Sustainability, in this case based on the Circular Economy, is in the DNA of CHEP’s business and this marks the difference in the sustainability activities of other firms with distinct business and day-to-day activities. What is the business case behind the combination of Sustainability and the Business of CHEP? Why does it cost so much in other companies to make this combination?
The truth is that, in our case, the original business idea was already fundamentally sustainable. Over 50 years ago in Australia, long before the terms sustainability and circular economics were invented, Walter Bramble, the founder of our company, saw packaging elements abandoned after World War II and thought: Why throw something away when I can repair and reuse it? And that is where we came from, we started with a search for efficiencies and immediately gave rise to a sustainable model.
Other companies that have different beginnings have to step back and think about where they can find opportunities to “circularise” their business model and above all think about what partners they need in this venture. One thing we have learned over the years of working with institutions such as the World Economic Forum and Ellen MacArthur Foundation is that to implement a circular pattern you require the collaboration of all stakeholders in the value chain, which incidentally is one of the foundations of our business model!
CHEP, along with other companies such as Philips, form part of the working group created through the Word Economic Forum on the Circular Economy. Why does circular economy interest the World Economic Forum so much? What is your activity in this group? What is the mission of this group working with the WEF?
I think the World Economic Forum (WEF) -like the Ellen MacArthur Foundation – is committed to a future where the production models are more circular. In the “Mainstream” the project of the WEF the necessary agents interact to achieve large-scale change: from governments to corporations, through supranational institutions. It’s a really ambitious approach that we are proud to participate in.
CHEP is a large multinational company, but being a BTB enterprise, it perhaps does not have as much recognition in society. Can you give us an idea of the size of the company globally? -sales figures, countries, customers…-
The truth is that the company is not as well known to the general public because we are B2B. Whenever someone asks me I tell them that the next time they go to a supermarket look down … you sure see a lot of blue pallets. These are part of our products, and we make sure they are reused again and again! As for the size of our business, we are present on 5 continents and in more than 50 countries, basically anyone with a supply chain that allows the implementation of recovery mechanisms for our products. And as for our customers, I would say almost all manufacturers and distributors of consumer goods in one way or another work with us.
How did CHEP exactly get their large customers to buy pallet management through your process of circular economy?
The benefits are obvious: instead of buying a packaging element which you then have to throw away, we rent it to you, which is cheaper and also easier to operate. And also the peculiarity of our business model is that the more we are, the more benefits there are for all participants, once we have started activities, the addition of a new customer creates efficiencies for everyone, it is what we call the advantages of sharing, which is one of the key facilitators of the circular economy.
What solutions or success stories does logistics, in practice, provide the circular economy? Is it possible to globally extend this new economic model using this sector as a change driver or motivator?
I think it’s hard to imagine a circular economy model that does not include an important element of managing the supply chain, call it reverse logistics or recovery processes or any of the other names that this concept has. When implementing circular patterns, we should not think of sectors as independent islands, but as interconnected areas. Logistics is a must when dealing with any circular flow of materials.
Technology communications, the internet of things … all these new elements, how are they entering the supply chain?
It is another important facilitator, for example for collaboration and for the recovery of materials – if I want to recover something I have and you know where it is – and here is where traceability technologies enter. But be careful, do not forget that in this case technology is a means, not an end, your have to come up with a business model that is viable and then use technology as an enabler for execution.
How would characterise the emerging markets in terms of sustainable logistics?
There is a misconception that sustainability is a luxury that only rich countries can afford. I do not think that’s true. We are talking about finding efficiencies and this is even more necessary for emerging markets. Of course there are barriers, but the opportunity here is that they do not follow in the footsteps of the mature market -creating “untenable” logistics and the improving it – but rather they should jump directly to more circular models. The WEF is working on this.
We read here the importance that employee volunteering has for CHEP. How are the personnel and managers mobilised to engage with the communities where they operate?
We are trying to move forward every day to be more sustainable, and that includes social responsibility activities. Among other things, every employee in our organisation has three days a year to devote to the social project they choose. Furthermore we facilitate contacts with some organizations to make it easier In this regard we should mention, for example, our partnership with food banks in different countries. Only in Spain last year more than half of our employees spent a day on these activities.
Why do you think events such as Sustainable Brands Barcelona are important?
Implementing new models requires thinking differently, and there is a very important forum for outreach and visibility. It is important to speak up and say we’re not talking about a utopia and it is possible to operate under circular models, there are companies that already do like us and others that are moving toward it, and if there are barriers, overcome them through collaboration.
What would you like to come out of this international event, what result do you want most?
Personally I give myself two tasks: for me it would be a success if someone, after attending the talks, was inspired to start making changes within their own company; and moreover if we are able to activate some collaborative projects between companies that previously operated in isolation. And in this game, to collaborate is to win.