The supply chain is becoming an increasingly important part of carbon accounting.

5 February 2014 — Research published by CDP (Carbon Disclosure Project) and Accenture shows that many companies are recognising the benefits from investing in sustainability measures and engaging with their supply chain, however, uncertainty around the regulatory framework is slowing down the rate of investment in emissions reduction.

The CDP supply chain report, Collaborative Action on Climate Risk, is based on information from 2868 companies including some of the world’s largest corporations. Together these companies produced some 14 per cent of global industrial carbon emissions in 2013.

Key findings from the report include:

  • almost three quarters of companies identified a current or future risk related to climate change
  • 56 per cent of companies said consumers are becoming more receptive to low-carbon products and services
  • investment in emissions reductions programs has declined in the past year and is shorter term in focus. Seven out of 10 sectors reported investment falling from earlier years. Shorter pay-back initiatives (less than three years) are on the rise with these almost doubling between 2011 and 2013. The average sum invested per reporting company has dropped 22 per cent since last year
  • 81 per cent support policies promoting energy efficiency and clean energy generation
  • 67 per cent support mandatory carbon reporting
  • 43 per cent support cap and trade programs

To give links in a company’s supply chain more incentive to work on emissions reduction through targeted action, CDP have launched the Action Exchange initiative. Companies that have already joined the initiative and are asking their suppliers to participate include Bank of America, L’Oreal, Philips and Walmart.

In conjunction with companies including Phillips and Nokia, CDP has produced a series of videos about how these companies are engaging key suppliers in sustainability and how they plan to drive change going forward.