Companies ... Ball
Product ... Beverage Containers

Ball is a major beverage container manufacturer ... about sustainability

Burgess COMMENTARY

Peter Burgess

Around the globe, more than 10,000 companies supply goods and services to Ball Corporation. Roughly 90 percent of our supply chain partners worldwide support our packaging businesses. The remaining suppliers and subcontractors serve our aerospace business. The top 100 suppliers represent the majority of money we spend, primarily in three categories: aluminum, steel and coatings. The supply chains for these categories are very complex, global and diverse.

Ninety percent of our global sourcing volume comes from countries within the Organisation for Economic Cooperation and Development (OECD), an international organization promoting policies that improve the economic and social well-being of people around the world. Global supply chains continue to grow and expand, so we will likely purchase more goods from countries outside of the OECD in the future. While we will strive to require suppliers from these countries to comply with our standards, ensuring their compliance might pose additional challenges.

STRATEGIC AND RESPONSIBLE SOURCING

We utilize strategic, rather than tactical, sourcing and have developed stable and proven relationships with the majority of our suppliers over the past decades. Crucial to building sustainable supply chains, these long-lasting partnerships enable us to discuss our sustainability-related expectations with suppliers and to collaborate successfully on new technologies, product innovations and recycling programs.

Most metal and some coating suppliers are significantly larger than Ball, and their business activities can result in major environmental and social impacts. Mining, for example, is associated with safety, biodiversity and human rights issues. Metal smelting, casting and rolling requires vast amounts of energy, which releases significant greenhouse gas emissions.

Based on the results of intensive research, including life cycle assessments, that Ball conducted with industry partners in the U.S. and Europe, we know that most of metal packaging's environmental impacts occur during metal production. Also, the biggest risks and opportunities with respect to social issues such as employment practices, conflict minerals and safety occur in the upstream stages of our supply chain.

Due to the scale of their impact and risk exposure, many of our metal and coating suppliers established formal sustainability programs prior to 2000. Eighty-nine percent of our global metal suppliers, for example, published environmental and social metrics in formal sustainability reports or on their websites in 2013.

In line with our global sourcing strategy, our supply chain sustainability efforts help us to:

Utilize lean supply chains that support our Drive for 10 and sustainability strategies

Create shared value and reduce risk for our business and relevant stakeholders, including customers, suppliers and shareholders

Build sourcing solutions in line with stakeholder expectations

Enhance our products' sustainability profile

SUPPLIER COLLABORATION

Exchanging information and ideas on sustainability issues with our suppliers is critical to improve the performance of our products. To lightweight our metal containers, for example, we must collaborate with our metal suppliers to develop a material that allows us to minimize the weight of the containers while maintaining their integrity. This exchange of ideas creates opportunities for Ball and our supply chain stakeholders to invest in research and development of lighter, yet structurally sound, containers and to reduce the environmental footprint of our products.

Because we can achieve only so much as one company, we align our efforts with business partners inside and outside of the packaging industry and with certain trade associations, including those for aluminum and steel. By encouraging the exchange of ideas and capabilities, we will be able to deliver more sustainable products to our customers and consumers. We also engage in various cross-industry collaboration platforms (see 'Supply Chain in Action' below) to develop and implement common sustainability standards, and to combine different stakeholders' resources and expertise to achieve common goals like increasing metal packaging recycling rates.

Recycling is another important area where we collaborate with our supply chain.

In 2013, Ball joined the Aluminium Stewardship Initiative (ASI). ASI's objective is to develop a standard to foster responsible environmental, social and governance principles and performance throughout the aluminum value chain. The standard will apply to all aluminum value chain stages, from bauxite mining to smelting, material conversion, consumer/commercial goods suppliers and recycling. It addresses critical industry issues, including energy and greenhouse gas emissions, waste management, biodiversity and land management, pollution, resource efficiency, recycling, labor rights, indigenous rights and transparency.

The International Union for Conservation of Nature (IUCN) coordinates the ASI standard-setting process, which is based on public multi-stakeholder consultations. The Standard Setting Group is comprised of ASI member companies and 13 non-industry organizations with expertise in various environmental, social and governance issues, including the World Wide Fund for Nature (WWF) and Social Accountability International.

In 2013, Ball joined the Aluminium Stewardship Initiative (ASI). ASI's objective is to develop a standard to foster responsible environmental, social and governance principles and performance throughout the aluminum value chain. The standard will apply to all aluminum value chain stages, from bauxite mining to smelting, material conversion, consumer/commercial goods suppliers and recycling. It addresses critical industry issues, including energy and greenhouse gas emissions, waste management, biodiversity and land management, pollution, resource efficiency, recycling, labor rights, indigenous rights and transparency.

The International Union for Conservation of Nature (IUCN) coordinates the ASI standard-setting process, which is based on public multi-stakeholder consultations. The Standard Setting Group is comprised of ASI member companies and 13 non-industry organizations with expertise in various environmental, social and governance issues, including the World Wide Fund for Nature (WWF) and Social Accountability International.

Supply Chain in Action

SUPPLIER DIVERSITY

In 2013, Ball's North American packaging businesses spent $79.2 million with minority- and women-owned businesses (MWBE), an increase of 8.5 percent over the previous year. The majority of our MWBE suppliers are information technology, logistics, industrial, facility service or maintenance and repair companies. Because of the nature of our business and the fact that aluminum, steel and metal coatings are our greatest material costs, reaching $79.2 million is a significant achievement.

Nevertheless, we are working toward further increasing our MWBE spend in the future.