BRM Foundations – Operations & Logistics

Higg BRM Foundations How to Higg Guide

Scope of this section

This section will cover the environmental management of business operations: offices, transportation and distribution centers

The Operations & Logistics section is intended to outline the best environmental practices companies can adopt in the operations of their offices, transportation and distribution centers.

We recognize that many companies do not directly own or operate their office buildings, transportation fleets or distribution centers, but rather lease or contract these services through others (landlord and third-party logistics providers). In those situations, these questions in this section still apply as the program can focus on partnering with these stakeholders to meet environmental goals. While you may not directly control the environmental outcomes, your company can still attempt to work with your landlord and logistics providers towards environmental improvements through sustainable procurement.

Environment

Offices

The scope of this section covers both owned and leased offices or buildings.

Intent of the question
This question builds on from question 3 in the Management System section by evaluating how your company is addressing the environmental risks in your corporate offices that were identified as part of your risk assessment process.

While it is possible to make progress in advancing sustainability without a formal program in place, establishing such a program enables a company to coordinate its efforts more effectively and realize continuous improvement over an extended period of time.

Technical Guidance

Environmental Performance Program – Includes formal policies, strategies, contracts or action plans to improve the environmental performance of the company’s office buildings.

Other stages of office operations – The stages of office design, construction, remodel/retrofit and closing should be included in the program if it has been determined to be a salient impact as a result of your environmental impact assessment

Answer options

  • To answer ‘yes’ to this question, more than 75% of corporate offices are enrolled in the company’s environmental program
  • To answer ‘partial yes’ to this question, 25% to 75% of corporate offices are enrolled in the company’s environmental program
  • To answer ‘no’ to this question, less than 25% of corporate offices are enrolled in the company’s environmental program

Transportation

Please select the percentages of inbound transportation methods that you have documented:

  • Air Freight – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Rail – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Road – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Sea – Yes (>75%), Partial Yes (25-75%), No (<25%), NA

Intent of the question
This question is intended to assess whether your company has visibility and control of your inbound transportation flows and subsequently knows the vendors of your products. This information is needed to build an understanding of the potential environmental impacts and risks associated with how the products are being transported. Knowing the transportation flows and identity of your vendors can help you to begin identifying their risks and impacts and building relationships with them to improve their site-level performance.

In this article, the U.S. Environmental Protection Agency has explained why freight matters to supply chain sustainability.

Technical Guidance

Inbound transportation refers to the transport, storage, and delivery of goods coming into a business. The inbound side concerns the relationship between companies and their suppliers. Example: the transportation of commercial products between the factory and distribution centers of the brand and retailer.

Definitions of Transportation Modes

  • Airfreight – the carriage of goods by aircraft.
  • Rail – the carriage of goods by the use of railroads and trains.
  • Road – the carriage of goods by the use of roads through motorized and non-motorized carriages and trucks.
  • Sea – the carriage of goods by sea, consolidated in containers on ships.

Answer options

  • To answer ‘yes’ to this question, over 75% of the inbound product transportation has been documented.
  • To answer ‘partial yes’ to this question, 25% to 75% of the inbound product transportation has been documented.
  • To answer ‘no’ to this question, less than 25% of the inbound product transportation has been documented.
  • To answer ‘NA’ to this question, that specific transportation mode it not used by your company

Helpful Resource

Please select the percentages of outbound transportation methods that you have documented:

  • Air Freight – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Rail – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Road – Yes (>75%), Partial Yes (25-75%), No (<25%), NA
  • Sea – Yes (>75%), Partial Yes (25-75%), No (<25%), NA

Intent of the question
The guidance of this question is the same as the previous one, with the exception that it is intended to assess whether your company has visibility and control of your outbound transportation flows.

Technical Guidance

Outbound transportation refers to the transport of goods going out of a business, e-commerce included. The outbound side concerns the relationship between companies and their customers. Example: the transportation of commercial products between the distribution centers to the retail store and/or customers.

How this will be verified

Documentation required

  • Relevant documentation or IT system that captures your total outbound product transportation flows, either by weight or by volume, in the .  Documentation that can be used includes: packing lists, invoices, online monitoring system provided by transportation vendors or your own internal documentation through Excel or other systems. 
  • Description of the process used by your company to document outbound transportation flows.
  • Explanation of the relevant staff resources and their roles and responsibilities as part of the aforementioned process.

Intent of the question
This question is designed to encourage companies to collaborate with their suppliers and logistics providers (if applicable), and to choose the most efficient transportation modes for their inbound shipments that reduces GHG emissions.

Technical Guidance

Inbound transportation flows were explained earlier as part of question 6. How to work with your suppliers and transportation partners

Working on the most environmentally efficient form of shipment not only supports the environment in reducing greenhouse gas emissions, it also makes sense from an economic (cost) perspective.

When engaging with suppliers

Companies should build and allow for sufficient shipping timelines to ensure that the most environmentally efficient form of shipment (ocean or rail) is being utilized. This can be standardized through shipping/shipment policy, via business agreements, or through a buying calendar.

