Back in January, CDP released its annual ***Global Supply Chain Report 2017***, highlighting the work of businesses around the world in helping reduce global greenhouse gas (GHG) emissions. In 2016 alone, the world’s largest purchasing organizations used their buying clout to drive down emissions by 434 million tons of CO2 — more than France’s total GHG emissions in 2014.
During SB’17 Detroit, the organization shared new stats on how US businesses factor into the equation. The main takeaway: There is still considerable work to be done.
According to CDP, more than a million suppliers around the world are being targeted by their US corporate customers, who are taking action to reduce the environmental impacts of their supply chains. Starbucks, 3M and Mondelez International, whose supply chains comprise tens of thousands — and in some cases hundreds of thousands — of direct suppliers, are just a few examples of the influential corporations working to embed sustainability into their supply chains.
“Businesses in the United States are well aware of the enormous benefits from taking climate action, which is good for both the bottom line and the planet. They are now taking what they have learned and cascading it down into their supply chains,” said Dexter Galvin, Head of Supply Chain at CDP.
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“This year’s top performers in CDP’s Supplier Engagement Rating include some of the biggest corporates, such as General Motors, Bank of America, General Mills and Hewlett Packard. Others are now following in the footsteps of these leaders and using their purchasing clout to drive positive change around the world.”
Yet despite the initiative taken by these industry giants, only 342 of the 1,500 US businesses that responded to CDP’s 2017 supply chain questionnaire reported that they are actively working to influence supplier sustainability.
In the wake of President Donald Trump’s disastrous — albeit entirely unsurprising — withdrawal from the Paris Climate Agreement, it has become painstakingly clear that if true and lasting progress is to be made, businesses will need to assume a greater leadership role. And while tackling sustainability issues at the corporate level are undeniably important, interventions across the value chain are where companies will experience the biggest gains in terms of reducing environment and social impacts.
“Over the past decade, many US corporates have taken huge leaps forward on improving the environmental performance of their own operations, as well as showing real leadership on issues such as climate change. But they have also recognized that their most significant sustainability impacts tend to occur outside of their own operational control,” said Hugh Jones, Managing Director of Business Advice at Carbon Trust.
“It’s great to see that they are using their considerable influence to drive suppliers to take action, as well as developing their capability and skills. However, those that are taking action are still in the minority, so the more they can inspire others to follow, the greater their influence will be.”
With thirty-seven percent of carbon reduction opportunities identified globally come from US suppliers, two-thirds of which (68 percent) show a return on investment in less than three years, the argument for action does indeed exist and by now, the business case for sustainability is well-known. It then becomes a question of helping businesses identify where and how to make meaningful changes.
CDP’s new data points to energy efficiency in buildings as presenting the largest opportunity for US suppliers in terms of carbon emission savings (37 percent). Other major opportunities include the purchase of low-carbon energy (22 percent), process emissions reductions (19 percent) and waste recovery (10 percent). To spur progress in these areas, the widespread adopt of tools such as life cycle assessment and setting science-based targets will continue to be essential to identify hotspots and prioritize actions.