Carbon management as a supply chain strategy
A.T. Kearney report on Carbon Disclosure Project notes that most global companies are preparing to de-select suppliers who fail to manage carbon.
Suppliers are increasingly expected by some oftheir global customers to demonstrate greenhouse gas emissions management,awareness and action, in order to maintain business relationships, a CarbonDisclosure Project (CDP) report produced by A.T. Kearney shows.
Based on information gathered from 710 suppliers,
more companies are requesting that suppliers disclose data via the Carbon
Disclosure Project (CDP) Supply Chain program. Of these 710 suppliers
disclosing to their customers through the CDP Supply Chain program, 48% were
reporting for the first time. The majority (60%) have appointed a board member
responsible for climate change and while 56% have a reduction plan, 38% have
committed to clear targets; which tend to be short term (less than two years).
The majority of CDP Supply Chain members (56%) havealso stated they actually expect to de-select some suppliers in the future forfailing to meet carbon management criteria set by the companies. This is anincrease from just 6% of members who would de-select suppliers today for failureto manage carbon. Some also indicate that they intend to develop contractswhich require improved carbon management.
"We see carbon management as an increasinglyimportant part of supplier engagement. It makes good business sense for us towork with suppliers who understand how climate change is impacting theirbusiness and manage these issues properly," said Brad Minnis, director ofEnvironmental, Health, Safety and Security at Juniper Networks.
The report shows that the importance granted by CDPSupply Chain members to managing carbon targets versus classic procurementtargets is expected to triple in the next five years. However, the report alsoshows that, despite the fact that a significant proportion of carbon emissionsare typically found in the supply chain, it is still a challenging area formember companies to measure and just 20% report figures for supply chainemissions.
A.T. Kearney partner and study co-leader Daniel
Mahler said, "Major corporations are taking carbon reduction seriously and
are developing strategies to address carbon emissions in their supply chains.
Corporate CEOs and boards of directors are demanding results from company
carbon reduction programs not only for the environmental benefits, but for
cost-reduction benefits as well. The challenge moving forward is for additional
corporations and suppliers to operationalize their carbon-reduction
A full copy of the CDP Supply Chain Report 2010 isavailable at www.cdproject.net
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