Transcript 0:00 We need to pay close attention to finances, environmental, social governance, and digitization. There's so many aspects of every element. That's why it's just not one person. 0:16 It's a company maintaining it. 0:21 [on-hold music] Welcome to The Peggy Smedley Show, your voice for our connected world, with your host, Peggy Smedley. 0:38 Hello, listeners, and welcome to today's edition of The Peggy Smedley Show. I'm your host, Peggy Smedley. Today on the show, we're gonna be talking all about one of my favorite subjects, and that's sustainability. 0:50 For more than two years, I've been saying if we want to measure, monitor, and reduce carbon emissions, then we need to do it all together. 1:00 We need all the generations, all the businesses to come together to move from our old linear ways to a more circular world. We need changes in our process, and we need new technologies to help us get there. 1:17 We can't have one without the other. So for today's show, I want to narrow in on one particular company, and this company is a great example, uh, and it's having a ripple effect across the supply chain. 1:32 We've been talking a lot about the supply chain lately. So let's look at the steps of one case study and the impact it's having on sustainability. And then I'll give you my thoughts for what I think needs to happen next. 1:46 Before we get to that discussion, let's talk about the guests I'm going to have on the show. 1:50 I'll be talking to Darryl Freedman, the global president and CEO of CEDIA, and then I will wrap up the show welcoming back Edward Sanchez, senior analyst in Global Automotive Practice at Strategy Analytics. 2:06 So let's get to it. 2:08 Continental has been participating in the annual reporting and disclosure of climate-relevant data for, from the CDP, otherwise known as the Glo- the Carbon Disclosure Project, for more than ten years. 2:24 Now, this is kind of an assessment. By scoring companies and cities, the CDP aims to incentivize and guide them on this journey through disclosure. 2:36 This non-for-profit charity runs the global disclosure systems for investors, companies, cities, states, and regions to man- kind of manage their environmental impacts. 2:52 Now, let me tell you what Continental has set as its targets. This company has the goal to achieve fully sustainable supply chains by twenty fifty, and to hit that target, 3:06 it has already taken many of the first steps to help achieve its goals. Continental has been recognized by the Carbon Disclosure Project. 3:17 Specifically, it has been recognized by the CDP, again, as I mentioned earlier, for the implementation of measures and strategies to reduce emissions in actually the supply chain. 3:32 So this is the fourth time in a row it's been recognized. 3:37 So this particular assessment is based on the data provided by the companies on the corporat- corporate governance and Scope 3 emissions, as well as supply chain management as a whole. 3:54 Now, it specifically looks at strategies and measures that help to make environmental risks and, and looking at emissions measurable along value chains in order to minimize them. 4:08 So how, then, did Continental achieve this, and could it potentially be repeatable for your organization? That's what I wanna kinda talk about right now. 4:19 The company has taken this holistic approach of working closely with its suppliers to achieve this comprehensive improvements. 4:28 And basically, it has involved as many stages of the supply chain as possible, which I think is truly commendable. 4:36 So this includes material sourcing, recycling, uh, as we talked about circularity, and, and so much more in the entire process. 4:46 Of course, the company has also used technology, digitalization, transformation to make environmental risk transparent, as well as to reduce this in the entire supply chain again. 5:01 So if you think about it, it's, it's really that holistic approach I mentioned at the beginning. So here is one way it's doing this. 5:08 So let me kind of narrow in on something that'll help you understand it a little bit more. 5:13 I-In its natural rubber sourcing, Continental has defined clear responsibilities and obligations for all parties involved in its sourcing policy. 5:24 So if you're thinking about your company right now, this'll help you understand what exactly they're doing. The company also employs third-party partners to evaluate its suppliers based on verified self-reports. 5:39 So this is very critical in the way you look at your supply chain, your collaboration, your partners. 5:45 Further, it, it's been able to kind of promote a digital system for the traceability of natural rubber from the project region in Indonesia since twenty eighteen. 5:58 So you can see this is not something it just did overnight.By optimizing the supply chain and offering training in the sustainable cultivation of natural rubber, 6:10 smallholders are able to increase quantities, quality, and yields, if you think about this, which is ultimately improves their incomes as well as the outcomes. 6:23 So this strategy, if you think about it, also prevents logging and deforestization, which we all know conserves resources dramatically. This is critical. 6:38 Following this pilot, the number of smallholders integrated into this main project is expected to increase from a, a number of four hundred and fifty to somewhere around four thousand by twenty twenty-four. 6:54 Now, let's look at one last way the company is being sustainable itself, and it's in the supply chain again. The use of sustainable raw materials for tire construction. 7:07 Continental and its partners are researching the industrialization of the use of kind of a R-Russian dandelion for the extraction of natural rubber. 7:19 In the future, the goal is to be able to grow part of the natural rubber required near the company's own tire plants in order to reduce CO2 emissions caused by l-long transport routes. 7:35 The use of sustainable raw materials also includes the use of recycled polyester from the recycled plastic bottles and the use of silicate from the ash of rice husks. 7:48 Plant-based oils and resins also reduce the proportion of crude oil-based materials already used today. 