carbon behavior:
transportation purchasing decisions • Consider a potential conflict of interest with both your shippers and LSPs (agency theory18) in the
design of the categorization criteria and the possible subsequent incentive mechanism;
• Categorize LSPs in line with the adoption of low-carbon selection criteria for LSPs and carriers as
per Action 1.1 – Set up support for low-carbon freight procurement;
• Use a categorization system that allows the inclusion of different levels of supplier sophistication
around the world.

• Share information on categorization with suppliers to enable transparency, the establishment of an

improvement feedback cycle, and the establishment and development of low-carbon behavior.

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 Examples • Promote the development of emissions reductions initiatives and joint strategic development
A.P. Moller-Maersk Group Responsible Procurement Programme plans in collaboration with LSPs. The long-term perspective of the relationship between the
Braskem A vertical approach to supplier engagement buyer and its LSPs also promotes the development of joint initiatives in collaboration between
DHL Global Forwarding GoGreen rating scheme to evaluate air & ocean freight carriers the buyer and the provider. It is possible for buyers t o participate actively in the development
Home Depot Supply chain restructuring, bidding process rethinking, carrier rating, of the green service offerings of their LSPs.19
collaboration
Nike Sustainable Manufacturing & Sourcing Index • Detail service specifications:
Unilever Responsible Sourcing Policy • Include KPIs and reporting requirements in GHG emissions performance in the contract, as
established in Action 1.1 – Set up support for low-carbon freight procurement and Action 1.4
– Engage suppliers.
• Adapt service specifications to enable low-carbon freight and logistics by considering the
following points:
Action 2.3 – Share incentives for low-carbon behaviors I) Changing transport lead time specifications may offer opportunities to reduce costs in
combination with reduced environmental impacts;
II) Including a minimum order quantity or other similar requirements can lead to a decrease
Impact: Improve supplier behavior to achieve carbon emissions reductions. in the number of shipments;
III) Increasing the understanding of each other’s operations allows the detailing of better
Toolbox service specifications, facilitating more efficient and effective operations;
• Build market-based mechanisms, such as emissions trading, into your tender specification, IV) It is possible to achieve long-term improvements if transport buyers and LSPs jointly
which can act as an incentive for shippers to lower emissions within their supply chains. demand the inclusion of low-emissions actions with reasonable environmental goals in
• This must be in accordance with the award scheme for the suppliers’ low-carbon behavior their contracts;
established in Action 0.2– Award scheme establishment. V) It is best to develop new solutions in collaboration with LSPs, making use of their expertise.
• Embed the market-based mechanism for sharing incentives with suppliers into the contracting terms
for suppliers established through Action 1.1 – Set up support for low-carbon freight procurement: Examples
• To influence supplier behavior, reward their low-carbon efforts with discounts and/or longer contracts. Home Depot Supply chain restructuring, bidding process rethinking, carrier
rating, collaboration
Examples Johnson & Johnson Using sustainability to strengthen carrier relationships
Port of Rotterdam Discounts on port dues for sustainable vessels

3.4 Contracting phase-related actions Action 3.2 – Allow exceptions to achieve innovation

Impact: Enable and support suppliers' innovative behavior to reduce carbon emissions.
Action 3.1 – Define the low-carbon-oriented contract
Toolbox
Impact: Ensure supplier behavior aims to reduce carbon emissions. • Allow for exceptions in the behavior of freight and logistics suppliers to push for emissions
reductions:
Toolbox • Exceptions in relation to the service specification established in Action 3.1 – Define the l ow-
• Define and prepare the contract: carbon-oriented contract (e.g., modifications of lead time, pick-up and delivery times, t ransport
• Take into account the terms established in Action 1.1 –Set up support for low-carbon freight mode/s) are allowed.
procurement, ensuring in particular that the contract terms support such procurement; • Buyers can often be a barrier to the development of green initiatives, limiting the providers’
• Clearly state low-carbon requirements in the freight and logistics contract: investments into green technology.20 One way of addressing this problem is to be willing to pay extra
I) Adapt the corporate social responsibility GHG emissions reductions clauses to the for innovative, low-emissions solutions in line with the impact expected from the i mplementation of
supplier (size/sector/country); Action 0.1 – Top management engagement.
II) Include in the contract the possibility of verifications and audits, penalties and termination clauses.
• Include a bonus system in the contract based on the progressive achievement of KPIs defined Examples
in Action 1.1 – Set up support for low-carbon freight procurement to incentivize supplier None, as yet.
behavior to achieve carbon emissions reductions.
• Promote long-term partnerships with longer contracts (at least 12 months), if possible
factoring joint emissions reduction goals into the process to improve environmental
performance without having a negative impact on cost. Longer term contracts and joint
development would likely enhance the level of emissions reduction initiatives. Longer term
contracts may indirectly result in an opportunity for the buyer to influence LSPs to increase
commitments to lower emissions; interaction with employees on different levels in the
company, including top management, can further boost this.

22 23
 3.5 Contract-based supplier management-related actions
DHL Global Forwarding GoGreen rating scheme to evaluate air & ocean freight carriers
Home Depot Supply chain restructuring, bidding process rethinking, c arrier
Action 4.1 – Monitor & report rating, collaboration
Johnson & Johnson Using sustainability to strengthen carrier relationships
Multinational Shippers (China) Smart Transport Manager Training
Impact: Enhance supply chain transparency. Nike Sustainable Manufacturing & Sourcing Index
Port of Rotterdam Discounts on port dues for sustainable vessels
Toolbox
• Drive supply chain transparency through KPI monitoring and reporting as agreed in Action 1.1
– Set up support for low-carbon freight procurement:
• Adopt standardized reporting formats;
• Do not set too many KPIs;
Action 4.3 – Collaborate
• Give preference to KPIs that are transparent and most commonly used in freight and logistics.
This will help suppliers streamline their reporting efforts with multiple customers.
Impact: Implement concrete actions to achieve performance-based improvements.
• Use both internal and external communications to make sure that your employees, customers
and other stakeholders are aware of your smart freight procurement actions and results: Toolbox
• Provide suppliers with clear feedback on the use of the monitored KPIs and data; • Establish and maintain broader cooperation with supplier personnel at various levels:
• Share the different scores your suppliers are receiving according to their performance when • The strongest drivers among suppliers are their internal sales and operations management
taking action to reduce emissions; personnel. The implementation of an engagement plan to establish trustworthy relationships with
• Consider establishing a feedback mechanism to detail the benefits that your organization is deriving LSP and carrier employees beyond top management can further enhance collaboration on
from suppliers’ low-carbon behavior to encourage their further investment a
nd commitment. incorporating environmental best practices throughout the logistics supply chain.
• We advise you to consider the different levels of sophistication of suppliers to properly approach the
Examples cooperation strategy.
Braskem A vertical approach to supplier engagement
Nike Sustainable Manufacturing & Sourcing Index • Collaborate with freight and logistics service providers:
Van der Stelt The CO2 Performance Ladder • Provide suppliers with clear feedback on their performance;
Applicable to all companies GLEC Declaration • Collaborate with suppliers on innovation, including through Green Freight Programs;21
Applicable to all companies Shippers and LSPs using SmartWay Data to inform t ransportation • Collaborate across the entire supply chain to reduce risks; good business relationships and supply
purchasing decisions chain insights support managers in delivering a company's corporate social responsibility policy,
including GHG emissions reductions, which improves risk management.

• Implement joint strategic development plans with LSPs and carriers, following the contract defined
under Action 3.1 – Define the low-carbon-oriented contract:
Action 4.2 – Support suppliers and exert leadership • Identify and implement opportunities for future improvements and innovation with suppliers and
favor potential gain sharing;
• Recognize that small LSPs have more potential to perform joint development plans with s hippers,
Impact: Encourage suppliers to maintain and improve the emissions reduction efforts. as large LSPs generally have their own development plans for low-emissions freight;
• Consider providing unique grants or other financial support to launch low-emissions freight s olutions
Toolbox by LSPs and collaboration on low-carbon freight projects.
• Design a process/tool to support LSPs and carriers with different levels of sophistication to
implement concrete actions for improvement in a systemic way, encouraging them to embrace all Examples
organization processes instead of tackling them on a project basis. A.P. Moller-Maersk Group Responsible Procurement Programme
Ford Motor Company Applying GEMI’s Quick Guide to Strategic Buyer/Supplier
• Support freight and logistics service providers in promoting continuous communication a nd Collaboration on Sustainability
collaboration between their procurement, supply chain and sustainability departments, f ollowing Home Depot Supply chain restructuring, bidding process rethinking, carrier
the activities started in Action 1.4 – Engage with suppliers. rating, collaboration
Jumbo Collaboration between retailer, product suppliers and LSPs
• Support low-emissions road mapping by LSPs and carriers and provide guidance on their Unilever Responsible Sourcing Policy
assessment to help identify options for improvement. Walmart Ambitious fleet efficiency targets result in considerable savings
applicable to all companies FreightShare Lab’s asset sharing platform
• Recognize the actions and improvements that LSPs and carriers make to comply with c ontractual
GHG emissions reductions expectations, e.g., following the award scheme for suppliers suggested
under Action 0.2 – Award scheme establishment.

Examples
A.P. Moller-Maersk Group Responsible Procurement Programme
Braskem A vertical approach to supplier engagement

24 25
 4 Company examples
This chapter provides examples of companies implementing actions aligned with the guiding principles of the
SFP Guidelines. # Company Title
The examples illustrate how the actions detailed in chapter 3 can lead to measurable emissions reductions 17 Van der Stelt The CO2 Performance Ladder [*]
throughout the preliminary and the four procurement phases. Each example may be relevant to one or more 18 Walmart Ambitious fleet efficiency targets result in considerable savings
actions. We may enrich the list of examples in the future. 19 Applicable to many companies FreightShare Lab’s asset sharing platform
20 Applicable to many companies GLEC Declaration
21 Applicable to many companies Shippers and LSPs using SmartWay data to inform t ransportation
4.1 Company examples – Overview purchasing decisions
22 Applicable to many companies SmartWay's RFP specification
Table 2 provides an overview of the examples that organizations are implementing or can implement.

There are two categories:

• Company specific, i.e., examples from company experience, provided by the companies mentioned or
drafted on the basis of publicly available information (no. 1-18); 4.2 Company-specific examples
• Examples companies are implementing or can implement and that are applicable to many companies
(no. 19-22).
A.P. Moller-Maersk Group – Responsible Procurement Programme22
We have highlighted the company-specific examples provided verbatim and/or signed off by the respective
company with an asterisk in square brackets next to the title. Whereas the Schneider example in this section As part of its main Sustainability Strategy 2014-2018, A.P. Moller-Maersk Group put in place mandatory
does not specifically focus on emissions reductions, the majority of contributing members found it useful as programs to ensure compliance with minimum standards for anti-corruption, responsible procurement
a pertinent example of the different steps in building an effective RFQ, which is key to addressing emissions and global labor principles. It established a six-step process to evaluate suppliers: qualification,
reduction in the process. tender, workshops, negotiations, implementation and supplier relationship management. The company
gives preference to suppliers based on quality and price and those who share the group’s commitment
Table 2: Overview of company examples to conducting business in an ethically, environmentally and socially responsible manner. It expects
suppliers to make continuous improvements and to have similar rules for their own suppliers. To
prioritize resources and achieve maximum impact, the program has a focused approach based on
# Company Title high-risk categories. The category guides act as a blueprint for carrying out supplier due-diligence.
Included among high-risk categories are: trucking/intermodal, warehousing services, terminals,
1 A.P. Moller-Maersk Group Responsible Procurement Programme shipbuilding yards/drydocks, container manufacturers and manning – seafarers. Specific category
2 Braskem A vertical approach to supplier engagement guides and supplier evaluation questionnaires are available as well.
3 DHL Global Forwarding GoGreen rating scheme to evaluate air & ocean freight carriers [*]
4 Dow Chemical Global Emissions Inventory (GEI) [*] The case for GHG emissions reductions: The company established the Responsible Procurement
5 Ford Motor Company Applying GEMI’s Quick Guide to Strategic Buyer/Supplier Programme to promote continuous improvements in its supply chain.
Collaboration on Sustainability
6 HEINEKEN Boosting internal initiatives to achieve supply chain sustainability [*] Some suppliers may be in a better position to easily adopt good business practices in the areas of
7 IKEA IWAY Standard on Purchasing Products, Materials and Services human rights, labor, environment and anticorruption than others. Nevertheless, what is important to
8 Johnson & Johnson Using sustainability to strengthen carrier relationships the group is that suppliers show commitment to including the main principles of the code in their own
9 Jumbo Collaboration between retailer, product suppliers and LSPs operations and across their supply chains, including environmental principles, in some instances
10 Multinational Shippers (China) Smart Transport Manager Training geared to GHG emissions reductions.
11 Nike Sustainable Manufacturing & Sourcing Index
12 Philips Case from SPLC Guidance for Leadership in Sustainable Purchasing Impacts/lessons learned: Over a longer period, the practice of evaluating suppliers with the six-step
13 Port of Rotterdam Discounts on port dues for sustainable vessels [*] process will enable Maersk to rate suppliers across defined risk categories. The group expects
14 Schneider How to create an effective transportation RFP long-term suppliers to have management systems in place to ensure compliance with the Group
15 Home Depot Supply chain restructuring, bidding process rethinking, carrier Third Party Code and to proactively extend these principles within their own supply chain, further
rating, collaboration extending the reach of environmental action.
16 Unilever Responsible Sourcing Policy [*]

26 27
 Braskem – A vertical approach to supplier engagement23 selection represent important levers for optimizing the carbon efficiency of supply chains. To make an
informed decision, shippers need transparency across different transport options. Selecting a more
Braskem has adopted a comprehensive and integrated strategy across both its own operations and its efficient solution does not necessarily result in higher expenses; however, it can affect lead times and
value chain to address climate change. Recognizing the role that suppliers play in mitigating and air and marine ports of loading and discharge. Most tenders still primarily have a commercial focus
managing climate risks and opportunities, the company has decided to take a vertical approach to within a narrower scope. The company therefore recommends analyzing and discussing options to
engagement. Braskem begins by assessing engagement and awareness levels among its suppliers reduce emissions in the supply chain beyond the tender process and, ideally, within a holistic scope.
and rates them at different levels. Braskem supports them through targeted workshops, which vary
depending on their level of engagement. These workshops improve supplier awareness and provide Impacts/lessons learned: The GoGreen rating scheme provides carriers with a better understanding
them with training and the dissemination of best practices, as well as technical support in identifying of DHL Global Forwarding’s expectations and how they can contribute to Group Mission 2050 – Zero
opportunities to reduce emissions and costs. Furthermore, all suppliers receive feedback on an Emissions. At the same time, the rating insights enable DHL Global Forwarding to support shippers
annual basis, allowing them to identify actions for further progress. by helping them optimize the carbon footprint of their own supply chains.

