KREATIZE’s Road to Ethical Manufacturing
In an increasingly opaque world, KREATIZE is doing all it can to provide hardware businesses with ethical machine capacities. Developing a carbon neutral and human rights preserving manufacturing and supply chain is a core pillar of KREATIZE.
There is no Planet B, and making the right human choices now is how we can help ensure a prosperous future for humanity. In the world of business, there is a lot of talk about what constitutes a good moral and ethical strategy for commerce. Many businesses claim to be doing a lot, but fail to be open about their plans, and results.
Consumers and clients are increasingly demanding of Environmental, Social and Governance (ESG) issues. In fact, some of the largest consulting groups (MckInsey & Co., EY and PwC) have reported that effective implementation of ESG policies can unlock value for businesses. This means that companies must not only execute ESG strategies, but also measure their success and share it transparently to both internal and external stakeholders.
Two Strategies One Goal
In order to establish transparency, we want to showcase the efforts KREATIZE is taking to become an ethical and ESG provider of manufacturing services. We will highlight our strategy and roadmap for creating a climate-neutral and human rights-compliant supply chain. Committing to and enforcing an ESG strategy is not an easy task. It takes a lot of time and discipline to develop something that spans business activities across the entire value chain. Rome was not built in a day and our ESG-compliant supply chain won’t be either. For us, sustainability is not perfection, but rather a process of working effectively and collaboratively toward ambitious goals.
KREATIZE®’s long-term orientation towards sustainability
In order to give proper attention and dedication to the above shown ESG verticals, we have prioritized our sustainability management efforts for 2022 into two respective pillars: The Environmental Pillar and the Supply Chain Governance Pillar.
We are tackling this pillar with a three step strategy: first to measure, second offset and finally reduce our Carbon footprint.
In the first quarter of 2022, we laid the foundation by conducting a comprehensive carbon footprint analysis of all our activities. This included an in-depth carbon emission analysis of all supply chain-related activities and all corporate activities.
The calculation for the supply chain-related emission is based on the “cradle-to-gate” approach, consisting of all relevant life cycle stages from the production of raw materials to product deliveries (see full list below). The usage phase and the end-of-life treatment of the products are excluded from this calculation. The following life cycle stages are taken into consideration:
- Extraction of raw materials and pre-products
- Transportation to production facility
- Manufacturing processes, including:
- Production technology
- Energy consumption
- Country-specific energy-mix
- Transportation to client
KREATIZE partnered with the climate consultancy ConClimate to properly tally the emissions from each individual process.
After our analysis and data gathering stage, we offset all the emitted CO2 emissions, thereby becoming a CO2 neutral cloud manufacturing platform. This was done through supporting a solar energy project in India. We took the selection of the initiative very seriously and consequently opted for a Gold Standard project. Additionally, every customer that ordered a custom made part via the KREATIZE cloud manufacturing platform in Q2 2022 received an individualized offsetting certificate with a tailored overview of their emitted and offset CO2 emissions. We have again worked closely with ConClimate to find the best offsetting projects.
Each sustainability strategy needs a roadmap and call-to-action plan to reduce CO2 emissions. Once we fully understand our corporate and supply chain emissions, we will deep-dive into the levers we can pull to set ambitious reduction targets. We will also further explore ways to reduce the CO2 in the services we offer, such as by providing access to green suppliers and offering guidance to our customers in selecting sustainable processes or materials.
Bottom line: We will measure and offset CO2 in Q1 & Q2 2022, and then work towards implementing reduction programs in Q3 2022.
Supply Chain Governance Pillar
Much like our Environmental approach, our due diligence strategy is also a 3-step process. At KREATIZE, we want to pioneer responsible behavior in our supply chain and meet the requirements of the German government’s Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetzes) in the near term. Our step-by-step approach is also in line with the German National Action Plan for Business and Human Rights.
The first step is to anchor the issue of sustainability and human rights (ESG) development at the core of our corporate strategy. This begins with the process of formulating a policy statement (Grundsatzerklärung) that will act as a guide for our internal and external stakeholders. It will convey the values of our corporate philosophy and indicate what our company and our employees stand for.
To formulate this, we will obtain professional assistance from the helpdesk of Business & Human Rights – an initiative of the German Agency for Economic Development. We will also benchmark our version with peer companies.
Once we have formulated our commitments, we will introduce a Supplier Code of Conduct (CoC), which will be signed by our suppliers and will become an integral part of existing supplier contracts. In essence, the CoC will form the interface between our sustainability values and the desired behavior of our suppliers. In order to ensure acceptance and impact we will start with a low requirements version for our suppliers, and then gradually increase the requirements over time to ensure adoption.
Once we have laid the foundation for a sustainable relationship with our suppliers, we will schedule ESG feedback sessions with each to gain a better understanding of their standards. The data obtained will then be collected, analyzed and used for further process optimization and ESG enforcement.
Bottom line: We will develop our strategy in Q1 2022, develop a supplier Code of Conduct in Q2 2022, and monitor the impact in Q3 & Q4 2022.
ESG should be a core strategy of any business, and at KREATIZE we are doing what we can to achieve this. Throughout the year, we will provide updates on our progress, celebrate some of the major milestones and share any of the challenges we face along the way.
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