Companies that fail to manage carbon and climate change in their supply chains could find themselves being named and shamed under a new scheme from CDP, formerly the Carbon Disclosure Project.
It has devised a “supplier engagement rating” that in the first instance will shine a spotlight on the companies taking action to reduce emissions and lower climate-related risks in the supply chain.
Companies scoring the highest on supplier engagement on climate issues will be named in the annual CDP supply chain report, released in January 2017.
But, in subsequent years, the report will also list those companies failing to manage carbon and climate change in their supply chains.
Supply chains are responsible for up to four times the greenhouse gas emissions of a company’s direct operations.
In 2016, 89 organisation – including global retailer Metro Group and the US Department of the Navy – requested data from over 8,300 suppliers worldwide through CDP’s supply chain programme, which asks companies in the supply chain to report on their environmental performance via an annual questionnaire.
CDP is an international, not-for-profit organisation providing the global system for companies, cities, states and regions to measure, disclose, manage and share information on their environmental performance.
The CDP supplier engagement rating will score all companies that disclose to the 2016 CDP supply chain questionnaire, with over 4,000 companies having disclosed in 2015. CDP supply chain members (purchasing organisations that request data from their suppliers via CDP) that themselves disclose to the supply chain or climate change questionnaire will also be evaluated on supplier engagement.
Scores will be given based on performance across four key areas related to governance, ambition, measurement and supplier engagement.
Dexter Galvin, head of CDP’s supply chain programme, said: “By shining a light on whether companies are taking responsibility for the emissions hidden in their supply chains, we hope to spur on the laggards and drive a race to the top. This in turn will result in more sustainable supply chains, helping companies to significantly reduce the size of their carbon footprint.”
Régine Lucas, chief procurement officer at L’Oréal said: “We look forward to being scored by CDP on our supplier engagement. By showcasing examples of best practice, the CDP rating will spur us to work even more closely with our suppliers and continue driving down emissions in the supply chain.”