Leading companies cut supply chain emissions, save money

A new report by CDP, a global environmental disclosure platform, says major companies worldwide achieved a significant reduction in greenhouse gas emissions in their supply chains in 2017.
Carbon emissions in supply chains are on average four times those of company’s direct operations. The report says as a result of emission reduction activities, the companies saved costs amounting to USD 14 billion last year.
The research, covering companies from Honda to Microsoft, highlights the growing momentum for global climate action. It shows that the number of companies embracing an industry-leading approach to tackling emissions in their supply chains has doubled within a year, with total emission reductions reaching 551 million metric tonnes of carbon dioxide – more than Brazil’s total carbon emissions in 2016.
In a foreword to the CDP report, Patricia Espinosa, Executive Secretary of UN Climate Change, says: “Delivering on the ambitions of the Paris Agreement will require businesses to play a key role to reduce emissions, manage water resources and limit deforestation within their operations and their supply chains.”
“I am pleased to see that an ever-increasing number of companies reporting to CDP are integrating sustainability-thinking into their business models and applaud the members of the CDP supply chain program for being pioneers in this regard. I encourage businesses to work with suppliers to raise ambition across their supply chain.”
The central aim of the Paris Climate Change Agreement is to limit the rise of global average temperatures to well below two degrees Celsius and as close as possible to 1.5 degrees. A significant reduction in global greenhouse gas emissions worldwide, above all from business, is critical to achieving this goal.
The World Economic Forum’s latest report on major risks and challenges facing the world shows environmental risks as one of the most significant risks facing humanity, and during discussions at the annual meeting in Davos last week, the importance of addressing supply chains when tackling environmental challenges was underscored – not least because of the high amount of carbon emissions in supply chains.
Recognising companies for their efforts with suppliers to tackle carbon emissions and lower environmental risks in the supply chain, CDP has awarded 58 companies a place on its second annual Supplier Engagement Leader Board. This is double the number of companies identified in 2017 and includes giants such as Apple, Honda, Bank of America, Microsoft, Nestlé, Société Générale, Tokyo Gas Co. and Unilever.
Examples of leadership among the 58 companies include:
Ajinomoto: The Japanese food, chemicals and pharmaceuticals corporation worked with a key supplier to become the only company worldwide to sell drinks in 100% recycled heat-resistant PET bottles, reducing the use of virgin plastics from fossil fuels by around 2,000 tonnes a year.
Kellogg Company: the global food company operates its Origins™ program across 21 countries, supporting around 294,000 farmers to become more sustainable and build resilience to the impacts of climate change.
Sky: in partnership with a key supplier, the European entertainment and telecommunications company is pioneering a circular economy model for its new set-top box, using sustainable product design to create a closed loop system with zero waste to landfill. With analysis provided by McKinsey & Company, CDP’s Global Supply Chain Report 2018 titled Closing the Gap: Scaling up Sustainable Supply Chain Practices, is based on climate, water and deforestation-related data collected from over 4,800 supplying companies across global supply chains.
The report reveals that this leadership is paying dividends, as awareness of climate change-related risks and opportunities is increasing down the supply chain. Over three quarters (76%) of suppliers responding to CDP have identified some inherent climate change risks to their business and more than half (52%) report that they have integrated climate change into their business strategy.