Big buyers harness the power of purchasing to deliver emissions reductions in the supply chain



By Tom Delay

This article was originally published on Carbon Trust and is republished with permission.

 

Some of the world’s biggest businesses and public sector organisations are using their influence to drive sustainability improvements throughout their supply chains. The CDP Supply Chain Report, written by the Carbon Trust and BSR, reveals that suppliers disclosed emissions reductions equivalent to 434 million tonnes of carbon dioxide in 2016 – greater than France’s total greenhouse gas emissions in 2014.[1] And these reductions resulted in associated cost savings of US$12.4 billion.

 

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Indirect emissions from supply chains are typically four times greater than an organisation’s direct operational emissions, so represent a huge area of opportunity for improvement. But although leaders are finding ways to take action in the supply chain, those commitments are typically not cascading beyond the first tier. Only 22% of responding companies are currently engaging with their own suppliers on carbon emissions, with just 16% engaging suppliers on water use.

 

The report, Missing link: Harnessing the power of purchasing for a sustainable future,was written on behalf of CDP’s 89 supply chain members – including PepsiCo, Microsoft, BMW and Wal-Mart – collectively representing US$2.7 trillion of procurement spend. The insights are based on data from 4,366 suppliers, as well as the strategies and actions taken by the members themselves.

 

The report incorporates the Carbon Trust’s four-part framework approach for developing an effective supply chain engagement programme. It also contains details of the types of interventions that can be effective in delivering change within the supply chain, illustrated by practical examples where they have been successfully implemented.

 

Supply chain is the next frontier in sustainability. Managing the environmental impact of your own operations is expected behaviour. But the greatest opportunities for reductions are typically outside of direct operational control, in the supply chain. While some are showing what can be done today, the majority do not yet have a clear understanding of how to measure their impact or find the value in working with suppliers. Large public and private sector organizations can deliver change at the scale and speed required to address the challenges of climate change and resource scarcity. We hope that our insight and the examples from the leaders engaged with CDP help to accelerate the shift to a more sustainable, low carbon economy.

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