About this ATALK
Join us for the third panel discussion at the APLANET Summit 2023 as we delve into the heart of Supply Chain transformation.
We are discussing how sustainability plays an integral role in redefining supply chain strategies for the future.
The panel discussion sheds light on:
🔹 𝗚𝗿𝗲𝗲𝗻 𝗟𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀: A look into the role of sustainable transportation in supply chains, and how companies are reducing their carbon footprint.
🔹𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗚𝗼𝗼𝗱𝘀 & 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆: An exploration of how the consumer goods industry is making strides in creating more sustainable supply chains.
🔹𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆 𝗮𝗻𝗱 𝗧𝗿𝗮𝗰𝗲𝗮𝗯𝗶𝗹𝗶𝘁𝘆: The importance and challenges of maintaining transparency and traceability in modern supply chains.
🔹𝗧𝗵𝗲 𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗳 𝗖𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝗕𝗲𝗵𝗮𝘃𝗶𝗼𝗿: Understanding how consumer demand for sustainability is influencing changes in supply chain operations.
Meet our esteemed panelists, who bring rich experiences from diverse industries to the table:
🔸 𝗠𝗮𝗿𝗶𝗮 𝗟𝘂𝗶𝘀𝗮 𝗠𝘂ñ𝗼𝘇-𝗖𝗼𝗯𝗼: As the Marketing and Communications Director at Volta Trucks, Maria brings expertise in green logistics and sustainable transportation, key elements of the future of supply chains.
🔸 𝗜𝗴𝗻𝗮𝗰𝗶𝗼 𝗚𝗮𝘃𝗶𝗹𝗮𝗻: Ignacio, the Sustainability Director at the Consumer Goods Forum, will share insights about sustainability efforts in the consumer goods industry.
🔸 𝗗𝗲𝗹𝗶𝗮 𝗚𝗮𝗿𝗰𝗶𝗮: As the Sustainability and CSR Director of L’Oreal for Spain and Portugal, Delia offers an exclusive view into how one of the world’s largest cosmetics companies is implementing sustainable practices within its supply chains.
Engage with us in this insightful dialogue, and understand how we can shape supply chains for a sustainable future.
Transcript
You can find the full transcript of their conversation below.
| Joana Alves | And now I have the honor to be here with the supply chain panel where we will discuss the main sustainability challenges in the supply chain of different sectors and industries. And I have the pleasure to have with me Delia Garcia, Sustainability and CSR Director of L’Oreal at Spain and Portugal. Welcome Delia. Next to Delia, I have Ignacio Gavilan, Director of Sustainability at The Consumer Goods Forum. Welcome. And lastly, I have Maria Luisa Muñoz-Cobo Marketing and Communications Manager at Volta Trucks. Welcome Maria Luisa. And starting with Delia. Delia, you are the CSR and Sustainability Manager at L’Oreal. You have more than 12 years of experience in designing sustainability strategies from the business core, actively involving stakeholders, I mean, L’Oreal is a very global brand, it doesn’t need any introduction. I imagine you have a very complex supply chain. So my main question is what are the main sustainability issues that you face in your supply chain and what initiatives do you have to address all these issues? And besides that, does L’Oreal support these companies in the supply chain that I imagined and many are SMEs into integrating sustainability in their businesses? |
| Delia García | We do want to first of all, thank you very much for having me here. Thank you very much to APLANET Summit and it’s and thank you very much to this panel. I think it’s a great panel. So yes, indeed we do have a lot of challenges. If I can explain a little bit about the L’Oreal for the future strategies based, first of all, it’s based on 3 pillars, which is transforming ourselves, transforming business, empowering our business ecosystem. And that’s for example, suppliers for sure, but not only, but clients, consumers and everyone that it’s part of this business ecosystem that it’s L’Oreal, which is of course very complex. And the third of all is helping to solve the main challenges of the world and we created three different funds for helping also companies, initiatives, startups that are making something in these three different areas which is vulnerable women and nature regeneration and circular economy. So that would be the three pillars and I would say also there’s three drivers, which is science, purpose and ambition. If I start by science we were talking today about that, we were talking to the about how important is to measure. We important, it’s super important and as a matter of fact for L’Oreal, the base of everything is the science is the planetary boundaries and also the science based targets and everything that we do, we do it based, science based. For example, one of the challenges we are facing but not only one but it’s the climate emergency, for sure. So we do have a very ambitious program for decarbonization and we involve our suppliers in that for sure. That’s one of the challenges we are facing together, but not only we’re facing the water challenge and we also involve our suppliers and clients in that. And we are facing resources challenge and we involve our suppliers and clients in that. And we are facing also energy challenges and the social challenge, the inequality challenge, which is also part of our L’Oreal for the Future program. For example, we do have this solidarity sourcing program where we try through our sourcing. We give opportunities to vulnerable people. Last year more than 500 people only in Spain and Portugal. And talking about how complex it is our supply chain, sure, we do have strategic suppliers for many things like raw materials like logistic for sure. But