24% jump in companies asking their suppliers for environmental transparency

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CDP

Environmental non-profit CDP today announced a significant 24% jump in the number of companies asking their suppliers to report environmental data this year.

Blue chip corporations like NikeAirbusSainsbury’s and Ørsted, as well as public sector organizations including the New York Metropolitan Transport Authority (NY MTA) are among the 30 large purchasing organizations from around the world that have started working with CDP for the first time this year to help manage their supply chains more sustainably.

They are asking their key suppliers to report data through CDP’s environmental disclosure platform on their impacts, risks, opportunities and strategies related to climate change, deforestation and/or water security issues. This data will then be used to inform procurement decisions and supplier engagement strategies.

These companies are joining the likes of WalmartMicrosoftStanley Black & Decker and Japan’s Environment Ministry, bringing the total number of CDP supply chain members to over 150 organizations with a combined procurement spend of over US$4 trillion, all calling for transparency on environmental issues from their suppliers. In total the request has gone out to over 15,000 suppliers this year.

Dexter Galvin, Global Director of Corporations & Supply Chains at CDP, commented: “The current Covid-19 pandemic and its economic fallout has shown that building resiliency into our global supply chains has never been more vital. Global corporations have supply chains that wrap around the globe, touching millions of people, and by holding the purse strings they have the power to drive impact at scale – incentivizing a behavior shift in the companies that supply them. With emissions in the supply chain being on average 5.5 times higher than a company’s direct emissions, the buyer-supplier dynamic will make or break whether our economy can reach net zero by 2050, as the science demands.”.

The organizations joining CDP for 2020 hail from around the world, with a surge of 34% growth in North America:

  • North America: 17 new joiners including Nike, One Jeanswear Group, Prudential, The Clorox Company, Nordstrom and the New York MTA
  • EUTen new joiners including Airbus, Ørsted and Bayer
  • UKSix new joiners including Sainsbury’s, HSBC, CBRE and GSMA (the international mobile networks trade association)
  • Latin AmericaThree new joiners including Vale and Empresas CMPC
  • Australia: Telstra Corporation
  • China: Fujian Sunner Group
  • Japan: Yokohama Rubber Company

The demand for this data among the procurement teams of some of the biggest buyers in the world is driven by growing awareness of the environmental risks posed to business – including physical impacts disrupting global supply chains and reputational risks to brands because of environmental damage in the supply chain.

Jaycee Pribulsky, Vice President, Sustainable Manufacturing & Sourcing at Nike commented: “Engagement with our extended supply chain and manufacturing partners has been key to Nike’s climate strategy for over a decade. We are pleased to join CDP as a supply chain member this year to further support our suppliers in reducing emissions and strengthening their climate resiliency. We look forward to working with CDP to catalyze greater action among our supply chain partners and drive impact at scale as Nike works toward meeting our 2030 science-based target.”

Rasmus Skov, Head of Sustainability at Ørsted, said: “Businesses will need to collaborate across supply chains to cut emissions at the pace and scale demanded by science. At Ørsted, we encourage our top suppliers in the renewable energy industry to make carbon reductions a part of their business strategy. This is key to staying competitive and accelerating the global transformation to green energy. With the help of CDP, we’re asking suppliers to disclose their own emissions and set science-based carbon reduction targets.”

James Lloyd, Procurement Director at CBRE said: “Our ambition in CBRE’s UK Advisory Business to be net zero by 2030 includes our scope 3 emissions, and we can only achieve this by engaging our suppliers. As the first real estate advisor to become a CDP supply chain member, we are calling on our suppliers in the sector to drive transparency and emissions reductions”.

Nicolás Gordon, Chief Sustainability Officer at Empresas CMPC added: “As we developed our 2030 sustainability roadmap, we realized that stronger engagement with our key suppliers was a vital element. For this reason, we decided to become a CDP supply chain member and request our suppliers to report environmental data, to inform our engagement strategy”.

When joining, 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.

Most have focused on climate change, but this year has seen an uptick in purchasers asking for forests data, with six new companies making the request in 2020, including UK supermarket Sainsbury’s, toymaker Lego Group and Chinese poultry giant Sunner Group, bringing the total to 19 out of 150+. This reflects a growing, but still often overlooked, understanding that halting deforestation and land degradation is essential to tackling climate change and biodiversity loss.

This includes companies like WalmartLego Group and METRO AG that were already driving transparency and action through CDP and have this year expanded further.

Sarah Schlegel, Head of Corporate Responsibility at METRO AG said: “METRO has been collaborating successfully with CDP as a supply chain member over several years to analyze the water footprint of the products we sell to our hospitality customers. This assessment with our key suppliers 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: This is why METRO is now calling on our suppliers to report climate and deforestation information to us through CDP’s system, as well as water security data. By analyzing 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: cdp.net/en/supply-chain

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