The case for GHG emissions reductions: With this approach to supplier engagement, Braskem has
achieved a voluntary and steady improvement in supplier performance in key areas, such as setting
up GHG emissions inventories, defining reduction targets, and identifying opportunities and risks
associated with their business. As a result, Braskem reports nearly 44% of its scope 3 emissions. Dow Chemical – Global Emissions Inventory (GEI)24 [*]

Impacts/lessons learned: The Braskem approach to supplier engagement has allowed the company Dow has a corporate database called the Global Emissions Inventory (GEI). The emitting businesses
to achieve voluntary and steady improvement in supplier performance in key areas. The feedback sent track and record their emissions in the GEI, the central database that is used as the basis for regional
to suppliers on an annual basis allows them to identify actions for further progress. Additionally, and global reports of emissions. Each facility has an environment, health and safety focal point
Braskem has been able to start analyzing the opportunities and risks communicated to the company responsible for collecting and reporting all waste and emissions data. The GEI tracks Scope 1 GHG
by suppliers, which will inform its future engagement strategy. In light of this success, the company emissions coming from the manufacturing processes, which include power plants (cogeneration),
has subsequently launched the same engagement process targeting suppliers operating in water- crackers, smelters, flares, etc. Dow’s Scope 2 GHG emissions come from purchased power. Dow’s
stressed regions, offering more targeted support for water resource management strategies. emissions are divided by Scope 1 GHG emissions, 74.5%; and Scope 2 GHG emissions, 25.5%. Dow
manages the reporting and cost of emissions with the joint objectives of minimizing the cost of
emissions and maximizing the profitability of the company over the long term. There are two types of
work performed to achieve these objectives:
• The Energy and Climate Change business, led by a global business director and through regional
DHL Global Forwarding – GoGreen rating scheme to evaluate air & directors and their organizations, both purchases and trades any required allowances for these
emissions, and considers the cost of carbon in the production and acquisition of steam and power
ocean freight carriers [*] for the company. This includes developing long-term projections of the cost of carbon at each of its
production locations globally;
The GoGreen carrier rating is an integral part of DHL Global Forwarding’s overall carrier evaluation • In addition, the global carbon management director and team are responsible for developing an
process by which the environmental sustainability of carriers is determined. An above average rating optimized list of projects to reduce carbon emissions and to increase efficiency and to ensure the
is an essential element to obtain “preferred carrier” status by DHL Global Forwarding. Carriers are present and future cost of carbon is included in all capital investment and maintenance decisions.
rated along the following four categories:
• Sustainable management: sustainability strategy, policies, training and emissions reporting are in place; Dow tracks progress in reducing emissions through three specific goals as part of its 2025
• Transparency: the provision of “credible” carbon efficiency data on different levels of granularity; Sustainability Goals:
• Carbon efficiency: significant share of DHL volumes needs to be shipped with better than average I) Dow will obtain 750 MW of its power demand from renewable sources by 2025;
gCO 2e per transported kilometer; II) Though Dow will grow globally over the next 10 years, Dow’s absolute greenhouse gas emissions
• Sustainable innovation and development: decarbonization strategy, technology and fuel pilots in place. will not exceed the 2006 baseline;
III) Dow will grow but offset emissions of priority compounds, volatile organic compounds and
Carriers are invited to provide qualitative information via a standardized survey. Quantitative data nitrogen oxides.
(CO 2e efficiency) is provided by the individual carrier and matched with the company’s shipment
profiles and data. After an assessment of the data provided, carriers receive a points-based rating in The case for GHG emissions reductions: Dow is well on track to meet these goals. The company has
each of the four categories. The evaluation criteria of each category are adjusted yearly to better long-term contracts to procure clean energy in the United States, Latin America and Europe.
reflect the ever-changing industry status and any possible future development needs. Via a separate Approximately 9.5% of purchased electricity is from renewable sources. Similarly, its new plants have
Evaluation Factsheet, detailed scores and benchmarking are shared with the carrier on a regular significantly improved efficiency, enabling them to increase sales significantly with stable emissions.
basis and discussed bilaterally. Carriers are expected to continuously improve their performance and
strive for maximum scores. Impacts/lessons learned: The integrated central management approach for reporting greenhouse
gas emissions and their cost allows Dow to minimize the cost of emissions while maximizing the
Additionally, carriers are provided with a GoGreen Carrier Certificate recognizing the carrier’s efforts profitability of the company over the long term.
and performance once a year in December. If the performance requirements of a category are
fulfilled, the carrier is awarded with a green aircraft/vessel.

The case for GHG emissions reductions: Carrier evaluation insights are used to optimize the
environmental supply chain performance of DHL Global Forwarding’s customers. Carrier and routing

28 29
 Ford Motor Company – Applying GEMI’s Quick Guide to Strategic Buyer/ IKEA – IWAY Standard on Purchasing Products, Materials and Services26
Supplier Collaboration on Sustainability25
IWAY is the IKEA code of conduct, first introduced in 2000. It specifies the requirements, including
some specific to emissions, placed on product and service suppliers and details benefits they can
Braskem has adopted a comprehensive and integrated strategy across both its own operations and its expect in return from IKEA. In addition to the main document, there are several industry-specific
value chain to address climate change. Recognizing the role that suppliers play in mitigating and supplements and a special code of conduct for child labor; there is also a specific transport section,
managing climate risks and opportunities, the company has decided to take a vertical approach to which details requirements for all services (road, rail, ocean, customer distribution including home
engagement. Braskem begins by assessing engagement and awareness levels among its suppliers delivery, shunting, barge and consolidation points) involved in transporting IKEA products. IWAY is
and rates them at different levels. Braskem supports them through targeted workshops, which vary based on eight core conventions defined in the Fundamental Principles of Rights at Work, the United
depending on their level of engagement. These workshops improve supplier awareness and provide Nations International Labour Organization declaration of June 1998, the Rio Declaration on Sustainable
them with training and the dissemination of best practices, as well as technical support in identifying Development of 1992, The UN Johannesburg Summit on Sustainable Development and the Ten
opportunities to reduce emissions and costs. Furthermore, all suppliers receive feedback on an Principles of the UN Global Compact of 2000.
annual basis, allowing them to identify actions for further progress.
The steps for procuring supplier services are: (i) start-up requirements must be complied with before
The case for GHG emissions reductions: With this approach to supplier engagement, Braskem has signing a business contract; (ii) the IKEA supplier shall acknowledge and accept the IWAY requirements
achieved a voluntary and steady improvement in supplier performance in key areas, such as setting by signing the IWAY Compliance Commitment document; (iii) the IKEA supplier shall appoint one or
up GHG emissions inventories, defining reduction targets, and identifying opportunities and risks several persons who shall have defined responsibilities and the authority to ensure compliance with
associated with their business. As a result, Braskem reports nearly 44% of its scope 3 emissions. requirements; (iv) the IKEA supplier shall communicate the IWAY requirements to all workers and
sub-suppliers and ask the latter to accept it in writing.
Impacts/lessons learned: The Braskem approach to supplier engagement has allowed the company
to achieve voluntary and steady improvement in supplier performance in key areas. The feedback sent The case for GHG emissions reductions: By specifying the requirements for suppliers, with a focus
to suppliers on an annual basis allows them to identify actions for further progress. Additionally, on transport, IWAY pushes suppliers to adopt CO2 emissions reductions programs and practical
Braskem has been able to start analyzing the opportunities and risks communicated to the company actions and/or plans to reduce environmental impacts related to their own facilities.
by suppliers, which will inform its future engagement strategy. In light of this success, the company
has subsequently launched the same engagement process targeting suppliers operating in water- Impacts/lessons learned: IWAY creates a common approach to procurement for the IKEA Group,
stressed regions, offering more targeted support for water resource management strategies. applying high standards to all services and materials sourced. This includes exploring ways to work
with circular procurement models to save materials, increasing the share of renewable, recyclable or
recycled materials in the non-home furnishing range, working with suppliers to ensure compliance
with the IWAY supplier code of conduct, and developing a sustainable approach for food, including
animal welfare standards. It sets specific requirements for ocean transport, land transport and
HEINEKEN – Boosting internal initiatives to achieve supply chain sustainability [*] consolidation points; suppliers have to update and submit related surveys to IKEA annually.

The carbon reduction ambition of the company is driven by management and it is cascading to all
teams by two main initiatives:
• Linking personal targets to sustainability. All logistics-related buyers have the target to have three Johnson & Johnson – Using sustainability to strengthen carrier relationships27
projects related to sustainability. There are a few standard projects (e.g., increasing the usage of
telematics by carriers). A local team can identify and do its own projects and the global functions
have the overview to ensure that they can select best practices that can be considered for The Johnson & Johnson logistics operation in North America has a long track record of attracting
implementation in other regions as well. carriers that share the company’s commitment to customer service, efficiency and sustainable
• Motivating via internal competition. The company has established a Supply Chain Implementation transportation. This includes the United States Environmental Protection Agency’s (US EPA)
Award, for which different efficiency or sustainability topics are selected every year. The Global SmartWay Transport Partnership, a public-private initiative between the EPA and the freight
Supply Chain department organizes the related events and relevant regional or local teams have transportation industry aimed at improving efficiency and sustainability. Johnson & Johnson has
the opportunity to submit projects that are interesting and impactful. Then the jury selects the been a SmartWay partner since 2005 and works exclusively with freight carriers that participate
best submissions, and these are invited to the final competition event where the finalists have in the program.
the opportunity to showcase and present their projects to the other finalists and to the top
management (including the CEO). The winning team will have dinner with the top management. Johnson & Johnson has several initiatives to back up that commitment:
• The logistics incentive order program incentivizes customers to place orders in quantities that
The case for GHG emissions reductions: The personnel is encouraged to undertake initiatives to legally optimize space use on trailers, which reduces the number of deliveries and makes it more
improve supply chain sustainability. These include GHG emissions reductions. efficient to schedule, load and unload goods. These financial and service-oriented incentives are
available to all customers that meet a certain order and volume threshold. Furthermore, the
Impacts/lessons learned: The initiatives have motivated the personnel to include sustainability – company also promotes reductions in idle time and faster turnaround times at distribution centers
including GHG emissions reductions – in their daily activities, as this impacts their personal targets. by scheduling deliveries, allowing dropped trailers and, where available, offering shore-power
Furthermore, local teams are motivated via competition. The Supply Chain Implementation Award electrical connections for trucks.
also allows the company to show the commitment of the top management.