we do have a super complex ecosystem of suppliers in Spain, only in Spain and Portugal, more than 1000. So for sure it’s super important to take everything into account to to make it visible, to make it to make it bigger and to to have alliances and regarding your second questions and linking to the first one. One thing I really think it’s very important is that we do create alliances with our suppliers and I do have for example 2 interesting examples. I mentioned logistic for example we do have an alliance with bask startup named Koiki which is last last mile delivery startup that through this alliance with L’Oreal, we have for our Knicks and Kills stores last mile delivery which is 002 only by food and bicycle or public transport. But we also created jobs for vulnerable people, in this case the disabled people. And it’s also a very interesting project because we improved our customer satisfaction with with this alliance with Koike. Another example totally different but but it’s related to the resources challenge it’s a Click Recycle also another startup that we are working with them and we out and and with more than 500 salons in in Spain and Portugal to recycle hair, recycle hair and do something which is very interesting which is absorbing material for for oils and d at the ports for example and. Another example, it’s the water saver also and startup that we are working with to save more than a 70% of the water also in the saloons with these hairdressers for the future program within more than 500 saloons in Spain and Portugal. So that’s what we do together with our suppliers and for sure it’s a very strong part of our L’Oreal for the Future program. |
| Martin Nichols | You have a lot of initiatives. And you not only demand them to integrate ESG criteria in their businesses, but you also support them. You have this responsibility of supporting your supply chain, which is amazing, perfect. And then moving on to Ignacio, Ignacio, you are a senior sustainability business executive with over 20 years of leadership experience. You have a very impressive CV. You are the global supply chain manager at McDonald’s, the Global sustainability strategy Manager at BP, and currently you are the director of sustainable The Consumer Goods Forum in Paris. OK, So it’s quite, quite an impressive CV and basically for those of you, for the public that doesn’t know what the consumer goods forum do. Can you explain what you do and also why supply chains are key part of your work and maybe highlight the food and beverage industry and also the agriculture industry? |
| Ignacio Gavilán | OK, good. Thank you. You made me feel old with all of this. Anyway thank you very much. It’s an absolute pleasure to be here as a proper Madrileño as I am, but I left 23 years ago when everybody was wearing a tie and now it’s Andres and I. The country has changed. The country has changed. So anyway, so The Consumer Goods Forum, basically what you need to remember, this is an organization that brings together retailers and manufacturers from around the world. 400 of them is governed by a board with 56 CEOs. So every time I have to explain anything to them, I lost 2 kilos. Just talking to them, it’s not easy. But from the manufacturer side, think about the likes of L’Oreal, think about the likes of Kellogg’s, Unilever, Nestle, Mondelez, etcetera. From the retail side, think about your Tesco’s, your Walmart’s, El Corte Inglés, etcetera, etcetera, right. So what we do is think about the supply chain. In one end, you have 8 billion consumers, on the other end you have 1.5 billion raw material producers, farmers, right in the middle, there’s about 400 companies that have all the leverage right. They pretty much control 80% of the choices when it comes to food and beverages and somehow beauty and hygiene. That’s our greatest point of leverage. We work with those, we bring them together to solve the issues that will never, ever be solved alone by themselves. Cocacola, Pepsi, Nestle and Danone, for bottlers, they put together about 1,000,000 bottles of water per minute in the marketplace. They will never solve that issue one by one. They will solve it together, right. So that’s what we do. We bring them together and we make it happen. Let’s move away from pigmented PET into transparent PET. Sounds simple, but it’s a very long process that involves R&D, etcetera, etcetera. So that’s in essence once we do. Good things like deforestation, free commodities, food, waste, plastics, of course, food safety, health and Wellness, the whole diet concept. So very big issues that need that collective action. And it’s CEO led, which means I don’t have to deal with operations, marketing, procurement. I go to the CEO, look in the eye and say are you going to do it? Yes, No, which is it’s a very important point. Because then we can cut through all of this. So to your question on on supply chain and and reflected not only on The Consumer Goods Forum but on previous experience, I have just three reflections that I that I put together. #1 supply chain whether you like it or not is your responsibility, right when I started early 2000s, everybody that’s my supplier, I have a code of conduct and the code of conduct says that you have to be no, no, no, it’s your responsibility. If you’re McDonald’s, if you’re Unilever or El Corte Inglés, something explodes in the supply chain, everybody’s going to look at you. It’s your supplier. So take responsibility and take a good command of the whole thing, right, Partner with suppliers as L’Oreal is doing. That’s the very