Big Companies Pilot Project to Measure Supply Carbon Footprints
The
Carbon Disclosure Project (CDP), a collaboration of more than 315
institutional investors, including Goldman Sachs, Merrill Lynch,
Allianz and HSBC, with assets under management of more than $41
trillion, is working with some of the world’s largest companies to help
them measure their emissions through their supply chains.
CDP has teamed up with some of the largest purchasing global
organizations under the CDP Supply Chain Leadership Collaboration. New
corporate members include Dell, HP, L’Oreal, PepsiCo, and Reckitt
Benckiser. They join original members Cadbury Schweppes, Imperial
Tobacco, Nestle, Procter & Gamble, Tesco and Unilever, which were
announced in October 2007. CDP is working with these global companies
and their suppliers to create one single standardized information
request to elicit key climate change information throughout their
supply chains.
Each member of the collaboration has selected up to 50 suppliers to
work with them and to respond to the CDP pilot information request in
the first quarter of 2008. The results of the pilot will refine the
process in preparation for the roll out and will help customers and
suppliers work together to develop strategies to reduce their carbon
footprints. Some members will work with suppliers at the national
level, others will work internationally.
The project will be rolled out in May, and CDP is inviting more
companies to join the collaboration. This will broaden both the
geographical and sectoral scope – and potentially bring tens of
thousands of new suppliers into the CDP process and extend disclosure
globally. A report will be produced on the findings.
“The Supply Chain Leadership Collaboration is a key step toward a
unified business approach to climate change," said Paul Dickinson, CEO
of CDP. "By bringing together the purchasing authority of some of the
largest companies in the world, CDP will encourage suppliers to measure
and manage their greenhouse gas emissions. This will enable large
companies to work toward managing their total carbon footprint, as the
first step to reducing the total carbon footprint is to measure its
size.”
The CDP information request elicits detailed information on
companies’ supply chains. It encourages suppliers to report carbon
footprints and climate change-relevant information, such as greenhouse
gas emissions data, emissions reduction targets and climate change
strategy. This is the first scheme that allows corporations to measure
the emissions through their supply chain using one single standardized
mechanism. This will decrease the burden on suppliers who might
otherwise receive several separate requests for similar information.
Key sectors represented in member supply chains include agriculture,
transportation, buildings management, packaging and electronic
components. This is the first time CDP will request climate change
relevant information from private companies and Small and Medium
Enterprises (SMEs) and the collaboration will bring some of the world’s
largest privately owned companies into the system. It also is an
important step to moving the CDP process into China, where many
suppliers to large multinationals are based.
“For decades, HP’s Design for Environment Program has focused on
innovation, reducing environmental impacts and responsible practices in
product development, operations and supply chain," said Pat Tiernan,
vice president, Social and Environmental Responsibility at HP. "We
joined the CDP Supply Chain Leadership Collaboration project to help
develop a consistent and appropriate methodology for reporting energy
use and carbon emissions throughout the supply chain.”
“Participating in the CDP Supply Chain Leadership Collaboration is
one of the steps that will help P&G achieve its new 5-year
sustainability goals, which include improving the environmental profile
of our products across their lifecycles," said Peter White, P&G
director of Global Sustainability.
CDP is an independent, not-for-profit organization established in
2000 to facilitate dialogue between companies and investors, supported
by quality information, from which a rational response to climate
change will emerge. The Carbon Disclosure Project is a special project
of Rockefeller Philanthropy Advisors in New York, with 501(c)3
charitable status.
Institutional Investors use CDP data to feed into investment
products as well as to inform their lending decisions. Investors also
identify companies in their portfolios with both high quality and poor
carbon disclosure practice and some file shareholder resolutions for
better disclosure on climate risk from companies not complying with CDP
disclosure.