How purchasing was restructured at RBI to meet ESG objectives

Sourcing teams play an “essential” but “underappreciated” role in achieving the Sustainable Development Goals, one event said.

Paul Lacy-Smith, CPO at Restaurant Brands International (RBI), one of the world’s largest fast-food brand owners, described how the company restructured its supply function to achieve its sustainability goals, including the creation of two new positions dedicated to sustainable development in the supply chain.

Speaking at the CIPS Sustainable Sourcing Summit, Lacy-Smith said: “Procurement supply chain teams clearly play a critical and underappreciated role.

He explained that the RBI brand teams – which include Burger King, Tim Hortons and Popeyes – had previously made sustainability commitments independently without consulting the company’s wider sourcing team on feasibility. of these commitments, which has hampered their ability to meet targets and establish roadmaps.

He explained: “The big question here is, ‘In this process, where were the procurement and supply chains?’ They were nowhere. We were at the back of the queue, having to deal with commitments that were suddenly announced to us.

“It doesn’t matter to a certain extent if the commitment is in 2030 and in 2020. But the problem was that there were commitments due in 2021, and some of those that we didn’t even know when they were due. been taken.

“80% of our carbon footprint is in our supply chain. It would be a big deal if brands made commitments on planetary issues around climate without consulting procurement supply chain teams. It just wasn’t happening.

However, this presented an opportunity for the sourcing team to lead ESG objectives and place themselves at the center of the company’s sustainability strategy.

“It then gave us an opportunity, because it created a problem that we had to solve. We took leadership and responsibility and said, “We can’t make this happen for future engagements that are coming in 2023 or 2025. We said we needed a long-term strategy. term where supply is right in the middle”.

Here are the three steps taken by the RBI Sourcing team:

1) Take ownership

“The first thing we did was we took ownership of the process,” Lacy-Smith said.

He explained that RBI has introduced two dedicated supply chain sustainability managers in the procurement department to work alongside the CPO, dedicated to focusing on sustainability commitments and their impact on supply chains. supply, feasibility and prospect.

2) Restructuring

The new structure meant that all sustainability pledges had to go through the corporate procurement sustainability team before they could be signed by individual brands. This was a reversal of the previous corporate structure.

Lacy-Smith said: ‘Procurement then had to be consulted and there was no way the commitments could go through before they went through our team, and that team would have a feasibility assessment package that would come from brands. We would do the feasibility assessment and then we would come up with the recommendations, and only then would it go to the mark. »

He said commitments would not be signed until the procurement team made it clear that there was no risk to the business, it was commercially feasible and the scale of time of the engagement “made sense”.

3) Revise commitments in light of procurement feasibility

“The result of this process is that we had to revise 45% of our commitments and declarations before they were made public,” he said. “We didn’t just revise down or up, it was a mix of revisions, but we had to revise them to make sure they were achievable and relevant.”

He said: “You need to develop really, really deep expertise in this area and integrate the role of sustainability and supply chain or procurement managers on a day-to-day basis.”

The success of this structure has been key to how the supply chain sustainability team has become a “true center of expertise”.

“They knew everything there was to know about the associated risks and the supply chain, every commitment for every category. They might say, “Is this commitment feasible compared to our competitors? Where do we need to be compared to our competitors in this area? Is it doable with investors? Is it doable from what they say? Is it doable with NGOs?’ »

Want to stay up to date with the news? Sign up for our daily newsletter.

Back To Top