All 44 global company members of the Carbon Disclosure Project (CDP), a 'who is who' of the world’s leading companies including Dell, Vodafone Group, Unilever, Sony Corporation, PepsiCo and Reckitt Benckiser, are requesting their suppliers to disclose data via the CDP Supply Chain program.
A new report from CDP and A.T. Kearney shows that, while there has been significant improvement in best practice since last year, suppliers still have a long way to go in order to meet the ever-expanding sustainability requirements of these global companies.
Business is increasingly seeing climate change in terms of opportunity and return on investment. This indicates that governments must come to a robust, international, legally binding agreement that will create the right incentives and structures in order for them to invest in the transformation to a low-carbon global economy, unlocking the power of business to be an integral part of the solution to climate change.
This emerging framework will need to include long-term and medium-term targets for the world and for individual countries, setting a pathway to global emissions reductions that are in accordance with the science. Clearly, reluctance to act on climate change – or worse, a lack of awareness about it – can bring devastating short and long-term risks to any company. In this context, CDP works with key stakeholders to encourage companies all over the world to measure, manage, disclose and ultimately reduce their GHG emissions and related climate change risks.
The CDP Supply Chain Program – assessing member and supplier performance
The CDP Supply Chain is a collaboration of global corporations who have extended their climate change and carbon management strategies beyond their direct corporate boundaries to engage with their suppliers via CDP’s annual Information Request. Member companies use CDP’s standardised format to communicate with their suppliers in a streamlined, unified, annual request. This year, 44 member companies reached out to 1,402 of their Suppliers, and 710 (51%) responded to the request. 95 (7%) formally declined to participate and 597 (42%) did not respond.
This report synthesises the key findings that have been extracted from the 2009 CDP Supply Chain Information Request responses and is structured in three main sections:
How are CDP Supply Chain member companies driving climate change strategies with their suppliers?
How well are their suppliers currently performing?
How will CDP Supply Chain members and suppliers use the work to drive further improvement?
Members are at the forefront of carbon emissions management
All CDP members now have a strategic approach to deal with climate change. A majority (63%) have a formal, documented corporate climate change strategy and the remaining (37%) have general guidelines. They have integrated a carbon policy into their procurement organization, and a large majority of them (90%) have a reduction plan in place. While defining their reduction objectives, members realise that beyond reducing their Scope 1 and 2 emissions3, they also have to reduce their Scope 3 emissions. In particular, their supply chain emissions usually represent a significant part of their total emissions and need specific focus. Members cite several reasons for measuring supply chain emissions, the four most important being:
Increased customer interest that creates opportunities for differentiated products;
Risks facing suppliers that ultimately threaten sourcing activities;
Increased public, investor and stakeholder pressure to integrate carbon management within Corporate Social Responsibility programs that usually involve suppliers;
Joint process improvement to improve collaboration and efficiency, reduce carbon emissions and ultimately generate cost savings for members and suppliers.
However, the report has found that member companies face significant challenges when it comes to putting their good intentions into practice. Only a small number of companies have extensive knowledge about the availability of green products for their major spend categories, and most members do not currently have the tools they need to track their Suppliers’ climate change performance appropriately.
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