Value chain management

Our sustainability objective is to create more value from fewer resources – right across the value chain.

  • Value for our customers by providing products with excellent functionality that generate resource/energy benefits ahead of competitive products
  • Value for the environment through more effective use of natural resources and a significant reduction in specific greenhouse gas emissions across the value chain
  • Value for society through the positive impact of our products in our end-user segments
  • Value for our business by focusing on our end-user segments – delivering growth and profitability

There are three aspects for the delivery of this value chain strategy, which are summarized over the following pages:

  • Sustainable business
  • Resource efficiency
  • Capable engaged people

Key performance indicators – value chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

2013

 

2014

 

Target 2015

 

Target 2020

1

2011-2012 restated due to KVC review.

2

Product related (raw materials and packaging).

3

Non-product related.

Sustainable business

 

 

 

 

 

 

 

 

 

 

 

 

Resource Efficiency Index (2012 baseline)

 

94

 

100

 

98

 

96

 

 

Eco-premium solutions with downstream benefit (% of revenue)

 

 

17

 

18

 

19

 

 

20

Eco-premium solutions total (% of revenue)

 

22

 

22

 

24

 

24

 

30

 

VOC in product (% reduction from 2009)

 

6

 

10

 

7

 

n/a

 

 

Resource efficiency

 

 

 

 

 

 

 

 

 

 

 

 

Carbon footprint cradle-to-grave per ton of product sales (% reduction from 2012)

 

 

0

 

2

 

-4

 

 

25-30

Carbon footprint cradle-to-gate per ton of product sales (% reduction from 2009) 1

 

3

 

1

 

4

 

0

 

10

 

Carbon footprint own operations (million tons of CO2(e))

 

4.8

 

4.7

 

3.9

 

3.9

 

<4.6

 

<4.6

Renewable energy own operations (%)

 

 

33

 

31

 

34

 

 

45

Renewable raw materials (% of organics)

 

 

13

 

13

 

13

 

 

Supplier management

 

 

 

 

 

 

 

 

 

 

 

 

Critical PR 2 spend covered by supplier management framework (% of spend)

 

 

69

 

80

 

83

 

88

 

PR 2 suppliers signed Vendor Policy (% of spend)

 

95

 

97

 

96

 

98

 

98

 

NPR 3 suppliers signed Vendor Policy (% of spend)

 

77

 

80

 

83

 

80

 

80

 

Suppliers on SSV program since 2007

 

304

 

373

 

392

 

432

 

 

Lifecycle assessment

Lifecycle thinking is the basis for all our sustainability work. Our standard assessment method is eco-efficiency analysis (EEA), based on a combination of lifecycle assessments and lifecycle costing. Assessment work is carried out by business and company level specialists and is based on ISO 14040-44 and a company lifecycle assessment database.

Lifecycle assessment has been included in a range of processes for many years. The company is currently developing a number of common processes – either at company or Business Area level, which will also include lifecycle thinking.

Innovation process

The new Innovation process for product and process developments covers an assessment of market segments and strategic alignment, including sustainability. AkzoNobel’s eco-premium solutions concept requires the assessment of sustainability aspects along the value chain. It encourages the development of more innovative, sustainable products. We continuously aim to reduce the environmental footprint of our product value chains.

Carbon footprint assessment

We measure the carbon footprint of all our key value chains (374 in 2014) using a full cradle-to-grave, or screening, lifecycle assessment.

Commercial excellence processes

Including sustainability in marketing propositions is an essential aspect of our Planet Possible agenda. We are developing environmental product declarations (EPDs) for some products as part of our marketing activity.

Investment decisions

All our major investment proposals (more than €5 million) require a sustainability evaluation alongside the financial case. This includes assessments at different stages in the project development. At the point of application for capital, the requirements include an eco-efficiency assessment, as well as a full review of health and safety, process and product safety, natural resource/raw material requirements and environmental impacts. The proposals are reviewed by subject matter experts, who give input to the Executive Committee, to provide a strong basis for the investment decision.

Other value chain aspects

While we focus on carbon footprint as a proxy for raw material and energy efficiency, our lifecycle assessment considers a range of impacts. In 2014, this included:

Biodiversity

We continue to work alongside the IUCN Leaders for Nature program following on from the 2013 hotspot evaluation in our value chains. The focus for 2014 has been on sourcing of renewable raw materials.