03 June 2011 18:38 [Source: ICB]
A growing number of distributors are taking environmental issues into their own hands
A growing number of distributors are taking environmental issues into their own hands
Sustainability has become an effective way of doing business. "The most successful sustainability initiatives among distributors are those which are profitable," says Peter Newport, director of the UK's Chemical Business Association, which represents around 100 distributors in the country.
For chemical distributors, the key issue is not so much whether to adhere to sustainability principles, but to which ones they should give preference in certain markets. Supply chains such as those of cosmetics, healthcare and food have different priorities than, for example, those of chemicals and coatings.
Also, different types of distributors have to focus more on sustainability requirements than others. Office-based distributors, which outsource all their storage and transport operations, will tend to focus less on sustainability than the full-service distributor, which runs its own storage, blending, packaging and transport operations.
The larger distributors with activities in warehousing, manufacturing and transport have been drawing up coherent, long-term strategies so that they can work within a framework policy rather than taking ad hoc measures.
Univar, one of Europe's largest chemical distributors, has branded its sustainability strategy under the name U+stainability. It sees this as giving a clear demonstration of its commitment to being a company that customers and suppliers can rely on.
"As a chemicals marketing and distribution business, we have an important role in the supply chain," says Phil Hockaday, Univar's director for safety, health environment and quality for Europe, the Middle East and Africa.
"This gives us the opportunity and responsibility to make a real difference, both in terms of our own business practices but also in ensuring a coherent and effective sustainability strategy can exist all the way through the value chain," he continues.
"Our suppliers and our customers invest significant resources into developing sustainability strategies and the ability of a distributor to form a meaningful and constructive link in this chain through serious commitment to product stewardship is becoming one of the most important differentiators in our industry."
Sustainability policies can also be determined by the closeness of relationships between suppliers and distributors. Suppliers with tight links with distributors will tend to influence their strategies on health, safety and the environment.
"These relationships can differ considerably," says Newport. "In some cases, the distributor is just another customer to the chemicals manufacturer. In other cases, the two are much more closely tied together. It is more like a partnership in which the manufacturer may demand from the distributors certain ways of doing things."
Some suppliers regularly check the health, safety and environmental practices of closely linked distributors and put forward suggestions for improvements.
For distributors, the main means of showing commitment to sustainability is by signing up to the chemical industry's Responsible Care program. The performance of distributors under the program is also regularly monitored by the European Association of Chemical Distributors (Fecc) and by national chemical distributor associations.
Responsible Care covers environmental and safety practices in the six areas of product responsibility, plant safety, occupational safety and health, comprehensive environmental protection, transport safety and dissemination of information to the public.
Within Responsible Care is the concept of product stewardship, under which supplier, distributor and user take joint responsibility for the safety and environmental aspects of a product through the supply chain and its life cycle.
Around 40% of distributors who are Fecc members are signed up to Responsible Care, according to the latest survey on the program, published jointly by the association and the International Council of Chemical Trade Associations (ICCTA), the global body representing distributors. This compares with an average of 55% committed to Responsible Care within the ICCTA membership as a whole.
After a slight increase to 42% in 2008, the proportion among Fecc members fell back to the same level in 2009 as it was in 2007, which compared with 43% in 2005. In absolute numbers, the 416 distributors in Europe belonging to Responsible Care represented a drop of 66, or 14%, since 2005, but this was mainly due to industry consolidation.
Fecc and ICCTA concluded that the latest survey showed that there had been "no progress with the implementation of Responsible Care in Europe."
The figures have, in fact, been boosted by a commitment to Responsible Care being compulsory for members of the national distribution associations in the UK, Netherlands and Ireland. Elsewhere, it was 72% in Sweden, 62% in Germany and 59% in France, while in Denmark it was only 19% and in Austria 1%.
Distributors are also making greater efforts to extend the principles behind Responsible Care to the logistical services companies to which they contract activities such as storage, blending, packaging and transport.
The CBA has 20 members that are logistics services companies. They have to sign up to Responsible Care under CBA rules. In other national associations, Responsible Care membership is confined only to chemical distributors, some of whom strive instead to improve safety, health and environmental (SHE) standards voluntarily among their contractors.
Some distributors have drawn up clear strategies to improve not only their own sustainability performances, but also those of companies they deal with. VWR International, a company specializing in distribution of laboratory products, states that its continuous improvement policy includes working with suppliers, contractors and customers to help improve their own performances in environment, health, safety and security.
There has been a rise in the number of distributors adopting at least one International Organization for Standardization (ISO) standard, mainly ISO 9001 on quality management systems. But there seem to be more distributors adopting standards for specific markets - such as ISO 14001 on environmental management, which is demanded by the automobile sector.
"There are a number of markets - like in the food and feed sectors - which require the adoption of specific standards in order to meet our customers' high expectations," says Wilfried Rattay, global quality manager at Ter Hell of Hamburg, Germany.
In addition to having an ISO 9001 and Responsible Care compliance certificate, his company also adheres to the food safety standard of Hazard Analysis and Critical Control Points (HACCP) and to FAMI-QS for safety of specialty feed ingredients and mixtures, and is signed up to QS Hanseatic, an international standards certification organization.
Multisol, a UK solvents distributors, has become the first chemical company to adopt the British Standards Institute's (BSI's) PAS99 standard for integrated management systems, ensuring that all its individual accredited management systems work in unison and operate properly in ensuring safe working practices.
Some companies operate their own internal certification systems, using external auditors to ensure their sites maintain standards. Univar, for example, has a certification scheme for its European sites, called U+.
"U+ is a stringent, goal-based internal certification applied to each site in order to help continually improve safety, health, environment and quality standards," explains Hockaday. "By aiming to ensure our sites exceed industry requirements, the program has helped cut the overall Lost Time Incidence Rate by 60% over four years, as well as increase the number of ISO certifications awarded."
By switching to a variety of certification schemes, the chemical distribution sector is introducing a culture of accountability that goes well beyond that demanded by regulation. Above all, it is what suppliers and customers want to see their distributors doing.
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