Emissions reduction still lacking at supply chain level, despite improvements higher up

Global corporations are yet to realise the opportunities earned by reducing emissions across their supply chains, according to a new CDP and Accenture report. Alex Blackburne looks into it.

A report by the Carbon Disclosure Project (CDP) and Accenture has found that whilst multinational companies have gone to great lengths to improve their own carbon performance, their supply chains are still lagging behind.

The report, called A new era: supplier management in the low-carbon economy, has highlighted that whilst carbon reduction is certainly on most agendas, it often doesn’t seep through to suppliers.

With the help of global management consultants, Accenture, CDP surveyed 49 of its member companies, including L’Oréal, Philips and Walmart, as well as over 1,800 of their suppliers.

It found that 43% of companies can boast a yearly emissions reduction, but that only 28% of suppliers can.

This is despite the fact that 39% of CDP Supply Chain members have taken the ruthless but admirable stance of threatening to abandon suppliers that don’t adopt carbon reduction mechanisms.

39% of companies have also recognised significant financial savings from reducing their carbon emissions, and over a third (34.5%) have benefited from their suppliers doing so.

“The business case is strong and growing”, reads the report. “Suppliers that do not measure, quantify, and manage their greenhouse-gas emissions will soon see their business move to competitors that can provide better information and clearer evidence of change”.

Implementing carbon reduction methods, then, seems the logical choice for businesses at both levels.

Gary Hanifan, global sustainability lead for supply chain at Accenture, claimed that the need for doing so is only going to get greater, too.

He said, “Those companies that are able to use this information to create sustainable, profitable growth through climate resilient and emissions efficient supply chains will be better positioned to capture market opportunities in the long term, as companies increasingly make carbon emission reductions not only the price of market entry, but a point of competitive differentiation”.

CDP was recently awarded the Zayed Future Energy Prize at the World Future Energy Summit and this report is its fourth annual global study into how well-equipped company supply chains are for the effects of climate change.

In a society that is becoming increasingly sustainability-conscious, a company’s environmental impact should, naturally, be high on its agenda.

The report says, “Executed correctly, supply-chain engagement will not simply generate benefits for the environment but for the balance sheet as well”.

The 39% of companies that are now willing to dump suppliers that don’t have carbon reduction methods in place has risen significantly in two years, from 17% in 2009 to 23% in 2010.

Blue & Green Tomorrow has produced an infographic depicting all of the statistics emerging from the CDP and Accenture report. Have a look.

Click to enlarge.Suppliers need to realise that there is an increasing risk that they soon won’t have anyone to supply to, unless they recognise the need for an improved environmental awareness policy.

You can help to highlight this by being wise about where your money is invested.

Responsible investment, which balances the needs of the planet, its people and future prosperity, is imperative if we are going to make the shift towards a sustainable planet.

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