7:58 Continental's goal is to s-be s- kind of to successfully use a hundred percent sustainably produced materials in its tires, in its entire products by twenty fifty at the latest. I mean, think about that, at the latest. 8:15 This is simply one case study of sustainability in the supply chain. Now, I'm a big fan of what Continental is doing overall. 8:24 I spent some time with the company personally, uh, in fact, driving an F350 King Ranch trunk, truck, I should say, making my husband-- driving an F350 King Ranch truck, making my husband jealous, of course, for the first time that, uh, through the rough terrain, testing their tires. 8:44 Uh, never drove a truck before and enjoyed doing that, learning about their technology, understanding their vision. 8:51 All in all, Continental is a company that cares about the people and the environment, and they, and they showed it. They, they, they let us spend a day there really understanding. It was more than a day, actually. 9:04 But, uh, what I'm enjoying about a company like this is they really... This isn't something that happened overnight. It's something that's been going on for years. So here's my opinion for today. 9:15 Our journey to carbon neutrality is speeding up. Our businesses and our supply chains need to focus on things like circularity, digitization, and using more sustainable materials. 9:30 I absolutely appreciate what companies like Continental are doing. But my questions are, are these, and this is what I want to pose to all of you. 9:41 Can we get more on the board, more on the docket, more doing these right now, more of what we talk about? 9:48 I know there's many of you asking these questions and raising and saying we've been doing it, you know, for, for years. We're not been doing it for years. We have a lot more we have to do. 9:58 And can our supply chain sustain this? We need to have a real discussion about how are we going to maintain this effort. It can't be just a few doing it. We need to understand how this must be an all-in approach. 10:16 The big companies must take steps to help the smaller companies, or this simply is not going to work. And I think there's the part sh- part of the disconnect in the supply chain. 10:28 We're going to have to make the big companies take big steps, but will the small companies be left behind? W-we, we can't leave the smaller companies, the small and mid-sized companies behind. We have to work together. 10:42 Will they struggle and fold up shop in the process? Can't have that happen. Can't leave those small and mid-sized companies behind. We are all in this together. You know, I feel like a song coming on here. 10:55 And we all need to work together. So here's my tip for today. Review case studies in your own ish- industry. We learn from our own industries, but we learn from other industries. Share that knowledge. 11:10 Collaborate together. That's where we grow. And then ask yourselves some of these very important questions as you review them. What worked for that company? What worked for that industry? How did they do it? 11:25 What isn't working for that company, and why didn't it work for that company? What could actually work for you, and what can you replicate in your own company based on what you're seeing? 11:41 Every company has its own challenges, but based on talking and learning and reading and sharing, perhaps traceability is too large of a step for now. We get that. 11:55 But maybe there are more sustainable products your company can source, and that's the place to start.Every inch becomes a mile, and that's where we have to look at this. 12:11 When examining the broader sustainability issue, it is important to look beyond just the climate. There's so many things. That is just one component of a much larger goal. 12:26 We need to pay close attention to finances, environmental, social governance, and digitization. There's so many aspects of every element. That's why it's just not one person. 12:41 It's a company maintaining it. Every person in the company needs to be focusing on it. 12:48 We need a larger approach to make this work in tandem, and we need every company in every business, in every sector thinking about it. Consider what you might do this week to take that first step 13:04 or that next step, depending on where you are in your sustainability journey at this moment as you're listening to this show. 13:14 There are many things we need to be thinking about every day, and we have many hurdles, and we have many successes, and we have many journeys to continue to take. Think about how you're transforming your company. 13:27 Think about how that sustainability journey that you're on will-- you'll continue to be on. But w- you're not alone. Many companies are doing it. Your, your executive team is learning how to do it, but that's the thing. 13:43 Everybody's learning it together, and every day something new happens. Some new evolution of all of this is happening. 13:52 This is not something you have to go it alone, and that's why rely on your partners in a collaborative supply chain. Rely on those suppliers to help you share and to grow together. All right. 14:06 As always, if you have thoughts on what I've talked about today, please send me a tweet to continue this discussion on social media at Connected World, or post something on Twitter. I love... 14:17 I mean, on LinkedIn, because either on Twitter or LinkedIn, because I love when we're all talking and engaging. 14:23 When we learn from each other, when we share our thoughts, that's when we can advance and continue to do better in our sustainability efforts, our technology efforts, whatever that might be. All right. 14:34 That's all the time I have for this segment. But stick around. We've got so much more to come. 14:40 And in the meantime, while you're taking a quick br-break, please check out our website at connectedworld.com or our show website at thepeggySmedleyShow.com. And don't go away. We'll, uh, be right back. 14:52 As always, this is The Peggy Smedley Show, your voice for our connected world. And remember, with great technology comes great responsibility. Go get that quick cup of coffee. [upbeat music]
