The supply chain is the new frontier in environmental responsibility – an area rich with opportunity that remains mostly unexplored, where a number of pathfinders are starting to show others the value that can be found, says CDP which has published a report on the climate potential of green supply chain management.
In its report: “Missing link: Harnessing the power of purchasing for a sustainable future”, CDP has surveyed its 89 supply chain members collectively represent US$2.7 trillion in procurement spend, an amount that is broadly equivalent to the economy of the United Kingdom in 2016.
Savings of USD $12.4 billion in 2016 were reported by suppliers, proving that action on climate change and water is not only the right thing to do, but the smart thing to do.
Building on previous years, this 2017 report goes beyond setting out the current state of action from supplier respondents and members of the CDP supply chain program.
It sets out a framework for action within the supply chain, illustrated with case studies and examples of how organizations are taking action today. This year also sees the launch of CDP’s new Supplier Engagement Rating, recognizing the organizations that are demonstrating real leadership and best practice in working with their supply chains on climate change.
“By raising awareness of the positive aspects of supply chain action, it is possible to deliver tangible, meaningful results for the bottom line and the planet,” says Patricia Espinosa Executive Secretary, United Nations Framework Convention on Climate Change.
“I applaud the public and private sector purchasingorganizations that are taking climate action to their supply chains. It is encouraging to see the power of addressing climate change in supply chains. I also congratulate the companies highlighted by CDP as leaders on climate action in the first-ever Supply Chain Engagement Rating.”
By shining a light on leading company practices, this report provides insight into the evidence for action. It also highlights the tools and practices needed to deliver positive outcomes by taking greater action outside the direct operations of global companies.
CDP is developing an emerging body of knowledge and best practice on how to increase visibility and have a positive impact on their supply chain. Sharing these effective strategies as widely as possible could be the missing link in creating a sustainable, low carbon economy.
With the help and authority of the Supply Chain Member companies, CDP collected data from more than 4,300 suppliers around the world in 2016. Large public and private sector organizations have enormous purchasing power, often engaging with thousands – or tens of thousands – of direct and indirect suppliers. By harnessing the power of their procurement decisions it is possible for them to cascade their own commitments throughout the supply chain.
“Sustainability needs to move beyond organizational boundaries into the supply chain,” CDP says. “Supply chains are responsible for up to four times the GHGs of a company’s direct operations. They house sizable regulatory risk but also present ample opportunity for businesses to lower emissions.”
One of the most promising routes for delivering this transformation is harnessing the purchasing power of big buyers, who can collectively have an enormous impact on the sustainability of their extensive supply chains.