Getting suppliers involved to better assess circularity throughout the value chain: a project by ENEL
The Italian utility ENEL involved its suppliers to implement circular economy more efficiently. The project Circular Economy Initiative for Suppliers Engagement aims to improve the sustainability of the supply chain and its efficiency and circularity in the medium and long term. It provides a web tool for the suppliers to insert their environmental data.
In order to measure the circularity of products and their impact in terms of environmental, energy and material resources, a lifecycle assessment is carried out in some categories of products, according to ISO 14040. The output is translated into a protocol for the specific product (set of rules, KPI, unit of measurement) turned into international standards (PCR = product category rules) through EPD system. The EPD is a certified declaration representing the consumption of natural and energy resources and environmental impacts related to the production. At the time of publication of the PCR, all qualified suppliers are asked to obtain the relevant EPD and to use the tool. Once all data are available, the KPIs are analysed to define actions for corrections, reward or re-design.
The project involves around 200 significant global suppliers out of 12 product categories, which today account for more than 60% of material purchasing.
The Circular Economy Initiative for Suppliers Engagement allows ENEL to:
- measure all its circular economy initiatives against a common yardstick
- define benchmarks/KPIs on the goods it acquires so it can define targets for improvement
- begin monitoring its environmental footprint on topics such as water consumption, CO2 emissions, use of natural resources, etc.
- assess its exposure to risks of price and supply interruption (based on materials and their origin)
- bring costs down by optimizing manufacturing processes
with the following expected results:
- cost saving
- designing/innovation
- product/project life value.