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“We have raised the awareness of our


suppliers to these issues by setting business requirements for them to disclose and reduce their GHG impacts – and to set expectations for their suppliers to do the same. Next challenge is to make sure the information they are disclosing is accurate and allocated consistently, and to really use the CDP data to help our supply partners identify climate risks and opportunities material to their operations.”


Dell


Improved supplier scorecards will help members take the next step Members are now willing to take the next step: actually challenging suppliers to set targets and measure their performance on a more quantitative basis. However, this means that members have an increasing need for accurate and comparable data to give them the understanding they need. They are therefore developing and improving scorecards, either on their own or with the support of CDP, to enforce supplier commitment. These are mostly based on KPI’s such as CDP participation, emissions reporting, setting a reduction target and engaging with their own suppliers. Few members are yet able to set a specific CO2 emissions reduction target across significant portions of their supply base.


Increased engagement by deploying differentiated levers Members have engaged over 1,000 suppliers this year to respond to CDP. This is an increase of 40% compared to 2009. Also the response rate increased, showing the impact that members have on their suppliers. In emerging markets, such as India and China, the response rate to the CDP Supply Chain request is almost twice as high as for the Investor CDP request. The power members have to make a difference by engaging with their suppliers is acknowledged and members are starting to deploy different strategies to engage with their suppliers. However, defining the appropriate engagement strategy requires a clear understanding of the demand and supply power playing field (Figure 12).


Figure 12 – Levers for supplier engagement in carbon management


Re-designing products to reduce carbon impact


• Changing specifications by product innovation or (re) design


• Technical data mining to reduce carbon • Managing climate change risks


Supply power Reducing the external demand for carbon


• Commercial data mining to reduce carbon • Volume bundling/co-sourcing to increase impact


• Managing demand to reduce carbon Low


Low Supply and Demand Power


Buyer Advantage Demand power High Using sustainability criteria to select suppliers


• Including carbon management requirements within tenders


• Reviewing supplier carbon management scorecard


• Imposing emission reduction target on suppliers


10 High


Supplier Advantage


High Supply and Demand Power


Jointly improving carbon performance with suppliers


• Managing carbon jointly with suppliers • Integrating low carbon operations planning • Low carbon cost/value partnerships


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