Report: Suppliers Neglect Climate Change

Suppliers of major global companies need to increase their awareness of the regulatory, physical and general risks that climate change poses to their business, according to the 2008 CDP Supply Chain Report, written by PricewaterhouseCoopers LLP, and released March 5.

Of 634 suppliers surveyed globally, only 58 percent said they believed that climate change posed a risk to their operations, while one third said it posed no risk at all. These results show that there is still a lack of understanding among suppliers about the business threats caused by climate change, said the authors of the study.

In the study, Cadbury, Colgate-Palmolive, Johnson & Johnson, Juniper Networks, P&G, Unilever and Vodafone were among the 34 companies who requested that their major suppliers report on their carbon footprints and on their climate change strategies aimed at maintaining a resilient and sustainable supply chain. The findings follow the framework of the Carbon Disclosure Project, the first process to provide a standard reporting model for suppliers of major global companies in order to advance carbon disclosure in the supply chain. Suppliers of these global companies were invited to provide information that examined their carbon risks and opportunities, emissions, reduction targets and plans; and their governance and product lifecycles. Suppliers to the 34 member companies came from multiple sectors and countries.

The results showed Asian suppliers are the most likely to use governance and employee incentives to drive positive action in carbon and climate change activity. Of the 77 Asian-based suppliers that responded, 66 percent cited board level responsibility for climate change issues, above the 54 percent average worldwide. An additional 39 percent of responding Asian companies reported the use of employee incentives as a key lever for change. For more information about the non-profit Carbon Disclosure Project, visit: www.cdproject.net/