In episode 11, we welcome Bob Mitchell, CEO of the Global Electronics Council (GEC), to Five Lifes to Fifty. Before beginning his tenure at the GEC in 2023, Bob worked at the Responsible Business Alliance (RBA) where he served as Vice President, Human Rights and Environment from 2016. He also has previous experience with Hewlett-Packard (HP) and Hewlett Packard Enterprises (HPE).

The GEC is is a mission-driven nonprofit that leverages the power of purchasers to create a world where only sustainable technology is bought and sold. GEC manages the EPEAT ecolabel, a free resource for procurement professionals to identify and select more sustainable products. In addition, the EPEAT ecolabel is a resource for manufacturers to demonstrate that their products conform to the highest sustainability standards. Since its launch in 2006, procurement professionals have reported purchases of over 2.7 billion EPEAT products, generating cost savings exceeding $30 billion USD and a reduction of over 30 million metric tonnes of greenhouse gas emissions.

In this episode 

Shelley - With your deep experience with supply chain, I thought we could start with how product sustainability changes in a company that has a fully outsourced supply chain compared to one that might have a more vertically integrated supply chain. 

• Bob - That's a great question. The supply chains of multinational companies has evolved quite dramatically over the last few decades. Ones that were more vertically integrated and the manufacturing owned by, especially in the electronics field, by companies and brands that we know quite well in the late nineties into the early aughts [2000-2010], was outsourced both from an efficiency perspective, cost perspective, and that really led to a complete shift in terms of the leverage that companies have. [00:54 ]  

• That's been, I think, further changed by the supplier community beginning to evolve their capabilities as well, going from pure contract manufacturers where they were provided designs by the brands, into moving up that ladder from contract manufacturers into original design manufacturers. So, they actually own the designs in many cases and engage with the brands after the fact. And so that began to change both that leverage within the supply chain, but also very key components of business relationships, like who owns the intellectual property. It's completely changed how companies engage when it comes to specific standards, but in this case, social environmental responsibility standards specifically. [01:29 ]  

• And that really begins to affect this space in a couple of ways. One is when it comes to integrating social and environmental standards into product design and manufacturing, as well as the complete value chain. So, these specific standards are very complex and, in some cases, not only begin to affect the price of materials and logistics and shipping, things like that, but also the behavior and policies that a company might have in the supply chain. So that's one. And I think we'll talk a bit more about that as we get into the impact of regulations and voluntary standards as well. But the second area is really around when something runs afoul of social environmental responsibility standards, whether it be environmental specifically, or we get into, for instance, human rights within international supply chains. [02:18 ]  

• And how do you remediate those adverse impacts? The UN Guiding Principles on Business and Human Rights actually has a ladder in terms of how you begin to address that, which now with some of the corporate due diligence requirements that are coming out of the EU, is really beginning to move its way over to the environmental space as well. Where you take a look at, ‘Did you cause that adverse impact? Did you contribute to it or are you directly linked to it?’, and you have different responsibilities. This concept of leverage comes in when you're directly linked to one of those adverse impacts. So again, whether it's environmental or human rights, you have the responsibility to apply what leverage you have to be able to remediate that adverse impact, and if you can't, if your leverage is not strong enough, then it says that you should consider exiting that business relationship. [03:17 ]  

• That is important when it comes again to running complex international supply chains, especially when you're applying voluntary standards, whether it be specific to that social space or when you get into dictating environmental requirements as well. Or if you have a vertically integrated supply chain or a very close relationship where your company has a large amount of the spend with a specific supplier, then you have a lot of leverage and you can change things. If you don't, for instance with a commodity supplier or where that supplier might have more control because they, for instance, created the design, have the intellectual property, something to that nature, then you have less leverage. And that's really changed the landscape, I'll say. And the power structure within international supply chains to be able to address these two types of these two points of leverage. [04:10 ] 

Jim - From your experience, has the differences and the frequency of your first leverage versus the second leverage changed over time? I’m curious about it I’m a procurement officer, which ones do I have to pay more attention to? [05:08 ] 

• Bob - Well, they've gone at different paces. So, integrating social environmental standards into product design specifically had a head start. And a lot of that gets into regulation and the demand from the purchasing community specifically. So, there was a greater awareness of the environmental impacts related to the materials in a product, its energy efficiency, its end-of-life treatment as an example, versus some of the specifics around the environmental impacts of Scope 3 emissions, of human rights and supply chains, and other factors. But that's beginning to change as well. And I think part of that was that we saw earlier regulation which set that level playing field related to product level requirements in the early 2000s. [05:26 ] 

• When it comes to the value chain aspects, those are just coming to light now from a regulatory perspective, especially as it relates to different requirements, for instance, related to traffic enforced labour. So, we saw regulations in California and the UK and Australia, but that's been followed up now in the European Union related to corporate sustainable due diligence - and that's across both human rights and environment. Now those behaviors, as it relates to how products are manufactured and those potential negative consequences from a social environmental perspective, has really changed. So, to some degree, it's trailed a bit, that second piece. But the awareness when it comes to the purchasing or the demand community, which can include others like policymakers and investors, they're really waking up to it. It's beginning to drive different behaviors and as we get into voluntary standards, it's really evolved voluntary standards as well, from just focusing on the product to focusing on the entire basket of ESG practices. [06:19 ] 

Neil - I think if you look at what's happening in the automotive sector right now, the chemical sector, fashion sector, I think this is where that voluntary aspect comes into play, where you have tier one suppliers in the automotive supply chain running for their money, trying to adapt to or respond to the requests from the OEMs. I'm particularly interested in regulation. In the former category where regulations are a driver - because I think it has taken a very long time - if you look at what happened with REACH and RoHS, and I would even say EP dread in the early days, it took regulation to make the industry move. Do you still see this being a requirement going forward? [07:32 ] 

• Bob - Well, I think it's important to sort of examine the path that it took. The years prior to the mid 2000s, environmental features and products were really aspirational, and they were very unstructured. We knew that we wanted sustainable products after this realization that we're putting so much into the world and not thinking or considering these types of aspects of the product. I remember picking up in the early 2000s, William McDonough's book Cradle to Cradle, and a lot of it popularized the fact that we're thinking cradle to grave and we need to rethink the way we build products. And that's easier for some types of products that are more simple, very difficult for complex products like electronics. But then we saw regulations come into play, both RoHS and REACH, but also, we when it came to end of life and that began to level the playing field and created centres of expertise in deep corporate functions. So, think supply chain engineering, sourcing and procurement teams, etcetera. Not just these overarching corporate social responsibility teams that were really focused on reputation, where there wasn't a good demand signal to be able to put out that buyers could really point to. They were trying to create a halo effect for their companies. [08:16 ] 

• So that was one benefit of regulation. Another, which I think is rea