Car support structure

This case is based on the 2016 Handbook and uses the Qualitative approach

Introduction

The pilot was conducted by the BMW Group and BASF on a polymers support structure for cars produced by BASF and then used in a BMW car. The main goal of the pilot was to identify risks and strengths in the supply chain of the polymers support structure, using the social indicators from the handbook and initiating activities to discuss various topics with different players along the value chain

Application of the methodology

For this pilot, the scales-based approach in combination with a hotspot analysis was used.  As the goal of the assessment was to find areas of risks and strengths in the supply chain, the scales-based approach was considered the most fitting to reach this goal.

A cradle-to grave approach was chosen to take into account all life cycle steps of the materials (i.e. extraction of raw materials until end-of-life) and to get insights into the impacts throughout the whole supply chain. The assessment focused on the workers and local community stakeholder groups.  The consumers stakeholder group was considered less relevant, because the consumer experience during use phase is not really affected by this component when in use.

After high-level screening, the major hotspots were identified and were further investigated.  From the hotspot analysis the following indicators were identified as most relevant for the car support structure supply chain: working hours, training, work-life balance, forced labour, and job satisfaction.

Aggregation was used for some indicators only, since the goal of the pilot was to identify risks and strengths in the supply chain. To achieve this aim, and to define improvement opportunities, non-aggregated results are easier to interpret and give a more transparent overview on of the social impacts along the product life cycle. No weighting factors were used, as the goal of the study was not to generate a single score for the car support structure.

Operationalisation and Feasibility

The sustainability experts from both companies took the lead in this assessment and involved experts from different disciplines and departments. This included the strategy department, the development department and marketing across both companies. Life cycle assessment specialists plus some specific suppliers worked together to collect the data and assess the social impact. Around 3 person-months were needed to collect data and we succeeded in gathering approximately 75% of it. Internal meetings and discussions were organized to involve all parties and to make them aware of the value and benefits of product social impact assessment. Most of the people involved were quite positive and interested in the outcomes of the study. The final results were presented at management level. It was important to show the strengths of this methodology and how it can support management in their decision-making process.

A social database with product or company-related data would greatly reduce workload in the data collection phase. Most of the data for the scales-based approach is available and not confidential,  but collecting this data is very time-consuming. The Social Hotspot Database, which is already available, allows us to check some of the topics covered in the handbook. However, a further extension of this database is desirable to cover all indicators of the scales-based and the quantitative approaches proposed in the handbook.

 

Value added

This pilot gave a clear and comprehensive overview of the social impacts along the whole supply chain. The assessment uncovered unknown hotspots; it identified parts of the life cycle with no or low risks as well as part of the life cycle where no further improvement is needed.

Perceived advantages of using the Product Social Impact Assessment are:

Valuable  information about the product and its social impact;

More transparency, trust and better cooperation between customers and suppliers.

Good overview for comparison of different materials and their supply chains.

The handbook gave clear guidance on how to work, how to conduct the impact  assessment, which aspects the practitioner should focus on, and in which format the results could be presented and discussed.

Bleaching chemicals business

This case is based on the 2016 Handbook and uses the Qualitative approach

Introduction

The pilot was conducted by AkzoNobel Pulp and Paper Chemicals (PPC) and addressed the bleaching chemicals business in Brazil. The goal of the pilot was to investigate the total effect of the business, taking into account social, financial and environmental aspects, profit and loss (P&L) and the full value chain. The handbook was used to estimate the social capital.

Application of the methodology

The approach chosen was the ‘scales-based’ assessment because of data availability and speed of the process. AkzoNobel also considers that the quantitative method is too immature to offer reliable results. The upstream value chain was considered but only for the main streams of materials: salt, power, chemical production and pulp production. The downstream part of pulp was excluded as it is too diverse. All the social topics in the handbook were considered. No weighting/aggregation was used, in order to avoid misunderstanding and maintain transparency. The Hotspots Database and AkzoNobel data were used in the assessment.

Operationalisation and Feasibility

During this pilot, AkzoNobel Sustainability, AkzoNobel PPC, and a consultant participated in the assessment.  No suppliers were contacted.  The complete assessment took one week.

