Interview A.P. Moller Maersk on sustainability in logistics

Supply chains in particular are hugely complex. How did the sustainable procurement initiatives get started?

By creating a detailed implementation plan. We analyzed the goals for the next five years for our business sectors and put specific action plans in place for each of them. This  included developing an organizational structure that allows us to take an effective approach to the issue.

Getting the implementation phase off the ground involved a lot of paperwork. Gaining an overview of the status quo in a global organization was quite a challenge – it  involved things like checking supplier contracts, analyzing the structure of our pool of suppliers, and mapping country-specific requirements. The first thing we did with all  that information was to make sure we were fulfilling all the necessary compliance regulations and safety requirements. We’re just getting started on the next step, which is  about specific strategic issues – like reducing Scope 3 emissions in transport, actively improving safety conditions during loading operations, and implementing provisions for  human rights in developing countries – above and beyond statutory requirements. We’re working very closely with our suppliers during this phase.

Could you give us an insight into what’s involved in practical terms? Is your team having to work hard to get people on board with this?

Not really because, at the end of the day, we’re all in the same boat. I think there are hardly any companies that aren’t aware of the urgency of the situation right now. Some of  our core suppliers are major corporations and they now tend to have dedicated sustainability officers. So we and our suppliers share the same goals as a rule; we just have  different needs. Understanding them and responding appropriately is an important part of our transformation. Rather than everyone working to further their own interests as  quickly as possible, it’s about working with our suppliers to come up with the best solutions.

Some of our suppliers are still near the start of their sustainability journey and often don’t have the corresponding resources, so we’re supporting them in meeting statutory  requirements, developing targeted improvement plans, and setting objectives. But others have already made a lot of progress and are meeting or surpassing all the conditions  in our code of conduct, so we’re discussing options for further improvement with them. We’ve also adapted our total cost model to support this and added ESG criteria, so our  Category Managers have a basis for their negotiations.

But we need to be prepared to compromise as these negotiations often involve trade offs; sometimes more sustainability entails costs, while sometimes it’s the other way  round. We always try to set mutual goals with our suppliers so that we create win-win situations for both sides.

But does this mean you’ve significantly changed what you need from your team? How do make sure that all your employees are on board with you?

You need the backing of a strong management team. The clear message from our management is that sustainability is our top priority, but that doesn’t mean that the transformation as a whole will follow a top-down sequence. When we developed the strategy, it was very important to us that everyone had a say and was involved in the process, to make sure that sustainability also genuinely becomes an intrinsic part of our corporate culture. Stakeholder management is a crucial factor in our success and that includes ensuring that everyone has access to the strategy. Everyone needs to understand their individual role in the process and what needs to be done. Setting objectives and acknowledging when they are achieved underlines the importance we attach to the issue and ensures that everyone remains committed.