“We have integrated sustainability criteria into our supplier scorecards, but these are not in the contracts. We are a big player and we make it clear we think this is really important, but it is too early to use it as a de-selection criteria. We need to be sure we are measuring them against the right criteria.”


Bank of America


Guest Commentary


The 2011 CDP Supply Chain report may be likened to the proverbial glass containing water – depending on the reader’s sense of optimism, it may be considered half-full or half-empty.


First, optimists who see the glass as half-full have something to cheer about. When compared to the year before, the number of companies with a formal and documented climate change strategy has increased by 25%. Emissions reduction targets have also become 50% more aggressive, rising to 3.4% per year on average. The percentage of companies tracking supply chain carbon emissions has more than doubled to 45%, while those who have initiated a collaborative process with their suppliers has almost doubled to 86%. Many companies are moving from qualitative scorecards to quantitative measurements using targets and performance measurements.


Yet, proponents of the half-empty perspective may also be justified in their skepticism. For example, not more than a third of suppliers have emissions reductions targets. Since only a third of suppliers are engaging with their own suppliers regarding emissions reductions, the number of Tier-2 suppliers with emissions reductions targets is significantly less than a third. The product of these two numbers – currently much less than 10% – provides us with a sense of supply chain coverage across the Tier-1/Tier-2 supply chain universe. The consequences of this low coverage are clearly pointed out by the report. By 2015, instead of an 18% reduction in emissions as required by the IPCC target, we may expect a 1.2% increase, if present trends continue.


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