  • Shipping/shipment policy which specifies important details about how you ship your goods and the transit time associated with it.
  • Buying calendar (a calendar that combines buy dates with shipping dates). This calendar can be used to determine delivery schedules by taking into consideration loading, and pick and pack dates, in order for products to be delivered to stores as per agreed upon delivery schedule.

Note: The Higg BRM has included guidance in the Brand – Social & Labor section around Responsible Purchasing Practices to ensure that brands do not make last minute changes or order cancellations which could cause or contribute to adverse impacts for their supply chain partners. Please refer to the guidance in that section to ensure you are a collaborative partner to suppliers.

When engaging with transportation logistics providers

  • Discuss with them your current and future requirements on incorporating sustainability in the evaluation of your transportation activities and logistics providers.
  • Gain an understanding from your logistics providers on their current and future ambitions when it comes to embedding sustainability into their transportation activities. For example, questions could include: does the company have a sustainability report; to what extent are they using/planning for alternative fuels for their fleets; are they using environmental certification programs: do they participate in CO2 compensation schemes; or are they taking part in an industry initiative that helps measure and reduce GHG emissions in the transportation sector?
  • Support or invest in logistics providers (either with your time or financially) towards their development and implementation of action plans to improve the environmental sustainability of their transportation activities.

Answer options

  • To answer ‘yes’ to this question, your company has collaborated with your suppliers and/or logistics providers on the implementation of action plans (for using the most efficient and environmentally friendly shipment methods).
  • To answer ‘partial yes’ to this question, you can demonstrate that your suppliers and/or logistics providers have provided information to your company on how they have measured their environmental impact (GHG emissions) and subsequently have been able to reduce their GHG emissions through reduction plans and/or compensation for the CO2

Helpful Resources

  • We highly recommend the free resources from two organizations that support companies in transitioning towards sustainable freight procurement:
  • Companies that have developed online platforms/technology to help companies consolidate and optimize global freight shipments are: Flexport, Echo Global Logistics, Crane Worldwide Logistics. Kindly note that this is not an endorsement of these companies and is only intended to point companies to resources they can research further. The Higg BRM will be updating guidance on an annual basis based on user feedback.

Intent of the question
This question is designed to encourage companies to collaborate with their distribution centers and logistics providers, and to choose the most efficient transportation modes for their outbound shipments to reduce GHG emissions.

Technical Guidance

When engaging with your distribution centers (DCs)

  • Ensure that your owned or contracted DC’s are informed of your sustainability ambitions or strategy on outbound product transportation and how this relates to shipment policies.
  • Ask about the current setup of the DCs to understand level of their optimization concerning GHG emissions reduction.
  • Gain an understanding from the DCs of how they could support the optimizing and/or lowering of environmental impact on outbound shipments from the DCs.

When engaging with logistics providers

Please review the guidance of the previous question.

Answer options

  • To answer ‘yes’ to this question, the company must participate in at least one relative initiative and provide evidence in support of participation.

Helpful Resources

Online platforms such as Qui Cargo and Transfix are working towards better utilization of empty trucks and minimizing wasted miles. Kindly note that this is not an endorsement for these companies but is intended to point companies to resources they can research further. The Higg BRM will be updating guidance on an annual basis based on user feedback.

Distribution Centers

Many companies do not directly own or operate their distribution centers, but work with third party logistics providers. In those situations, these questions still apply as the program can focus on partnering with these providers to meet environmental goals. It’s important to note that while you may not directly control the environmental outcomes in a distribution center owned by the third party provider, your company can still attempt to work with them towards environmental improvements.

Intent of the question
This question builds on from question 3 in the Management System section by evaluating how your company is addressing the environmental risks in your distribution center operations that were identified as part of your risk assessment process.

While it is possible to make progress in advancing sustainability without a formal program in place, establishing such a program enables a company to coordinate its efforts more effectively and realize continuous improvement over an extended period of time.

Technical Guidance

 Environmental Performance Program – Includes formal policies, strategies, contracts or action plans to improve the environmental performance of the company’s distribution centers.

Other stages of distribution center operations – The stages of distribution center design, construction, remodel/retrofit and closing should be included in the program if it has been determined to be a salient impact as a result of your environmental impact assessment.

Answer options

  • To answer ‘yes’ to this question, >75% of your distribution centers are enrolled in your company’s environmental program
  • To answer ‘partial yes’ to this question, 25-75% of the distribution centers are enrolled in your company’s environmental program
  • To answer ‘no’ to this question, less than 25% of the distribution centers are enrolled in your company’s environmental program

Social & Labor

Employees are a company’s most valuable asset; they champion your business and determine the success or failure of it. It is important for you to treat your employees with the value they contribute, as the work they do determines your company’s success with customers and partners.

In this section we will be focusing on the working conditions for employees across your offices, transportation and distribution center operations.

Scope of this section

The Operations & Logistics section is intended to outline the best social & labor practices companies can adopt in the operations of their offices, transportation and distribution centers.

We recognize that many companies contract the services associated with transportation and distribution centers through third-party logistics providers.

Questions in this section still apply as the program can focus on partnering with these providers to ensure social/human rights goals are met for their workforce. While you may not directly control the outcomes, your company can still attempt to work with these third-party logistics providers towards social & labor improvements through sustainable procurement.

