Carbon Management Becomes Key Part of Supply Chain Strategy for Major Global Companies

Suppliers are now expected by some of their global customers to demonstrate greenhouse gas emissions management, awareness and action, in order to maintain business relationships, a Carbon Disclosure Project (CDP) report shows.

The second annual CDP Supply Chain Report, produced by A.T. Kearney, summarizes climate change information from 710 suppliers. Members, who include global customers, such as Dell, Juniper Networks, National Grid, PepsiCo and Reckitt Benckiser are requesting their suppliers to disclose data via the CDP Supply Chain program. Although this report shows significant improvement in best practices over last year's results, suppliers still have a long way to go.

The 44 CDP Supply Chain member companies are leading in carbon management within their own businesses and expecting their suppliers to demonstrate strong carbon management strategies too:

The majority of CDP Supply Chain members (56 percent) have also stated they actually expect to drop some suppliers in the future for failing to meet carbon management criteria set by the companies. This is an increase from just 6 percent of members who would drop suppliers today for failure to manage carbon. Some also indicate that they intend to develop contracts which require improved carbon management. These companies are choosing to take these steps ahead of regulation, because they make good business sense.

"It is clear that some companies are now requiring their suppliers to address carbon management as a core business issue. This is no longer a ‘nice to have' for the leaders, it is becoming a ‘need to have' and we expect to see this trend growing across the whole business sector," said Paul Dickinson, CEO of CDP. The report shows that the importance granted by CDP Supply Chain members to managing carbon targets versus classic procurement targets is expected to triple in the next five years.

A full copy of the CDP Supply Chain Report 2010 is available at www.cdproject.net.

Source: http://www.supplychainbrain.com/