essence of of this work, right? Enable end to end visibility and transparency. There’s a saying that I love. It’s only when the tide goes out that you learn who’s been swimming naked. That’s very true. It’s only when the flashlight comes and a point in your supply chain, when you have no clue what’s going on, that you get exposed. So anticipatory issue management, go and understand how your supply chain works, whether it’s vanilla from Madagascar or palm oil for your shampoo out of Indonesia. And understand the supply chain and anticipate the issue and be honest about it. Right. I have a problem in my supply chain because I don’t know about it. That’s far better than being exposed by a campaign where you come up with a statement like we’re we’re working with our suppliers now, that’s no longer valid. You need to understand the supply chain in a world of full radical transparency, you need to understand that. So we work with a lot of companies in understanding and putting together mechanisms for things like commodities, right, which is a very vast sort of universe, but we start narrowing it down to something that is palatable for companies that they can work with, right? And the third one is basically take control of your own destiny. By doing that, it’s your license to operate at the end of the day. The more control you had on your supply chain, the better you will be. And if you try to put things under the carpet one day, they’re going to get exposed. And you know, there’s this whole thing, artificial intelligence, for example, it’s been helping a lot throughout the supply chain, you know, And I had one member saying, you know why? Why are we working so much in artificial intelligence when we haven’t get rid of human stupidity? But we need to really work on all of those tracks. That’s upstream. Downstream is the consumer is a different story, which it’s for another chapter. But those will be my reflections on supply chain. I’ll leave you there. |
| Joana | Yeah. And great reflections. A lot of food for thoughts, let me say. And so now I’ll pass it to Maria Luisa Muñoz-Cobo, the Marketing and communications director at Volta Trucks. So Maria Luisa, can you explain us what’s the value proposition of your company, the main sustainability initiatives, and how do you address the problems in your supply chain? |
| María Luisa Muñoz-Cobo | Yes, thank you very much. First of all to APLANET to invite us here and to be a member of this panel with Ignacio and Delia. It’s really a pleasure to be here with you guys today and well, Volta Trucks. In Volta Trucks we were born with the aim of decarbonized the logistics in urban transports and to explain this, I like very much to use the metaphor of the three S. The first S, of course is sustainability. So we are a sustainable company. We really care very much about not just the drivers of the vehicles that we produce, but about the we do care about the citizens. That’s why we were born. Really to think about citizens and the urban transport and how we can make cities more health, more healthier and more safe for everybody. And the second S, of course would be the S of safety because we have created a vehicle from zero. This means that we have decided from zero. And I like very much to say zero and be redundant with this because we are and that’s our added value, Joana, because we have 0 tailpipe emissions. So we are the only one manufacturer that is doing this actually. And because of this, we are producing by orders of big clients, big customers that are very interested in the sustainable logistics and that do they care as well as our providers about the health problems that we have in the urban spaces right now it is, I think we all have noticed how climate change is affecting us, how pollution is affecting us these days, how climate is changing, especially at the Iberian Peninsula. And this is really concerning. And there is a sentence that we have on our website that I really like because we say that this is the last… the First generation that is realizing that we have a problem with climate change. And this is the last generation that is going to be able to do something for it. So we are really concerned about this. So continuing this metaphor of the S, we have addressed already about sustainable, sustainability, sorry and what we can do about this from the point of view of logistic transports because we do need transport in the city, but we can make it really better for all of us, the citizens then we have addressed the issue of safety and it is, it is really true that we need a vehicle that it’s as we have designed a vehicle from zero that allows a complete visibility that has its lighting doors that is very easy to jump in. It’s really it’s designed with also with recycled materials. So it really thinks about the environment, not just the driver itself himself, that it’s also in a centered position. But the third S would be the S of supply chain, because we really care also about what are not just the materials but the providers, as for instance the batteries that we use. And this is a problem that we have as manufacturers in the automotive industry. Sometimes commercial vehicles are conceived as something industrial, something let’s say not very clean, something… It’s like a necessary evil and we don’t like to think like that. We think that we can do really something completely different. With batteries coming from our provider, Proterra, these batteries are have a life of 10 years which is a lot for truck and then they are, they are recyclable. I really liked when Ecoalf… Then they say that. They are using recycled materials but also recyclable materials. So we are doing the same. We have recycled materials but we can also recycle these batteries 100% of the aluminium use that is recyclable as well. So we are really very conscious of the life of four materials and the work environment of providers of drivers and also citizens. We really like to do, to say and, and that’s my final sentence, this claim that we have humans at the center of we do. We really like to be seen like that. |
