Carbon Disclosure Project Supply Chain Report 2011

Over 50% of an average corporation’s carbon emissions are typically from the supply chain rather than within its own four walls. Managing supply chain emissions is therefore critical if we are going to address climate change effectively.

The Carbon Disclosure Project’s Supply Chain program is a unique collaboration of 57 global corporations who are members of CDP Supply Chain. These companies recognize the significance of the supply chain in carbon management. They are actively engaged in working with their suppliers to manage carbon and have the power and influence to really make a difference. This report is based on this work and is the most significant study of how business is managing supply chain emissions. The insights are informed by detailed data and research conducted with 1,000 participating suppliers across industries all over the world.

There are three core results from this year’s research:

1. Supplier carbon reduction ambition still does not meet global carbon reduction requirements to limit the rise of global surface temperature. Only one third of responding suppliers have a target for carbon reduction and even the targets that are in place are not sufficient. Should this status continue, this would mean global emissions by 2015 will increase by 6% instead of the necessary 20% reduction.

2. But there is hope…
Compared to last year, companies have improved in assembling the building blocks for dramatic change – including improved reporting, increased board level responsibility and greater realization that carbon management presents a wider cost and revenue opportunity rather than being a pure risk mitigation activity.

3. CDP Members are leading the way
They have started a chain reaction for engagement in the supply chain – they are increasingly using their influence and power to drive change. They do this by deploying differentiated levers to engage with their suppliers. These include redesigning products, directly reducing demand for carbon intensive purchases, working collaboratively with suppliers to cut emissions and making effective carbon management a supplier selection criterion.

The report highlights that it is still early days in the quest to reduce emissions. While progress has been made, a major step change is required if business is to meet the global requirements. Increased engagement and commitment in the supply chain is indispensable for achieving this. This report highlights that although there is work to do, through leadership – as demonstrated by CDP Members in working with their suppliers – a positive snowball and domino effect in the supply chain can bring about the change needed.