There were positive reactions from PPC, corporate management, and the media. Internally the results were communicated in regular management meetings and were also used in a number of interviews with the press and in press releases.

Based on the test and discussions, AkzoNobel recommends that the questions and indicators should be more in line with the data and processes which  already exist in companies.  Working conditions, for example, can be linked to health and safety processes, and community issues are normally covered by CSR or engagement processes.  Close connection and harmonisation of definitions between data providers could also be useful (e.g., RobecoSam, SEDEX, Social Hotspots Database, Ecovadis).

Value added

The added value of the handbook is to provide a useful screening tool to identify hotspots in a structured and consistent way. A risk assessment approach was used:  compliance-thinking plus benchmark per category. Nothing was discovered about the product itself but it was useful to highlight our own operations.

Task chair component

This case is based on the 2016 Handbook and uses the Qualitative approach

Introduction

Steelcase and DSM have partnered in this pilot. The product chosen by the companies was a Steelcase task chair component, made of a DSM polyamide grade.

Application of the Methodology

The approach chosen was the “scales-based” assessment. The scope was the life cycle stages from materials production to use phase, with the following actors:

• Materials production: DSM and a DSM supplier
• Component production : injection moulding at a Steelcase supplier
• Assembly and completion of the final product: assembly of the task chair at Steelcase
• Use: consumer

End of life, transportation, and some of the materials production steps were excluded from the scope considering the limitations of the data in terms of time and availability. The consumer’s “experienced well-being” was excluded from the scope.

Operationalisation and Feasibility

Several departments were contacted for the related data collection, depending on the companies involved: human resources, product certification in-house experts, research and innovation, operations, environmental management and sustainability. Most data were available. Test partners considered that this data collection was not very time consuming.

Value added

It sounds obvious that such a social assessment could be performed on most office furniture products (chairs, storages, desks, partitioning walls, screens, etc.). It is also highly probable that the most interesting outputs would come in particular from the analysis of both the materials production stages. In fact, many industrial operations occur during those stages, which means that a number of workers and local communities are potentially directly or indirectly concerned.

Based on the test and discussions following the outcomes, Steelcase and DSM have defined a number of observations and recommendations:

If the assessment is primarily based on reports provided by companies and suppliers themselves, how can the data quality be guaranteed and the right level of confidence regarding the resultant answers (i.e. risk mitigation strategy) be created? Suggestions might include requesting extra evidence that substantiates the answers, or performing audits. Within the boundaries of throughput time and time spent on this pilot, it was difficult to assess the end-of-life stage. For future case studies we would recommend creating a database with end-of-life principles and data.

For this test we looked at one part of an office chair. The question is how to allocate the social impacts of a whole chair which could consist of a large number of components. A chair is made from about 300-400 parts, of various weights (from a few grams to a few kilos) and material types. We believe it is important to continue exchanges between participants to find a feasible and practical solution for this.

We believe that data collection could probably be optimized if data are collected together with environmental data, for instance for LCAs, certifications, CSR reports, etc.

Product Social Impact Assessments can provide additional data that can be used for CSR communications, except that with this type of assessment there is a more important focus on specific products and/or specific life cycle stages (e.g. external production).

Assessments like this can potentially create new information that can be used in marketing, for instance new information on improved experienced well-being by the end-user (including, for instance, comfort). In this case we could not test this, but we can imagine that if you assess a whole product, market research can help to provide information on experienced well-being.

Run on Flat

This case is based on the 2016 release of the handbook and explores the Quantitative approach

Introduction

The product chosen for this pilot was a Run On Flat tire as mounted onto a BMW vehicle. This tire is designed to provide extended mobility by providing temporary performance in deflated mode. In order to simplify analysis, four main materials were considered in the production of the tire, with the main raw material feedstock being produced by BASF and the tire manufacturing phase being conducted by Goodyear. This case demonstrates the methodology by evaluating a well-known product and product application. Through the testing, we considered multiple tiers in the supply chain and attempted to collect data through a variety of methods. Furthermore, this case sought to examine how the methodology might be applied to businesses of different sizes.