30 31
 • Dedicated trucks operate as a regional fleet for a distribution center in the northeastern US. Multinational Shippers (China) – Smart Transport Manager Training30
The company has precisely matched its truck specifications to the characteristics of the load,
using day cabs instead of sleepers. Four Multinational Shippers (IKEA, Heineken, H&M and Walmart) in China defined their long-term
• A modal shift in North America has allowed the company to shift approximately 700 shipments on five sustainability strategy to include GHG emissions reductions throughout the entire supply chain.
lanes from truckload to intermodal transport; and in 2017 it improved intermodal use from 69% to 78%. They requested that the transport managers from several of their key carriers attend Smart
• The exclusive use of 50 SmartWay carriers in its North American logistics operations ensures that Transport Manager Training. Carriers’ transport managers play key roles in the operations of road
the company measures, benchmarks and shares fuel use and emissions. freight operators as they look after the operation’s resources and are responsible for safety, compliance
and customer service, as well as for maximizing resource use and reducing operating costs.
The case for GHG emissions reductions: The optimization of deliveries, the use of trucks, promoting
modal shifts and the use of carriers that are able to measure their performance have allowed John- Smart Transport Manager Training, a training course offered by the SFC, equips transport managers
son & Johnson to double its miles-per-gallon fuel savings throughout its logistics operations in North with the skills and expertise they need to develop a robust, credible and effective action plan to increase
America. Consequently, GHG emissions from the Johnson & Johnson supply chain have decreased. fleet fuel efficiency. The action plan is based on the five principles of efficient truck fleet management:
1. Fuel management – managing your fuel use;
Impacts/lessons learned: 2. Driver and staff skills – develop skills and motivate drivers and staff;
• The financial and service-oriented incentives enable customers to improve truck space use and 3. Vehicles and maintenance – optimize vehicle specifications, operations and maintenance;
reduce the number of deliveries. 4. Performance monitoring – continuously monitor and improve your truck fleet’s performance;
• The use of dedicated trucks matched with specific loads had allowed savings of about 5,000 5. Information technology – use the right information technology efficiently.
pounds of tare weight per truck and another four to five pallets of payload per trip compared to the
tractor-trailers the company used previously. The case for GHG emissions reductions: By raising awareness of the holistic approach to fleet fuel
• The mode-shifting initiative has doubled miles-per-gallon fuel savings (6.3 miles per gallon for efficiency, carriers typically reduce fuel consumption by a minimum of 5% per tonne kilometer, which
truckload vs. 12 miles per gallon for intermodal), removed 420 trucks from the road, and kept reduces the carrier’s Scope 1 GHG emissions and the shipper’s Scope 3 emissions.
truckload capacity free for other lanes.
• The exclusive use of SmartWay carriers gives Johnson & Johnson the possibility to evaluate Impacts/lessons learned: Trained transport managers who prepare an action plan during the Smart
carriers’ performance. Furthermore, it gives the company opportunities to collaborate with Transport Manager Training will start implementing it by themselves or seek follow up support to
carriers and customers on more efficient and sustainable transportation practices. work on specific activities, such as eco-driver training or implementing new technologies.

Jumbo – Collaboration between retailer, product suppliers and LSPs29 Nike’s Sustainable Manufacturing & Sourcing Index31

In 2015, Dutch retailer giant Jumbo, five product suppliers (SCA Hygiene, Heinz, FrieslandCampina, Part of Nike’s growth strategy is to seek partners who are developing agile and resilient management
Hero Benelux and Refresco) and logistics service provider Nabuurs decided to focus on CO2 reductions systems to drive sustainable business growth by minimizing their environmental impacts, fostering
and a more responsive supply chain as a common goal. They understood the everyday challenge that a strong culture of safety and developing an engaged and valued workforce. In 2012, Nike launched
Jumbo was facing when getting products to shops and consumers across the Netherlands using its Sustainable Manufacturing and Sourcing Index, a system combining factory ratings for lean
hundreds of carriers. Suppliers transported products from different brands separately to Jumbo's manufacturing and human resource management, and health, safety and the environment. Nike’s
distribution center in Woerden, only for trucks to then return empty. The five product suppliers sourcing strategy prioritizes and favors suppliers who show demonstrable leadership in corporate
and Nabuurs arranged to bundle orders for Jumbo in shared trucks and avoid empty running on responsibility and sustainability and who seek to move beyond minimum sustainability standards.
freight backhauls.
Nike measures contract factory performance through the index and works only with factories
The case for GHG emissions reductions: Their actions paid off: 40% fewer supplies stacked at achieving at least the bronze level. Reaching a bronze rating demonstrates baseline factory
the distribution center; 40% fewer deliveries; 30% higher truck load factors; 35% fewer transport compliance with Nike’s Code of Conduct and Code Leadership Standards, which the company
kilometers; and 35% lower carbon footprint. This has translated into cost savings for all partners. designed to respect the rights of workers and create a safe working environment.
While these have not been the same for each, everyone has benefitted in some way, at the very least
by contributing to a greener and more responsive supply chain and being able to position themselves Nike monitors and audits supplier compliance (for finished goods) through its Factory Compliance
as a supply chain partner striving for excellence in logistics. Ownership Program, which is based on the company’s Code of Conduct and Code Leadership Standards.
Internal and accredited third parties, including the Fair Labor Association (a neutral industry body)
Impacts/lessons learned: Logistics supply chains involve several stakeholders. Collaboration among and assessments by Better Work – a joint initiative of the United Nations International Labor Organization
them is key to accelerating the decarbonization of the sector. and the International Finance Corporation, a member of the World Bank Group – conduct regular
announced and unannounced audits. Suppliers with higher compliance ratings receive contractual
preference. When a supplier does not reach the bronze rating, Nike works with factory managers to
ensure that they take corrective actions. A supplier that fails to remedy the issues identified is subject
to review and sanctions, including potential termination of the supply agreement. As a requirement
for working with Nike, factories must comply with Nike’s Code of Conduct and Code Leadership
Standards, which align with International Labor Organization standards.

32 33
 The case for GHG emissions reductions: Nike seeks partners with management systems that enable • Seagoing LNG tankers, chemicals/gas tankers and oil/product tankers provided with a Green
them to minimize the environmental impact of their activities. Nike’s Sustainable Manufacturing and Award Certificate qualify for a 15% discount on port dues related to gross tonnage size. The Green
Sourcing Index allows it to rate suppliers according to their level of commitment to corporate respon- Award35 is a voluntary quality assessment certification scheme; the certificate is issued by the
sibility and sustainable practices, giving precedence in contract decisions to those that would result independent Green Award Foundation to vessels and shipping companies that have made additional
in decreased emissions. investments in the vessel and crew in order to improve environmental performance, safety and
quality. The Green Award system also applies to a wide range of inland vessels. Certification is
Impacts/lessons learned: The Sustainable Manufacturing and Sourcing Index gives environmental based on the environmental performance of the engines, various other energy saving equipment,
and human resource management performance equal weight alongside business metrics in Nike environmental management and safety. Inland vessels with a Green Award certificate qualify for
sourcing, increases transparency to reduce non-compliant practices, and creates targets and a discount of up to 100% on port dues.
incentives for suppliers to go well beyond compliance. • Seagoing Vessels that score 31.0 points or more on the Environmental Ship Index (ESI),36 as
administrated by the International Association of Ports and Harbors (IAPH)37 qualify for a 10%
discount on port dues related to gross tonnage size already paid. If the vessel also has an individual
ESI nitrogen oxide score of 31.0 points or more, the discount will be doubled. The ESI identifies
seagoing ships that perform better in reducing air emissions than required by the current emissions
Philips – Case from SPLC Guidance for Leadership in Sustainable Purchasing32 standards of the International Maritime Organization; in particular, it evaluates the amount of
nitrogen oxide and sulphur oxide that is emitted by a ship and includes a reporting scheme on the
Philips invests in improving operations and achieving its sustainability goals with innovative strategies greenhouse gas emission of the ship.
that require a new way of doing business, moving away from the traditional linear economy towards
a holistic and circular one. In 2015, the company’s Procurement and Sustainability groups worked The case for GHG emissions reductions: Both the Green Award certificate and the ESI act as indica-
together to develop a strategy to achieve carbon neutrality, a commitment the company made as part tors of the environmental performance of vessels. They are quality marks and can bring benefits to
of the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change. their holders. The Port of Rotterdam Authority rewards vessels that hold the certificate and/or have a
The strategy includes energy efficiency initiatives, the deployment of onsite renewable resources, the good ESI indicator, thereby encouraging more sustainable behavior in the shipping industry.
purchase of renewable energy credits, and the purchase of a long-term power purchase agreement.
Philips undertook the process to develop its cross-functional strategy to carbon neutrality, along with Impacts/lessons learned: The discount scheme used by the Port of Rotterdam allows the rewarding
an analysis of power purchase agreement benefits and the business case. of ships that have a reduced environmental impact and enables the promotion of cleaner ships. Both
the Green Award certificate and the ESI score can also be used by shippers and ship owners as their
The case for GHG emissions reductions: The strategy includes energy efficiency initiatives, the own promotional instrument.
deployment of onsite renewable resources, the purchase of renewable energy credits, and the
establishment of a long-term power purchase agreement, which will allow the company to achieve
carbon-neutral operations in the US and reduce its global carbon footprint by 8.3%.

Impacts/lessons learned: Already a leader in sustainability, the Philips power purchase agreement Schneider38 – How to create an effective transportation RFP39
has helped the company take a leap forward in reducing the impact of its North American operations.
Though not specific to transport and Scope 3 emissions, the company’s cross-functional carbon A request for proposal (RFP) is the formal call for a carrier to answer a shipper’s business needs
reduction strategy is a good example. once the shipper has chosen a select group to consider for hire. Carriers’ completed proposals
provide the opportunity to compare information on a level basis across all submissions. During the
• The use of dedicated trucks matched with specific loads had allowed savings of about 5,000 process, shippers can narrow down potential carriers to hire to those who will best execute the work.
pounds of tare weight per truck and another four to five pallets of payload per trip compared to Before compiling the necessary questions and statistics to create an RFP, the shipper makes decisions
the tractor-trailers the company used previously. for components that will affect the final proposal and impact how a carrier crafts its response:
• The mode-shifting initiative has doubled miles-per-gallon fuel savings (6.3 miles per gallon for • Determine the number of bid rounds;
truckload vs. 12 miles per gallon for intermodal), removed 420 trucks from the road, and kept • If packaging or bundling lanes, determine in advance how to evaluate this in the bid process;
truckload capacity free for other lanes. • Decide the bid/price duration – best practice is a two-year bid term with annual escalation;
• The exclusive use of SmartWay carriers gives Johnson & Johnson the possibility to evaluate • If splitting bids, implement annual price-adjustment processes for the freight on which your
carriers’ performance. Furthermore, it gives the company opportunities to collaborate with carriers are about to bid;
carriers and customers on more efficient and sustainable transportation practices. • Establish whether to adjust bid rates to value incumbency.

After making these decisions, the shipper can create the RFP. In order to allow carriers to provide the
most accurate and comprehensive overview of their capabilities, the RFP should ask for both qualitative
and quantitative information:
Port of Rotterdam – Discounts on port dues for sustainable vessels33 [*] • Qualitative, to allow carriers to report the details of their expertise and business, often in
fill-in-the-blank or short-answer formats. Guidelines:
The Port of Rotterdam Authority offers several discount options on port dues. Vessels that regularly I) Create clear, streamlined questions and avoid repetition;
visit the Port of Rotterdam or handle a large amount of cargo are rewarded, but sustainable vessels II) Include adequate space for respondents to provide context or add additional information to a
are eligible for a specific incentive scheme. In particular, the following discounts on port dues may numerical answer – numbers do not always tell a complete story;
apply to sustainable vessels:34 III) Format the RFP so that the carrier provides accurate scores and data – outdated formats may
inhibit the correct reporting of data;