| Joana | That’s impressive because you really have a sustainable business model that is able to escalate. And I want to ask you what’s the importance for you or what’s the role of technology and innovation when creating your products? |
| María Luisa | Thank you for that question. That’s a very interesting question because that’s the core of for vehicle because technology and innovation is how the Voltas 0 has been designed and why it’s named like that. So as I was telling you before, we have this cabin that it’s completely different as any other track that you have seen. It is very loud. You jump on it, you have a center position so you can drive in the middle, literally in the middle of the track and it that’s completely different. We don’t have mirrors, we just have cameras. So technology for us is very, very important. We have an incorporated navigation system and of course we are… We have a team of innovation and engineers that are working completely together with our supply chain as well to provide the better solutions for clients and to deliver the best logistic transport for everybody because we are all in need, especially after the pandemic, we are all in need of deliveries and we do think that we can provide this in a sustainable and safe way for every everyone of us. |
| Joana | That’s amazing. Congratulations and moving to back to Ignacio and talking about the role of data that I think it’s very important to find, to identify blind spots on the supply chains such as Scope 3 Emissions, Deforestation, Food Waste… So can you comment on this? |
| Ignacio | Yeah, absolutely. I’ll beat a little bit on what Ed mentioned as well in the beginning, but everything we do on supply chain requires data today, right? Through different methodologies and standards and all that but. In order to get better at what we do, data is fundamental. I’ll give you 3 examples. Three things that are very close to my heart on food waste on plastic, and on deforestation. So on food waste. We spent half of our lives saying, you know, 1/3 of the completely edible food goes to waste. This is horrible. This is pathetic. How can we let that happen? Okay. So let’s start to get data. So we Commission a study just on tomatoes in the European Union, particularly France, Italy, southern Spain, where tomatoes are produced, to find out that out of 100 tomatoes that we plant, 57 get eaten by us. Appalling, right? That’s an industry that did not take control of its own destiny. We’re letting almost half of it go to waste. In the world with a billion people, malnourished, etcetera, etcetera, right? There’s a lot of arguments from the environmental, social, economic perspective that are wrong about that. So we put data on it and that and then we started working backwards, OK. So what’s going on? On farm and post harvest, it’s about 12 to 20% of that loss. Let’s start putting measures in place to guarantee that doesn’t happen. Transportation, logistics, it’s another good chunk of it. Storage is a big chunk of it. Arrives into the retailer, and then the retailer selection, the quality controls, etc, etc. It gets the mix into these horrible numbers. It’s not until the point that we got data that supermarkets started taking it seriously. Yes, a tomato is probably 0.001 cents off and that’s the problem. We created such an efficient system that is no longer important to look at these things, but when you add the cat foods, the Tesco’s, the Mark and Spencer, El corte Inglés, it’s tons and tons of tomatoes that go to waste, right? So that’s why data is very important. I put it in front of the CEO’s and they were like, oh shit, this is big this, you know, that’s what data is critical, right? Second one on plastics. Europe has a pretty good collection system. The extended borders of responsibility whether, you know, we pay it one way or the other, but it it, it usually works. It works well for rigid plastics, the easy plastic to collect. But flexibles are a really big problem because there’s no way to really treat flexibles. So again, we Commission study, we started putting a what we call a black box with members. We need to be careful about antitrust and we everything we do is pretty competitive, right? So we ended up with a figure which is 800,000 tons of flexible packaging coming from our members in the EU that find nothing but landfill or incineration. That’s value that is completely lost into the system. Now, that number allowed me to come up with something that investors will appreciate, which is I need 30 to 40 chemical recycling plants in Europe to fix that problem. Now we’re talking. So we published a letter of intent that basically says we, the signatories produce 800,000. Please help. So if you’re BlackRock, oh, these people need help. And that’s a very good investment. So let’s start building chemical recycling plants. Chemical recycling plants allow that plastic to be used again and again and again up to seven times. Again, data is it’s a critical one in in this sort of decision. Then