The demands of supply: How BT’s customer-focused carbon commitments rest in the hands of suppliers

The murky winter of 2015 was punctuated by rays of hope driven by the positive progress made through the historic Paris Agreement and the landmark Sustainable Development Goals (SDGs). Now the concept of sustainable business is evolving from a form of business marketing into a megatrend that is beginning to resonate with individual consumers.

With governments seemingly intent on mummifying green policies with red tape, the consensus has fallen on the shoulders of the private sector to accelerate the low-carbon movement in order to comply with the established 2C pathway.

As sustainability and CSR reports develop from time-consuming chores into the centrepiece of company excellence, businesses that are beginning to champion the movement are looking beyond merely dusting the carbon cobwebs in-house and instead looking to enhance customer experiences by hacking away at emissions from a product development and usage perspective.

Supply and demand

While some companies remain seemingly content with filling oil-rig shaped holes in the ground, firms such as BT are beginning to unleash the willingness of the public to combat climate change through ambitious CSR goals.

The telecoms giant recently revealed that it is on course to reduce customer carbon emissions by three times the end-to-end carbon impact of its own operations by 2020, with the company’s most recent sustainability report noting that the ambition currently sat on a 1.6:1 ratio.

On the surface, this initiative may seem like the perfect opportunity to communicate with customers on the subject of climate change. But with behaviour change experts Global Action Plan highlighting that “polar bears and climate change” are unlikely to spark engagement among the masses, BT has instead turned to its supply chain to cut-back on in-house emissions and produce innovate products in an attempt to hit the lofty the 3:1 ratio.

With BT using the far-reaching, financial juggernaut of its sport branch to relay climate-related messages to consumers, the company has turned to its supply chain – and more specifically its head of sustainable business policy Gabrielle Giner who was speaking to edie ahead of her appearance at the Sustainable Supply Chain conference (scroll down for details) – to drive progress in the 3:1 ambition, while simultaneously creating a domino effect that has seen supply chains within supply chains comply with BT’s way of thinking and operating.

“We have an element of expectation at BT,” Giner told edie. “We have a climate change policy that we expect all companies we work with to abide by. For us, a supplier must have its own policies in place to mitigate climate change effects.

“The relationship we have with our suppliers creates a carrot and stick scenario. Companies working with us will get to learn a lot more, and it allows us to collaborate and innovate in order to change what we’re producing.”

BT’s climate change policy calls on suppliers to report on carbon emissions through CDP compliance and have emissions reduction targets in place and commented on as part of annual progress reports. With CDP claiming that the majority of businesses are still “in the dark” in regards to climate risks in supply chains, BT is preaching these practicing standards as part of an ongoing effort to reduce the carbon footprint of its supply chain, which counts for an eye-watering 60% of the company’s total emissions.

While Giner noted that this movement will help to lower BT’s operational emissions, which makes up the bulk of the “one” in the 3:1 emissions reduction ration ambition, the company has also been able to drive down emissions in the later part of the ratio by introducing a range of supplier forums and initiatives aimed at creating an intrinsic desire to innovate.

Forum focus

In 2012, the company established the Better Future Suppliers Forum (BFSF), aimed at reducing supply chain risks by introducing suppliers to the concept of sustainability, before encouraging them to embark on a 10-step journey that culminates in that company getting benchmarked against a best practice approach.

“We expect key suppliers to be part of the Forum and promote these practices,” Giner says. “But being there with them on the ground and being very pragmatic in terms of communicating what they could save and what they could do has made them see that these processes are beneficial to their business.

“For suppliers, cost savings are a big part, but we’ve also seen new ideas form, such as new logistic processes, as part of an innovation drive which is creating economic and environmental benefits to both BT and the supplier. I think it’s important to focus on hand holding with suppliers to ensure they get the best benefits.”

The 10 factor model, established in the forum, works as an eye-opener for companies who perhaps aren’t aware of the benefits and challenges surrounding eco-design, circular economy and resource efficiency and management. By “hand holding” these suppliers, in the forms of mapping diagrams and gold, silver and bronze rankings, BT can work to establish what best practice should look like and how it should be implemented.