34 35
 IV) Limit financial questions, as most carriers are unable to answer them due to privacy • Rethinking the bidding process: In 2009, during the recession, declining retail sales slowed activity
restrictions; along transportation lines. As trucking companies had an abundance of capacity and few expiring
V) Consider creating the RFP in Excel for easy data input and tracking. contracts, Home Depot began to aggressively bid out its trucking rates against the evergreen
• Quantitative, aiming to provide as many details as possible in order to enable the carriers to prices carriers had long held. Carriers needed work and accepted the new, lower rates, but when
prepare an accurate proposal. Guidelines are: the economy began rebounding in 2010 those carriers came back to Home Depot looking to raise
I) Pay attention to the details, as the shipper needs to see a clear and accurate picture of the prices even though the new contracts were still in place. Home Depot held firm at first, but soon
carrier’s capabilities. The carrier’s expertise in the industry, portfolio of services, its tender (load) acceptance began to go down: therefore, the rate per mile increased because
cultural fit, network and technology use are just a few components to help shippers carriers were not accepting Home Depot’s loads, causing many of those loads to move at spot
make the right choice; rates. Home Depot responded by quickly adjusting rates for carriers, but the experience made the
II) Provide details regarding origin-destination pairings (ZIP/postal codes, states/provinces, retailer realize it needed a more standardized process for setting OTR shipping costs. In 2011,
regions, freight volume between destination points on each lane; Home Depot held its first national bid for a one-year OTR shipping contract. For the past five years,
III) Include detailed freight characteristics (e.g., drop and hook); Home Depot has rebid approximately 80% of its expiring OTR trucking and intermodal contracts.
IV) Describe any seasonality/variability and take into account whether there will first be Incumbent carriers retained the 20% not bid at a neutral rate. This practice allows strong performing
negotiations with incumbents or if it will be a one-bid round, with key lane negotiations carriers to hold on to lanes that are critical parts of their network. Home Depot typically favors
among incumbents; asset-owning carriers because it wants to spend money on companies that are investing in their
V) List any ancillary requirements (e.g., top-off, trailer detention); own trucks and drivers: asset-owning carriers handle more than 95% of Home Depot’s overall
VI) Identify who is the shipper and who is the consignee; OTR shipping.
VII) Include bid-to-implementation duration and objectives between the shipper and carrier; • Rating carriers: In order to have a strong understanding of how each transportation partner and
VIII) Be prepared to select 2 to 5 alternative carriers as a backup to the primary carrier; how the network as a whole have performed, Home Depot has developed the Carrier Rack and
IX) Consider creating the RFP in Excel for easy and consistent data input and tracking. Stack program, a scorecard that rates the performance of all the carriers in its network. The
company shares those scorecards with carriers on a weekly basis, showing how the carrier
The case for GHG emissions reductions: Reliable and complete upfront information provided in the performed that week, in four-week, twelve-week and year-to-date periods against all other
RFP can help the carrier determine whether the potential business will be the correct fit, mitigating transportation providers in the network. Home Depot factors that annual performance into the
the risk of winning the business and later realizing it is not the right opportunity and/or operating it following year’s bid to choose transportation providers. Based on where the carriers rank, Home
inefficiently. Inefficiencies in the supply chain exercise can have a negative impact on GHG emissions Depot artificially inflates the carrier’s rates entered into the biding tool. The reasoning is that a
(e.g., unoptimized deliveries, increased number of needed trips, inefficient use of trucks). low-performing carrier will actually cost more than a top performing one and accounting for
carrier service in the bid helps Home Depot determine the true cost of its contracted rates.
Impacts/lessons learned: To get the most accurate and effective bid from carriers, it is important to The end-process rewards carriers based on a combination of performance, rates and a carrier’s
have a user-friendly and informative RFP. Thoroughly creating and detailing the RFP at the onset of SmartWay ranking, which encourages the carriers to reduce emissions and support the environment.
the process will save shippers time once the carriers return the proposals for consideration. With Home Depot also uses the scorecards to make service adjustments based on quarterly
clear expectations set up front, it will be easier to both eliminate carriers who do not meet the basic performance reviews.
requirements of the RFP and spot the ones that are indeed viable candidates.
Furthermore, Home Depot has recognized the importance of collaboration along the supply chain.
After transforming how it approaches its transportation contracts, it continues to work with carriers
to improve efficiency in its supply chain and capacity by employing supply chain synchronization
where freight orders coincide with selling store patterns. This synchronization results in steadier
Home Depot – Supply chain restructuring, bidding process rethinking, week-over-week shipping and reduces lead times.
carrier rating, collaboration40
Home Depot is conscious of the difficult work/life balance many truckers experience and is responding
by improving efficiencies across its carrier base. This leads to happy drivers who want to run loads for
Home Depot, a home improvement supplies retailing company41 based in the United States (US), the company. The goal of those efforts is for drivers to make Home Depot a higher priority in shipping.
favors a balance between performance and cost when selecting carriers. For the past several years,
the company has been revising its approach to the supply chain to better support its retail operations, The case for GHG emissions reductions: The general restructuring of the supply chain and the bidding
with three main actions: process, and the consequent introduction of the carrier rating system, have allowed the company to
• Centralized supply chain: More than 10 years ago, the company took transportation responsibilities acquire better knowledge and control of its supply chain. The influence of the new carrier rating system
away from regional offices and centralized them at Home Depot’s headquarters in Atlanta, Canada in the selection process allows for the rewarding of carriers based on a combination of performance,
and Mexico. Prior to centralization, 30% of Home Depot’s freight went through the distribution rates and its SmartWay ranking, a United States Environmental Protection Agency (US EPA) rating that
supply chain and 70% went direct to stores; centralization has led to a reversal in those numbers. encourages transportation companies to reduce emissions and support the environment.
In the US, Home Depot operates over 60 distribution centers across the country.42 Moving products
between those distribution centers and more than 2,000 US locations requires Home Depot to use Impacts/lessons learned:
multiple forms of transportation: Home Depot does not own its own trucks, but each distribution • The length of the contracts with shippers and the way Home Depot is managing its national trucking
center has a dedicated fleet run by dedicated carriers on three-year contracts. Likewise, it puts its and intermodal bids for OTR shipping is changing the relationship between carrierand customer.
less-than-truckload (LTL) contracts out for bidding every two years. The length of those contracts • Home Depot has set up a more standardized process for setting OTR shipping costs, holding
and the way Home Depot is managing its national trucking and intermodal bids for over-the-road national bids for a one-year OTR shipping contract.
(OTR) shipping is changing the relationship between carrier and customer.

36 37
 • Rebidding all of the national carrier contracts each year requires a strong understanding of how takes measures to reduce the carbon footprint of the project that is awarded to the company by means of
each transportation partner and the network as a whole have performed. A carrier rating system the CO2 Performance Ladder. The company remains in dialogue with the water authority to ensure
facilitates this process and makes the selection of best performing carriers easier, including those effective CO2 reduction measures are taken. Both Van der Stelt and the commissioning party are
committed to emissions reductions. investigating various measures to keep the carbon emissions of this project at a minimum.

• The 12-month bid process allows Home Depot and its carriers to reset based on market conditions The case for GHG emissions reductions: In addition to the implementation of CO2 reduction measures
and network changes. The process has also encouraged carriers to follow through with their in its projects, Van der Stelt also takes measures to cut back carbon emissions within the organization.
commitments: once the new lanes and rates are set, Home Depot sustains approximately 98% of Examples of the measures taken are the use of LED lighting, the installation of solar panels, as well
the volume locked-in during the following 12 months. Further, resetting those contracts annually as stimulating behavioral change, such as efficient driving measures to save fuel. In order to stimulate
gives Home Depot an opportunity to adjust its lanes and commitment levels to improve capacity. behavioral change, the company arranges training for its drivers to become more aware of the
consequences of carbon emissions in the atmosphere and how to drive more efficiently. These
measures led to carbon savings of 2.6% in 2017. The company has the goal to reduce its carbon
emissions by 15% in the period 2015 to 2020. To achieve this objective, Van der Stelt is looking into
alternative fuels such as hydrotreated vegetable oil (HVO) and hydrogen fuel. The use of alternative
Unilever – Responsible Sourcing Policy43 [*] fuels will help the company cut most of its carbon emissions, because 97% of the CO2 resulting from
its activities are caused by diesel. Moreover, the transportation company is looking for ways to reduce
CO2 emissions during the loading and unloading of the goods during transportation.
Unilever’s Responsible Sourcing Policy (RSP) aims to enable Unilever to work together with suppliers to
establish sustainable supply chains. This ambition is also at the core of the Unilever Sustainable Living Impacts/lessons learned: Thanks to the Ladder, Van der Stelt has now has a control mechanism for
Plan (USLP), based on 12 fundamental principles anchored in internationally recognized standards (i.e., its ambitions to structurally reduce CO2 and the company is becoming more and more aware of
UN Guiding Principles on Business and Human Rights; International Bill of Human Rights; International carbon emissions within its operations and within its projects. In addition, the CO2 Performance
Labor Organization’s Declaration on Fundamental Principles and Rights at work). Ladder contributes to the relevance of discussions to reduce CO2. With this, the importance of carbon
emissions reduction is spread throughout the entire organization.
The RSP includes a set of mandatory requirements that all the suppliers need to meet in order to
be able to do business with Unilever. RSP supports the implementation of the Unilever Supplier
Qualification System (USQS 44) for all suppliers of products and services to Unilever. When invited to
register in USQS, suppliers are assessed against the principles detailed in the RSP. Unilever verifies
alignment with and the implementation of the policy’s mandatory requirements through the use of Walmart – Ambitious fleet efficiency targets result in considerable savings
supplier self-declaration, online assessments and – for designated high-risk countries and supplier
types – independent verification including third-party audits. A three-step process is established:
implementing mandatory requirements relevant to the fundamental principles and applying to all the In 2005, Walmart committed to a momentous goal: doubling the efficiency of its fleet by the end of 2015.
suppliers in a Unilever supply chain; advancing to good practice; achieving and maintaining best Walmart achieved such impressive results in part by collaborating with associates to establish more
practices. Suppliers are also encouraged to move from the mandatory requirements to best practices. efficient techniques for loading, routing and driving, as well as through collaboration with tractor-trailer
manufacturers on new technologies.
The case for GHG emissions reductions: The RSP embodies the way that Unilever seeks to operate in
addition to the standards it expects of its suppliers. This can also be used to push GHG emissions The case for GHG emissions reductions: Its year-end results showed a 102.2% improvement in efficiency
reductions along the supply chain. over its 2005 baseline, with associated savings of nearly USD $1 billion annually and avoided emissions
of almost 650,000 metric tons of CO2.47
Impacts/lessons learned: The policy reinforces Unilever’s commitment to working together with
suppliers to ensure that the business objectives are delivered while making a positive social impact Impacts/lessons learned: Collaboration with supply chain partners to optimize operations and to
on supply chains and reducing environmental impacts and GHG emissions. incorporate improvements in equipment and technologies is fundamental to achieving efficiency goals.

Van der Stelt – The CO2 Performance Ladder45 [*]

Van der Stelt is a Dutch freight transportation company with a fleet of 45 trucks that has the ambition to
continuously develop its sustainability and CO2 reductions. For this, the organization is certified on the
CO2 Performance Ladder.46 Through the award advantage provided by the CO2 Performance Ladder, Van
der Stelt won the tender for a project consisting of the transportation of sediment for one of the Dutch
water authorities, Hoogheemraadschap Hollands Noorderkwartier. The water authority presented a
tender for this project in 2015 in which it used the CO2 Performance Ladder as a procurement instrument.
To register in this tender, Van der Stelt set itsCO2 ambition level to 3; the company did not have a certificate
on the CO2 Performance Ladder at the time. When Van der Stelt was awarded the contract, it needed to
prove that it complied with the CO2 Performance Ladder level 3 within a year, which it did. Van der Stelt

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 4.3 Examples applicable to many companies Applicable to many companies – Shippers and LSPs using SmartWay data to
inform transportation purchasing decisions54
Applicable to many companies – FreightShare Lab’s asset sharing platform48
SmartWay55 is the United States Environmental Protection Agency’s (EPA) program aiming to help companies
Optimizing asset use is one of few decarbonization measures in the logistics sector that closely aligns advance supply chain sustainability by providing the transportation industry with tools to measure, benchmark
with good business practice and offers low-carbon mitigation costs.49 FreightShare Lab is developing an and take action to reduce GHG emissions and improve fuel efficiency. Partnering with SmartWay allows
advanced platform to improve asset use and reduce the number of freight transport vehicles on the shippers and LSPs to equip themselves with actionable data and, in turn, use that information to help
road. The objective is to create “the” platform of platforms where companies can share loading spaces further inform customers' buying decisions and improve freight sustainability. Initially, SmartWay focused
within a common service provider, thus potentially optimizing every journey and avoiding empty running. on gathering data from shippers, carriers and LSPs on factors such as tractor age and emissions, miles per
The heart of the platform is the optimization algorithm developed by Route Monkey, which can reduce gallon, distance travelled, and trailer load weights. Specific, defined transportation emissions data, controls
total fleet mileage by up to 20% and increase productivity by up to 30%. An estimation with real data and operational targets are necessary to drive emissions reporting and meet sustainability goals. Measure-
shows that one fleet of 1,500 vehicles could increase deliveries per vehicle by one-third after using the ment is the first step in applying the value of the derived data to reach identified targets. The newest
advanced platform. The enhancement of the algorithm could effectively collate vehicles, depots and generation of SmartWay allows shippers and third-party logistics providers to evaluate and incorporate
other assets from multiple companies, treating them as if they were one fleet. In this way, it can further environmental data and use it to make educated, meaningful and valuable business decisions. SmartWay
reduce empty-running of trucks and vans, reduce the number of vehicles operating in congested urban compiles information into a standardized, transparent format for reporting carbon footprint data. This allows
areas, and therefore substantially cut costs and emissions. comparison among carriers' emission profiles and their use as a decision-making factor in procurement.

The case for GHG emissions reductions: The Low-Carbon Technology Partnerships initiative’s (LCTPi) The case for GHG emissions reductions: Shippers and LPSs can incorporate environmental performance
2017 annual report found among its key outcomes that “modest asset sharing models that can save 15% data into purchasing decisions. For example, carriers in all transport modes can have specific CO2, nitrogen
[in emissions and mileage] are only being used by 20% of operators, while highly integrated vehicle and oxide and particulate matter emissions factors for their operating fleets. These advancements in fleet-specific
depot sharing can lead to a 20% [emissions and mileage] savings and is yet to be taken up in the case of emissions factors create measurable ways to incorporate environmental performance into the procurement
at least 85% of commercial vehicle miles.”50 FreightShare Lab’s dynamic data and asset sharing plat- process. When reducing environmental impact, shippers and LSPs often look first at direct emissions or
form can enable route and load optimization/consolidation while simultaneously providing development those they can control. Over time, they can improve these impacts and extend their focus to reducing the
opportunities to small and medium-sized enterprises. The result is a potential reduction in costs and indirect emissions that result from global supply chain operations. In the future, shippers and LSPs will not
emissions across fleets of approximately 20%. only use SmartWay data as a decision point when purchasing services; they will also come to expect its
availability and disclosure.
Impacts/lessons learned: Freight and logistics operations are notoriously difficult to decarbonize.
Smart solutions like an asset sharing platform can accelerate emissions reductions and enhance the Impacts/lessons learned: Shippers and LSPs have information on their GHG emissions and use it in the
sector’s efficiency so that there are fewer vehicles carrying the same, or greater, volumes of goods. decision-making process. Actively participating in these programs brings value directly to shippers,
This collaboration among stakeholders encourages them to consolidate their cargo, resulting in an carriers and LSPs by creating efficiency opportunities, new avenues to advance shipper sustainability
optimized load factor, a reduction in fleet mileage, and an increase in productivity. initiatives and, ultimately, new ways to improve global freight sustainability.

