How is GM Integrating Sustainability into its Supply Chain?

Leading automotive giant General Motors is leading initiatives to embed sustainability into every area of the supply chain, with a focus on logistics, materials, packaging and supplier sustainability. 

Through a policy of  active engagement, the cross-functional GPSC Sustainability Team aims to foster robust relationships with suppliers, urging them to identify opportunities for emissions reduction with ambitious goals and aggressive timelines.

The team also continues to encourage Tier I suppliers to sign GM’s Supplier Pledge, which comprehensively embraces sustainability. This pledge includes commitments to achieving carbon neutrality for Scope 1 and Scope 2 emissions related to products or services provided to GM and attaining or exceeding a minimum EcoVadis score of 50 by 2025 in the areas of Labor and Human Rights, Ethics, and Sustainable Procurement.

By the end of 2023, 71% of GM’s direct and logistics suppliers by budgeted annual purchase value had committed to the pledge. 

What is the GM Supplier Sustainability Goals Framework?

GM introduced the Supplier Sustainability Goals Framework as a comprehensive system designed to evaluate and enhance sustainability within its Tier I supplier community, including key indirect and logistic suppliers. The framework is part of GM's broader strategy to encourage suppliers to take progressively ambitious steps towards a more sustainable future.

Central to this initiative are the GM Supplier Pledge Guide and the Supplier Sustainability Goals Framework. These documents outline GM's supply chain goals, priorities, and processes for its Tier I suppliers. The framework categorises supplier engagement into four levels allowing for tailored, supplier-specific goals based on priority assessments:

• Compliance
• Commitment
• Growth
• Leadership

This structured approach aims to drive increased sustainability engagement across the supply chain.

“Sustainability is not just good policy. It’s good business — good for the company, for employees, and for recruiting and retaining the best people, people who will help us achieve our vision,” said GM Chair and CEO Mary Barra. 

“We’ve made tremendous strides through our investments and innovations in electric and autonomous technology, and we’re going to expand our reach, especially with many important EV launches across a wide range of price points and segments this year.”

How does GM Assess Supplier Performance?

GM uses the EcoVadis platform to evaluate management systems supporting the environment, labour and human rights, ethics, and sustainable procurement. By the end of 2023, 88% of GM’s direct and logistics suppliers, measured by budgeted annual purchase value, had enrolled in EcoVadis, achieving an average score of 52 out of 100.

GM has also been an active participant in the CDP Supply Chain Initiative since 2013, working with CDP and its suppliers to mitigate environmental impacts. The company invites its direct material strategic suppliers, a selection of indirect suppliers and top strategic logistics suppliers to complete the CDP Climate Change and Water Security surveys. 

In 2023, suppliers representing 92% of GM's budgeted annual purchase value participated in CDP, with an impressive response rate of over 95% among in-scope SSE and key logistic suppliers for the Climate Change survey.

GM and Sustainable Logistics 

GM also uses its logistics operation to further enhance the sustainable performance of its supply chain. The commitment to freight sustainability includes participating in programmes like the EPA’s SmartWay Partnership, which the company has been a member of since 2013. 

In 2023, GM boosted its engagement with the SmartWay programme by encouraging eligible logistics suppliers to join, resulting in substantial participation increases. U.S. and Canadian carriers representing over 97% of GM’s 2022 truck, rail, and intermodal ton-miles committed to the SmartWay programme.

GM North America received recognition as a SmartWay High Performer for meeting the programme’s stringent emissions and carrier selection criteria. Extending these efforts, GM also participates in Mexico’s Transporte Limpio programme to enhance freight efficiency with Mexican truck carriers.

The GM Logistics Team is also active in continuously evaluating and optimising the company's logistics network. Through strategic route design, mode changes, and frequency adjustments, the team integrates carbon calculation methodologies to improve CO2 emissions visibility and incorporate sustainability into various network scenarios.

Managing Risk in the GM Supply Chain 

The company also uses technology to integrate risk management plans into an advanced in-house supply chain visibility tool that integrates GM plants, Tier I, II, and III suppliers, as well as logistics nodes worldwide. This tool plays a crucial role in mapping geographic locations and relationships across GM’s global supply chain. It also monitors and maps supply chain disruptions, potential human rights issues, and sustainability-related events affecting the supply chain members.

Through this monitoring process, GM can proactively identify suppliers potentially involved in human rights events. Working alongside the Supply Chain Risk Management Team, GM’s Global Supply Chain Crisis Response Teams are then notified. These cross-functional teams collaborate with Tier I suppliers, as well as GM’s Purchasing, Logistics, and Engineering Teams, to mitigate potential human rights and sustainability risks.

GM’s internal teams also assess sustainability and ethical risks associated with each commodity. They also analyse sustainability trends throughout the purchasing organisation, making sure there is awareness and proactive management of sustainability challenges.

GM Sustainability Report and Supply Chain 

General Motors’ 2023 sustainability report details its wider commitment to sustainable practice across the business. It celebrates GM's initiatives to accelerate electric vehicle adoption, forge strategic partnerships to enhance supply chain sustainability and support the development of a future-ready grid powered by renewable energy.

"At GM, we are taking important steps toward supporting the transition to a more sustainable, zero-emissions future for everyone," says Kristen Siemen, GM Chief Sustainability Officer. 

"We continue to make progress integrating sustainability into our business from the initial design and selection of materials, through product development and manufacturing, to innovative solutions for end of life. While there’s more work to do, we are proud of our progress and are moving with purpose."

******

Check out the latest edition of Supply Chain Magazine and sign up to our global conference series – Procurement and Supply Chain LIVE 2024. 

******

Supply Chain Digital is a BizClik brand.