Browse
Engage
Research
NEW YORK , NY — More major companies are tracking their supply chain emissions, and many, along with their suppliers, are also saving money from reducing carbon.
The Carbon Disclosure Project's latest supply chain report looks at what the 57 members of its Supply Chain program and 1,000 of their suppliers have been doing to integrate climate change into their businesses.
The report, by consulting firm A.T. Kearney, looks at activities from 2010 and found that 86 percent of member companies worked with their suppliers on carbon-related activities, a jump from the 46 percent that collaborated with suppliers in 2009.
More than 50 percent of member companies and 25 percent of suppliers say they've lowered costs thanks to actions that also reduced their emissions, the typical result from cutting down on things like energy and fuel, but in this case it also sends a message to other suppliers that aren't tracking or tackling their carbon.
The number of companies with formal climate change strategies has grown from 63 percent in 2009 to 79 percent last year, though in 2010 the number of companies citing employee motivation, brand improvement and product differentiation as drivers jumped much more than with other factors.
Although suppliers are admittedly expected to lag behind larger companies due to having fewer resources and the fewer expectations and pressures put on them in previous years, the report shows that the same percentage of suppliers as in 2009, about 33 percent, have carbon reduction goals. That's compared to the 90 percent of member companies that have goals.
And while 72 percent of member companies have their supply chain emissions data verified externally, only 39 percent of suppliers do the same due to the costs of verification.
A bright spot in the report is that 45 percent of companies are tracking and reporting on supply chain emissions, double from 2009. But along with that, businesses said one of the major hurdles to tracking supply chain emissions is the lack of standardization for such Scope 3 emissions reporting.
Money - CC license by epSos.de (Flickr)
It is good to see that the
It is good to see that the sustainable supply chain movement is gaining some momentum. I was at a discussion about the metrics of sustainability with several businesses from Northeast Ohio yesterday, and a few of the larger businesses discussed their approaches to supply chain management. Most of them were hesitant to begin requiring data disclosure from small businesses within their supply chain, which can have positive and negative consequences. It seems like much of the effect of large corporations like Wal-Mart and P&G requiring this of their suppliers has largely been confined to medium and large businesses, rather than extending down to the true small businesses. While it may be difficult for SMEs to get into this process of tracking and verifying sustainability metrics for their supply chain partners, it is an issue that will need to be addressed in the near future. The true potential of supply chain sustainability sits untapped within the small business community. Once SMEs get engaged in this process, there are untold amounts of carbon and dollars that can be saved. We just need to make sure that they have structures and support systems available to lean on when working through this process, rather than forcing them to jump in all at once.
- Tim Kovach,
Product Coordinator, Energy Programs at COSE
www.cose.org/blog
www.twitter.com/COSEenergy