Working with Our Suppliers
Our Global Procurement team has a number of mechanisms in place to assess the sustainability practices of our suppliers.
IPL has processes in place to assess potential and current contracted suppliers to ensure sustainability risks are well understood and addressed. Potential and current contracted suppliers are assessed using a questionnaire that covers environment, social and governance aspects and the Global Procurement team works with suppliers on gap closing action plans where required. Contracts between IPL and materials suppliers also contain clauses that are consistent with IPL's expectations of suppliers’ workplace health, safety and environmental performance. The assessment of suppliers and close out of assigned actions is monitored through regular reporting.
We will deliver best cost commercial outcomes aligned with stakeholder requirements through a sustainable, systematic sourcing process and active management of supplier spend.
Our procurement team assesses the effectiveness of our supplier management processes through the IPL Supplier Relationship Management (SRM) program. Suppliers included in the SRM program are determined by segmentation analysis. The aim of the program is to create value from existing supplier relationship for both parties through discussion and delivering improvements. Regular supplier meetings are held and SRM actions are recorded in the Procurement Contracts Database (PCD) and tracked by the Procurement Manager. Completed and overdue actions are tracked on the IPL SRM dashboard, which includes targets and KPI’s based on the number of meetings held, their timing and Contractor TRIFR and TRIs.
During 2018, IPL conducted a review of current procurement processes against the ISO:20400 Standard for Sustainable Procurement and identified areas for improvement. ISO:20400 was released in 2017 and provides guidance, rather than certification, on building sustainable procurement processes and developing a sustainable supply chain. As part of this work, the IPL Supplier Code of Conduct was completed in 2018 and the IPL Modern Slavery Project Team was formed to manage compliance with the requirements of the new Australian Modern Slavery Act 2018 (Cth) to assess and address human rights risks in our supply chain.
In line with our commitment to develop the sustainability of our supply chain, we continued to work with suppliers, customers and industry bodies on a range of initiatives in 2018 to reduce our impacts and bring positive change. Two of these are outlined in the case studies below.
Case Study: Working with RightShip to reduce, quantify and offset Scope 3 carbon emissions associated with our global shipping
During 2018 we continued to minimise the emissions associated with our global shipping contractors in the performance of their services for us. By using the RightShip Greenhouse Gas (GHG) Emissions Rating to find more efficient shipping vessels, we are using our influence to bring change in the maritime industry by rewarding ship owners that prioritise energy efficiency in line with our values, our commitment to minimise environmental impacts, and our drive to improve our financial performance.
The relative performance of a vessel is rated from A through to G, the most efficient being A, the least efficient being G. Selecting more efficient ships means less energy used as fuel, lowered fuel costs and reduced Scope 3 carbon emissions.
Since we began using the Rightship GHG emissions rating system in 2016, we have reduced our emissions by 8 percent, even though our cargo quantity has increased by 10 percent. 32 percent of our ships in 2018 were rated A or B, and almost 80 percent were rated D and above. We used no G rated ships in 2018.
As part of this engagement with our global shipping suppliers, we were also able to quantify the Scope 3 greenhouse gas emissions associated with our global shipping for the second year. The Rightship GHG methodology uses the standard European energy efficiency scale and allows emissions to be benchmarked and tracked per journey and over time. The methodology has been verified according to an internationally recognised standard (EN16258:2012). Although present data collection systems do not currently allow us to calculate the amount of emissions avoided by our use of more efficient vessels, we continue to work with our suppliers to be able to calculate this in 2018.
During 2018, the Scope 3 emissions associated with our global shipping were 68,634 tCO2e. Through an opportunity provided by Rightship and CBL Markets, we are pleased to report that we were able to offset these emissions through the purchase of verified carbon credits.
Although a small contribution to reducing our total impact, this is the first offset purchase by an Australian company in the global shipping space, and we continue to look for opportunities to work with our suppliers to bring change in new ways. Although present data collection systems do not currently allow us to calculate the amount of emissions avoided by our use of more efficient vessels, we continue to work with our suppliers to be able to calculate this in future years.
Case Study: In 2018, IPL continued to work with suppliers, customers and industry bodies to collect and recycle our fertiliser packaging through the Farm Waste Recovery initiative.
In any given year, over 80% of our fertiliser sales are bulk sales which require no packaging. However, approximately 15% of our fertilisers are transported to customers in one tonne FIBCs (Flexible Intermediate Bulk Containers) and 5% is sold in small packs. Prior to 2015, we used reusable FIBCs to reduce our packaging impacts. With the move to single trip plastic packaging, in order to improve customer safety and reduce the risk of potential spills to the environment, we worked with our fertiliser packaging suppliers, plastics reprocessing companies, 23 local councils, the Queensland Department of Environment and Heritage Protection, and ‘Farm Waste Recovery’, a subsidiary of the Australian agricultural industry body, AgStewardship, to establish the Sugar Cane Fertiliser Bag Recovery Trial. AgStewardship’s key objective is to support and develop Australian Agriculture’s environmental sustainability and stewardship, while the key objective met by the trial was to develop a sustainable model for the collection of fertiliser bags and the reuse of the recovered materials.
Due to its success, we are continuing to extend the bag collection and recycling program across eastern Australia during 2017 and 2018 through providing financial and promotional support to encourage growers to tie the bags in bundles and drop them at local council and private farm collection centres, where they are bailed for transportation to Brisbane for recycling.
Now in its third year, the Farm Waste Recovery program continues to grow, with 17% more plastics collected than last year and 60.3 percent more than the pilot year. In total, 2,3,41 tonnes of plastics have been collected for recycling since the program began. This amount includes all types of recyclable farm plastics, as well as our fertiliser bags. The success of this program demonstrates the commitment of our customers to a sustainable recycling option for our fertiliser packaging.
Not only was the volume of plastic collected in 2018 enough to make 2,201 park benches, it means tidier farms, less material going into landfill sites and less likelihood of the plastic packaging ending up in the environment.