Application of the Methodology

We decided to implement a quantitative approach for the entire product life cycle while considering all three stakeholders groups. We decided to apply a quantitative approach because BASF, Goodyear and BMW are interested in quantifying social aspects along the supply chain in existing life cycle activities. Examples of experiences in this topic are BASF’s SEEBALANCE® methodology as well as BMW Group´s Sustainability Risk filter. Another goal was to test the ability to quantify and aggregate the data to allow for comparison of alternatives. The test phase was a good opportunity to see if the methodology provides a workable approach to support decision-making with quantified, life cycle-based data founded on social indicators.

Our initial goal was to assess the product from cradle to grave, including the production of raw materials at multiple tiers of suppliers throughout the use phase of the car (the tire can, for example, affect the comfort and “well-being” of the driver in the use phase) until the end of life of the tire. Inadequate data availability led to the eventual exclusion of some phases and a focus on the most relevant products and life cycle steps.

We decided to include data from the production of other materials, such as steel and natural rubber that were outside the operational control of the project partnership. The data were collected using questionnaires to suppliers, different types of reports, and statistical databases. This approach allowed testing of data collection from multiple data source types, showed the quantified contribution of different industries to the social impacts and made it possible to identify improvement potential in the supply chain.

Operationalisation and Feasibility

Operationalisation of the assessment might be easier in large companies because they might have expertise in house. In our case, it was necessary to involve several departments in the assessment (e.g., human resources, company site management, procurement, EHS). Furthermore, the assessment was coordinated by specialists from the departments responsible for sustainability and life cycle assessment who were able to contribute data from existing databases and methodological set ups. These departments may be best suited to facilitate the assessment, particularly a quantitative one, because the logic relies on the methodological approach normally used in a life cycle assessment. Even if there are no existing ISO standards for social assessments, the logic and processes of ISO 14040, 14044, and 14045 are helpful in performing a study using social indicators.

The time requirement is not easy to estimate as it may depend on company size, the number of parties involved in the data collection process, existing databases and data sources. Due to the large number of indicators for which it is necessary to find data, data collection is likely to require a minimum of 30 to 40 working days. This depends to a large extent on the complexity of the assessment, the number of industries covered, and the number of alternatives to be assessed. It is easier if all companies involved in the product life cycle jointly participate in the project; otherwise, obtaining social data may be challenging for reasons of confidentiality.

In our case, we succeeded in obtaining 65% of the data for the entire life cycle. This included steps that were not directly controlled by the project partners. In some cases, we found that it is possible to obtain secondary data from sustainability reports and statistical data at sector or country levels. However, statistical data were not available for all indicators within the assessment (e.g., job satisfaction, experienced well-being). The end-of-life step was particularly challenging: No specific social data were available and it was not even possible to identify country-specific data.

By asking similar questions to different stakeholders about the same area, it was found that interpretation may pose a challenge due to greater subjectivity in the social metrics. More guidance may therefore be required in the future to enable more uniform assessments and to ensure that all actors within the value chain respond similarly to questions. The testing further showed that there were opportunities to improve the quantitative assessment methodology both for indicators and aggregation of results. This feedback was integrated into the revised handbook.

For a number of reasons, some modification would be required for it to be truly applicable to this group: 1) criteria may be worded for an organisation with a management structure and employees (e.g., employment relationships), 2) some criteria may not be expected of small farmers or suppliers, 3) some criteria would require consideration external to a farmer’s operation (e.g., training), 4) some criteria would need to be interpreted differently (e.g., wages), and 5) some data may not be collected or available (e.g., job satisfaction). This experience has also been made in other agricultural applications and initiated the development of “AgBalance™” by BASF, a holistic agriculture specific evaluation method including social indicators.

The results of the analysis can be used in internal decision-making, as well as for marketing purposes by informing the supply chain and society about the benefits related to products and innovations. It makes sense to place priority on evaluating products that have high visibility in society, due to the greater consumer awareness of such products. Social benefits/impacts of a product might help to spread the product itself in the marketplace because of its sustainability performance and generates better understanding of this new type of evaluation including social aspects. Additionally, specific hotspots can be identified and optimized during product design and development and can be shown to different stakeholders. It is also helpful to get an overview of the whole life cycle of a product and supply chain, refine results from important life cycle steps, and identify areas where improvements would be most effective.

