Carbon Disclosure Project Supply Chain, UK
Climate change has become a mainstream business issue and large corporations are now extending their gains in internal carbon management to the next opportunity: their supply chain. An organisation’s supply chain can represent as much 60-80% of its total emissions depending on the industry. Last year, 78% of supply chain program members identified regulatory, physical and other classes of climate risks, and report a risk management approach integrating the issue into their company-wide, multi-disciplinary risk management processes. At the same time, 38% of suppliers invited by the program members reported no documented processes for assessing and managing climate-related risks, which presents a risks to themselves and their customers.
The business case is strong and growing: suppliers that do not measure, quantify, and manage their GHG emissions will soon see their business move to competitors that can provide better information and clearer evidence of change. Supply chain engagement can help mitigate these risks and drive greater emissions reductions, as well as identifying new revenue opportunities and improved brand positioning. Cost reductions primarily come from energy efficiency measures, collaborative efforts in packaging and logistics, and behavioural change.
Leading companies are now taking the risks and opportunities that climate change presents seriously by directly engaging their suppliers. The CDP Supply Chain program enables member organisations to implement successful supplier engagement strategies, reduce supply chain emissions and manage risk in a changing climate. CDP works with 66 of the world’s largest organisations, including Walmart, Dell and L’Oréal to drive action on climate change from purchasing companies and their suppliers.
CDP Supply Chain makes a win-win scenario a reality: both the purchasing organisation and their suppliers benefit because relationships with suppliers are strengthened and suppliers improve their capacity to operate in a low carbon economy. Executed correctly, supply chain engagement will not simply generate benefits for the environment, but for the balance sheet as well.