Multinationals train sights on supply chain emissions

Pressure to curb carbon emissions is rapidly filtering down the corporate supply chain, according to a new report from the Carbon Disclosure Project (CDP) which found many of the multinationals that pioneered carbon reduction techniques are now turning their attention to their suppliers' carbon footprints.

The report, which will be released later today, surveyed 44 end-user companies, including global giants such as Dell, Juniper Networks, National Grid, PepsiCo and Reckitt Benckiser.

It found that while 91 per cent have a board level executive responsible for climate change and 90 per cent have an internal emissions reduction plan in place, a similar proportion, 89 per cent, also have a strategy in place to engage with suppliers regarding carbon emissions.

In addition, 56 per cent said they expect to deselect some suppliers in the future for failing to meet carbon management criteria. A number also indicated that they intend to develop contracts that explicitly require suppliers to improve their carbon management policies.

However, the report also revealed that understanding of supply chain emissions currently remains patchy, with just 20 per cent of respondents claiming they were able to gain accurate information on the carbon impact of their supply chain.

"Major corporations are taking carbon reduction seriously and are developing strategies to address carbon emissions in their supply chains," said Daniel Mahler, a partner at consultancy firm A.T. Kearney, which undertook the research. "[But] the challenge moving forward is for additional corporations and suppliers to operationalise their carbon-reduction strategies."

The CDP has recently extended its program of information requests relating to firms' climate change strategies to cover suppliers as well as multinationals, and last year received data from 710 firms operating within larger companies' supply chains.

It found significant awareness of climate change issues, with the majority having appointed a board member responsible for climate change, 56 per cent having put an emission-reduction plan in place, and 38 per cent having disclosed carbon targets.

However, just 28 per cent of suppliers have incentive schemes in place for employees to drive carbon reduction, and only 33 per cent had a strategy to engage with their own suppliers further down the supply chain.

"Collaboration and best practice sharing between members and their supply base will be crucial on the journey to bringing carbon emissions and climate change management to the next level," the report concluded.