Applicable to many companies – GLEC Declaration51 Applicable to many companies – SmartWay’s RFP specification56
Over the years, many company managers have complained that none of their transport providers The SmartWay Transport Partnership is a voluntary collaboration between the United States Environmental
provide data in the same format or that none of their customers ask for information in the same Protection Agency (US EPA) and the freight industry designed to increase energy efficiency while significantly
way. This leads to wasted efforts in processing and reporting logistics performance data in response reducing greenhouse gases and air pollution. The program gives some suggestions on the proper wording
to different requests. The Global Logistics Emissions Council’s GLEC52 Declaration is a harmonized to adopt in preparing (the shipper) and answering (the carrier) RFPs.
template, customized to each target audience, that companies and organizations can use to report • Suggested RFP specification: “Vendors awarded this contract will be required to be an EPA SmartWay
GHG emissions to different users/stakeholders. Indeed, it builds on a menu of data/information Transport Shipper Partner and commit to shipping at least 50% of goods using an EPA SmartWay
on logistics emissions that organizations can include in their report/GLEC Declaration. GLEC Transport Carrier Partners.”
developed the Declaration in consultation with businesses, starting with a selection of GLEC • Suggested RFP questions: “Preference will be for suppliers who are an EPA SmartWay Transport
member companies and then with the wider GLEC community, including additional companies as Shipper Partner and commit to shipping at least 50% of their goods using EPA SmartWay Transport
well as green freight programs, NGOs and policy-makers, as well as the European Commission Carrier Partners. For a list of Partners, see http://www3.epa.gov/smartway/about/partnerlists.htm.
and LEARN53 partners. I) Is your company an EPA SmartWay Transport Shipper Partner? (Yes/No) Prefer YES a. If yes, have you
committed to ship or receive 50% or more of your freight using SmartWay registered carriers? (Yes/No)
The case for GHG emissions reductions: The use of a standardized reporting template to report GHG II) If you have a private fleet of trucks, is your company a registered EPA SmartWay Transport Carrier
emissions publicly and to customers could make better data available, enabling the underpinning of Partner? (Yes/No) a. If yes, what bin number are you in (1, 2, 3, 4 or 5) for CO2 g/mile and g/ton-mile?”
European Commission policy and tracking of logistics emission across the European Union against
targets. Furthermore, it means companies can have better data to underpin corporate targets and The case for GHG emissions reductions: SmartWay transport partners are leading the way in achieving a cleaner,
support decision-making. The GLEC Declaration can help businesses streamline efforts to better more efficient transportation future by adopting fuel-saving strategies that increase profits and reduce emissions.
understand results, lower costs and allow greater focus on emissions reductions.
Impacts/lessons learned: Companies that achieve environmental goals through procurement and
Impacts/lessons learned: The main reason to implement the GLEC Declaration is to achieve greater contracting strategies built on the success of US government environmental purchasing programs can
harmonization in the disclosure of data/information and to increase transparency at different levels benefit from the same services that federal, state and local governments require of their suppliers. All
(e.g., overall company, by region, by customer, per shipment). suggested strategies are adapted from RFP and contract language used by US state and federal agencies.

40 41
 Annexes
A. Smart Freight Leadership Both the SFL concept and SFP Guidelines aim to enable companies to move in the same direction. Three guiding
principles – transparency, collaboration, leadership and innovation – are the cornerstones of the SFP Guidelines
Climate change continues to climb the global agenda, driven by momentum from the Paris Agreement and the (see section 1.6). Such principles are consistent with the SFL concept shown in Figure 3 as the SFP Guidelines provide
Sustainable Development Goals. Within in the framework of the Paris Agreement, governments have companies with instructions on how to embed a low-carbon approach in companies’ freight and logistics services
developed / are developing Nationally Determined Contributions that embody efforts to reduce emissions and procurement processes, along with reference material including examples and sources to illustrate efforts.
adapt to the impacts of climate change.

In parallel, businesses are strengthening their strategies to reduce their carbon footprint. What is currently B. Sector initiatives
lacking is a global and unified strategy for heavy transport covering air, sea, and land and transshipment
centers. This would both strengthen efforts between businesses and enable corporations to collaborate with By joining forces in a sector initiative, organizations can address the urgent, systemic challenges that are
governments directly, planning for and achieving compliance with Nationally Determined Contributions. difficult to tackle alone. Members of a sector initiative bring their expertise and perspective together in a
common approach that enhances the best potential in the industry.
Smart Freight Centre (SFC) simplifies the pathway for companies to report emissions, implement solutions
to reduce emissions, and collaborate and advocate for uptake and recognizes that leaders must come forward, Most industries manage complex value chains and a deeply structured supplier base. As supply chains are
inspire others and set industry norms. Smart Freight Centre calls this Smart Freight Leadership. global, it is necessary to promote the standardization and harmonization of supply chain approaches to
achieve long-term impact. It is also important that companies active in a sector send a common message
Figure 3 summarizes the Smart Freight Leadership concept, illustrating actions companies can take to about their sustainability activities and requirements to their providers across the supply chain, including for
become Smart Freight Leaders and the support offered by the SFC to help them achieve such recognition. GHG emissions and air pollutant reductions.

Figure 3: Smart Freight Leadership chart By joining a sector initiative, organizations show suppliers, other partners and stakeholders that they hold
a common and unified position and understanding of and commitment to supply chain sustainability, while
Smart Freight Leadership maintaining independent supply chain management. Furthermore, they can develop and apply common tools

1 2 3
to drive change and have a positive impact on sustainability, including in their supply chains and its
What companies Report Implement Collaborate environmental footprint.
do across their credible emissions solutions as buyer and advocate
global logistics and set science-based and/or supplier that for sector-wide Sector initiatives can strive to embed sustainability topics, in particular GHG emissions reductions, into the
supply chain reduction targets reduce emissions uptake procurement processes of companies in a targeted sector. When shippers have a common approach to
sustainability, it also benefits suppliers who clearly understand what the companies’ specific sector expects
from them.
Smart Freight GLEC Solutions Collaborate
Sector initiative reference table
How Smart • GLEC Framework • Smart Freight • Advocacy with The following table summarizes the main sector initiatives that can be useful for company procurement
Freight Centre • SBTI target setting Procurement influencers teams that are aiming to embed sustainability and GHG emissions and air pollutant reductions in their freight
supports guidelines Guidelines • Recognition of leaders and logistics services procurement process. We may enrich the list of sector initiatives in the future.
companies • Accreditation of • Smart Transport • Smart Freight
programs and tools Manager Training Initiatives Map Table 3: Sector initiatives reference table
• Smart Freight
workshops # Name Sector Tools

Smart Freight Centre recognizes companies that calculate and report logistics GHG emissions using the Global 1 CDP’s supply chain program Cross-industry • Standardized reporting platform
Logistics Council’s GLEC Framework and demonstrate leadership globally by making progress on one or more of • Scope 3 reporting emissions data into
the other smart freight leadership behaviors. Visit SFC’s website or contact SFC for further information and for their scope 3 inventory
up-to-date news on Smart Freight Leadership,. • Analytics products to benchmark and
compare suppliers and yourself
SFP Guidelines role • Facilitation of collaborative projects
The Smart Freight Leadership (SFL) concept supports the SFP Guidelines as one possible solution that supply 2 Cefic Chemical • Safety and Quality Assessment System
chain buyers (and consequently suppliers) can implement to reduce logistics GHG emissions. The SFP Guidelines (SQAS)
have the mission of providing guidance to ensure that companies can leverage their transport and logistics 3 Confederation of European Pulp and paper • To Our Roots and Beyond project
procurement to achieve GHG emissions reductions. Paper Industries (CEPI)

42 43
 # Name Sector Tools CDP’s supply chain program

4 Consumer Goods Forum Consumer goods • End-to-end Value Chain Initiative: Sector: Cross-industry
(CGF) Best Practice Sharing, Learning Series Active from: 2008
• Sustainable Supply Chain Initiative
(SSCI): SSCI Benchmarking and Brief description
Recognition CDP, formerly the Carbon Disclosure Project, runs the global disclosure system that enables compa-
5 Drive Sustainability Automotive • Self-assessment questionnaire (SAQ), nies, cities, states and regions to measure and manage their environmental impacts. Over the past 18
• Supplier Training Series years, CDP has built a comprehensive collection of self-reported environmental data worldwide.
• Raw Material Observatory
6 Green Electronic Council Information • Electronic Product Environmental CDP’s supply chain program enables purchasing organizations to engage their suppliers on environ-
(GEC) technology • Assessment Tool (EPEAT) mental issues to manage risks and drive positive action. Through CDP’s standardized global online
7 International Council of Mining • Details not available reporting platform, supply chain members invite strategic suppliers to report their climate change,
Mining and Metals (ICMM) deforestation and water security information using CDP’s annual questionnaires.
8 International Petroleum Oil and gas Reports and guidance on various topics,
Industry Environmental among them: CDP’s supply chain program supports purchasing organizations in collecting a primary data set, buil-
Conservation Association • Low-emission pathways ding stronger supplier relationships, joining an established group and benefiting from tried and tested
(IPIECA) • Transparency and reporting supplier engagement best practices, and changing the way suppliers do business for their customers
• Emissions management and for their own economic and environmental benefit.
9 Kitchen Cabinet Cabinet • KCMA Certification Seals: KCMA/ANSI Tools
Manufacturers manufacturing A161.1 Quality certification • Internationally recognized and standardized reporting platform.
Association (KCMA) • Environmental Stewardship Program • Scope 3 report to help purchasing organizations integrate suppliers’ primary emissions data into
10 Pharmaceutical Supply Pharmaceuticals • Common Tools for guidance their scope 3 inventory.
Chain Initiative (PSCI) and healthcare • PSCI audit sharing program • Analytics products to benchmark and compare suppliers.
11 Responsible Business Electronics • RBA Online • Facilitation of collaborative projects for buyers and suppliers.
Alliance (RBA) – formerly • Self-assessment questionnaire (SAQ)
the Electronic Industry • Risk Assessment Platform Link: www.cdp.net/supplychain
Citizenship Coalition (EICC) • Risk Readiness Assessment
12 Retail Industry Leaders Retail • Retail Sustainability Leadership Model
Association (RILA) • Retail Sustainability Management
Resource Library Cefic
• Sustainability recognition opportunities
• Sustainability reporting platforms
Sector: Chemical
13 Supplier Ethical Data Cross-industry • Sedex Advance – collaborative platform
Exchange (Sedex) • Sedex Members Ethical Trade Audit Active from: 1972
14 Sustainable Apparel Apparel, footwear • Higg Index
Brief description
Coalition (SAC) and textile Based in Brussels, Cefic represents large, medium and small chemical companies across Europe.
15 Together for Sustainability Chemical • TfS Sustainability Assessment
These companies directly provide 1.2 million jobs and account for 14.7% of the world’s chemical
(TfS) • TfS Sustainability Audit
production. Cefic interacts on behalf of its 670 members with international and European Union
16 World Ports Sustainability Maritime ports • WPSP Portfolio
institutions, non-governmental organizations, the international media, and other stakeholders.
Program (WPSP) • Environmental Ship Index (ESI)
• Further tools for CO2 reductions available
Cefic is also an active member of the International Council of Chemical Associations, which represents
via the World Ports Climate Initiative
chemical manufacturers and producers all over the world and seeks to strengthen existing cooperation
website (guidance document to develop or
with global organizations, such as the United Nations Environment Programme and the Organisation
improve GHG emissions inventories; CO2
for Economic Co-operation and Development, to improve chemicals management worldwide.
calculators; IAPH Tool Box for Port Clean
Air Programs) Tools
• The Safety and Quality Assessment System (SQAS) is a standardized assessment that Cefic
centrally manages and that organizations use to evaluate the quality, safety, security and environ-
mental performance of logistics service providers and chemical distributors. The SQAS covers all
Sector initiative cards key service providers in the land-logistics chain: road transport companies, intermodal operators
The following cards take a closer look at the sector initiatives listed in Table 3 to better understand how they and terminals, rail carriers, rail tank car maintenance workshops, packaged goods warehouses
can support organizations in achieving the intended outcomes when implementing actions to promote and tank cleaning stations. Independent assessors carry out assessments.
emissions reductions through the freight and logistics procurement process. • Chemical companies use the SQAS system to support their risk management plan for logistics’
activities as part of product stewardship. The SQAS reports provide good insights into the s trengths
and weaknesses of (potential) service providers. Chemical companies use the assessment reports

