There is a sustainability gap between members of Carbon Disclosure Project’s (CDP) Supply Chain initiative, and the suppliers of those companies, as a report by CDP and Accenture shows. Most of the CDP members (92 percent) have emissions targets, including big brands like Dell, L’Oreal and Walmart. Not so for their suppliers. Only 38 percent of suppliers said they had emissions targets. About two-thirds of CDP members (69 percent) are investing in emissions reduction measures and energy use reduction, while only 27 percent of suppliers reported investing in both. When it comes to having a climate change strategy, 64 percent of suppliers reported having an integrated climate change strategy. However, only 34 percent report having board-level oversight, while 81 percent of CDP members report having board-level oversight.
The report is based on a CDP survey of companies taken from its fifth annual information request for member companies and their suppliers. CDP sent the information request to 52 large companies in its Supply Chain initiative and over 6,000 of their suppliers. A total of 2,415 companies, including the 52 CDP members, sent back responses.
The advantages of being CDP members
There are distinct advantages to being CDP members, the report indicates. CDP members are more likely to get results from environmentally friendly business practices than suppliers. A total of 73 percent of CDP members saved money from emissions reductions, up from 39 percent in 2011. Only 29 percent of suppliers report saving money from emissions reductions, and that is up from 19 percent in 2011. The 29 percent of suppliers that reduced emissions saved about $13.7 billion. CDP members are also twice as likely to accomplish year-on-year emissions reductions, with 63 percent doing so, up from 43 percent in 2011, versus only 29 percent of suppliers.
Perhaps more pressure from the companies who purchase from them would encourage suppliers to adopt sustainability. Only 42 percent of suppliers receiving one invitation report physical risks related to climate change. However, 67 percent of those who received three or more invitations reported risks. “This suggests that as more members reach out to each supplier, the supplier’s performance and awareness of climate change risk improves significantly,” the report states.
What’s driving companies to deal with climate change risks?
More companies (23 percent) identified “changing consumer behavior” as a key driver of dealing with climate change, up from 17 percent in 2011. Those identifying “reputation” increased from 16 to 19 percent. The majority (90 percent) of CDP members identified physical risks related to climate change as a driver, but only 45 percent of suppliers did. Almost 80 percent of CDP members identified regulatory, physical and other climate-related risks as drivers, while only 31 percent of suppliers identified the full suite of risks. A little over half (51 percent) of all companies surveyed said that extreme weather events are already having a negative effect on company operations, or are expected to within five years.
Image credit: Accenture