Supply chains are responsible for up to four times the greenhouse gas emissions of a company’s direct operations and yet half of major companies’ key suppliers don’t provide requested climate data to their corporate customers, according to a study produced by CDP (formerly Carbon Disclosure Project), as reported by Jessica Lyons Hardcastle in Environmental Leader.
What is holding suppliers back from supplying this information is the availability of financing, according to Dexter Galvin, head of CDP’s supply chain program. So the group is developing a plan to offer preferential rates. Currently they are working with a number of banks and financial institutions.
Suppliers who report on their carbon disclosure strategies are better able to manage risk and that can lead to costs savings. Around three quarters of the 1,850 repeat participants in CDP’s supply chain program have climate risk management procedures in place and are actively reducing emissions, compared to fewer than half the 1,258 first time disclosers.
“Suppliers that took part in our program for the first time last year averaged $900,000 of savings as a result of each initiative to reduce emissions,” Galvin says. “That number jumps to $1.5 million when suppliers have been disclosing through CDP for three years plus.”