44 45
 Cefic
in their selection processes for new service providers and for the ongoing evaluation of the The Forum’s vision is “Better lives through better business”. To fulfil this vision, its members have given
standards and performance of their existing ones. SQAS reports support the dialogue between the Forum the mandate to develop common positions on key strategic and operational issues affecting
chemical companies and their LSPs as part of a continuous improvement process. the consumer goods business, with a strong focus on non-competitively sensitive process improvement.
Link: http://www.cefic.org/ Tools
• End-to-End Value Chain Initiative: Best Practice Sharing, Learning Series.
• Sustainable Supply Chain Initiative (SSCI): SSCI Benchmarking and Recognition.
Link: https://www.theconsumergoodsforum.com/
Confederation of European Paper Industries (CEPI)
Sector: Pulp and paper
Active from: 1992 Drive Sustainability
Brief description
Sector: Automotive
The Confederation of European Paper Industries (CEPI) brings together national associations
representing 18 countries from the pulp and paper industry across Europe to coordinate actions at the Active from: 2013
European level and support the industry’s strategy and objectives. CEPI’s goal is to bring added value
Brief description
to the industry for future growth. Its mission is to promote the uniqueness of the industry as an example
Drive Sustainability is a leading automotive partnership based on strong collaboration, innovation and
to follow, demonstrating how sustainability and competitiveness can go hand in hand.
impact. The initiative brings together 10 global automotive companies willing to address sustainability
issues in raw material sourcing, committing to improve both its own performance and that of its
In order to achieve its mission, CEPI facilitates cooperation throughout the entire forest and paper
supply chain.
chain. The European pulp and paper industry uses three basic modes of transport – rail, road and
maritime – with road transport as the predominant mode. The organization recognizes that high-quality,
The vision is to achieve excellence, innovation and performance in a sustainable manner, including
flexible, cost-efficient and sustainable transport solutions are essential to maintaining the European
ensuring that all individuals making vehicles or components or providing services receive decent
pulp and paper industry’s competitiveness.
working conditions and are treated with dignity and respect, while minimizing the environmental
Tools impact of the industry and promoting business integrity. The partnership’s mission is to drive sustain-
The To Our Roots and Beyond project helps maintain focus on the industry’s leading role in contributing ability throughout the global automotive supply chain by integrating sustainability in the overall
to a sustainable low-carbon society. The project demonstrates how industry is taking responsibility in procurement process.
reducing its carbon emissions, as well as taking a leading role in providing bio-based solutions to
decarbonize society at large. In total, the project has gathered 14 innovative case studies from 10 Drive Sustainability’s set of common guidelines – the Global Automotive Sustainability Guiding
European Union countries involving 12 companies representing a diverse array of projects. The case Principles57 – outline expectations for suppliers on key responsibility issues, including human rights,
studies focus on energy efficiency and/or renewables and are indicative of the diverse means the paper the environment, working conditions and business ethics. The Guiding Principles represent the global
industry has at its disposal to reduce emissions while building upon its unique strength as an entirely strategy and base of all activities.
renewable material.
Tools
Link: http://www.cepi.org/ • It uses a self-assessment questionnaire (SAQ) to assess the sustainability performance of
automotive suppliers. It focuses on social and environmental sustainability, business conduct and
compliance, and supplier management. It aligns with the Global Automotive Sustainability Guiding
Principles. The SAQ is globally applicable to all suppliers in the automotive supply chain, including
sourcing, manufacturing, logistics, assembly and retail.
Consumer Goods Forum (CGF) • The supplier training series aims to build supplier capacity. The training series covers topics in areas
such as social and environmental sustainability, business conduct and compliance, and supplier
Sector: Consumer goods management. The content is based on Global Automotive Sustainability Guiding Principles and
Active from: 2009 tailored to the country where it offers training.
• The Raw Material Observatory is a process to: (i) assess the sustainability risk of the top raw
Brief description materials for the automotive sector and (ii) identify potentially impactful activities that Drive
The Consumer Goods Forum (CGF) is a global, parity-based industry network, driven by its members. Sustainability partners could pursue collectively to address such risk. The Material Change report
It brings together the CEOs and senior management of over 400 retailers, manufacturers, service presents the results of the first round of raw material assessments. The report examines the
providers and other stakeholders across 70 countries and reflects the diversity of the industry in responsible sourcing of materials in the automotive and electronics industries.
geography, size, product category and format. Its board of directors, which includes 50 manufacturer
and retailer CEOs and chairpersons, governs the Forum. The CGF provides a unique global platform for Link: https://drivesustainability.org/
knowledge exchange and initiatives around four strategic pillars: sustainability, product safety, health
and wellness, and end-to-end value chain and standards; the CGF's fifth focus area is knowledge and
best practice sharing. It actively shares knowledge collectively created under the CGF umbrella with its
members, strategic alliances and other key stakeholders.

46 47
 Green Electronic Council (GEC) International Petroleum Industry Environmental Conservation Association (IPIECA)
Sector: Information technology Sector: Oil and gas
Active from: 2005 Active from: 1974
Brief description Brief description
The Green Electronics Council (GEC) is a mission-driven non-profit that collaborates to achieve a world The International Petroleum Industry Environmental Conservation Association (IPIECA) is a non-profit
in which companies only design and manufacture and customers only purchase sustainable information association providing a forum to encourage continuous improvement in the industry’s performance.
technology (IT) products; it acts as the fulcrum point between those who buy (institutional purchasers) It is a global association involving both the upstream and downstream oil and gas industry. It is also the
and those who make (IT brands) IT products. By deciding to buy sustainable IT products, institutional industry’s principal channel of communication with the United Nations.
purchasers can help the world achieve greater sustainability: GEC supports them implement sustainable
procurement and, through its flagship Electronic Product Environmental Assessment Tool (EPEAT) IPIECA convenes industry and stakeholders to work on issues across the environmental spectrum,
program, provides additional tools and resources. including oil spill preparedness and response, biodiversity and ecosystem services and water
management. The association promotes environmentally responsible operations across the oil and
Tools
gas sector by developing, sharing and promoting good practices and knowledge while its member
EPEAT is a leading global ecolabel for the IT sector and an easy-to-use resource for purchasers,
companies continue to meet society’s demands for fuels and petroleum products.
manufacturers, resellers and others wanting to find or promote electronic products with positive
environmental attributes. The EPEAT system evaluates electronics on more than 50 environmental Tools
criteria, some required and some optional, that measure a product's efficiency and sustainability Reports and guidance on various topics, among them:
attributes: products are rated gold, silver or bronze depending on how many optional criteria they meet. • Low emissions pathways.
• Transparency and reporting; emissions management.
EPEAT provides independent verification of manufacturers’ claims and the EPEAT online registry lists
Link: http://www.ipieca.org/
sustainable products from a broad range of manufacturers. National governments and private and public
institutional purchasers around the world use EPEAT as part of their sustainable procurement decisions.

GEC developed EPEAT using a grant from the US Environmental Protection Agency. GEC manages it
and maintains EPEAT's website and product registry; it also documents the environmental benefits Kitchen Cabinet Manufacturers Association (KCMA)
resulting from the purchase of EPEAT-registered products.
Sector: Cabinet manufacturing
Link: https://greenelectronicscouncil.org/
Active from: 1955
Brief description
The Kitchen Cabinet Manufacturers Association (KCMA) is a non-profit organization that represents
International Council of Mining and Metals (ICMM) companies that manufacture kitchen cabinets, bath cabinets and other residential cabinets, and key
kitchen and bath industry suppliers. With a membership of more than 300 companies throughout North
Sector: Mining and metals America, KCMA works to advance the cabinet industry through standardization, advocacy, setting
cabinet quality standards, and sponsoring kitchen and bath cabinet-related research, and by providing
Active from: 2001
the cabinet industry with management tools and educational programs.
Brief description
Tools
The ICMM is an international organization dedicated to a safe, fair and sustainable mining and metals
The KCMA Certification Seals:
industry. Bringing together 27 mining and metals companies and over 30 regional and commodity
• KCMA/ANSI A161.1 Quality Certification, which certifies that products meet the established and
associations, the ICMM strengthens environmental and social performance. The council aims to serve
proven standards for performance and durability.
as a catalyst for change, enhancing mining’s contribution to society. The ICMM is currently working on
• The Environmental Stewardship Program (ESP), which proves that manufacturers build cabinets
numerous programs and activities that relate to climate change, socio-economic development, and
with sustainable and responsible practices that benefit the environment and communities. As part
health and safety matters and involving a large number of companies and organizations.
of this certification, the manufacturer must enroll in the US Environmental Protection Agency’s
SmartWay Transport Partnership as a registered partner.
The ICMM supports greater use of renewable energy, other cost-effective low-emissions technolo-
gies, and improved efficiency, including in member company operations. It recognizes that implemen- Link: https://www.kcma.org/
ting cost-effective energy efficiency has the dual benefit of reducing operational greenhouse gas
emissions while improving productivity and reducing costs.
Tools
The ICMM encourages member companies to take voluntary actions to reduce GHG emissions by: Pharmaceutical Supply Chain Initiative (PSCI)
• Developing greenhouse gas emissions reduction strategies (e.g., carbon reduction cost curve assessments,
energy-efficiency studies) and implementing economical emissions reductions measures. Sector: Pharmaceuticals and healthcare
• Ensuring the efficient use of natural resources.
• Supporting research into and the development of low greenhouse gas emissions technologies relevant Active from: 2006
to the industry. Brief description
• Measuring progress and reporting results. The Pharmaceutical Supply Chain Initiative (PSCI) is a non-profit business membership organization in
Link: https://www.icmm.com/ the United States. Its aim is to create a better supply chain in the pharmaceutical and healthcare

48 49
 Cefic
industry. Its vision is to establish and promote responsible practices that will continuously improve Cefic
Brief description
social, health, safety and environmentally sustainable outcomes for the supply chains of its members. The Retail Industry Leaders Association (RILA) is a trade association in the US that promotes consumer
This includes: choice and economic freedom through public policy and industry operational excellence. Executives participate
• Fair and safe work conditions and practices; in RILA for its educational forums, its public policy advocacy, and its advancement of the industry.
• Responsible business practices;
• Environmental sustainability and efficient use of resources. RILA focuses on core areas where retailers can collaborate to make a difference, including supply
chains, sustainability, and technology and innovation.
The purpose of the initiative is to bring together the pharmaceutical industry to define, implement and
champion responsible supply chain practices. Members of the PSCI share knowledge and expertise RILA has three types of members: retailer, consumer product manufacturer and service provider.
across the industry to drive complex, global change more effectively than any one organization can alone.
Tools
RILA helps retailers become sustainability leaders through its Retail Sustainability Initiative (RSI). The RSI
Its three strategic pillars are: (i) leadership; (ii) a community of improving suppliers; (iii) partnering.
offers various programs and working groups that provide education, sharing and networking, such as:
Tools • The Retail Sustainability Leadership Model, which is a tool for retail sustainability executives to
• PSCI develops common guidance tools assessing performance and risk and tailors them to the identify management practices that will drive improved corporate and sustainability performance.
industry. It represents the collective knowledge of many industry experts and numerous retailers.
• The PSCI audit sharing program enables suppliers to share audits with more than one member via • The Retail Sustainability Management Resource Library composed of the Retail Sustainability
a web-based platform, thus avoiding the replication of audits for each supplier and resulting in Management Maturity Matrix. Retailers can refer to the resource library for specific tools, case
efficiency gains for members. studies and further opportunities to help them advance the maturity of their programs.
• Sustainability Recognition Opportunities, a matrix that summarizes a variety of recognition
Link: https://pscinitiative.org/home
opportunities available through third parties to showcase leadership in areas ranging from
operations to consumer engagement, with links to learn more.
• Sustainability Reporting Platforms, a matrix providing an initial overview of the platforms most
often used and referenced in the industry, with links to learn more about reporting on sustainability
Responsible Business Alliance (RBA) efforts and accomplishments.
Link: https://www.rila.org/Pages/default.aspx
Sector: Electronics
Active from: 2004
Brief description
The Responsible Business Alliance (RBA) is the world’s largest industry coalition dedicated to corporate Supplier Ethical Data Exchange (Sedex)
social responsibility in global supply chains. Founded by a group of leading electronics companies, and
formerly named the Electronic Industry Citizenship Coalition (EICC),58 RBA is committed to supporting Sector: Cross-industry
the rights and well-being of workers and communities worldwide affected by global supply chains. RBA Active from: 2004
members commit to a common Code of Conduct and RBA holds them accountable for their actions
under the code. Members use a range of RBA training and assessment tools to support continuous Brief description
improvement in the social, environmental and ethical responsibility of their supply chains. The Supplier Ethical Data Exchange (Sedex) is a global membership organization that aims to make
doing business that is good for everyone simpler by working with the right standards, information and
Today the RBA is comprised of more than 140 companies, with combined annual revenue of over $5 technologies.
trillion, directly employing more than 6 million people.
Sedex hosts one of the world’s largest collaborative platforms for the sharing of responsible sourcing
Tools data on supply chains. More than 50,000 members in over 150 countries use it to manage labor rights,
• RBA Online, a sustainability data management system designed to help companies manage and health and safety, the environment and business ethics performance. Sedex services enable members
share sustainability data. to bring together many kinds of data, standards and certifications, to make informed business decisions,
• A self-assessment questionnaire (SAQ). and to drive continuous improvement across their value chains.
• The Risk Assessment Platform, which assesses inherent/potential risks of supplier sites for an early
high-level risk assessment within supply chains. Sedex works in partnership with many of the world’s most recognizable brands and thousands of
• The Risk Readiness Assessment, which assesses risks in raw material supply chains. factories, producers and industry experts to shape the future of global trade and to have an increasingly
Link: http://www.responsiblebusiness.org/ positive impact worldwide.
Tools
• Sedex Advance is a collaborative platform for buyers, suppliers and auditors to store, share and
report on information quickly and easily. It includes a self-assessment questionnaire (SAQ), which
Retail Industry Leaders Association (RILA) supplier and buyer members complete when they register.
• The Sedex Members Ethical Trade Audit is a social audit procedure that provides a globally recognized
Sector: Retail way to assess responsible supply chain activities, including labor rights, health and safety, the
environment and business ethics.
Active from: 2007
Link: https://www.sedexglobal.com/

