World’s biggest businesses cut CO2 equal to South Korea’s emissions from their supply chains last year, according to the disclosure platform, which also added AstraZeneca, Coca-Cola European Partners, Diageo and LG Innotek to its A list for action on water risk. Terry Slavin reports

Unilever, Danone, L’Oréal, Microsoft, BT Group, Nestlé and McDonald’s are among 120 companies named as supplier engagement leaders in a report published this week by CDP.

The report, Cascading commitments: Driving upstream action through supply chain engagement, is based largely on data disclosed to the non-profit global disclosure platform by 5,562 suppliers in 2018. But Dexter Galvin, global director of corporates and supply chains at CDP, pointed out that not all of the leaders named in the report are members of CDP.

“It is possible for a company to be a supplier engagement leader by using their own systems or processes to engage their suppliers,” he told Ethical Corporation. “Our focus in highlighting the leaders is not to promote membership of the program necessarily, but to celebrate leadership on supplier engagement.” 

The report highlights a 35% growth in targets for water use among suppliers as organisation take a holistic approach to environmental management

CDP said there has been “a step-change in corporate awareness and action on environmental impacts within the supply chain in the last decade”, with 115 organisations with a combined purchasing power in excess of $3.3trn requesting environmental information in 2018, up from 14 organisations 10 years ago. Suppliers reported emissions reductions of 633m metric tonnes of carbon dioxide – greater than the emissions of South Korea in 2017, leading to collective cost savings of $19.3bn, according to CDP.  

The report highlights a 35% growth in targets for water use among suppliers from 2017, as organisations take an increasingly holistic approach to environmental management.

Companies have slashed emissions by engaging their suppliers. Credit RK008

It said that 43 corporates, including Braskem, HP Inc, and Intel, had asked their suppliers to report on water in 2018, up from 37 in 2017, while the number of suppliers reporting water targets grew from 51% in 2017 to 69% this year. 

But with fewer than half of companies reporting board-level oversight of water issues – compared to 69% for climate issues – governance of water security remains low. (See ‘We can’t wait for Al Gore. CEOs have to lean in to the water crisis’)

Meanwhile, with deforestation and forest degradation accounting for approximately 10-15% of the world's GHG emissions, protecting forests is rising up the corporate agenda.

FIRMENICH,  L'Oréal, and TETRA PAK feature on CDP's A list for forests and for supplier engagement

In 2018 305 suppliers provided disclosures to 14 purchasers, including Arcos Dorados, L’Oréal and McDonalds,  a 247% increase on the 88 businesses that responded to seven purchasers in 2017’s pilot phase.

However, just 17% of those suppliers report setting any sort of target related to deforestation; not enough to slow the 18.7 million acres of forests lost annually, according to WWF.

This was reflected in CDP’s A list report issued last month, in which only seven of the 455 companies that reported to CDP on deforestation received an A, compared with six of 264 reporters last year. (See Firmenich and L’Oreal get triple A scores as CDP raised bar in climate risk reporting) FIRMENICH SA, L'Oréal, and TETRA PAK feature on both the deforestation A list and supplier engagement leader board 


Only 17% of suppliers set any sort of target related to deforestation. Credit Rich Carey/Shutterstock

Meanwhile, CDP announced this week that AstraZeneca, Coca-Cola European Partners, Diageo and
LG Innotek have now been added to its water risk A list for 2018, lifting the number to 31 among a possible 2113 companies. This was a substantial drop from 74 last year, and reflected CDP’s adoption of stricter methodology in line with recommendations by the Task Force on Climate Related Financial Disclosures. When CDP released its A list last month, it reported that 100 companies were “still undergoing final quality assurance checks”.

Joe Franses, VP of sustainability for Coca-Cola European Partners, said the company was proud to be one of only 19 companies to score an A for both climate and water.

“Reporting standards show no sign of standing still due to the rising urgency of global environmental challenges and this result is even more significant as CDP updated its scoring methodology in 2018,” Franses said. “This clearly demonstrates the progress we are making to deliver our sustainability goals, and challenge ourselves as a business to stretch our targets.”

Senior executives from five CDP supplier engagement leaders will be among over 100 speakers at Ethical Corporation’s Responsible Business Summit New York 18-19 March. Hear from Jorge Soto from Braskem, Cisco Systems Inc's John Kern, Citigroup Inc's Davida Heller and Hui Wen Chan, McDonald's Rachael Sherman and Unilever's John Coyne.

CDP  TCFD  water risk  deforestation  climate 

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