you’re off to deforestation. Everybody talks about deforestation and you know soy, for example, soy meal or soy, it’s driving deforestation in Brazil. This is horrible. Now you start dissecting the European Union imports 35 million tons of that. Five million of those tones end up in Spain. How much of that is certified 1%. The 1% that goes into biodiesel for the blend, which means all the food applications for soy in Spain come from an unknown which again data. Now I can go back to the Spanish producer and say guys, you need to understand where is cash, where does it come from, What suppliers are you working with? Are you driving deforestation or are you buying from already deforested areas and if So what is the cut off date? Was it deforested in 2016, in 1950s or yesterday? Which means you pushed that deforestation again, data in the supply chain, satellite imagery, it’s helping us drastically with it. And the last one will be just claims, right? When we’re going to claims how we’re going to justify the claims? Recyclable, reusable, you know. Substantiated on what? What is the what is the mass balance or the book and claim mechanism that you used. Are you saying this is recyclable because you have 2% recycle content? Does it justify the claim? Are we fooling the consumers with this whole thing and we live through that in the whole organic, bio, responsible. What a word, responsible product. What does it mean? Are you marking up a product with two cents or the 25P? Because it’s responsible. What does it mean? I mean, there’s a whole universe of data that needs to come into that supply chain from prison labor, child labor, deforestation… Think of any product that you buy in the supermarket, particularly those with a lot of ingredients. It’s a super complex supply chain. Are you gonna claim that is responsible? Are you sure? Do you have absolute control? So for us, data is paramount, is very important and we encourage any data system to really work in the interest of all the supply chain. |
| Joana | It’s amazing and there are great challenges to overcome in such complex supply chains. And moving now to Delia, basically the same question, in your opinion, what is the world of ESG data and technology to overcome the challenges in your supply chain? |
| Delia | Well, I have to say it’s key. Sure. How can I say it’s it’s it’s key. It’s key for the strategy. It’s key because what you don’t measure, it doesn’t exist. So you need to mesure. You need to know, you need to understand your supply chain, you need your value chain. You need to understand where’s your value proposition, where do you put your efforts. Because as we as I said at the beginning. There’s a lot of challenges. There’s a huge challenge. The climate emergency is huge. It’s it’s tragedy now. So we need to be very, very quick in our decisions, very quick, agile and to put the efforts and the resources where it’s needed. So for sure for our, for ourselves, for example, in L’Oreal, we do assess our whole value chain. We do have for example our spot methodology, sustainable product optimization tool which is an eco design. An eco design methodology that we do for all our products. We do have this Cam footprint and water footprint assessment at the whole value chain also. And guess what, we discovered a lot of things where we did that. We discovered that for example at the use phase we do have a lot of impact. So we started to work at the use phase to start with, to work with our consumers, with our clients. To reduce that that that footprint, that carbon and water footprint at the use phase because what we also discovered something which is very interesting that actually that are fantastic but also data have a huge impact and I don’t know if you know but L’Oreal we are kind of we do have, we are very intensive in media for example and we discovered that we could do something special with media. We could do something with this huge investment in media. We could do much better sustainable media. So we started the developing a program with Impact Plus, which is also the startup and we in Spain and Portugal now, we did it with 17 different campaigns, also the sense of purpose campaign, which is kind of poetic because we did it with this sense of purpose. We create the beauty that moves the world campaign and we started to analyze and clarify where are the impacts, what can we do and for example by simple things like compressing the creatives or the creations, the videos, understanding the different platforms that we use for the media campaigns or using this only Wi-Fi download and note data download for the media campaigns, we can actually improve our media campaigns do it that much more sustainable. We reduced up to 20% of the the greenhouse gas emissions of the, of this in particular of this campaign of sensor bubbles. And we are doing that with a lot of different media campaigns. So data sure they are key. They are that we need to understand our value chain. We need to understand what is the value proposition and and we’re have what do we need to put the efforts. But for sure be aware that data also create impact. |
| Joana | Yeah, exactly. And you cannot measure or improve what you cannot measure, right. So you need to know where you’re at so. Perfect. Congratulations. Thank you so much to all the speakers was very enriching and I think it’s really illustrated what are the main pain points in the supply chain of different sectors and industries. So please give them a round of applause. |
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