Suppliers in the United States, Brazil, China & India Least Resilient Against Climate Change Risks, Finds New Global Study fr...
27 January 2015 - 04:01PM
Business Wire
Lack of preparation currently leaves supply chains in Brazil,
China, India and the United States more vulnerable to climate risks
than those in Europe and Japan. However, suppliers in China
and India deliver the greatest financial return on investment to
reduce their greenhouse gas emissions and demonstrate the strongest
appetite for collaboration across the value chain, according to
research released today by CDP, the international NGO formerly
called Carbon Disclosure Project, and Accenture (NYSE:ACN).
Supply chain sustainability revealed: a country comparison. CDP
supply chain report 2014–15 is the most comprehensive overview of
the climate risks and opportunities that exist for supply chains
globally. The new research, which also incorporates information
from the United Nations’ World Risk Report*, is based on data
collected from 3,396 companies on behalf of 66 multinational
purchasers that work with CDP to better understand and manage the
environmental impacts of their supply chains; they account for $1.3
trillion in procurement spend, and include organizations such as
Nissan Motor Co. Ltd., and Unilever plc.
Analysis and scoring of suppliers’ climate change mitigation
strategies, carbon emissions reporting, target setting, emission
reduction initiatives, climate risk procedures, uptake of
low-carbon energy, and water risk assessment efforts, as disclosed
by suppliers to CDP, were used to create a sustainability
risk/response matrix which offers a visual comparison of how well
prepared suppliers across 11 major economies* are to mitigate and
manage environmental risk in their supply chains.
“While climate and water risks are apparent, the implications
for businesses and economies reliant on complex supply chain models
are less understood,” said Paul Simpson, chief executive officer,
CDP. “That multinationals are engaging with thousands of
suppliers to better manage environmental challenges and
opportunities is encouraging. These companies are catalyzing
progress in response to global problems.”
Mr. Simpson added: “It is particularly exciting to see such a
strong appetite for collaboration and superior financial returns on
initiatives to reduce emissions from Chinese and Indian
suppliers. This should attract investment, which in turn will
drive greater action within these high emitting markets.”
“What is concerning is that, despite the increase in the number
of companies assessing and reporting on their emissions, the data
suggests that suppliers are making either marginal or no
improvements in their development of sustainable supply chains
capable of weathering climate risks and other natural disasters,”
said Gary Hanifan, managing director, Accenture Strategy. “The
good news is that as companies transform their supply chains into
digital supply networks they will gain greater end-to-end
visibility, traceability and access to information to report on
their compliance progress and mitigate climate risks.”
The sustainability risk/response matrix reveals that:
- Suppliers in France, the UK, Spain
and Germany – in that order – are identified as the most
sustainable. They have taken extensive measures despite
comparatively low levels of exposure to climate risk. However, the
report notes a year-on-year decline in the percentage of German
suppliers implementing a number of key environmental performance
indicators, such as having a climate risk management processes in
place, which has dropped from 82 percent to 72 percent.
- Japan is the only country with
suppliers that are well-equipped to respond to high climate risks
as they have matched their awareness and actions with the high
levels of risk to which they are exposed. Suppliers in
Japan can claim some of the highest levels of emissions reporting,
target setting and climate risk awareness and management.
- Suppliers in China, Italy and the
United States are found to be vulnerable. An assessed
imbalance between high exposure to climate risk and the steps that
suppliers have taken in response to the situation leaves room for
improvement for those in these geographies.Even so, the United
States has been identified by CDP as an incubator of leadership,
given that the majority of constituents of the CDP Supplier Climate
Performance Leadership Index – those suppliers identified as taking
the most positive actions to address climate change - are
headquartered in the United States.
- Brazil, Canada and India must do
more as suppliers there who participated in the research report
fewer emission reduction initiatives than the global average.
- A collaborative approach and
profitable emissions reductions initiatives give China and India a
competitive edge. Suppliers in China and India offer the
best return on investment in terms of emissions reductions and
monetary savings. Further, suppliers in both markets demonstrate
the highest propensity to collaborate with partners across the
value chain in order to reduce climate risk.
The global picture, which is presented alongside the
country-by-country analysis in the report, establishes some
encouraging signs of global progress. Today, more
organizations than ever assess and report to CDP about their
environmental impact. The 3,396 companies that took part in
the program this year represent a substantial increase of 40
percent in the past three years.
Further, the quantity and percentage of suppliers setting
emissions targets, which is a crucial and advanced component of
climate risk management, shows a steady upward trend: nearly half
(48 percent) of the suppliers set targets last year, compared to 44
percent in 2013 and 39 percent in 2012. There has also been an
increase in the number of suppliers achieving emissions reductions
since 2012, with the percentage rising from 34 percent to 40
percent in 2014. As suppliers become more advanced at carbon
management, the number of companies realizing monetary savings from
their actions to reduce emissions mirrors the rising trajectory,
jumping from 29 percent in 2012 to 33 percent in 2014.
Supply chain sustainability revealed: a country comparison. CDP
supply chain report 2014–15 is available to view online today.
* United Nations University-Institute for Environment and
Human Security, World Risk Report 2014. See
www.ehs.unu.edu/file/get/11895.pdf* The economies of Brazil,
Canada, China, France, Germany, India, Italy, Japan, Spain, the UK
and the US were identified as the major markets most relevant to
the purchasing organizations working with CDP, and as where CDP had
sufficient data. A global overview is presented alongside
market-by-market analysis within the report.
About CDP
CDP, formerly Carbon Disclosure Project, is an international,
not-for-profit organization providing the only global system for
companies and cities to measure, disclose, manage and share vital
environmental information. CDP works with market forces, including
767 institutional investors with assets of US$92 trillion, to
motivate companies to disclose their impacts on the environment and
natural resources and take action to reduce them. CDP now
holds the largest collection globally of primary climate change,
water and forest risk commodities information and puts these
insights at the heart of strategic business, investment and policy
decisions. Please visit www.cdp.net or follow us @CDP to
find out more.
About Accenture
Accenture is a global management consulting,
technology services and outsourcing company, with approximately
319,000 people serving clients in more than 120 countries.
Combining unparalleled experience, comprehensive capabilities
across all industries and business functions, and extensive
research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home
page is www.accenture.com.
CDPCatherine von Altheer, + 44 (0) 20 3818 2913mobile: + 44 7794
003 903catherine.vonaltheer@cdp.netorCDPKharunya Paramaguru, + 44
(0) 203818 3916kharunya.paramaguru@cdp.netorAccentureBarbara Lyon,
+ 703 947 1838barbara.d.lyon@accenture.com
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