Data Collection

The topics covered in this section are specific to your offices, transportation and distribution centers workforce an involve a broad range of topics related to your company’s corporate social responsibility associated with the operations of the sites that you own, operate or lease. Staff that should be consulted are responsible for Human Resource and/or managing offices/logistics providers/distribution centers operations.

Offices

Intent of the question
This question intends to confirm that your company has a process for integrating human resource management and labor law compliance across all of your office operations (including any contracted employment or labor agencies).

Technical Guidance

Companies are responsible for ensuring all of their owned and operated sites (including corporate offices) are meeting labor rights compliance. Monitoring of this compliance ensures the office operations reflect jointly shared values and fulfills the commitment of your organization to the office employees.

Staff responsible for human resources (HR) should implement an integrated process to ensure compliance to local labor laws (as part of the Human Resource Policy) is applied consistently across all business operations, including offices.

Process and procedures are needed to ensure alignment with the company’s social/human rights policy. A forward looking process addresses how the company intends to stay up to date on the changing legal landscape and how remediation or preventative efforts will be taken when non-compliance has been found in office operations.

  • To answer ‘yes’ to this question, your company has implemented a process to ensure corporate offices are in compliance with local labor law.
  • To answer ‘partial yes’ to this question, your company is developing a process to ensure corporate offices are in compliance with local labor law.
  • To answer ‘no’ to this question, your company does not have a process in place to ensure corporate offices are in compliance with local labor law.

It is recommended that your company consult with legal counsel(s) in the different geographies you operate in, to ensure your corporates offices are in compliance with local labor law.

How this will be verified

Documentation required

  • Description of the labor violations
  • Where a citation for non-compliance exists, the company can demonstrate that it has rectified the non-compliance (e.g. corrective action plan).

Transportation

Intent of the question
Integration of social/human rights in the transportation operations may be a complex process that involves several organizational levels in different parts of the world. This question intends to ensure that social/human rights compliance terms are captured in procurement / business contracts with logistics providers that your company directly contracts.

Technical Guidance

It is important for companies to align human rights policies with contractual mechanisms to ensure social/human rights compliance of their logistics providers. A company may provide social/human rights training to strengthen this awareness amongst business partners.

Helpful Resources

How this will be verified

Documentation required

  • A copy of the procurement or business contract for contractors and/or vendors of transportation services that include social/human rights compliance terms 
  • Description of the process to ensure that contractors and vendors are in compliance of social/human rights terms and how often monitoring is conducted.

Intent of the question
This question intends to confirm that your company has a process for integrating human resource management and labor law compliance across all of their transportation operations (including any contracted employment or labor agencies).

Technical Guidance

Staff responsible for human resources (HR) should implement an integrated process to ensure compliance to local labor laws (as part of the Human Resource Policy) is applied consistently across all business operations, including transportation.

Process and procedures are needed to ensure alignment with the company’s social/human rights policy. A forward-looking process addresses how the company intends to stay up to date on the changing legal landscape and how remediation or preventative efforts will be taken when non-compliance has been found in transportation operations.

Answer Options

  • To answer ‘yes’ to this question, your company has implemented a process to ensure transportation operations are in compliance with local labor law.
  • To answer ‘partial yes’ to this question, we are developing a process to ensure transportation operations are in compliance with local labor law.
  • To answer ‘no’ to this question, your company does not have a process in place to ensure compliance.

Helpful Resources

Distribution Centers

Intent of the question
Integration of social/human rights in the distribution centers operations may be a complex process that involves several organizational levels in different parts of the world. This question intends to ensure that social/human rights compliance terms are captured in procurement / business contracts with contractors and/or vendors.

Technical Guidance

It is important for companies to align human rights policies with contractual mechanisms to ensure social/human rights compliance of contractors and/or vendors. A company may provide social/human rights training to strengthen this awareness amongst business partners.

Helpful Resources

How this will be verified

Documentation required

  • A copy of the procurement or business contract for contractors and/or vendors of distribution centers that include social/human rights compliance terms. 
  • Description of the process to ensure that contractors and vendors are in compliance of social/human rights terms and how often monitoring is conducted.

Intent of the question
This question intends to confirm that your company has a process for integrating human resource management and labor law compliance across all of their distribution centers operations (including any contracted employment or labor agencies).

Technical Guidance

Staff responsible for human resources (HR) should implement an integrated process to ensure compliance to local labor laws (as part of the Human Resource Policy) is applied consistently across all business operations, including stores.

Process and procedures are needed to ensure alignment with the company’s social/human rights policy. A forward-looking process addresses how the company intends to stay up to date on the changing legal landscape and how remediation or preventative efforts will be taken when non-compliance has been found in stores.

  • To answer ‘yes’ to this question, your company has implemented a process to ensure distribution centers are in compliance with local labor law.
  • To answer ‘partial yes’ to this question, we are developing a process to ensure distribution centers are in compliance with local labor law.
  • To answer ‘no’ to this question, your company does not have a process in place to ensure compliance.

Helpful Resources

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