‘Surge’ in climate leadership puts greater focus on the supply chain

29-Jan-2018 - Last updated on 29-Jan-2018 at 12:40 GMT

Engage to cut supply chain emissions, CDP urges

Last year saw a “surge” in climate leadership, prompting environmental disclosure platform the Climate Disclosure Project (CDP) to praise food and beverage companies including Nestlé, Ajinomoto, Coca-Cola, Kellogg and Unilever for their supplier engagement efforts.

The five food and drink manufacturers were included in CDP’s list of 58 “supplier engagement leaders”, which also consisted of corporations from the tech, financial and auto industries.

CDP’s Global Supply Chain Report 2018, released today (29 January), is based on climate, water and deforestation-related data collected from 4,872 supplying companies across global supply chains.

Total emission reductions achieved by the companies covered in the report in 2017 reached 551 million metric tonnes of carbon. This represented cost savings of US$14bn in 2017, CDP said.

Highlighting some of the achievements reported in 2017, CDP noted Japanese food group Ajinomoto worked with a “key supplier” to become the only company worldwide to sell drinks in 100% recycled heat-resistant PET bottles. This reduced the group’s use of virgin plastics from fossil fuels by around 2,000 tonnes a year.

Food companies also work with their agricultural suppliers to promote sustainable practices. For example, Kellogg engages with 294,000 farmers across 21 countries to help them become more sustainable and “build resilience" to the impacts of climate change, CDP observed.

Untapped potential of supply chains

CDP stressed the importance of engaging with suppliers in order to cut global emissions. According to the organisation, greenhouse gas emissions in supply chanis are on average four times that of emissions produced by a company’s direct operations.

“Businesses can leverage the power of purchasing to push for more action on climate change,” Patricia Espinosa Executive Secretary, United Nations Framework Convention on Climate Change, suggested.

“Despite unprecedented disclosure, only 23% of supplier organisations that responded to the 2017 CDP supply chain questionnaire report engaging on climate with their supply chains. This indicates that large portions of the global supply chain network are not considering climate in their decision making, which represents significant untapped opportunities and financial savings,” Espinosa continued.

Making the A-list

In cooperation with Adec Innovations, CDP analyses the responses submitted to recognise which companies are “leading in their actions to reduce emissions and mitigate climate change”.

Consumer staples companies that made the A-list for tackling climate change in 2017 included Coca-Cola Europe, Nestlé, Deageo and Unilever. Ingredients suppliers were also recognised for their climate efforts, with Firmenich, Givaudan, International Flavors & Fragrances and Symrise all receiving an ‘A’ rating.

“Climate and environmental protection have the highest priority for us as a global company, especially in our sourcing processes and supplier relationships,” responded Hans Holger Gliewe, Chief Sustainability Officer at Symrise.

For sustainable water use, Anheuser Busch InBev, Associated British Foods, Conagra Brands, Danone, Diageo, Kellogg Company and Unilever all received A ratings. As did suppliers BASF, Symrise and Firmenich.

CDP flagged Danone’s water management incentives and the implementation of a sustainable relationship between Danone and its suppliers as a driver for supply chain sustainability. “For Danone, the supplier relationship is evolving towards a relationship between partners, enabling a co-creation approach with mutual benefits, shared risks and economic development. This approach creates new sourcing opportunities and secures Danone’s long-term supply,” the report noted.