SUSTAINABLE SUPPLY CHAINS
SABIC aspires to be recognized globally as a chemical industry’s leader in sustainable supply chains. Not only does this help our company perform better, reducing costs and improving efficiencies, it also drives our desire to innovate and deliver value to customers, the communities where we operate, and the environment.
ASSESSING LOGISTICS SERVICE PROVIDERS
We continually raise the bar on what it means to create a sustainable supply chain. One of the ways we do this is by driving home our commitment to sustainability among logistics service providers.
To this end, we have revamped our approach to assessing and selecting logistics service providers to more deeply integrate sustainability.
As a committed user of tools such as the Safety and Quality Assessment for Sustainability (SQAS), Gulf SQAS, Chemical Road Transport Safety System (CRSAS), and the Chemical Distribution Institute (CDI) scheme, SABIC provides expertise on questionnaires and assessor training, and our representatives serve on the technical and executive committees of these initiatives. In the past, these tools have focused on traditional supply chain safety. We are expanding the criteria to include more sustainability initiatives, including ethical requirements, Operation Clean Sweep to prevent plastic pellet spills, and incident insights.
SABIC requires that every supplier agrees to our Supplier Code of Conduct. We have achieved 100 percent compliance with our Supplier Code of Conduct for all new suppliers and now report those numbers in our procurement data.
SAFETY AND QUALITY ASSESSMENT SYSTEM
SABIC uses the Safety and Quality Assessment System (SQAS), among other schemes, to help identify performance gaps and areas for improvement among logistics service providers, identifying the best performers.
In recent years, SQAS representatives worked closely with industry stakeholders, including SABIC, to enhance the scheme with more robust sustainability and corporate social responsibility criteria. We are pleased with this development, which aligns with SABIC’s long-term emphasis on environmental and social-responsibility performance.
This year, 100 percent of our liquid goods carriers in Europe, the Middle East, and China – including those who carry non-dangerous liquid goods – have been assessed according to SQAS.
In our solids-transport operations, which all transport non-dangerous goods, we have assessed 91 percent of those chartered in China, the Middle East, and in Europe using SQAS protocols. Among these carriers, we assessed all bulk carriers.
Chemical Road Transport Safety Assessment System
This year, SABIC transitioned from using the Road SQAS scheme in China to the Chemical Road Transport Safety System (CRSAS). Challenges and performance gaps in local markets vary, so applying this scheme in China enabled us to fulfill our Responsible Care charter in land transportation in China, while meeting our global SQAS sustainability KPI.
The development of CRSAS began in 2015 to promote the safe, efficient road transportation of dangerous goods through the Chinese logistics industry.
By the end of 2018, 17 chemical companies had signed on to CRSAS.
SQAS for Liquids and Solids
SQAS by region for Liquids and Solids
CHEMICAL DISTRIBUTION INSTITUTE
SABIC uses the Chemical Distribution Institute (CDI) scheme to ensure that maritime logistics service providers are meeting industry expectations for safety, security, and quality performance when it comes to chemical transportation and storage.
Today, CDI has 64 chemical-company members, with almost 1,000 ship operators registered in the CDI-Marine scheme. In a one-year period, around 2,400 inspections are conducted by over 100 globally located CDI accredited inspectors, resulting in over 2,000 active CDI Marine inspection reports in the database at any one time.
Since its inception in 1994, this scheme has evolved and grown, aligning more closely with sustainability and transparency objectives.
ADDRESSING PLASTIC IMPACTS THROUGH OPERATION CLEAN SWEEP
The Plastics Industry Association and the American Chemical Council launched Operation Clean Sweep® to encourage industries that handle plastic resins to prevent plastics from entering the world’s streams, waterways, and oceans.
Having initially committed in Europe since 2015, this year we started to roll out Operation Clean Sweep across all of our global facilities. In 2019, we will formally include this commitment for all relevant operations as part of a new SABIC-wide water-management standard. In our supply chain, we are implementing the program, and helping it to expand beyond Europe through engagement with logistics service providers.
SABIC reports, analyzes, and tracks incidents across our supply chain. We use our Supply Chain Incident Reporting KPI to measure safety performance.
We aim to identify the root cause of every incident so that we can understand how to avoid similar incidents in the future. We have an ambitious multi-year target to achieve either a 10 percent improvement over the average of the past three years or a 10 percent improvement over the previous year’s target, whichever is lower.
Our incident rate this year shows a 77 percent improvement over our three-year performance average. Based on this, our reduction target for 2019 is 50 percent.