RS Group Q&A: Creating Sustainable Supply Chains

Supply chain sustainability is rapidly becoming a hot topic for industry leaders, with many focusing on Scope 3 emissions and electrification.

A recent report from EY found more than 90% of an organisation's greenhouse gas emissions are attributable to supply chains, whilst one report from Accenture found that supply chains account for around 60% of global carbon emissions.

At the same time, half of all CEOs view supply chain responsibility as integral to their sustainability strategy and DP World reveals 82% of industry professionals say embracing sustainability has improved their organisation's financial performance. 

RS Group, a leading distributor of industrial and electrical products, is just one of the companies leading the way in this area. 

Andrea Barrett, RS Group's VP of Social Responsibility and Sustainability, often underscores the importance of cross-industry collaboration to achieve ambitious, but necessary, climate goals, whilst Carolyn Park, VP for Supply Chain Optimisation at RS Components, has made some significant innovations in packaging and logistics. 

Here, they speak to Supply Chain Digital about the steps RS Group is taking to ensure more supply chains are prepared for a sustainable future. 

Carolyn Park, Vice President of Group Supply Chain, is responsible for optimising the supply chain across the group, focusing on cost, service and sustainability. Her primary goal is to reduce carbon footprint, especially in transport and packaging.

Andrea Barrett, the Vice President of Social Responsibility and Sustainability, oversees the group’s ESG agenda. This role involves strategising for the 2030 action plan, setting goals and implementing initiatives.

Her emphasis is on exceeding compliance requirements and embedding sustainability into the core business model to create value for all stakeholders. The team collaborates closely with various departments, including supply chain, to report on progress and engage stakeholders effectively. 

RS recently published its annual ESG report. Could you tell us more about the findings and explain what a Better World product means?

"Every year we publish our annual ESG or sustainability report, which provides a much fuller picture of everything we've achieved across our action plan. And it's much more directed to a wider stakeholder audience rather than just our shareholders," explains Andrea. 

"We're always thinking about how can we as a global provider of products and a distributor of products; how can we offer the kind of cleanest and greenest distribution service that we can to our customers?"

A cornerstone of their sustainability strategy is the "Better World Products" initiative, a flagship program designed to promote sustainable products. This initiative responds to customer demand for more sustainable options, simplifying the selection process amid prevalent market jargon and distrust.

RS has developed a robust framework, in collaboration with specialists, to identify 17 key product improvements across the product lifecycle: sourcing, performance and end-of-life. This framework ensures that sustainability claims are scientifically verified, ideally by third-party certifications, providing customers with trustworthy information.

"We've reduced emissions by 57%, so well on our way to achieving that 75% reduction. And then we've also set science-based targets around our logistics emissions, which is the area that Carolyn leads," Andrea adds. 

These targets are part of a broader effort to achieve net zero emissions by 2030, covering scope one, two and three emissions.

To facilitate the adoption of sustainable practices, RS works closely with suppliers, encouraging them to enhance product sustainability. They provide a standardised framework that aligns with green claims guidance, ensuring a level playing field.

Additionally, RS promotes these improved products through marketing efforts, demonstrating that sustainability investments offer both environmental benefits and commercial returns. This dual benefit of profit and planet is central to RS's strategy, aiming to make sustainable choices easier and more attractive for both customers and suppliers.

"We need to inspire and influence [suppliers] and offer them that commercial opportunity through things like marketing of the products or boosted products so that they can see that actually investing in these sustainability improvements has a commercial return as well as a return for the environment," Andrea concludes.

What do you think the future of packaging looks like for RS and the wider industry?

"What's really important to us is the reuse of materials. We've introduced totes and pallets so that when we move around our network between the UK and into Europe we now have replaced tonnes and tonnes of cardboard that used to make those journeys," says Carolyn. 

RS is actively reviewing all packaging to identify areas for reduction in tonnage, with a strong emphasis on enhancing the customer experience by ensuring packaging is sustainable and reusable. This includes listening to customer feedback to continuously improve packaging solutions.

A notable initiative in this regard is the concept of "eco totes," which involves consolidating deliveries in reusable materials that can be returned and reused, leveraging learnings from internal logistics for customer-facing solutions.

Collaboration is essential to achieving these goals. RS works closely with packaging suppliers to innovate and develop more sustainable solutions, such as transitioning to JIFFIES with all-paper content.

"We are working with our suppliers, doing testing with them so that we jointly co-create what that future looks like. No one individual is going to make this happen. We have to collaborate with packaging suppliers and we have to collaborate with customers to get their ideas as well," Carolyn adds.

Why is tackling Scope 3 emissions so important and how can companies make progress on this?

"Scope 3 emissions are more than 90% of a company's total carbon footprint," Andrea highlights.

"It's incumbent on the businesses that are really driving the agenda, its on the big businesses to really lead the way.

"You’ve got to start with measuring it because you can’t tackle what you can’t see and what you can’t measure. Then, similarly, you’ve got other big categories; purchase goods and services, products in use."

RS exemplifies this approach by analysing logistics emissions, understanding shipment routes and distances.

The company emphasises that setting accurate measurements and building strategies around each emission category is essential.

For example, shifting modes of transport has significantly reduced carbon emissions and costs simultaneously, illustrating that environmental and financial goals can align.

"Having KPIs that are embedded in the business for sustainability is key - every one of those KPIs is embedded somewhere in the business. Sustainability is a key metric at the forefront of everything that we do," Andrea concludes. 

How can companies integrate their ESG goals with supply chain optimisation- does AI and digitalisation have a role to play? 

"The way to make sustainability a standard business activity will be to use the modern practices in data around AI and machine learning in the future," says Andrea. 

AI can collect and analyse data to measure carbon footprints accurately, for example - however, many sectors still rely on traditional methods.

To streamline and standardise sustainability practices, integrating modern data techniques is essential, as these technologies can handle complex and time-consuming processes more efficiently and for less cost. 

You often talk about collaboration between competitors and across industries as the way forward to achieve sustainability goals- could you explain how you think that might work on a practical level? 

"The only way for me we can tackle this end to end is absolutely through collaboration," says Andrea. 

By working together, more advanced companies can share their expertise with those less developed, fostering mutual growth and improvement. According to Andrea and Carolyn, this approach is not limited to external partnerships but should also extend internally within organisations to maximise impact.

"It’s about building relationships to learn from those that are better developed, but also pass that knowledge on to others," Andrea comments. 

They conclude the discussion with a provocative question: "The future is actual enablement. How do you bring your supply chain together and make it easy for them to take action?"

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