3


Given these two trends—strong supply chain engagement among a number of environmental leaders, and increased disclosure among suppliers—the next step is to make these practices more widespread. Large corporations can and should serve as a catalyst in these efforts, by motivating suppliers to make climate change a key factor in the way that they operate.


This happens through: 1) more effectively evaluating suppliers; 2) building on a foundation of communication to reduce emissions; and 3) measuring success through better information- management platforms.


Evaluate suppliers 41


For companies to understand the full measure of their supply-chain emissions, they must develop a standard, consistent means to evaluate the sustainability efforts of their suppliers (not just carbon emissions).


59


Figure 11 – Companies have become adept at communicating their carbon management information, but that must lead to improvement.


Reporting trends among the most proactive communicators on climate change


Annual Emission Reductions 35% 41


Monetary Savings from Emission Reduction Initiatives 38%


Investments Made in Emission Reductions 38%


59 Emission Reduction Target(s) 74% Emission Reduction Initiative(s) 93% Do not communicate


Communicate climate change in public reports


12


Reporting trends among the most proactive communicators on climate change


Scope 1 and 2 Emissions


Annual Emission Reductions Performance


91% 35% Measurement


Monetary Savings from Emission Reduction Initiatives 38%


The Next Challenge


This is a complex challenge, given that suppliers can have widely different business models, geographic footprints, and other factors that make straight comparisons difficult.


To that end, the CDP Supply Chain program’s global reporting platform makes it easy for suppliers to respond— and for corporations to assess their efforts using standard metrics. In addition, CDP provides robust analysis via custom reports and CDP Analytics, an online tool that allows CDP Supply Chain members to quickly understand trends and extract specific details from their suppliers’ responses. Suppliers are benchmarked and provided with feedback to encourage future improvement. The platform effectively gives companies a set of reliable numbers, freeing them to focus on identifying opportunities and taking action.


Build upon communication to drive performance There is a growing trend among suppliers in reporting on climate change externally, but this reporting does not necessarily correlate with action to reduce emissions. In addition to their CDP responses, about 60% of suppliers (N=1251) also publish information about their climate strategy in annual reports, regulatory filings and other voluntary reporting outlets.13


Most of the suppliers


in this group (91%) have been doing so for more than one year. These suppliers reported having systems in place to understand their emissions by disclosing scope 1 and 2 emissions (91%) and report having reduction initiatives in the works (93%) and are reporting reduction targets (74%).


Yet, when it comes to concrete results on their actions to mitigate climate impact and risk, their overall performance lags behind. Only about one third of these companies report actual performance results from their climate-change initiatives: 35% report year-over-year emissions reductions, 38% report monetary savings from emissions reductions, and 38% reported making monetary investments in these initiatives (Figure 11).


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