Study Finds Half of Multinationals Will Choose Low-Carbon Suppliers

Study Finds Half of Multinationals Will Choose Low-Carbon Suppliers

Image CC licensed by Flickr user Robert Scoble

For years, some of the biggest names in the business community have looked to their global supply chains for opportunities to reduce carbon emissions.

Walmart, for example, famously decreed the supply chain the next frontier when it began surveying suppliers on their environmental impacts two years ago, later setting a goal of squeezing 20 million metric tons of emissions from its products and suppliers by 2015. AT&T also drew a line in the sand this year when it said that more than half of its expenditures would go toward suppliers that track their carbon footprints.

This focus on the supply chain is only going to sharpen in the coming years, new research from the Carbon Trust suggests. The organization's advisory services arm surveyed multinational firms on their views of supplier performance and found a potential payoff for those that deliver low carbon products and performance.

In fact, half of the survey firms said they would choose suppliers based on their carbon performance in the future. About 42 percent of those currently not addressing supply issues now would do in the next year.

Of those multinationals already working toward reducing supply chain emissions -- 40 percent -- two-thirds are willing to pay a 10 percent premium for low carbon products or services.

Considering the political and regulatory climate in the United States, it's not surprising that there is less scrutiny on supply chain emissions from multinationals based here. Nearly 30 percent of U.S.-based multinationals said they would probably drop suppliers because of poor carbon performance, compared to 56 percent in the UK.

Multinationals expect shareholders will exert growing pressure over carbon in the coming years, but again, we see the regional differences here come into play. Just 4 percent of UK-based multinationals view shareholder pressure as a key driver now, but 74 percent believe it will play a bigger role in the future. In the U.S., meanwhile, nearly a quarter feel the pressure now, but just 32 percent view shareholders as a key driver for reducing emissions down the road.

Image CC licensed by Flickr user Robert Scoble.

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