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Leading firms to be rated on supply chain carbon

The international system for measuring the environmental performance of leading global companies, CDP, will begin rating companies on their supplier engagement from 2017.

The international system for measuring the environmental performance of leading global companies, CDP, will begin rating companies on their supplier engagement from 2017.

CDP, formerly the Carbon Disclosure Project, provides the global system for corporations to measure and disclose information on their environmental performance. 

More than 6,500 companies disclosed environmental information through CDP in 2015. 

Supplier engagement

Starting in 2017, CDP will begin scoring companies on their actions to reduce emissions and climate-related risks in supply chains. 

According to CDP, supply chains are responsible for up to four times the emissions of a purchasing company’s direct operations and are therefore a critical focus area for forward-thinking businesses. 

Companies scoring the highest on supplier engagement on climate issues will be named in the annual CDP supply chain report, released in January 2017. 

Subsequent reports will also name the companies failing to manage carbon and climate change effectively in their supply chains.

‘Race to the top’

Companies will be scored based on performance across four key areas: governance, ambition, measurement and supplier engagement.

Dexter Galvin, head of CDP’s supply chain programme, said: “Purchasing organisations have the potential to galvanise significant environmental changes in their supply chain but we know that not enough companies are engaging with their suppliers on emissions and climate change strategies.

“By shining a light on whether companies are taking responsibility for the emissions hidden in their supply chains, we hope to spur on the laggards and drive a race to the top. This in turn will result in more sustainable supply chains, helping companies to significantly reduce the size of their carbon footprint.”

Mounting pressure

The pressure on leading companies to monitor the environmental impact of their supply chains is only expected to increase in future as companies are put under more stringent reporting regimes.

Dan Hamza Goodacre, programme director of energy efficiency at ClimateWorks Foundation, which is supporting CDP’s supply chain programme, said the ratings were vital to “help us all see which companies are at the forefront of taking greater responsibility for their emissions.”

CDP’s 2015 supply chain report, which did not rate individual companies on supplier engagement, placed the UK second behind France in a global comparison of the environmental performance of supply chains.