supply chain

Dhruvika writes on sustainable practices in various sectors for BuzzOnEarth. Get in touch with her at dhruvika@buzzonearth.com. Sometimes she reads her emails too.

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Over the past few years, there has been a surge in sustainably conscious consumers. According to Nielsen study, 81 percent of global consumers feel strongly that it’s a company’s responsibility to improve the environment and indulge in sustainable practices.

According to a new report by the non-profit global environmental disclosure platform CDP, the world’s biggest businesses cut down a massive 633 million metric tons of carbon dioxide from their supply chains.

The report, Cascading Commitments: Driving upstream action through supply chain engagement, is based on data disclosed through CDP by 5,562 suppliers. It also reveals a 35% growth in targets for water use among suppliers, compared to 2017, while the number of companies disclosing information to their customers on their forests-related impacts has more than tripled, from 88 in 2017 to 305 in 2018.

“For most organizations, the environmental impact within their supply chain significantly outstrips the impact related to their own operations. The decisions they make when purchasing goods and services, and the way they influence their suppliers, offers a far greater opportunity for positive change than could be achieved through acting only on areas within their direct operational control,” the report explains.

The data demonstrated that the big buyers are taking sustainability into account. 73% of the 27 major purchasers claimed that they are either currently deselecting, or considering deselecting, existing suppliers based on their environmental performance.

In addition, 63% are either currently using, or considering using, data from CDP disclosures to influence whether they contract with suppliers or not.

“Suppliers are critical partners as we work to transform our supply chain and deliver positive, lasting impact for our planet, people and communities,” commented Stuart Pann, chief supply chain officer at HP Inc. “For nearly a decade, we’ve used supplier environmental data in our procurement scorecard to help our suppliers advance from awareness and measurement to setting goals and taking action to reduce negative environmental impacts, including GHG emissions.”

This year, 305 suppliers provided disclosures to 14 purchasers – including Arcos Dorados, L’Oréal and McDonalds – a substantial 247% increase on the 88 businesses that responded to seven purchasers in 2017’s pilot phase.
However, just 17% of those suppliers report setting any sort of target related to deforestation; not enough to slow the 18.7 million acres[2] of forests lost annually.

CDP has awarded over 120 companies – out of a total of 5,000 – a place on its third annual Supplier Engagement leader board, more than double the 58 highlighted in 2018. These leaders – which include Canon, Diageo, GlaxoSmithKline, Mastercard, National Grid and Tessy Plastics – are recognized for their work with suppliers to reduce emissions and lower environmental risks in the supply chain.

The consumer demand is what driving this change and its likely to grow. The corporate will not change unless we do.

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