Developing a transparent and responsible supply chain

Mondi deals with some 30,000 suppliers from around the world and our procurement teams are organised for the different products we procure, to use economies of scale on a global or regional level as appropriate, but also utilise local knowledge and opportunities where they exist.

Mondi is committed to developing and maintaining transparent and sustainable supply chains, not only for wood, but also other key products including chemicals and films.

We recognise that developing transparent and responsible supply chains provides a number of challenges. They need to be addressed within a global framework, but must be managed in a multi-national, decentralised way, and in the most appropriate way for each respective product we procure. A responsible and transparent supply chain will become a prerequisite to secure existing and future business.

An annual evaluation of key suppliers is conducted in cooperation with local procurement teams. Says Beatrix Praeceptor, Mondi E&I Procurement Director, “The annual evaluation allows us to assess suppliers’ performances with regard to their quality of service and reliability of supply, as well as their environmental and safety practices. Where appropriate, the results are fed back to the business partner and any necessary improvements are jointly identified.”

In 2013, we piloted a revised procedure within our chemicals procurement team inviting strategic suppliers to share their sustainability performance. The objective of this exercise is to develop deeper understanding of our suppliers’ sustainability performance and to work together to improve transparency and responsible business conduct throughout our supply chain. The areas of our suppliers’ performance that we place emphasis on include management and certification systems; carbon emissions; water discharges; waste to landfill; transport fuel efficiency; employee safety; human rights; child labour; and corruption.

“We intend to widen the scope of this project in 2014 to include other relevant expenditure areas, such as printing, resins, film and transport,” says Beatrix.

Our sustainability standards are clearly stated in the Group’s Code of Conduct for Suppliers.

Reducing Scope 3 carbon emissions through optimised logistics

In order to further reduce our carbon footprint from indirect emissions along our supply chain, we are looking to optimise our logistics, and reduce our Scope 3 emissions from transport, which represents around 30% of the total.

Scope 3 emissions are indirect GHG emissions that occur in the value chain. Our Scope 3 emissions from transporting our products and raw materials, employee commuting, business travel and raw materials are estimated to have amounted to 2.7 million tonnes CO2e in 2013 (2012: 2.0 million tonnes CO2e) with the higher emissions in 2013 mainly caused by the increased volumes of procured polymers, as a result of our acquisitions of former Nordenia packaging operations towards the end of 20121.

Scope 3 emissions (million tonnes CO2e) 2012 2013
Raw materials 1.291 1.923
Employee commuting 0.049 0.047
Transportation of raw materials 0.428 0.424
Transportation of products 0.231 0.261
Business travel 0.003 0.003
Total 2.002 2.658

Currently, Mondi transports some 60% of its outbound products by road and the remaining 40% by rail or ship. Shipping is used for short distances within Europe as well as for long-distance transportation.

Despite increased traffic on the road, it is still the most effective transport mode from a cost and flexibility perspective. Marco Polo, a European Union initiative promoting a switch to greener transport modes for European freight traffic, aims to decrease the gap between road and rail options. This €450 million funding programme of the European Commission encourages companies to shift freight transport from the road to sea, rail and inland waterways. In support of this initiative and in order to benefit from this opportunity in decreasing our carbon footprint, we have shifted some 80,000 tonnes from road to rail through this programme.

Despite the economic challenges, Mondi is optimising logistics in a number of ways:

  • the use of combined transport when it makes good business sense, such as trailers being transported on railcars for a long-haul route; or containers being taken by rail from the mill to the port for shipping. Some 50% of our volume out of Austria to the Benelux countries is delivered using combined transport;
  • the use of short-haul sea shipping;
  • using rail transport where possible. Mondi delivers some 70% of volume to Switzerland by rail and also uses rail transport to Turkey and Greece. We also participate in dedicated company train concepts for major flows to our mills in Austria, Poland and Sweden. Company train concepts are initiatives between forest product companies designed to improve and combine transport logistics for participants. In Sweden, Mondi uses Scandfiber, a logistics company established by Sweden’s main paper producers, for nearly all outbound transportation from the mill to Europe;
  • shifting from road to rail where feasible through supporting programmes such as Marco Polo; and
  • using existing road transport in the most efficient way by using the full load capacity wherever possible to reduce the total number of journeys required.

Says Christian Müller, Head of Transportation and Indirect Spend Mondi E&I: “There are challenges associated with optimising our logistics, mostly related to cost. Rail and combined transport are more expensive than truck deliveries and combined transport isn’t available to all destinations. These options only make economic sense on long-distance routes.

“Despite these challenges our goal is to switch as much as possible from road to alternative transport modes where it makes business sense. This will not only help us avoid traffic jams, lack of drivers and driving restrictions, but also ensure a reduced carbon footprint across our transport chain,” says Christian.

Collaboration with partner companies that share our sustainability goals is key to success. LKW Walter, a leading European company that offers environmentally friendly transport solutions, comments on its collaboration with Mondi: “We are pleased to report annual carbon emissions reductions of over 155,000 tonnes. We have had much success through cooperation with companies that are committed to working along their value chains to decrease their transport related carbon emissions where possible. Mondi is a great example of this collaboration, and together we have worked on optimised transport solutions that are both economically sensible and environmentally responsible,” says Johann Anderl, CEO of LKW Walter.

“We are encouraged by the fact that we have already reduced CO2 emissions by increasing our load to transport ratio and the move from truck to train,” concludes Christian.