But with BT considered a “game changer” in regards to carbon reporting performance among the FTSE 100, the company looked to streamline its supply chain management further and has since introduced a new seven-step toolkit to drive efficiency within suppliers even further.

Off the back of the legally-binding Paris Accord and the SDGs, BT marked the turn of the year by unveiling its new BFSF Sustainability Assessor tool. Produced in collaboration with French firm Sagemcom – the manufacturer of the BT Home Hub – the new seven-step process asks suppliers a series of simple questions concerning the company’s existing sustainability measures. The answers are then assessed and a comparison is made against previously identified best practice case studies.

The Sustainability Assessor also provides recommendations on how the supplier can improve its business practices and gain competitive advantage over its industry rivals through an improved reputation as a good corporate citizen. While BT anticipated that the Assessor would create more resilient suppliers, the results have also seen companies push the toolkit out to their own suppliers to further enhance resilience.

“We wanted to find a way of making the Forum model more accessible to a wider audience,” Giner adds. “We’re quite early on in terms of roll-out, but already the suppliers that we’re talking to about this are beginning to turn to their supply chains because they’ve seen the results and benefits of the Forum first hand.

“The Forum allowed us to work with a handful of suppliers, but we have more than 16,000 and when we can reach out to more suppliers, and they in turn reach out to their supply chains, it has a much bigger effect. This is what we want to move towards and create a bigger impact outside of ourselves and our suppliers.”

Enabling innovation

With BT figures revealing that enhancing smart manufacturing, smart buildings and smart energy could reduce the European Union’s (EU) carbon footprint by more than 1.5Gt by 2030, the company has continuously strived to promote innovation to its suppliers in order to enhance it’s ICT capabilities.

The firm now offers SMEs and innovators a platform to explore new business models and product concepts through its “game changing challenge”. This innovation forum tasks suppliers to develop products and operating systems that could reap environmental and economic benefits for both BT and its suppliers by pushing the concept out as best practice through the BFSF.

With a recent report from the Ellen MacArthur Foundation revealing that the Internet of Things (IoT) could unlock a range of circular economy benefits, BT will use the game changing challenge to focus on circular economy concepts for the remainder of the year.

Ensuring that the firm doesn’t miss out the IoT potentials cited in the report, it is also using its Infinity Lab platform to engage with start-ups and suppliers, with this year’s focus concentrating on the IoT phenomena.

The combination of IoT and circular economy exploration has already seen BT partner and fund research from De Montfort University into the viability of recycled plastics. But as edie’s four part series into the challenges facing innovators reveals, ideas can often get lost in translation and to ensure that the concept is universally beneficial, BT always brings ideologies back to the 3:1 ambition.

“Suppliers aren’t a separate entity, we’re looking to shave the “one” ratio through them,” Giner says. “But when we look at the “three” ratio, which is how we grow the products and services, the key to that is innovation. We can’t innovate on our own and that’s where we really need to collaborate with our suppliers and get ideas from them so we can develop products and services together. We approach suppliers to reduce emissions to help the one target but also reduce the three by introducing innovate products.”

BT’s sector rivals, including Verizon and AT&T, have also developed similar strategies after being introduced to BT’s work through the GESI initiative – a cross sector association aimed at reducing emissions in IT business – which Giner believes is a “fantastic” sign of process.

With a new GESI-backed report on how ICT can impact the SDGs scheduled for next week, Giner has called on the industry to work together, along with the construction and transport sectors, to develop and explore the growing potential of trends such as machine-to-machine connectivity, 5G and even e-acquisition as part of ‘Industry 4.0’.

“What we need from the industry, one that collaborates with other sectors as well, is some sort of real time example of how we can decarbonise different sectors,” Giner adds. “We need to introduce roadmaps as a way of promoting collaborative growth.”

Gabrielle Giner at edie’s Sustainable Supply Chain Conference

BT’s head of sustainable business policy Gabrielle Giner is speaking at the edie Sustainable Supply Chain Conference, discussing the group’s experience in creating a framework to benchmark against best practice.

Now in its fifth year, the edie Sustainable Supply Conference equips procurement, supply chain and sustainability professionals across all industriesthe with the tools needed to overcome the multifaceted challenges of creating a truly sustainable and ethical supply chain.

View the full agenda for the conference here and register to attend here.

Matt Mace