115 organizations, representing over US$3.3 trillion of combined annual spend, are working to improve supply chain sustainability by requesting environmental data from more than 11,500 global suppliers. The organizations include four of the world’s top 20 retail companies – Walmart, Target, CVS Health and Tesco – which are demonstrating leadership by working with suppliers to cut supply chain emissions.
The leadership shown by the retail sector is part of a wider surge of action from private and public-sector organizations, harnessing their purchasing power to tackle climate change, deforestation and water security, according to the latest figures from global environmental impact non-profit CDP. The list of 115 organizations collecting supply chain data through CDP is up from just 99 last year. The figure has been growing since CDP started requesting environmental data from on behalf of purchasing organizations ten years ago.
“With emissions in the supply chain on average around four times greater than those from a company’s direct operations – and rising to up to seven times greater for retailers and consumer-facing companies – large multinational corporations cannot comprehensively address their environmental impact without looking to their supply chains,” said Sonya Bhonsle, Head of Supply Chain at CDP. “It’s very encouraging to see so many of the world’s biggest buyers taking supply chain sustainability seriously.
“By requesting data from their suppliers, they are shining a light on the risks hidden deep within their production chains – and uncovering a myriad of opportunities for reducing their overall environmental footprint, boosting innovation and cutting costs.”
CDP demystifies science-based target-setting
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The rise in companies scrutinizing their supply chains coincides with growing momentum behind the take-up of science-based targets – goals that allow companies to reduce their emissions in line with the decarbonization required to keep global temperature increase below two degrees Celsius, the central aim of the Paris Agreement. The Science Based Targets initiative (SBTi), which helps companies develop and approves such targets, requires companies to set scope 3 targets if their scope 3 emissions account for at least 40% of their total emissions. For global retailers that do not manufacture many of the products they sell, scope 3 emissions in their supply chain can be far greater than 40 percent.
“The future of Target’s business depends on taking care of the resources we have today, so we are constantly working to find more environmentally friendly ways to bring guests the products they want,” said Jennifer Silberman, VP of Corporate Responsibility at Target. “We have been reporting our own emissions to CDP since 2012, and will now seek this data from key Target suppliers to better support them in achieving greater efficiency, investments in innovation and sustainable choices.”
In addition to the retailers, other organizations which have begun requesting supplier data through CDP in 2018 include:
- Belgian-Brazilian company AB InBev, the world’s biggest brewer with revenues of US$46 billion in 2016, and it’s Brazilian subsidiary AmBev;
- Los Angeles Department of Water & Power, the main municipal utility in the United States, serving over four million residents;
- Leading specialty chemicals companies Croda (UK) and Arkema (France); and
- Royal Bank of Canada, the largest bank in Canada by market capitalization.