Suppliers face axe if they don’t go green

1 February 2010

1 February 2010 | Carly Chynoweth

Major global businesses would delist suppliers for failing to cut carbon emissions, a study has revealed.

More than half of the 44 businesses questioned for the Supply Chain Report from the Carbon Disclosure Project (CDP) would end relationships with vendors that do not meet carbon management criteria. Only 6 per cent, however, said they would do this immediately, according to the study produced on behalf of the CDP by consultancy AT Kearney.

The research, released today, quizzed the CDP’s 44 member companies (which include Dell, PepsiCo and BAE Systems) and 710 of their suppliers.

The report found that 89 per cent of the member firms had strategies for how to deal with suppliers on carbon-related issues, but only 20 per cent of the 44 companies had reported figures for supply chain emissions.

“We find that member companies face significant challenges when it comes to putting their good intentions into practice,” the report said.

“Only a small number have extensive knowledge about the availability of green products for their major spend categories, and most members do not currently have the tools they need to track their suppliers’ climate change performance appropriately.”

The CDP also criticised the “sustainability and depth of commitment” underpinning suppliers’ carbon reduction plans. Of the 710 suppliers that took part in the report, only 28 per cent have incentive schemes that encourage employees to drive carbon reduction, while only one-third have a strategy in place for working with their own vendors on this issue.

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