Value Added

The methodology helps to identify the most relevant social indicators and impacts, in addition to any data gaps. The transparent data aggregation provides direction for decision-making and can support development processes as well as demonstrate future product improvements. Furthermore, it was found that the data collection process could facilitate discussions with supply chain partners and provided a tool for engagement on important social topics within the company across functional groups. Due to consideration of both positive and negative criteria, the methodology allows for an action-based discussion that may help to promote more positive actions throughout the supply chain. This is a part of a more sustainable product solution that can be supported with quantitative data. Lastly, the methodology facilitates the communication of the social benefits of products to both sustainability professionals and non-experts to support a general understanding of the contributions of products and applications to a more sustainable society.

The pilot showed that the quantitative approach can generate information related to a product’s contribution to society (e.g., how many safety training hours are associated with the production and assembly of a tire throughout its life cycle). These data points are not easily available, but support the understanding of the overall importance of a product and provide a full picture of improvement opportunities beyond environmental and economic aspects in order to generate more sustainable solutions. The quantification allows a very distinct discussion of the results and the efficient support of decision-making processes. If it were to be scaled up, for instance to all produced cars, it could generate information about the overall contributions of specific products to social indicators. If the understanding of the methodology is clear, it might also be very interesting to assess products with lower visibility in order to demonstrate their contribution (positive or negative) to social indicators. The products with mainly positive contributions may in turn lead to higher acceptance of products in society.

Tapered roller bearing

The pilots were intended to test the methodology proposed in the handbook during the 3rd phase of the Roundtable for Product Social Metrics.

Introduction

The pilot was conducted by BMW Group & Mahindra Sanyo Special Steel. The product selected was a tapered roller bearing produced by Mahindra Sanyo and then used in the BMW 1 Series. The goal of the pilot was to verify that the methodologies and the indicators selected are suitable for assessing a product that has its life cycle spread across geographical borders and in different countries. In this pilot the steel rings for the bearings are produced in India, after which they are warehoused in Hungary; the bearings are then manufactured in Hungary and finally assembled in the BMW cars produced in Germany. Production at Mahindra Sanyo is carried out using the electric arc furnace method which reduces the extraction intensity of raw materials, thereby to a large extent softening the impact on environmental and social footprints.

The social impacts of the product were assessed from cradle to gate, from extraction of the raw materials for steel manufacturing, throughout the manufacturing phase of the bearing rings, delivery and the assembly phases of the tapered rolling bearings and car assembly. The use phase was not considered because the use of the car is not affected by this specific component.

Application of the Methodology

We implemented the scales-based and the quantitative approaches to prove their feasibility and that of the relative indicators. In the pilot, we assessed the employees and local communities stakeholder groups. We did not consider the consumer because the use phase is not relevant for this component of the car. We considered all indicators presented in the handbook relative to the two stakeholder groups. As the product life cycle includes an emerging country, India, it was meaningful to test all the indicators and their feasibility, by considering the different local contexts. Although India is considered to be a country with perceived high social hotspots, these risks can be seen as an opportunity for all companies that have a good level of commitment towards their social responsibility, since they can make a difference and improve the local conditions.

Aggregation was not the focus of the pilot implementation. We wanted to verify the methodology and assess the social impact of the product as it moves across the value chain, and then develop an action plan for risk mitigation, if necessary. Aggregation is important for summarising the results and making comparison of products easier, but it is not needed to identify hotspots, develop an action plan or define improvement opportunities.

