1 © 2degrees Ltd.

Supply chain engagement service overview

1st September 2011

Simon Brown, Managing Director – 2degrees Enterprise Services

Email: simon.brown@2degreesnetwork.com

Tel: +44 7980 241816

2 © 2degrees Ltd.

We see an opportunity for major

organisations and their suppliers to

enhance their competitiveness using the

2degrees supplier engagement service.

This service provides a means for efficient

and effective communication between

multiple organisations to achieve a

common goal.

We see our clients being able to become

better leaders in their supply chains - better

able to serve their customers and grow

their business without environmental or

social constraints.

Our service supports our clients drive for

continuous business improvement,

strengthens their bond with suppliers and

enables more sustainable procurement

practices.

2degrees Enterprise Services

Clients include:

Vision for an engagement service

3 © 2degrees Ltd.

• The 2degrees Supply Chain Engagement Service supports large organizations in

achieving their goals for more efficient, lower cost, lower risk and more

sustainable supply chains

• Progress towards goals is achieved through the development, sharing and roll-out

of sustainability best practices, and by the solving of practical problems across

the supply chain

• 2degrees role is focused on the facilitation of the engagement between suppliers,

client teams and other stakeholders. We work with the supply chain community to

surface best practices and help people to apply them in their business.

• The service addresses the cost, efficiency and scalability challenges that large

organizations face in engaging their supply chains effectively

• We originally developed the service in partnership with Tesco, the world’s third

largest retailer, and are now running it across several global supply chains

What is the Supply Chain Engagement Service?

4 © 2degrees Ltd.

Agree with client on whom to

engage and build activity plan

Stakeholders (i.e. Suppliers)

recruited to client portal on

2degrees

They are engaged around agreed

targets for improvement in:

• Energy, Carbon, Logistics, Other

GHGs, Water, Waste, Renewable

Sourcing, Ethical standards, Health,

etc.

2degrees facilitates a four-step

continuous improvement activity

plan

How it works

1. Surface

2. Select

3. Deliver

4. Assess

Continuous Business Improvement

5 © 2degrees Ltd.

An engaged supply chain that is better able to:

1. Reduce cost/improve efficiency along the supply chain:

• Reduction in carbon emissions, energy use and intensity

• Improvements resource efficiency, and sources of supply

• Improvements in other sustainability performance targets

2. Support products and services that organisations can offer to customers:

• Products and services that are more energy and/or resource efficient

• Develop new, better offerings that are unconstrained by environmental limits

• Improved contract win rate through performance against customer sustainable procurement

requirements

3. Enhance sustainability performance of individual suppliers

• Applying best practices in the suppliers own operations and facilities

• Reducing the cost of goods/services procured

• Eliminating waste (energy & resource) in the suppliers own operations and facilities

Target outcomes for clients

6 © 2degrees Ltd.

Supplier Engagement Case Study

Tesco Carbon Reduction Knowledge Hub

7 © 2degrees Ltd.

Case Study

Client Challenge Actions Outcomes

The world’s 3rd largest

retailer by revenue

£62.54 Billion revenue

(February 2010)

4,811 Stores across 14

countries

472,000 Employees

Over 100,000 suppliers

worldwide

Business goal:

30% carbon reduction in

the supply chain

Objectives:

Collaborate frequently with

suppliers

Enable suppliers to share

best practice

Assist all suppliers

regardless of size, product

or location

Help suppliers find

solutions

Deal with a wide variety of

challenges quickly

Launched the Tesco

knowledge hub Oct 2010

An exclusive area for

Suppliers to collaborate

and share best practice

Structured activity plan

designed around suppliers

challenges

Access to wider 2degrees

community

Over 85% of target

suppliers are using the

knowledge hub

Over 70% have found

solutions to their

challenges by way of

2degrees (e.g. VO)

Plan to grow to 1,000+

members from 500+

companies in 2011 &

begin to run common

projects, standards and

tools

“We have chosen 2degrees to be our cornerstone partner to help us work more closely with our suppliers to drive CO2 out of our supply chain”

Louise Willington, Climate Change Manager, Tesco plc.

8 © 2degrees Ltd.

A self contained community within 2degrees

Over 400 members from 15 countries

Benefits:

• Connects suppliers across and within

categories 24/7/365

• Shares knowledge on new technology, and

new thinking

• Wide variety of ways to share knowledge –

discussions, case studies, webinars, site

visits

• Fosters a collaborative environment

• Allows Tesco to talk to many suppliers at

once

• Scalable solution, ready for wider rollout

The Tesco Knowledge Hub

9 © 2degrees Ltd.

Facilitating questions that

lead to carbon reduction:

• What have you done that

has worked?

• What hasn’t worked?

• What are the challenges?

• What do Tesco do that

helps?

• What do Tesco do that

hinders?

Unlocking progress on carbon reduction

‘Hotspots’

I

N

I

T

I

A

T

I

V

E

S

L

I

S

T

‘SOFT’ BENCHMARKS OF PROGRESS

10 © 2degrees Ltd.

Actively Managed Service

Online & face to face

Inside the wider 2degrees

network

Range of communications tools,

WebEx, blogs, forums, etc

Tailored News feed

Networking tools

Wide range of information,

by recommendation, topic,

and popularity

11 © 2degrees Ltd.

The activity plan is

delivered by our

Community

Managers who: • Source and publish

relevant content

• Help set focus for

improvement and

benchmark

• Help to gain answers to

questions from

individual suppliers

• Arrange on-line

presentations from

subject matter experts

• Encourage the sharing

of knowledge between

suppliers

• Identify new areas of

opportunity for supply

chain sustainability

improvement

• Provide weekly

updates to your

supplier community

Pod cast interview

Facilitated discussion

Notes from facilitated site

visit

Recording of on line event,

presentation & audio

Video information

12 © 2degrees Ltd.

2degrees Overview

Uncoupling growth from environmental limits

13 © 2degrees Ltd.

• Focus on uncoupling growth from environmental constraints

• 3yrs investment >£2m in team, technology & community

• Apply to join 2degrees at: www.2degreesnetwork.com

Background to 2degrees

Members Team

>16,000, >90 countries,

growing ~1000/m

>30 staff, offices in Oxford (UK)

& New York (USA)

14 © 2degrees Ltd.

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15 © 2degrees Ltd.

"The 2degrees team worked closely with us to get the target suppliers on-

board quickly and efficiently. We look forward to continuing to work

through this platform to help our suppliers reduce their carbon emissions

and become more sustainable businesses." Helen Fleming, Climate Change Director, Tesco Plc

"We had the opportunity to share our views on carbon labelling with peer

suppliers in a 2degrees supplier engagement portal sponsored by one of

our major customers. It was a great way to promote what we've been

doing and to shape the agenda on this issue with a key customer and our

peers.“

Stephanie Demay, International Consumer Relations Manager, General Mills

Testimonials