Major emissions reductions in supply chains

Global businesses report significant reductions of carbon dioxide (CO2) emissions in their supply chains, according to a recent study.

The Carbon Disclosure Project (CDP) Global Supply Chain Report 2017, written by the Carbon Trust and BSR, reveals that suppliers disclosed emissions reductions equivalent to 434 million tonnes of CO2 in 2016 — with associated cost savings of over US$12 billion.

The report, Missing Link: Harnessing the Power of Purchasing for a Sustainable Future, was written on behalf of CDP’s 89 supply chain members — including PepsiCo, Microsoft, BMW and Walmart — collectively representing US$2.7 trillion of procurement spend. The insights are based on data from 4366 suppliers, as well as the strategies and actions taken by the members themselves.

Indirect emissions from supply chains are typically four times greater than an organisation’s direct operational emissions. But the report points out that, although leaders are finding ways to engage their supply chains in emissions reductions, those commitments are typically not cascading beyond the first tier of suppliers. Only 22% of responding companies are currently engaging with their own suppliers on carbon emissions, with just 16% engaging suppliers on water use, the report finds.

“Supply chain is the next frontier in sustainability,” says Tom Delay, Carbon Trust’s Chief Executive. “The greatest opportunities for reductions are typically outside of direct operational control, in the supply chain. While some are showing what can be done today, the majority do not yet have a clear understanding of how to measure their impact or find the value in working with suppliers. Large public and private sector organisations can deliver change at the scale and speed required to address the challenges of climate change and resource scarcity,” he added.

CDP reports a 20% increase in its supply-based members in 2016, which it says shows that organisations are increasingly concerned with managing and measuring emissions in their supply chains.

The report incorporates the Carbon Trust’s four-part framework approach for developing an effective supply chain engagement programme. It also contains details of the types of interventions that can be effective in delivering change within the supply chain.

Last updated 17 February 2017