GHG Emissions, Commercial, Industrial  -  February 6, 2019

Business combine to cut emissions, save $19.3B

Ten years of the world’s biggest purchasers – including Bank of America, Dell, Kellogg Company, Unilever and Walmart – requesting transparency from their suppliers has triggered a step-change in environmental action, leading to 633 million metric tonnes of CO2 emissions reductions and collective cost savings of  $19.3 billion reported by over 5,500 suppliers in 2018.

A new report by CDP (formerly the Climate Disclosure Project) noted that GHG emissions in supply chains are, on average, 5.5 times those of company’s direct operations. In the report, "Cascading commitments: Driving upstream action through supply chain engagement," Sonya Bhonsle, global head of supply chain at CDP said, “Leading purchasers are using disclosure to push positive change down the supply chain, with data playing an increasingly important role in their decision-making.”

To highlight best practice and spur further ambition, CDP has awarded over 120 companies – out of a total of 5,000 – a place on its third annual Supplier Engagement leader board, more than double the 58 highlighted in 2018. These leaders, including Canon, Diageo, GlaxoSmithKline, and Mastercard, are recognized for their work with suppliers to reduce emissions and lower environmental risks in the supply chain.

Examples of leadership among the 120+ companies include:

• Japanese chemical and cosmetics company KAO Corporation has been actively encouraging suppliers to reduce their CO2 emissions; so far, at least 80% of its suppliers have set emissions reduction targets.
• US technology company Microsoft invested more than $1 million with one manufacturing supplier to install solar arrays and complete an energy-smart building retrofit, using sensor technology and data analytics tools to reduce energy consumption.
• Working towards its science-based target of reducing scope 1, 2 & 3 GHG emissions 25% by 2030, from a 2016 base year, French cosmetics company L’Oréal has been training and supporting its suppliers to answer to CDP and improve their carbon footprint, providing an online toolbox, workshops, webinars, and one-to-one meetings.

Bhonsle added, “If suppliers continue to cascade good practices further down the supply chain, this has the potential to play a huge role in the rapid transition to a sustainable, low-carbon economy. However, with only 57% of suppliers reporting emissions reductions activities, and less than half (47%) with emissions reduction targets in place, the transformation in their customers’ expectations means that those suppliers failing to act sustainably may increasingly see it impact their bottom line.”

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