Supply chains key to emissions savings

Over a billion metric tons of emissions would be saved if suppliers to just 125 multinationals increased their renewable electricity by 20 percentage points. This is according to new research released today by global non-profit CDP, during the UN’s COP25 climate conference in Madrid.

CDP’s report, Changing the Chain, analyses environmental data collected from almost 7,000 supplier companies on behalf of 125 big major buyers including Walmart, L'Oréal and Samsung Electronics and finds that the average proportion of renewable electricity is 11 per cent. Increasing the proportion of the total electricity they purchase by 20 percentage points to an average of 31 per cent would cut a gigaton of greenhouse gas emissions.

However, only 4 per cent of the suppliers (or 292 companies) in the analysis reported a renewable energy target in 2019. To address this, 31 major buyers working with CDP with over $741.6bn in purchasing spend, are actively engaging their suppliers to source more renewable energy. These include global names such as AB InBev, Accenture, BT Group, Signify and The LEGO Group.

Other key findings from the report include: the $1tr of financial impact from environmental risks that suppliers say they face: $906bn at risk from climate change, $78bn for potential water security risks and $16bn at risk from deforestation.

Metrics are increasingly used, with 42 large purchasing organisations saying they have or will have integrated environmental metrics, including CDP data, into their supplier relationship management.

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