SEVERN TRENT WATER SUSTAINABILITY AND THE SUPPLY CHAIN

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SEVERN TRENT WATERSUSTAINABILITY AND THE SUPPLY
CHAIN

• Bob Breach
• Head of Quality and Environment

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OUR SUSTAINABILITY FRAMEWORK
Customers and investors expect companies to act
responsibly
..CSR is a sustainable approach to business
CSR is ultimately about sustainability its
about how the world works for the better
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Severn Trent Water is part of the Severn Trent
Group of Companies
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Integrating Sustainable Development into the
Business
Suppliers Governments Political
Parties Regulators Competitors
Environment Employees Shareholders
Other Investors Customers Communities
Code of Business Principles Conduct
Severn Trent Plc Board Commitment
Policies
Sustainable Development Human Resources Risk
Management Health Safety
Board Corporate Responsibility Committee Policy
setting and guidance
Protocols
Plc Defines standards to meet policies
Environment (ISO14001) People Values Group
Accounting Manual Health Safety
Group Companies Implement group standards
Local Policies and Procedures
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SEVERN TRENT WATER - SUSTAINABILITY FRAMEWORK
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OUR APPROACH TO SUSTAINABLE SUPPLY CHAIN
MANAGEMENT
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WHY ?
supply chain companies that take responsibility
for their impacts must also take responsibility
for the activities of their suppliers and
business partners. Unethical behaviour in the
supply chain is a legal and financial liability
that can severely damage a businesss reputation.
In response, many water companies are actively
encouraging their suppliers to act responsibly
and manage their impacts on people, communities
and the environment.
Water UK 2003
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OUR OBJECTIVE
We want to work with suppliers and contractors
who recognise-

• That their operations have an impact on the
  Environment and can demonstrate that they are
  committed to reducing those impacts.
• The rights of their employees and those of their
  suppliers and take positive action to ensure that
  Social Accountability is a fundamental part of
  their corporate philosophy.

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EMPR 13 Purchasing and Contract Services
OBJECTIVE to help suppliers deliver shared
environmental objectives
This protocol promotes the adoption of
environmental standards comparable to those of
the Severn Trent Group throughout the supply
chain of all Group Companies.

• Key Elements
• Identifying significant effects associated with
  supplied goods and services
• Monitoring key supplier performance and
  compliance with legislation
• Encourage suppliers to adopt best environmental
  management practices
• Work with suppliers to increase environmental
  benefit from business processes

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OUR SUPPLY CHAIN POLICY GOALS

• Ensure that all impacts associated with the life
  of a product or service, i.e. from production,
  through usage to end of life, are taken into
  consideration by the procurement process.
• Promote the introduction of new technology and
  review of working methods to achieve
  environmental and social improvements.
• Optimise the number of suppliers so that we can
  engage more effectively with our preferred
  suppliers.
• Encourage our suppliers to conduct their own
  Social, Ethical and Environmental Impact analyses
  and to develop plans to address any acute issues.
  
• Work with key suppliers to help them develop
  environmental management systems.
• Emphasise to our suppliers that environmental,
  social and ethical legislation should be adhered
  to at all times.

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WHAT DOES THIS MEAN IN PRACTICE ?
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TWO MAIN AREAS OF INFLUENCE
Engineering Environmental Steering Group
Engineering contracts
Our main supply chains
Purchasing Environmental Strategy Group
Purchasing policy
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BUILDING SUSTAINABILITY INTO ENGINEERING CONTRACTS

• Pollution incident risk reduction
• Environmental project risk assessment
• Environmental incident reporting
• Waste management
• Site audits
• Environmental code of practice for
  contractors/designers
• Environmental guidance database for contractors
• Project team environmental awards
• Consultation with external bodies to minimise
  adverse impacts
• Mitigation measures e.g. ecological enhancement

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BUILDING SUSTAINABILITY INTO PURCHASING POLICY

• Implementation of Group Protocol on supply chain
  management
• Development of environmental KPIs for suppliers
• Human rights considerations built into
  contracts
• Contracts used as a source of environmental
  performance data
• Further development of the Acorn Project
• Supplier environmental awards

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PROJECT ACORN
www.theacorntrust.org
Working with smaller suppliers
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WHAT DOES THE ACORN APPROACH PROVIDE ?

• A training and improvement programme, which
  addresses each element of the environmental
  management cycle
• An incremental development process which takes
  companies to the level of environmental
  management which is appropriate for their
  individual environmental impacts
• A training environment where different companies
  can share learning experiences, exchange ideas
  and solve common problems
• A means of gaining a recognised environmental
  management standard at a measured and affordable
  pace which, if desired, can culminate in
  certification to ISO 14001

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THE PILOT PROCESS

• 25 supplier companies were invited to
  participate and complete an electronic
  self-assessment matrix on their environmental
  awareness
• Awareness day at Severn Trents Cropston Visitor
  Centre to understand the rationale behind the
  study.

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INITIAL OUTCOMES
Positives The informal and interactive training
sessions gave suppliers a forum to share ideas
and address mutual problems The Acorn method was
considered flexible enough to allow companies to
mix and match applying elements from different
levels without necessarily completing the highest
level. Negatives The pace of training five
levels in 12 months deterred many of the
initial invitees. No very small companies (less
than 40 employees) participated in the pilot
programme, owing to pressures on internal
resources.
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INITIAL CONCLUSIONS

• The Acorn method, now BS 8555, provides a clear
  and logical route for environmental management
  and improvement.
• Although aimed principally at SMEs, this approach
  will prove attractive to many larger
  organisations
• A phased implementation approach provides a good
  framework for client companies that need to take
  a strategic view of their supply chain.
• A similar approach could be adopted for social
  responsibilities

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Building sustainability into the business from
top to bottom