Science-based targets and TCFD requirements in bail-out packages are helping to drive greater corporate disclosure. Terry Slavin reports
CDP has seen a 24% increase in the number of companies asking their suppliers for environmental transparency in the past year, the not-for-profit agency discloses.
Sainsbury’s, HSBC, Nike, Airbus, Ørsted and Bayer among the 30 new joiners, bringing the total to 150, with a combined purchasing spend of more than $4tn.
In an interview, Dexter Galvin, global director of corporations and supply chains at CDP, said that the Covid-19 pandemic had not dampened companies’ commitment to set long-term climate targets through signing up to initiatives like science-based targets.
I think it’s really interesting that Airbus, which is really struggling in the crisis, has committed to engaging its suppliers
And with emissions in the supply chain on average 5.5 times as high as in a corporation’s own operations, they are required to have a robust supplier engagement strategy to manage those emissions if they’ve set the more ambitious 1.5C target.
Galvin cited Sainsbury’s, which in January committed to investing £1bn to becoming a net-zero business by 2040, and to work collaboratively with suppliers to make their own carbon reduction commitments.
New members were still joining the supplier programme in March and April, despite being in the teeth of the lockdown, and had not pulled out of being part of the request for environmental data that CDP sent out to over 15,000 suppliers at the beginning of April.
Galvin said it was still too early to tell how the unfolding economic crisis will affect companies’ behaviour, but there were encouraging signs.
“I think it’s really interesting that Airbus, which is really struggling in the crisis, has committed to engaging its suppliers.”
Galvin added that another factor may be a growing pressure for major corporations to be transparent as a result of the pandemic. The pressure is coming from customers and from governments like Canada, which said this week that any company applying for its corporate bail-out package must commit to report on its climate impacts in line with the Task Force on Climate-related Financial Disclosures (TCFD), with which CDP is aligned.
Companies really need to know the symbiosis of all of the topics of deforestation, water and climate change
When joining CDP’s supplier programme, companies are asked to specify whether they want their suppliers to respond to CDP’s questionnaires on either climate change, deforestation or water security, or a combination.
The vast majority choose only climate change, but this year has seen an increase from 13 to 19 in purchasers asking for forests data, with six new companies making the request in 2020, including Sainsbury’s, toymaker Lego Group and Chinese poultry giant Sunner Group.
“It’s still way below what we would like,” Galvin said. “Companies really need to know the impact of deforestation in their supply chain, and the symbiosis of all of the topics of deforestation, water and climate change.”
But he said the addition of Sunner Group was particularly welcome. “The inclusion of this large Chinese conglomerate gets us, for the first time, I think, meaningful data on the supply chains of large drivers of deforestation in China.”
The German cash and carry wholesale group METRO AG, meanwhile, which has tracked its water footprint through CDP’s supplier programme for several years, has added deforestation and climate questionnaires for its suppliers.
Sarah Schlegel, head of corporate responsibility at METRO AG, said asking key suppliers to fill out CDP’s water questionnaire “has helped us make progress against our targets in reducing water use in our supply chain. Today, we want to go a step further and extend this engagement to our no-deforestation and climate commitments … By analysing the intensity of our suppliers’ emissions, we can more easily model and manage our scope 3 emissions.”
The full list of CDP supply chain members is available at: https://www.cdp.net/en/supply-chain
Science Based Targets Initiative Sainsbury's Covid-10 Coronavirus TCFD Sunner Group METRO AG