Carbon Disclosure Project announces findings in supply chain carbon emissions

96 percent of suppliers see climate change regulation as a potential risk

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, today 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.

Each of these companies has a supply chain spanning multiple sectors and countries. The majority of member companies’ greenhouse gas emissions are often caused by supply chain activities, such as processing, packaging and transportation. 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.

Participants:

• 144 suppliers responded to the information request. Companies were mainly large and medium sized. 95 of these companies have never reported through CDP and for many suppliers this was the first time they addressed climate change issues.

• 22 sectors involved, including chemicals, computer components, food industry and containers and packaging.

• More than a third of companies have a member of the Board of Directors responsible for climate change.
  
  

Findings:

Emissions reporting:

• 58% of responding suppliers report their scope 1 and 2 emissions (supplier’s own fossil fuels burnt and electricity purchased). The majority of these suppliers are large or medium sized.

• 12% of suppliers report that they track scope 3 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 3 emissions data.
  
  

Risks and Opportunities

• 96% 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% identified reduction in energy consumption as the best means of managing climate change related risks.

• Only 26% have established greenhouse gas reduction targets so far.