in supply chain carbon emissions
96% 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.
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.
Supply Chain Leadership Collaboration Findings:
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.
Phase 2 Supply Chain Leadership Collaboration – start date 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, said: '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.'
Current SCLC Members:
Cadbury Schweppes, Carrefour, Colgate-Palmolive Company, Dell Inc., Exelon Corporation, Fiji Water, Heinz, HP, Imperial Tobacco Group, IBM, Johnson Controls, Juniper Networks, Kellogg Company, L'Oréal , Merrill Lynch & Co., Inc., National Grid, PepsiCo UK & Ireland, Inc., Procter & Gamble Company, Reckitt Benckiser, SSL International, Tesco, Unilever, Vodafone Group.