Suppliers See Climate Change Regulation as Business Risk: Survey

Suppliers See Climate Change Regulation as Business Risk: Survey

An overwhelming majority of supply chain companies believe regulation of greenhouse gas (GHG) emissions is a potential risk to business, according to a Carbon Disclosure Project survey.

Of the 96 percent of suppliers that believe GHG regulation will be a risk, the most common concerns were taxation of emissions and emission limits.

The Carbon Disclosure Project questioned 144 suppliers for its Supply Chain Leadership Collaboration survey. Companies that work with the Collaboration to measure supply chain carbon risks include Cadbury Schweppes, Dell, HP, Imperial Tobacco, L'Oréal, Nestlé, PepsiCo UK & Ireland, Procter & Gamble, Reckitt Benckiser, Tesco and Unilever. Many of the companies report that their supply chain activities account for most of their greenhouse gas emissions.

Of the suppliers surveyed, only 26 percent have set GHG reduction targets, but even more recognize the risks that can come from climate change and what can be done to try to prevent change. Suppliers expect extreme weather changes or patterns to hurt operations and slow productivity, and more than half believe the best way to manage climate-related risks is to cut energy consumption.

Not all suppliers measure their own, or any, emissions. Fifty-eight percent report the amount of fossil fuels they burn and how much electricity their purchase, and 12 percent report emission due to their activity but are from sources owned or controlled by others.

Starting May 1, 13 additional companies are taking part in the Supply Chain Leadership Collaboration, and another survey of suppliers will be conducted. New companies include Carrefour, Colgate-Palmolive, Exelon Corporation, Fiji Water, Heinz, IBM, Johnson Controls, Juniper Networks, Kellogg Company, Merrill Lynch & Co., National Grid, SSL International and Vodafone.

"It is only by asking suppliers the right questions that large corporations will be able to manage their supply chain emissions," said Paul Dickinson, CEO of the Carbon Disclosure Project. "Engaging with suppliers is a key first step to understanding carbon liability and to bringing about emissions reductions through the supply chain."