A Third of Global Suppliers Unaware of Climate Change Risks: CDP

NEW YORK, N.Y. -- One in three global suppliers believes climate change poses no risk to their operations despite the increasing amount of attention being paid to supply chain greenhouse gas emissions.
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Nearly three dozen companies -- including heavy hitters such as Johnson and Johnson, P&G, Johnson Controls, Boeing, Dell and PepsiCo -- called on thousands of their major suppliers to disclose emissions and reduction strategies through the Carbon Disclosure Project.

Of the more than 2,300 suppliers asked to participate in the disclosure, 634 responded, the vast majority of which -- 71 percent -- were divulging their emissions and mitigation strategies for the first time. Fifty-eight percent of respondents acknowledged climate change risks.

Supply chain emissions often represent the largest slice of corporate carbon footprints, but is, in many ways, the least understood aspect of a company's environmental impacts.

Since many suppliers are confronting climate change risks for the first time, the CDP suggests companies engage them, raise awareness and identify the greatest opportunities to improve efficiency. There must be an open dialogue on the types of information needed and how they will be used, and companies should seek support at the board level of supplier companies.

"Procurement teams worldwide must take a role in developing more sustainable business practices and embed the issue of climate change into an organization's core operations," Francis Way, CDP's head of supply chain, said while announcing the survey results. "Risks posed to a company's supply chain from the impacts of climate change include extreme weather events, water scarcity, regulation and associated cost volatility. Companies must take steps to mitigate the impact of these risks to their business."

Michael Meehan, CEO of Carbonetworks, a carbon measurement software developer, hailed the CDP's contribution to supply chain emissions measurement but cautioned that addressing carbon goes beyond using a simple spreadsheet to track emissions.

"What's needed are strategies for managing corporate carbon emissions to achieve the ultimate goal -- that of reductions," Meehan said via email. "The tools to do that already exist, and corporations and their consultants need to evolve their thinking to reflect the possibility of active carbon management, versus passive measurement."