HomeNewsCreating change at the source: how one global company aims to ensure its supply chain is sustainable
Creating change at the source: how one global company aims to ensure its supply chain is sustainable
September 22, 2022
Great partnerships are invariably based on trust. Without it, it’s almost impossible to collaborate successfully and achieve a shared goal. But with it, you can go further and faster than you can alone.
Henkel believes that partnerships are a key lever for success. The multinational adhesive technologies and consumer goods company works with thousands of partners and suppliers to produce everything from aerospace adhesives to household brands such as Loctite and Persil. And it’s vital that its stakeholders see the company as a trusted partner, particularly on matters such as sustainability.
“Being a trusted partner is a fundamental element of our ability to execute our sustainability agenda at scale within the company, in our communities and for our consumers and customers,” says Bertrand Conquéret, president of global supply chain and chief procurement officer at Henkel.
Henkel’s approach to being a trusted partner has three key themes: performance, transparency and collaboration. Its core business units – consumer brands and adhesive technologies – are developing new, high-performing sustainable products, while also enhancing the environmental credentials of its existing brands.
Responsible sourcing plays a large role in combining these themes and creating more sustainable products by using alternative ingredients. This is what occupies Conquéret: how can responsible sourcing enhance Henkel’s sustainability, and how can being a trusted partner and building relationships with external partners get it there?
Acting on its belief that building partnerships is a key lever for success, Henkel became a founding member of the Together for Sustainability (TfS) initiative. The initiative was formed in 2011 along with five other companies in the chemical industry and welcomed its 37th member in May this year. It sets the de facto global ESG standards for chemical supply chains, aiming to improve sustainability performance and generate lasting impact.
Suppliers of TfS member companies undergo regular assessments. Once a business’s sustainability performance has been checked by one member, the detailed results can be shared with all the others. “In Henkel’s case, TfS assessments cover about 93% of our purchasing volume in the areas of packaging, raw materials, and contract manufacturing,” says Conquéret, who is the initiative’s president.
This sharing of information cuts bureaucracy for member companies and their suppliers – and ultimately creates what Conquéret calls a trusted ecosystem. “Every year, we have target dialogues with our strategic suppliers to define what we want to achieve together. We particularly focus on sustainability and sustainable innovations, or ‘sustainovations’, as we call them,” he says. Beyond sharing information, TfS has established the TfS Academy to upskill both suppliers and buyers on responsible sourcing topics, as education is another key enabler of sustainable change.
While TfS is busy with ongoing projects and the academy, members are now working to tackle their next big challenge: enhance transparency around Scope 3 greenhouse gas emissions – those not produced by the company itself but those that the company gets via the goods and services purchased.
This autumn, TfS will launch a product carbon footprint (PCF) guideline for chemical materials, which will enable suppliers and corporations to produce high-quality carbon footprint data. The new guideline will be backed by an IT solution that enables corporations and suppliers to share upstream product carbon footprints. This should make it easier for businesses to conduct cross-industry comparisons and compile and manage their emissions across all three scopes. Conquéret believes this sends a strong message of collaborative and responsible leadership, which is key for the triple bottom line. “It’s key for the planet, key for people, and key for prosperity.”
Separately, Henkel’s partnership in Europe with the global chemical producer BASF once again demonstrates that it is not only talking about sustainability but taking concrete action on responsible sourcing. Through this partnership, up to 100,000 tonnes of fossil-based raw materials used each year in both beauty products and laundry and home care ones will be replaced by renewable materials using BASF’s biomass balance approach, which is certified by the REDcert scheme.
More specifically, in the biomass balance approach, sustainable certified renewable raw materials sourced from Europe are used as feedstock – defined as raw material inputs – in the very first steps of chemical production. They can be used to replace fossil-based feedstock. The bio-based feedstock amount purchased by Henkel is then allocated to specific products. This means that many of Henkel’s core brands, including Persil, will come with a reduced carbon footprint.
The company expects to avoid about 200,000 tonnes of CO2 emissions over four years with this approach. “What is very important in this case is the scalability, the speed, and the impact,” says Conquéret. “We’re being very bold with these changes.”
Collaborations such as these are the foundation of Henkel’s trusted partnership approach and stem from the company’s core values around sustainability. “When you bring together integrity and transparency, you can start to move and collaborate within the company and with your partners,” says Conquéret. “You can design new products and new processes. And you can create real impact and become not only an organisation promising, but an organisation acting.”
Assessment of its sustainability performance by independent experts can also confirm Henkel’s position as a trusted partner. For example, EcoVadis, a sustainability performance assessment specialist, provides transparency for stakeholders as well as detailed feedback about how effectively the company is implementing its sustainability strategy. “We strongly believe in the power of collaboration, in sharing, harmonisation, and standardisation. This requires independent views on many elements, in particular on the assessments and the audits that we are conducting,” says Conquéret. “It can validate that we are on the right track.”
In 2021, EcoVadis granted Henkel’s sustainability management its “platinum recognition level”. “As responsible leaders, we need to take the lead,” says Conquéret. “Sustainability is a high priority and inseparable from our purposeful growth strategy.” And external reviews show Henkel is doing just that.
Find out more about how Henkel is driving performance and systems change through their values-based culture that is rooted in science and technology