Leading firms help suppliers to cut carbon

24th January 2017


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  • Reporting ,
  • Business & Industry ,
  • Management

Author

Jennifer Carter

Companies supplying corporations reporting to the CDP reduced emissions equivalent to 463 million tonnes of carbon dioxide in 2016.

The latest annual supply chain report from the CDP notes that the cut was more than France’s total greenhouse-gas (GHG) emissions in 2014 and said it reflected demands by some of the world’s largest purchasing organisations, including BMW, Microsoft and Walmart, for suppliers to do more to combat climate change.

‘Companies have a critical role to play in delivering on the Paris Agreement, and as well as setting their own house in order, it is essential they turn their attention to the risks and opportunities outsourced to their supply chain,’ said Dexter Galvin, head of supply chain at the CDP.

‘By harnessing their purchasing power, big buyers have the potential to deliver the large-scale, rapid change that is needed and lead the way towards our sustainable future,’ he said.

The report reveals that US company Hewlett Packard has helped its suppliers avoid 800,000 tonnes of CO2e emissions and save more than $65m through energy-saving action plans targeting local efficiency improvements.

Despite the reported reduction in emissions and examples of action, the CDP found that almost half (47%) of suppliers were failing to respond to customers’ requests for climate and water-related disclosure.

It also found that, although there had been 20% increase since 2015 in the number of big buyers requesting climate and water-related data from their suppliers, many large businesses were still failing to engage supply chains. Just 22% of responding companies were currently engaging with their own suppliers on carbon emissions and 16% engaging with suppliers on water use.

Tom Delay, chief executive of the Carbon Trust, which helped compile the report, said failure by large firms to engage suppliers was a lost opportunity: ‘Supply chain is the next frontier in sustainability. Managing the environmental impact of your own operations is expected behaviour. But the greatest opportunities for reductions are typically outside of direct operational control, in the supply chain.’

The CDP said common barriers to effectively engaging suppliers included: companies’ lack of experience in calculating and managing their own emissions; a perceived lack of leverage over business partners; the costs associated with managing an engagement programme; and an absence of mandatory requirements from customers or regulation.

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