50 51
 Sustainable Apparel Coalition (SAC) World Ports Sustainability Program (WPSP)
Sector: Apparel, footwear and textile Sector: Maritime ports
Active from: 2010 Active from: 2017
Brief description Brief description
The Sustainable Apparel Coalition (SAC) is a leading apparel, footwear and textile industry alliance for In May 2017, the International Association of Ports and Harbors (IAPH) set up the World Ports
sustainable production. Its vision is of an apparel, footwear and textiles industry that produces no Sustainability Program (WPSP) to enhance and coordinate the future sustainability efforts of ports
unnecessary environmental harm and has a positive impact on the people and communities associated worldwide and foster international cooperation with supply chain partners. The WPSP builds on the
with its activities. World Ports Climate Initiative (WPCI) that IAPH started in 2008 and extends it to other sustainable
development areas.59
Tools
The Coalition develops the Higg Index, a standardized supply chain measurement suite of tools for all
In this context, the WPSP aims to illustrate the global leadership of ports that contribute to the United
industry participants that enables brands, retailers and facilities of all sizes – at every stage in their
Nations Sustainable Development Goals (SDGs). The program seeks to empower port community actors
sustainability journey – to accurately measure and score a company’s or product’s sustainability perfor-
worldwide to engage with business, government and society stakeholders and create sustainable added
mance. The Higg Index delivers a holistic overview that empowers businesses to make meaningful
value for local communities and wider regions where they operate. The WPSP implements the SDGs
improvements that protect the well-being of factory workers, local communities and the environment.
along five themes, including climate and energy. This supports the Paris Agreement climate goal aiming
to keep global warming well below 2°C. Building on the output of the WPCI, port community actors can
The index measures environmental and social labor impacts across the supply chain. With this data, the
collaborate in refining and developing tools to facilitate CO2 emissions reductions from shipping, port
industry can address inefficiencies, resolve damaging practices, and achieve the environmental and
and landside operations. In addition, they can run programs to enable the energy transition, improve air
social transparency consumers are demanding.
quality and stimulate the circular economy.
Link: https://apparelcoalition.org/
Tools
• The WPSP Portfolio is a global database of port-related sustainable development projects. Through
the WPSP portfolio, ports worldwide and WPSP partner organizations raise awareness of their
ongoing work on sustainability, share their experiences and provide inspiration.
Together for Sustainability (TfS) • The Environmental Ship Index (ESI) is a WPSP project that allows the identification of seagoing ships
that perform better in reducing air emissions than required by the International Maritime Organization’s
Sector: Chemical current emission standards. Several ports offer a substantial discount on harbor dues for ships with
a high ESI score.
Active from: 2011 • Further resources to facilitate CO2 emissions reductions are available via the WPCI website:
Brief description • A guidance document that serves as a reference for ports looking to develop or improve their GHG
In order to enhance sustainability within the supply chain, a group of leading chemical companies joined emissions inventories.
forces in 2011 for the Together for Sustainability (TfS) initiative. The goal of the TfS initiative is to drive • CO2 calculators (Scopes 1 & 2; Scope 3 under construction).
and foster global supply chain resilience, efficiency and sustainability in the chemical industry. • IAPH Tool Box for Port Clean Air Programs,60 which complements and supports the WPCI website by
providing a resource for GHG case studies and emissions reduction strategies.
The TfS initiative aims to build the industry’s standard for sustainable supply chains and has established Link: https://sustainableworldports.org/
a common approach to evaluating and improving the sustainability performance of chemical industry
suppliers through a global program that assesses, audits and improves sustainability practices.

Within the TfS initiative, members conduct assessments and audits based on a pre-defined set of
criteria and then share them across members, improving efficiency for all involved.
C. Sources
Tools Professional literature and company practices
• The TfS Initiative Sustainability Assessment is based on established international sustainability • A.P. Moller-Maersk A/S. 2017. “Sustainability Strategy 2014–2018”. Retrieved from https://www.maersk.
standards and provides expert feedback to both members and suppliers. The assessment covers com/en/about/sustainability/read-more-about-sustainability/sustainability-strategy.
the supplier’s sustainability management approach to the environment, labor practices and human • A.P. Moller-Maersk A/S. 2017. “Third Party Code of Conduct”. Retrieved from https://www.maersk.com/
rights, ethics and sustainable procurement. To ensure a consistent and reliable supplier assessment en/about/sustainability/third-party-code-of-conduct.
approach, the TfS initiative selected EcoVadis as its partner and service provider. A typical industry- • A.P. Moller-Maersk A/S. 2017. Sustainability Report 2017. Retrieved from https://www.maersk.com/en/
specific assessment uses an online web-based questionnaire; the assessment is valid for three about/sustainability/reports.
years, though members can ask their suppliers for more frequent assessments to show continuous • A.P. Moller-Maersk A/S. 2018. “Responsible Procurement”. Retrieved from https://www.maersk.com/
improvement. en/procurement/responsible-procurement.
• The TfS initiative Sustainability Audit is an onsite examination of a company’s sustainability practices. • Association Club Déméter. 2018. “Dispositif FAIR FRET”. Retrieved from http://www.club-demeter.fr/.
Independent companies perform audits using a pre-approved auditor pool. The scope typically • BICEPS (Boosting Initiatives for Collaborative Emission-reduction with the Power of Shippers) Network.
covers a single or combined business location, such as a production site, warehouse or office 2016. “BICEPS Rating System”. https://bicepsnetwork.org/rating-system/.
building. The TfS initiative’s audit process verifies the supplier’s sustainability performance
against a pre-defined set of management, environmental, health and safety, labor and human rights,
and governance criteria.
Link: https://tfs-initiative.com/

52 53
 • BMW Group. 2017. BMW Group supplier sustainability policy. Retrieved from https://www.bmwgroup.com/ Academic literature/papers
content/dam/grpw/websites/bmwgroup_com/responsibility/downloads/en/2017/Supplier_Sustainability_ • Andersson, D., Dubois, A., Halldorsson, A. & Hulthén, K. 2016. “Purchasing transport services:
Policy.pdf. Relationships and conditions for ‘green connectivity’”. Paper 32. Green Logistics Management: Balancing
• BMW Group. 2017. Sustainable Supply Chain Management – Due Diligence in the Supply Chain. Retrieved environmental and shareholder priorities Colloquium. 29 September 2016.
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downloads/en/2017/BMW_Group_due_diligence_in_the_supply_chain.pdf. • Broman, G. & Robèrt, K.H. 2015. “A Framework for Strategic Sustainable Development”. Journal of
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Materials and Automotive Components”. Retrieved from https://b2b.bmw.com/documents/14402/
7501963/180331_IPC+2018_EN_clean_v2.pdf/150a812c-228b-7ffc-323e-f576133c39ae. • Celik, E., Erdogan, M. & Gumus, A.T. 2016. “An extended fuzzy TOPSIS–GRA method based on different
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Ladder 3.0. Retrieved from https://www.skao.nl/home_en. (Ed.), Outsourcing Management for Supply Chain Operations and Logistics Service (pp. 449-465). Hershey,
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3.0. Retrieved from https://www.skao.nl/home_en.
• Global Environmental Management Initiative. 2018. GEMI Quick Guide: Strategic Buyer/Supplier Collaboration • Evangelista, P., Santoro, L. & Thomas, A. 2018. “Environmental Sustainability in Third-Party Logistics
on Sustainability. Retrieved from http://gemi.org/solutions/solutions-quick-guides/gemi-quick-guide-on- Service Providers: A Systematic Literature Review from 2000–2016”. Sustainability. 10. 1627. 10.3390/
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• IKEA. 2013. “IWAY Standard: Transport section”. Retrieved from https://www.ikea.com/ms/en_US/pdf/
reports-downloads/IWAY-standard-transport-section.pdf. • Govindan, K., Agarwal, V., Dhingra Darbari, J. & C. Jha, P. 2017. “An integrated decision making model for
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IWAY-standard-ed-5.2.pdf. 10.1007/s10479-017-2654-5.
• INGKA Holding. 2018. Sustainability Summary Report FY17. Retrieved from https://www.ikea.com/ms/
en_US/pdf/sustainability_summary/INGKA_Sustainability_Summary_Report_FY17.pdf • Kähkönen, A.K., Lintukangas, K., Hallikas, J. & Evangelista, P. 2016. “Responsible buying practices in
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compact.org/library/205.

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 SFP Guidelines Contributors Notes
1
WBCSD and Smart Freight Centre developed a project concept to unify business in the low-carbon transition of freight transport with
The people who contributed to the SFP Guidelines are mostly from the Transforming Heavy Transport the working title Transforming Heavy Transport. The goal is to help create demand for low-carbon heavy transport and enhance
project and from the Global Logistics Emissions Council (GLEC). We would like to highlight the input of the collaboration. In particular, the project aims to:
following companies and experts. • Establish a global business community by identifying interdependencies between We Mean Business coalition partners,
Smart freight Centre and external organizations;
• Develop a We Mean Business strategy for heavy transport that builds on existing initiatives and covers the three Smart
Shippers Agencies/NGOs Freight Leadership behaviors;
• H&M • ADEME • Create a framework for logistics procurement that considers GHG emissions as guidance for companies that subcontract
• Heineken • CDP freight services. This will help mobilize action by logistics service providers and transport operators.
• Intel • Global Logistics Emissions Council
2
See the Low Carbon Technology Partnerships (LCTPi) initiative at https://www.wbcsd.org/Programs/Climate-and-Energy/Climate/
Low-Carbon-Technology-Partnerships-initiative.
• PepsiCo • SKAO 3
Smart Freight Leadership, as described in Annex A.
• Signify • TK Blue 4
As they are global in scale, the issues that dominate the sustainable development agenda – i.e., climate and energy, environmental
• Smurfit Kappa and social issues, including GHG emissions reductions – are too big for individual companies to tackle alone. Therefore, companies
• Unilever Experts must work together to achieve improvements that have a real impact. Sector initiatives help to achieve this goal. By joining a sector
initiative, companies can: share experiences and information; develop and apply common tools; work together on common projects
• Walmart • Ian Wainwright – Futurecitylogistics to improve the sustainability of their supply chains and work to achieve GHG emissions reductions; and send a common message to
• David Coleman – Transficient their supply chains about sustainability.
LSPs/carriers • Marcio Dagosto – UFRJ 5
For each action, we estimated the complexity of implementation by assessing all the sub-actions suggested in the Toolbox (see
• A.P. Moller-Maersk • Alan Dirks – Port of Rotterdam chapter 3) and expressed that as a percentage from 0% to 100%. We present this in a graph through the following equivalences:
0-20% = complexity of implementation 1 on 5;
• DB Schenker • Pietro Evangelista – CNR-IRISS 21-40% = complexity of implementation 2 on 5;
• Deutsche Post DHL Group • Alan McKinnon – KHL University 41-60% = complexity of implementation 3 on 5;
• Ewals • Buddy Polovick – US Environmental Protection Agency 61-80% = complexity of implementation 4 on 5;
• RCS Logistics • Jorge Tesler – Centro de Logistica y Sostenibilidad 81-100% = complexity of implementation 5 on 5.
6
A non-exhaustive list of interesting investor initiatives providing sustainability requirements includes CDP – Carbon Disclosure
• STEF • Laetitia Dablanc – IFSTTAR Project; DJSI – Dow Jones Sustainability Indices; MSCI – Morgan Stanley Capital International; Natural Capital Coalition; SASB –
Sustainability Accounting Standards Board Foundation; and the TCFD – Task Force on Climate-Related Disclosure.
7
See Annex B: Sector initiatives.
8
Agency theory explains the relationship between principals and agents in business. Agency theory aims to resolve problems that
can exist in agency relationships due to unaligned goals or different levels of aversion to risk. The most common agency relationship
in finance occurs between shareholders (principal) and company executives (agents). See https://www.investopedia.com/terms/a/
agencytheory.asp.
9
In terms of the agency problems of sustainability in a shipper-LSP relationship, the main findings are:
• Companies should better design and implement stimuli for sustainability (i.e., selection criteria and incentives) aimed at
shippers; agency theory can support traditional problems, such as moral hazards and adverse selection;
• The proactiveness of small and medium-sized enterprises and larger companies are different and impacts and drivers are
different; you should take this into account when establishing procurement processes;
• Sustainability in one-on-one or supply chain relationships demands different points of view and datasets, such as from a
local firm or from a network perspective.
10
This action logically follows the establishment of KPIs as per Action 0.2 – Award scheme establishment.
11
For instance, we propose a two-phase model based on data envelopment analysis (DEA) and analytic network process (ANP)
techniques:
• The methodology allows for the evaluation and selection of LSPs and freight operators in two steps: initial screening of
maximally efficient third-party logistics providers using DEA; and ANP-based final ranking and selection. ANP enables
companies to consider the degree of inter-dependences among the criteria.
• Selection criteria could be transportation charge per metric ton per km; fleet capacity/strength; vehicle type and quality
(rejection %); driver rejection %; LSP/freight operator performance with desired output; flexibility; vehicle lead (response)
times. Eco-efficient transportation leads to better transportation planning, better inventory and warehouse management,
lower inventory costs and sustainable supply chain operations.
12
Agency theory explains the relationship between principals and agents in business. Agency theory aims to resolve problems that
can exist in agency relationships due to unaligned goals or different levels of aversion to risk. The most common agency relationship
in finance occurs between shareholders (principal) and company executives (agents). See https://www.investopedia.com/terms/a/
agencytheory.asp.
13
The final KPIs and their benchmark values can be definitively agreed in the Contracting phase, but we recommend that you start
their elaboration in the Planning phase so as to ensure their alignment with the shipper’s objectives of cutting CO2 emissions and
monitoring supplier performance throughout the entire smart freight procurement process.
14
Govindan, K., Agarwal, V., Dhingra Darbari, J. & C. Jha, P. 2017. “An integrated decision making model for the selection of sustainable
forward and reverse logistic providers”. Annals of Operations Research. 273. 10.1007/s10479-017-2654-5.
15
This can immensely improve the sustainable performance value of the supply chain network and secure reasonable profits. You
can achieve this by introducing 7 economic criteria in LSP evaluation: financial position, asset ownership, optimization capabilities, cost
of service, reputation and market position, experience in a similar industry, geographical location. Through this, it is possible to obtain a
reasonable trade-off between financial gains and association with sustainable partners. Emphasis must be put on evaluating logistics
partners on social and environmental criteria along with the traditional economic criteria to enhance the firm’s sustainability image.
16
O. Large, R., Kramer, N. & Katharina Hartmann, R. 2013. “Procurement of logistics services and sustainable development in

