The Countdown to Disclosure Begins

On April 1, the Carbon Disclosure Project's (CDP) Supply Chain program officially opened. The CDP will soon be sending out its annual information request to companies around the world, inviting these organizations to voluntarily disclose their sustainability criteria and carbon emissions.

Each year for the last two years, the number of organizations reporting to the CDP has increased by over 20%, largely due to the growing CDP Supply Chain Program.  The Program is comprised of over 50 purchasing organizations, including Walmart, PepsiCo, and Dell, who use the CDP as a platform to gather and analyze their supply chain’s sustainability information. The Supply Chain Program has seen an increase in supplier submissions of more than 85% since 2010.

Added pressure from purchasing organizations is a primary driver behind this increase.  Buyers are looking for a methodical way to reach out to their suppliers in order to better understand how each is addressing sustainability and working to reduce greenhouse gas (GHG) emissions.  These large purchasers are turning up the heat by requesting more suppliers to respond to the CDP and becoming willing to deselect suppliers that won’t.  In 2011, there was a 128% increase in the number of suppliers that received a formal request from their purchasing organization to report to the CDP.

The advent of carbon accounting software systems like Mosaic™ is helping suppliers to meet these requirements by simplifying the process of measuring and reporting GHG emissions.  In 2011, the CDP reported that 80% of all supplier respondents disclosed their Scope 1 and Scope 2 emissions, a 33% increase from 2010.

Another benefit to measuring and managing GHG emissions is that companies can realize a significant bottom line impact.  In 2011, the CDP reported that more than 60% of supplier respondents described activities to reduce emissions and that 40% of those reported real cost savings as a result. 

One new incentive for suppliers to report to the CDP is the benchmarking analytics first provided to respondents in 2011.  The CDP gave each respondent and their requesting purchasing organization a score that included categorical breakdowns.  The average supply chain disclosure score was a 51, or mid-range, with suppliers generally scoring best in Governance and Strategy and worst in Stakeholder engagement.  This quantitative baseline provides respondents with a spring board for measurement and for future sustainability development.

It’s become increasingly important for suppliers to answer their purchasing organization’s request to report to the CDP.  As an official, accredited consultancy partner to the CDP, Renewable Choice can help your company prepare your supply chain questionnaire.  Contact us today for more information on our CDP services or check out our new CDP Essentials Briefcase to download important CDP reporting and deadline documents.

Ryan Meeks is Sustainability Analyst for Renewable Choice.