Engaging Our Suppliers on Energy and Carbon Emissions

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Over time, the definition of what it means to be a responsible corporate citizen has changed. Ten years ago, the focus was on what was happening within a company and its direct engagements. Today, scope and view are broader. Corporate responsibility is not just a “me” issue. It also includes what happens within the ecosystems and value chains within which an organization operates.

Our Dell 2020 Legacy of Good Plan embodies this systems-oriented view. When we announced our 2020 Plan in October 2013, we included operational goals – but we were very aware that our most important impacts and opportunities happen outside our walls, both upstream and downstream of our operations. So, we included customer-centric goals, such as our goal on product portfolio energy intensity. We also included supply chain goals, focusing on transparency on key environmental and social issues.

Since the introduction of our plan, we have seen much wider acceptance of a broader, more systemic view of impacts. This has sharpened the focus and attention on supply chain issues.

More and more companies are taking notice of what happens within their suppliers’ facilities, their suppliers’ suppliers’ facilities and beyond. This includes many of our customers. They are part of the same value chains in which we participate.

So, is it any surprise that, if we’re interested in this, our customers are as well?

While our 2020 Plan included a focus on supply chain transparency, we did not have an explicit goal looking at supply chain carbon impacts. Few companies did in 2013. When Dell and EMC came together last September, we found ourselves with an opportunity to update our plan – which we talk more about here.

It was the perfect time to add a goal to our program aimed directly at our upstream impacts – specifically, supply chain carbon emissions:

By 2020, Dell’s suppliers representing 95% of direct materials spend and key logistics suppliers will set specific greenhouse gas (GHG) emissions targets and report on their emissions inventory.

You can learn more about our 2020 Plan-related supply chain goals and our goal progress on our 2020 Legacy of Good Plan Annual Update web site.

This new goal is simple, but it’s also a jumping-off point for deeper engagement on these issues. That deeper engagement has four main elements.

First, we have to set expectations with our suppliers with respect to performance and behavior.

Our new goal focuses on behavior, specifically reporting and goal-setting. While we’d like to include performance now, there’s a lot more work that has to be done before we can consider that. We need to know more about our suppliers’ carbon emissions and their ambitions for reducing them. We need to know more about their capability and potential. And we need to know more about how they view their suppliers’ efforts.

Second, we need our suppliers to have environmental and energy management systems in place.

The International Organization for Standardization (ISO) has published a number of standards that help organizations design and implement environmental and energy management systems (ISO 14001, ISO 50001, respectively). Adherence to these standards are indicators that an organization takes these issues seriously. In addition, these systems are practical. They help provide focus and drive improvement. We use safety, environmental and quality audits to understand which of these systems our suppliers have implemented.

Dell has embraced ISO 14001 throughout our own operations. Deployment of these systems in our supply chain is expanding, but is not widespread. While many of our suppliers have ISO 14001 systems in place, ISO 50001 is newer and is making its way into a growing number of facilities (Dell has started to implement ISO 50001 across a number of its facilities).

Third, we need to be good partners with our suppliers, providing training, guidance on best practices, and helping them find additional resources for help or assistance.

Assistance with the management systems described above is a great example. Many of our suppliers have these in place. Other suppliers, however, may need our help to understand the role these systems play in their business, how they can implement them and how to obtain relevant certifications.

This also includes emissions reporting, goal-setting, and strategies for achieving those goals. CDP (originally the Carbon Disclosure Project) provides a mechanism for and yearly guidance on reporting.  Dell’s needs, however, go beyond CDP’s guidance. For us to be able to manage our upstream impacts, we need to be able to cleanly articulate what information we need and how best to provide it to us. So, our goal is not just a behavioral requirement for our suppliers, it a requirement for us, too.

Help with best practices is valuable as well. Any organization looking to manage its operational carbon impacts, including Dell, has to focus on three specific areas:

  • Direct emissions of CO2 and other greenhouse gases
  • Energy consumption
  • Energy sourcing

We know how to do all of these, but for our business.  What’s true for Dell may not be true for our suppliers. They know their business and their operations far better than we do. We look to our suppliers as collaboration partners. We don’t expect to dictate to them; but we do expect to work with them – on issues of importance to both of us.

A great example of this will be the Renewable Energy Buyers Alliance (REBA). While heritage EMC had been working with REBA for some time, we’re only beginning our engagement as Dell. What we learn, though, we’ll be happy to bring to our suppliers in turn.

Last, we have to be committed to tracking and assessing our suppliers’ progress.

A program such as this will not work if you don’t “close-the-loop”. In this case, that means we need to track how our suppliers are doing, and assess both their current progress, as well as where they’re headed. We know we’ll have plenty of accomplishments to celebrate, but we also know there will be times when we have to have some difficult conversations. Our goal does more than just provide text. It lets our suppliers know that managing carbon emissions is important to us and that we need it to be important to them as well. And we will manage our work accordingly.

At Dell, we believe that doing good and doing well are not mutually exclusive. As both Dell and our suppliers become more environmentally-sensitive and sustainable companies, as we become even better corporate citizens, we will see business results supporting our work.

Strong sustainability principles go hand-in-hand with strong business principles. Sure, we’ll see operational benefits. But, by being strong partners within the value chains in which we participate, our mutual customers will reward us as well. After all, they need us to manage our impacts if they are to manage their own.

For more information about our engagement with our supply chain on issues of both social and environmental responsibility, I invite you to review Dell’s 2017 Supply Chain SER Progress Report.

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This article shares one example of how Dell is committed to driving human progress by putting our technology and expertise to work where it can do the most good for people and the planet.

Explore our FY17 Annual update on our 2020 Legacy of Good Plan at legacyodgood.dell.com.

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