Vendors choke progress on supply chain emissions

22 January 2013

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22 January 2013 | Adam Leach

Businesses’ ambitions to make their supply chains more sustainable are being held back because those further down the chain are less focused on making progress.

Reducing Risk And Driving Business Value, a report published today by the Carbon Disclosure Project (CDP) and Accenture, found that while 92 per cent of purchasing companies have set emission reduction targets, just 38 per cent of suppliers have done the same. This disparity infringes on the buyer’s ability to reduce emissions from its entire supply chain.

Paul Simpson, chief executive officer at the Carbon Disclosure Project, said: “This research illuminates fragility in the global supply chain model. The marked difference in the sustainable actions of companies and their suppliers highlights a missed opportunity for suppliers to reduce energy costs and risks.”

The report, which is based on the responses of 56 major purchasing organisations and 2,363 suppliers, also found a number of other areas where the major players had stronger ambitions than their suppliers. While 69 per cent of purchasers had invested funds to reduce emissions, just 27 per cent of suppliers have also taken this step. In return for investing, 73 per cent of purchasers received cash savings, such as reduced energy bills. But only 29 per cent of suppliers saw their costs reduced as a result of lowering emissions.

Gary Hanifan, global sustainability lead for supply chain at Accenture, said: “Those who are the most transparent about their climate change risks are more likely to achieve the greatest emissions reductions and they are also more likely to enjoy monetary savings as a result of their responses to climate change risks.”

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