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Shaping the future together:
we aim for a sustainable supply chain
We can build a better world by sharing values and cooperating on the basis of trust. The same applies to Green Management. For greater synergy, Samsung Electronics practices Green Management with its suppliers – our strategic partners. We provide the budget and workforce needed for our suppliers to pursue Green Management meeting international standards, and we provide education to help their employees recognize the importance of environmental issues. This is because the full potential of Green Management can only be realized when everyone participates.
Sustainable Supply Chain Management Strategies
Samsung Electronics has an enormous supply chain consisting of some 2500 suppliers around the world. Some of them supply raw materials or components while others provide equipment, but all of them are indispensable. We are aware that if all of these suppliers took part in Green Management there would be a wider ripple effect, so we provide technical and economic support to our suppliers and assign consultants to them. By doing so, we encourage them to actively transition to Green Management and we build a sustainable supply chain. In addition, when choosing new suppliers, we conduct an environmental management assessment through our in-house certification program, the Eco-Partner scheme. A final decision is made after this evaluation, which reviews a candidate’s environmental values, their willingness to engage in eco-friendly production, and the degree to which the prospective partner has put these values into practice.
We are implementing the Eco-Partner certification
system to closely manage the supply chain
All suppliers that provide products or components to be sold by Samsung Electronics are subject to the Eco-Partner certification. We grant certification by assessing their compliance with our Standards for Control of Substances Used in Products and the suppliers’ environmental quality management system. Suppliers submit a product environmental report containing proof of their hazardous substances information, along with data from the raw materials company. Samsung Electronics then makes a thorough assessment by visiting the suppliers’ manufacturing sites to verify the submitted documents. To maintain the Eco-Partner certification, suppliers must be audited every two years, and those that fail to pass the audit are excluded from the supply chain. In these ways, we are striving to incorporate our suppliers in our Green Management initiatives. Rather than a one-time assessment, we provide continuous management and evaluation to ensure sustainable supply chain management.
The comprehensive supplier evaluation is held annually to strengthen the competitiveness of our suppliers. This evaluation is categorized into two areas, namely, business competitiveness and sustainability risks. The category of sustainability risks, which covers the environmental sector, evaluates the partner’s efforts in eco-friendly management and its certification status vis-a-vis international environmental standards. Suppliers with better assessment results will be given more opportunities and benefits while suppliers who fall behind will have to take responsibility for their shortfalls. This means suppliers that wish to work with Samsung Electronics need to be mindful not only of their business but also of the environment. If a supplier is categorized as high-risk due to low performance in the environmental sector, we manage that supplier separately and continuously follow up to see if it is making progress on the specified improvement agenda. Notably, starting in 2016, the environmental consultant support programs provided to major suppliers were expanded to secondary and tertiary suppliers to pursue a more integrated and sustainable supply chain.
With the efforts of suppliers to reduce greenhouse gas emissions, we produced the effect of planting one million pine trees
Once a year, Samsung Electronics surveys all of our suppliers’ energy consumption, including electricity and fossil fuels, and greenhouse gas emissions. In the process, we provide on-site consulting for suppliers that fail to manage energy efficiently. This consulting helps make their energy consumption more efficient or helps them conserve energy by improving their processes and providing necessary equipment. In 2016, we gave 10 suppliers 62 tasks for reducing energy consumption and greenhouse gas emissions and provided the resources necessary to address the problems. As a result, CO2 emissions were reduced by about 4920 tons. Considering that one pine tree absorbs about 5 kg of CO2 a year, this is equivalent to planting about one million pine trees.
Chemtronics Case Proves That What Benefits the Environment Benefits the Business
Chemtronics is a chemicals supplier. When we checked the company’s energy consumption for our energy efficiency assessment, we found that Chemtronics was highly dependent on electricity: 95% electricity and 5% LPG, to be precise. Samsung Electronics examined the condition of the company’s equipment. We found that there was a power loss in the air compressor, and that the desiccant air dryer consumed a lot of electricity. We started with simple tasks such as installing high-efficiency LED lights and also made improvements to complicated equipment that was causing a loss of power. Moreover, we installed a control system on the desiccant air dryer to prevent power waste by maintaining a constant humidity and temperature, thus reducing electricity consumption. After these improvements, we conducted an economic analysis of the investment in five aspects: the amount and rate by which power consumption was reduced, the amount of costs saved, the size of the investment, and the payback period. We also measured the size of the greenhouse gas reductions to verify their contribution to the environment. As a result, Chemtronics witnessed not only a significant boost to its energy efficiency, leading to cost reductions, but also a fall in greenhouse gas emissions totaling 432.9TOE.