Research suggests room for improvement on supply-chain emissions reductions

Despite good intentions, efforts to manage Scope 3 emissions have been limited at best.
Written by Heather Clancy, Contributor

Throughout 2011, one of the hottest topics among sustainability managers was work being launched by many big enterprise companies intended to extend emissions reductions efforts throughout their supply chains. Despite those good intentions, new research from the Carbon Disclosure Project (CDP) and Accenture suggests these efforts to reduce Scope 3 emissions have had minimal impact so far.

CDP and Accenture report that even though 43 percent of the companies they studied managed year-on-year carbon emissions reductions during 2011, only 28 percent of the suppliers working with those companies managed to do the same.

The data covers 49 multinational companies that contribute information to CDP; that data also extends to the roughly 1,800 suppliers serving those enterprises.

There is increasing pressure, however, for suppliers to get their act together. The report, "A new era: supplier management in the low-carbon economy," suggests that 67 percent of the responding companies now include carbon management parameter in the procurement selection process used to screen suppliers. What's more, a growing percentage of the CDP companies said they will "deselect" suppliers in the future for failing to meet their environmental criteria within five years. In 2009, just 17 percent of the businesses reporting to CDP made that claim; now, 39 percent of them have adopted this stance.

CDP's program director, Frances Way, observed:

"Companies are evolving the way they operate to better capitalize on the opportunities presented by carbon-efficient supply chains. Such a large shift in companies' procurement models is encouraging but since these trends are only now emerging, we are yet to see a transformational impact on suppliers' emissions."

For the short term, at least, there are growing incentives for supply-chain partners to start getting on board with their big-company partners' emissions strategies. More than 62 percent of the CDP-reporting companies said they look more favorably on supply-chain partners, in the form of positive external communications and other forms of preferential treatment.

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(Thumbnail image of smoke stack in Toronto by Dimitri Castrique, courtesy of Stock.xchg)

This post was originally published on Smartplanet.com

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