Operationalisation and Feasibility

Mahindra and BMW involved all relevant companies in the supply chain. These companies are located in different countries: Germany, Hungary and India, and not all of them are members of the Roundtable for Product Social Metrics. Therefore, it took more than 3 months to explain the value of social assessment, raise awareness on the importance, clarify the goal of the project and the need for primary data collection. Once the target of the project and the importance was clear, the collection of the data took 4 weeks. One of the companies was not prepared to deliver the social data even though it was available. The companies who were willing to participate involved their human resource department, and either their product sustainability department or, if applicable, their life cycle assessment department. At BMW and Mahindra the procurement departments were also involved at the beginning of the project to connect with the relevant stakeholders at the companies. After the initial meeting, the project was handled by the human resources and sustainability departments.

Once the date was collected, the assessment lasted no more than 3 days. When the assessment was finalised, the results were presented to the companies and internal departments involved in the data collection to demonstrate the importance and the potential of the methodology in supporting decision-making.  A report for senior management level showing the aggregated value for the stakeholders group may help to communicate the existing social footprint, since the single score is easy for non-experts to understand. On the other hand, the results at indicator level are important to help those involved in operations to identify the appropriate actions, measurements and implementation routes for improving the social conditions of the stakeholder groups included in the product life cycle.

Value Added

The Mahindra Sanyo and BMW Group are both strongly engaged in developing a comprehensive sustainability assessment. The main objective is the future integration of Product Social Impact Assessment in the current product development process. In particular, the quantitative approach can be integrated easily with environmental life cycle assessment to reach a comprehensive life cycle sustainability assessment, and can support decision-making in product development to improve the value of the product.

We had the opportunity with this study to verify that the indicators and references introduced in the handbook are valid and feasible in different countries and, in particular, in emerging countries such as India.

1 kWh of windpower

The pilots were intended to test the methodology proposed in the handbook during the 3rd phase of the Roundtable for Product Social Metrics.

Introduction

The subject of the study was 1 kWh of electricity generated by Vattenfall’s Nordic wind farms in Denmark and Sweden. The study focused on the core processes of the value chain, namely the development, construction and operation of wind farms. Distribution of electricity was judged to be less important as we expected the largest impact to be on local communities regarding the operation and on workers in the supply chain.

The goal of the study was to measure social impacts of the generation of electricity on local communities, society and workers. Another aim was to elaborate on Product Social Impact Assessment and find ways to integrate it with product declaration in accordance with the International EPD® System. The objective was to move towards an integrated approach and to see how product social impact assessment could be a part of product declaration.

Application of the Methodology

For this pilot, the quantitative approach was chosen primarily to facilitate further building on work previously undertaken within the organisation. Topics were selected following internal discussions as well as being based on an earlier company materiality analysis on wind power. In addition to selecting indicators   from this handbook, the UNEP SETAC Guidelines for Social LCA of Products, and the Global Reporting Initiative (GRI), internal company indicators were used, since these corresponded more closely  to the materiality analysis that had already been done and increased  opportunities to find data for the indicators included in the study.

Operationalisation and feasibility

The assessment was carried out by employees within the environmental department, supported by a human rights expert from the sustainability department. The assessment was conducted with the support of various internal departments: procurement, human resources, health and safety, professional training and  the Wind Business Area. The external parties involved in the assessment were one turbine supplier  and a service contractor.

Data collection methods included internal interviews,  extraction of data from internal systems, and questionnaires sent to four first-tier suppliers (of which two replied), in addition to using generic data provided by Verisk Maplecroft for the supply chain. The data collection from suppliers was supported by phone calls to explain the topic, followed by an interview for open discussion. Hard data was provided in the questionnaires completed after the interviews.

Weighting of supply chain impact on different manufacturing processes was applied to mass data as this was the only information available.

The interviews were received very positively by the first-tier suppliers but it was not always possible to find the data that was requested.  Another issue experienced was that it was even more difficult to find generic data from external sources that corresponded to the indicators, making it difficult to include the full life cycle of the product. Better sources of generic data are needed.

Value added

The results of the assessment were considered useful mainly for customer communication and stakeholder dialogues, as part of the environmental product declaration for electricity. Developing the method further, so that it becomes easier to apply, will also improve opportunities to use it for driving and monitoring improvements throughout the whole value chain. It may also be a tool to enhance collaboration on crucial sustainability issues with key suppliers. The handbook helps make the area of social impact assessments for businesses more concrete.