Today (22 January), the Carbon Disclosure Project (CDP) published their fifth annual report on the global supply chain’s Carbon Dioxide (CO2) emissions.

The CDP surveyed 2,363 suppliers and 52 purchasers who are CDP Supply Chain members (businesses that have begun incorporating carbon reduction strategies into their supply chains) including Ford, L’Oreal, Nestle, Coca-Cola, Colgate Palmolive and Vodafone.

In total, there were 1261 reporting suppliers from North America, 665 from Europe, 239 from Asia, 215 from Latin America and 45 from the rest of the world.

The report, compiled by Accenture, found that companies are ‘more aware than ever of the considerable risks that climate change poses to their global supply chains’ and are ‘increasingly aware of the potential business value that can be created through more sustainable supply chains’.

Indeed, the report found that 70 per cent of companies identify climate change as a ‘current or future risk’ to their business and that 51 per cent of the supply chain risks related to ‘drought and precipitation extremes’ are already affecting companies, or are expected to ‘within five years’.

Other findings in the report included:

• Of the 678 companies investing in emissions reduction initiatives, 73 per cent said that they felt climate change presents a ‘physical risk’ to their operations with 13 per cent identified regulation as a sole driver.
• Suppliers are much less likely to mitigate climate change risk; 38 per cent of suppliers currently have targets in place for reducing carbon emissions in place while 92 per cent of purchasers do;
• 73 per cent of purchasers made savings from their emissions reduction efforts compared to 29 per cent of suppliers;
• 23 per cent of respondents identified ‘changing consumer behaviours’ as the key opportunity related to climate change that can ‘increase intangible business value’, while 19 per cent cited the key opportunity as ‘reputation’.

Paul Simpson, CDP’s Chief Executive Officer commented on the findings: “This research illuminates fragility in the global supply chain model. The marked difference in the sustainable actions of companies and their suppliers highlights a missed opportunity for suppliers to reduce energy costs and risks. The 61 per cent of suppliers that failed to provide information through CDP are an even greater concern since they and their clients are unable to make a full assessment of the substantial climate risks or opportunities they face.”

Gary Hanifan, Global Sustainability Lead for Supply Chain at Accenture added: “This report provides clear evidence that those who are most transparent about their climate change risks are more likely to achieve the greatest emissions reductions, and they are also more likely to enjoy monetary savings as a result of their responses to climate change risks. But the return on investment by the most proactive companies will not reach its full potential unless those companies can encourage their suppliers to follow their lead.”

The Carbon Disclosure Project (CDP) is an international, not-for-profit organisation set up with the aim of enabling companies and cities from around the globe to measure, manage and make public important environmental information and reduce their impact on the environment.

Read the CDP’s 2012-2013 ‘Reducing Risk and Driving Business Value’ Supply Chain report.