Methodology

1.1 Identify the parts of the business to include in the scope of your EP&L. Kering focused on its largest brands first and chose key projects covering as many units as possible along the supply chain.
1.2 Separate the supply chain into Tiers, working backward from operations and sales to raw materials’ production. This approach will structure the measurement and analysis of the impacts in an EP&L.

Tier 0: Direct operations (offices, transportation, warehousing, and stores).
Tier 1: Final assembly of the finished product (handbag, clothing, jewelry, etc.).
Tier 2: Production of items needed to assemble the finished product (fabric, buttons, shoe heels, etc.).
Tier 3: Processing of raw materials so they can be used in our workshops (leather, thread, gold, etc.).
Tier 4: Production of raw materials (farming, mining, extraction, etc.).

What we have learned
By starting with the largest units in your company, you will benefit from what you have learned in this first phase for the assessment of the other units.

2.1 Outline the production process for each product, from the production of raw materials to product assembly. 
2.2 Identify suppliers. 
2.3 Collect data on the activities performed for the brand.

To measure the impacts in these steps, it is helpful to clearly diagram all the interconnected processes within the supply chain. With an overview of the activity this provides, it will be possible to determine where and how action can be taken to make the company more competitive.

What we have learned 
 

Mapping the supply chain and the production processes helps clarify all the risks and related factors.  
 

3.1 Identify the data relevant to the EP&L and define a system for collecting them across the entire supply chain.
3.2 Classify the data: the more precise the data, the easier it will be to make decisions.

What we have learned
Identify the most significant impacts and focus on collecting data at this level.

4.1 Collect environmental and non-environmental data from suppliers and the brands. The use of prepared forms can facilitate this step. 
4.2 Validate the collected data and extrapolate from them for groups of similar suppliers.

What we have learned

The EP&L is a change management tool that helps supply chain managers and suppliers to think in new ways. This process is an opportunity to increase partners’ awareness of sustainability and the impact they all have on the supply chain.

5.1 Supplement primary data by drawing on available external sources; there is a growing number of such sources and particularly ones that assess lifecycles.
5.2 Pool research: many challenges are common to all industries and call for cross-collaboration. It is therefore advisable to work with a large group of scientists, NGOs, industry federations, and other companies to pool research.
5.3 Calculate the environmental footprint using all collected data.

What we have learned
Available knowledge can be brought to light by working with a broad range of stakeholders. Therefore, the most relevant partners need to be identified at the start to maximize the response rate and the volume of collected data.

6.1 Identify changes in the environment and the costs incurred by the public due to their impact.
6.2 Calculate the coefficients to convert the data into impacts on human wellbeing. The coefficients will consider where the impact occurs to account for differences between urban and rural populations, dry and wet countries, and so on.
6.3 Assess the environmental impact and its consequences for human wellbeing.
6.4 Analyze costs and environmental benefits.
 

What we have learned
Calculating the monetary value of the environmental impact, which is more meaningful data for companies, helps to broaden the discussion within an organization.

7.1 Consolidate the results to obtain an overview of the environmental and human impact.
7.2 Present and communicate the results of the EP&L.

What we have learned
Implementing measurement systems and presenting the results are the most important features of the EP&L. Identifying opportunities is only the start of what the EP&L can do for a company. The findings of the EP&L can subsequently help to boost a company’s performance, too. Here are some examples at Kering.