56 57
 Europe: Fields of activity and empirical results”. Journal of Purchasing and Supply Management. 19. 122–133. 10.1016/j. 42
Eighteen (18) of them are Rapid Deployment Centers (RDCs) and roughly half of Home Depot’s products flow through those RDCs.
pursup.2013.05.002. At the RDCs, vendor freight delivers to Home Depot’s mechanized cross-dock buildings and the company swiftly delivers products
17
The Incoterms specify who organizes and pays for the physical movement of goods, their insurance while in transit and customs straight to stores and places them directly on store shelves. Stores receive daily deliveries from the RDCs, which has allowed Home
clearance. It is known that the amount of leverage that a shipper can exert on “carbon-sensitive” decisions depends partly on the Depot to cut the amount of inventory each retail location must keep.
Incoterms employed and the use of freight forwarders, as the Incoterms can give the shippers a substantial degree of control over 43
See https://www.unilever.com/Images/responsible-sourcing-policy-interactive-final_tcm244-504736_en.pdf.
their global supply chains, in particular for inbound transport. (See McKinnon, A. 2014. “The possible influence of the shipper on 44
See https://www.unilever.com/about/suppliers-centre/unilever-supplier-qualification-system/.
carbon emissions from deep-sea container supply chains: An empirical analysis”. Maritime Economics & Logistics. 16. 10.1057/ 45
See https://www.skao.nl/news_en/%E2%80%98The_CO2_Performance_Ladder_is_a_driver_for_structural_CO2_ reducti-
mel.2013.25.) on%E2%80%99 _-6666.
18
Agency theory explains the relationship between principals and agents in business. Agency theory aims to resolve problems that 46
The CO2 Performance Ladder is an accredited certification scheme originally developed by the Dutch railway in 2009; since 2011,
can exist in agency relationships due to unaligned goals or different levels of aversion to risk. The most common agency relationship the Foundation for Climate Friendly Procurement and Business (SKAO) owns and manages the system. The CO2 Performance
in finance occurs between shareholders (principal) and company executives (agents). See https://www.investopedia.com/terms/a/ Ladder helps organizations gain insights into and reduce their carbon emissions internally, in projects and in their supply chain
agencytheory.asp. business sector. It covers energy use and CO2 emissions. The instrument is both a CO2 management system as well as a procure-
19
Evangelista, P., Huge-Brodin, M., Isaksson, K., & Sweeney, E. 2013. “Purchasing Green Transport and Logistics Services: Implications ment tool that awards advantages to companies and projects with specific CO2 policies, in accordance with European Union
from the Environmental Sustainability Attitude of 3PLs”. In D. Folinas (Ed.), Outsourcing Management for Supply Chain Operations and procurement law. The Organisation for Economic Co-operation and Development mentions the Ladder among best practices for
Logistics Service (pp. 449-465). Hershey, PA: IGI Global. doi:10.4018/978-1-4666-2008-7.ch026. sustainable procurement (2015).
20
Evangelista, P., Huge-Brodin, M., Isaksson, K., & Sweeney, E. 2013. “Purchasing Green Transport and Logistics Services: Implications 47
See https://corporate.walmart.com/2016grr/enhancing-sustainability/reducing-energy-intensity-and-emissions.
from the Environmental Sustainability Attitude of 3PLs”. In D. Folinas (Ed.), Outsourcing Management for Supply Chain Operations and 48
See https://www.freightsharelab.com/freightsharelab2018/en/page/home.
Logistics Service (pp. 449-465). Hershey, PA: IGI Global. doi:10.4018/978-1-4666-2008-7.ch026. 49
McKinnon, A. (2018). Decarbonizing Logistics: Distributing Goods in a Low Carbon World. Kogan Page Ltd. ISBN 978-0-7494-8047-9.
21
Green Freight Programs promote the use of technologies and practices able to improve the efficiency of the freight sector, while 50
See https://www.wbcsd.org/Programs/Climate-and-Energy/Climate/Low-Carbon-Freight/
ensuring the possibility to benchmark and track performance. The final objectives are cost cutting, carbon tracking and creating Resources/A-Low-Carbon-Freight-report-under-WBCSDs-LCTPi.
environmental benefits. See “What are Green Freight Programs” at http://www.globalgreenfreight.org/why-green-freight/what- 51
See http://www.nucms.nl/tpl/learn/upload/LEARN%20Summary%202019%20-%20GLEC%20Declaration%20-%20online
are-green. %20%281%29.pdf.
22
See https://www.maersk.com/en/procurement/responsible-procurement 52
See http://www.smartfreightcentre.org/glecframework/glecframework.
23
The Carbon Disclosure Project (CDP) highlights this case as part of its Global Supply Chain Report to support collaboration and 53
See http://www.learnproject.net/.
transparency in the value chain. The 2017 edition explores how purchasers and suppliers are working together to improve sustainability 54
See https://www.inboundlogistics.com/cms/article/using-smartway-data-to-inform-transportation-purchasing-decisions.
across global supply chains and taking advantage of low-carbon opportunities. It includes the Braskem case as an example of the 55
See https://www.epa.gov/smartway.
framework approach for reducing carbon emissions and water impacts in the supply chain, in the section “Act”. See https://www. 56
See https://practicegreenhealth.org/pubs/epp/FiveEasyWays.pdf and https://practicegreenhealth.org/sites/default/files/
cdp.net/en/research/global-reports/global-supply-chain-report-2017. The CDP is an initiative that supports companies and cities in upload-files/smartway_supplier_disclosure.pdf.
disclosing the environmental impact of major corporations. It aims to make environmental reporting and risk management a 57
See https://drivesustainability.org/wp-content/uploads/2017/12/Guiding-Principles.pdf.
business norm and to drive disclosure, insight and action to achieve a sustainable economy. CDP works with purchasing organizations 58
In October 2017, the Electronic Industry Citizenship Coalition (EICC) became the Responsible Business Alliance (RBA) to reflect its
and suppliers to reduce climate, water and forest risks. expanded reach and influence.
24
See the Dow Corporate Sustainability Report 2017 at https://corporate.dow.com/en-us/science-and-sustainability/reporting. 59
The World Ports Climate Initiative’s mission is to:
25
GEMI brings together leading companies dedicated to fostering global environmental, health and safety and sustainability • Raise awareness of the need for action in the port and maritime community;
excellence through the sharing of tools and information to help business achieve environmental sustainability excellence. Through • Initiate studies, strategies and actions to reduce GHG emissions and improve air quality;
the collaborative efforts of its members, GEMI also promotes a worldwide business ethic for environmental, health and safety • Provide a platform for the maritime port sector to exchange information;
management and sustainable development through example and leadership. GEMI provides guidance for companies in a wide range • Make information on the effects of climate change on the maritime port environment and measures for its mitigation available.
of industrial sectors to work together in a cost-effective manner. Among the solutions, its Quick Guide aims to support companies in 60
The purpose of the International Association of Ports and Harbors (IAPH) Air Quality and Greenhouse Gas Tool Box is to provide
engaging with their suppliers in more collaborative ways to create shared value. See https://corporate.ford.com/microsites/ ports, both members and non-members of the IAPH, with quick access to the tools needed to start the planning process to address
sustainability-report-2017-18/operations/supplier-impact/reducing-footprint.html. port-related air quality and climate change issues. See http://wpci.iaphworldports.org/iaphtoolbox/.
26
Download the IWAY Standard from https://www.ikea.com/ms/en_US/pdf/reports-downloads/IWAY-standard-ed-5.2.pdf.
27
See https://www.inboundlogistics.com/cms/article/jj-uses-sustainability-to-strengthen-carrier-relationships.
28
See https://www.epa.gov/smartway.
29
See https://www.smartfreightcentre.org/en/news/blog/849/?token=XB1IUltvYhmcjSSLs-BPysiaJWuo3WL9.
30
See https://www.smartfreightcentre.org/en/what-is-smart-transport-managers-training/.
31
See https://sustainability.nike.com/sourcing-manufacturing-standards.
32
The reported example is based on the Sustainable Purchasing Leadership Council (SPLC) case “Carbon Neutrality: How Philips’
Procurement & Sustainability Teams Delivered Results”, available at https://www.sustainablepurchasing.org/library/. The SPLC is a
non-profit organization whose mission is to support and recognize purchasing leadership that accelerates the transition to a
prosperous and sustainable future. It has defined 5 principles (understanding; commitment; results; innovation; transparency),
along with guidance. It has developed maturity levels (initiating; developing; improving; leading) to allow purchasers to benchmark
where they are at themselves. The SPLC guide aims to be a comprehensive handbook to help organizations to iteratively grow their
sustainable purchasing efforts into a comprehensive sustainable purchasing program, thus improving environmental, social and
economic performance within their supply chains. The guidance also helps them link sustainable purchasing to business processes
and financial performance. SPLC Benchmark is a program released in 2017 that enables diverse organizations to assess their own
sustainable purchasing activities against the recommendations in SPLC’s Guidance and to benchmark the maturity of their sustaina-
ble purchasing activities against those of other organizations. This voluntary program is the basis for the SPLC Awards, a rating
system rewarding organizations that demonstrate leadership in sustainable purchasing; it also aims to provide standardization to
suppliers and purchasers. SPLC adds all awarded case studies to its Case Study Library and cross links them with the SPLC
Guidance.
33
See https://www.portofrotterdam.com/en/shipping/sea-shipping/port-dues/discounts-on-port-dues
34
See https://www.portofrotterdam.com/en/files/general-terms-and-conditions-including-port-tariffs
35
See https://www.greenaward.org/
36
See http://www.environmentalshipindex.org/Public/Home
37
See http://wpci.iaphworldports.org
38
Schneider is a provider of truckload, intermodal and logistics services in North and Central America and China. Its services
include regional, long-haul, expedited, dedicated, bulk and intermodal transport, brokerage, cross-dock logistics, supply chain
management, and port logistics. Its website includes a Knowledge Hub that aims to be a source of answers. It is organized by shipper
challenges, services and type of content and includes an article dedicated to requests for proposals (RFPs).
39
See https://schneider.com/knowledge-hub/best-practices/how-to-create-an-effective-transportation-request-for-proposal
40
See http://www.tlimagazine.com/sections/trucking-and-freight/2236-home-depot
41
At the end of the second quarter, the company operated a total of 2,270 retail stores in all 50 U.S. states, the District of Columbia,
Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The company employs more than 370,000 associates.
Home Depot is the largest home improvement retailer in the world.

58 59
Contact
Smart Freight Centre P.O. Box 11772, 1001 GT Tel office: +31 6 4695 4405
Keizersgracht 560, 1017 EM Amsterdam, Netherlands www.smartfreightcentre.org
Amsterdam, Netherlands [email protected]