CDP Finds Most Member Companies Expect to Deselect Suppliers Who Don’t Manage Carbon
More than half of Carbon Disclosure Project (CDP) supply chain members expect to deselect suppliers in the future for failing to meet carbon management criteria, according to a new CDP report.
The second annual CDP Supply Chain Report, produced by A.T. Kearney, summarizes climate change information from 710 suppliers, and it shows that carbon management is becoming an increasingly fundamental component of supply chain strategy for the 44 CDP supply chain member companies –including global corporations such as Dell, Juniper Networks, National Grid, PepsiCo and Reckitt Benckiser.
Specifically, the report found that:
- 56 percent of CDP Supply Chain members expect to deselect some suppliers in the future for failing to meet carbon management criteria. This is quite a significant increase from the 6 percent of members who would deselect suppliers today for failure to manage carbon.
- 89 percent of CDP Supply Chain members have an established strategy to engage with suppliers on carbon related issues. Some also indicate that they intend to develop contracts which require improved carbon management.
- 91 percent of members have a board level executive responsible for climate change, compared to 80 percent within the Global 500 constituents.
- 90 percent have an emissions or energy reduction plan in place, compared to 51 percent in the Global 500.
“We see carbon management as an increasingly important part of supplier engagement. It makes good business sense for us to work with suppliers who understand how climate change is impacting their business and manage these issues properly,” says Brad Minnis, director of Environmental, Health, Safety and Security at Juniper Networks.
Despite the obvious growing recognition that strategies to manage supply chain GHG emissions need to be a part of any comprehensive sustainability plan, the CDP report also found that member companies continue to struggle with metrics. In fact, 0nly 20 percent say they report figures for supply chain emissions.
That’s disappointing. But, I suspect that figure to improve as more companies realize that managing GHG emissions in the supply chain is not only good for the environment –it’s also a sound strategy for mitigating risks and improving the bottom line, as well.
The CDP’s Supply Chain report 2010 is available here.
