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- By requesting data from their suppliers, they are shining a light on the risks hidden deep within their production chains
- Walmart is working with CDP, our suppliers and others on Project Gigaton – an approved science-based target initiative aimed at avoiding a gigaton (one billon metric tons) of emissions from the global value chain by 2030
The battle to make the world of business more sustainable has seen many of the world’s largest companies step up with commitments to reduce their use of energy, water and other scarce materials.
Now that battle is moving to supply chains, with a number of the world’s leading retail powerhouses encouraging their suppliers to become more sustainable as well. The latest figures from CDP, the global environmental impact non-profit, show that Walmart, CVS Health, Target and the UK’s Tesco have started collecting data from their suppliers in order to cut their environmental risks and reduce carbon emissions in their supply chains.
“The leadership shown by the retail sector is part of a wider surge of action from private and public-sector organizations, harnessing their purchasing power to tackle climate change, deforestation and water security,” says CDP (which was formerly known as the Carbon Disclosure Project).
The pace of change is accelerating. A decade after CDP started collecting supply chain data on behalf of the world’s largest purchasing entities, 115 organizations – representing a combined annual spend of more than US$3.3 trillion – are now requesting data from over 11,500 suppliers. This is more than a 15% increase from last year, when 99 organizations requested data.
“With emissions in the supply chain on average around four times greater than those from a company’s direct operations – and rising to up to seven times greater for retailers and consumer-facing companies – large multinational corporations cannot comprehensively address their environmental impact without looking to their supply chains,” commented Sonya Bhonsle, Head of Supply Chain at CDP.
“It’s very encouraging to see so many of the world’s biggest buyers taking supply chain sustainability seriously. By requesting data from their suppliers, they are shining a light on the risks hidden deep within their production chains – and uncovering a myriad of opportunities for reducing their overall environmental footprint, boosting innovation and cutting costs.”
The rise in the number of companies scrutinizing their supply chains comes as a growing number of companies adopt science-based targets – goals that allow companies to reduce their emissions in line with the decarbonization required to keep global temperature increase below 2°C, the central aim of the Paris Agreement.
The Science Based Targets Initiative, which helps companies develop and approve such targets, requires companies to set Scope 3 targets – which covers emissions from their supply chains – if those emissions account for40% or more of their total emissions. That is one reason retailers have been signing up – because they do not manufacture the products that they sell, Scope 3 emissions make up a huge proportion of their carbon footprint.
Walmart has been asking its suppliers about their emissions for 10 years. Ariane Grazian, senior manager, sustainability at Walmart, said which has been requesting data from its suppliers for ten years, commented: “We are proud of the improvements we’ve made in reducing our own emissions, but we aim to do more.
“That’s why Walmart is working with CDP, our suppliers and others on Project Gigaton – an approved science-based target initiative aimed at avoiding a gigaton (one billon metric tons) of emissions from the global value chain by 2030 . In year one, Project Gigaton has helped inspire action that has led to the avoidance of 20 million metric tons of emissions and has expanded into China and the UK with participation from over 400 suppliers with operations in over 30 countries.”
It is not just retailers that are getting involved, though. Other organizations that have signed up to CDP’s supply chain request for information in 2018 include the world’s biggest brewer, AB InBev, the Los Angeles Department of Water and Power, chemicals groups Croda and Arkema, along with Royal Bank of Canada.
They join leading corporations including Bank of America, Dell, Microsoft, Philip Morris and NRG Energy in engaging with their supply chains through CDP.
Jennifer Silberman, vice-president, Corporate Responsibility at Target commented: “The future of Target’s business depends on taking care of the resources we have today, so we are constantly working to find more environmentally friendly ways to bring guests the products they want. We have been reporting our own emissions to CDP since 2012, and will now seek this data from key Target suppliers to better support them in achieving greater efficiency, investments in innovation and sustainable choices.”
Prodipto Roy, program manager for Buildings & Industry at ClimateWorks Foundation, the NGO that has supported CDP’s increased engagement with retailers, pointed out that retail companies can have a huge impact on awareness and action to reduce emissions because they sit at the top of a large global supply chain. “By setting a science-based target and asking their suppliers to disclose to CDP, retailers are sending a strong message that they are committed to making the transition to a low-carbon economy, and that they expect their suppliers to come with them on that journey.”
