Thursday 22nd Oct 2020 - Logistics & Supply Chain

Carbon Disclosure Project findings reflect risk of regulation

The Carbon Disclosure Project (CDP), the world’s largest investor collaboration on climate change, with 385 institutional investors holding assets under management of US $57 trillion, has announced the first ever findings of its Supply Chain Leadership Collaboration. Cadbury Schweppes, Dell, HP, Imperial Tobacco, L’Oréal, Nestlé, PepsiCo UK & Ireland, Procter & Gamble, Reckitt Benckiser, Tesco and Unilever all work through CDP’s Supply Chain Leadership Collaboration to measure carbon risks and liabilities in the supply chain.

The CDP’s Supply Chain Leadership Collaboration information request encourages suppliers to report carbon footprints and climate change-relevant information, including greenhouse gas emissions data, emissions reduction targets and climate change strategy. 144 suppliers from across 22 sectors – including chemicals, computer components, food industry and containers and packaging – responded to the information request, most of them being large and medium sized companies. For many suppliers this was the first time they addressed climate change issues.

On emissions reporting: 58 per cent of responding suppliers report their scope one and two emissions (supplier’s own fossil fuels burnt and electricity purchased). 12 per cent of suppliers report that they track scope three emissions (indirect emissions that are a consequence of your company’s activities, but which arise from sources that are owned or controlled by others). Many suppliers indicated difficulty in accessing scope three emissions data.

On risks and opportunities: 96 per cent of suppliers identified greenhouse gas regulation as a potential risk. Taxation and emissions limits are the most commonly reported risks. Suppliers foresee extreme weather conditions adversely affecting operations and slowing productivity. 58 per cent identified reduction in energy consumption as the best means of managing climate change related risks.
Only 26 per cent have established greenhouse gas reduction targets so far.

Phase two of the Supply Chain Leadership Collaboration starts on May 1, 2008.

Since concluding the initial phase of the CDP Supply Chain Leadership Collaboration, the founding members have been joined by new members including Carrefour, Colgate-Palmolive, Exelon Corporation, Fiji Water, Heinz, IBM, Johnson Controls, Juniper Networks, Kellogg Company, Merrill Lynch & Co, National Grid, SSL International and Vodafone. On behalf all the members, the second Supply Chain Leadership Collaboration information request is being sent out to over 1,000 suppliers. Suppliers include private companies and businesses based in China, where a significant number of suppliers to large multinationals are based. Findings will be announced in January 2009.

Paul Dickinson, CDP’s CEO, says: ‘CDP’s Supply Chain Leadership Collaboration shows how seriously some large corporations are taking the measurement of supply chain greenhouse gas emissions. It is only by asking suppliers the right questions that large corporations will be able to manage their supply chain emissions. Engaging with suppliers is a key first step to understanding carbon liability and to bringing about emissions reductions through the supply chain.’

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