More Companies Finding Cost and Carbon Savings in Supply Chains

NEW YORK , NY — More major companies are tracking their supply chain emissions, and many, along with their suppliers, are also saving money from reducing carbon.

The Carbon Disclosure Project's latest supply chain report looks at what the 57 members of its Supply Chain program and 1,000 of their suppliers have been doing to integrate climate change into their businesses.

The report, by consulting firm A.T. Kearney, looks at activities from 2010 and found that 86 percent of member companies worked with their suppliers on carbon-related activities, a jump from the 46 percent that collaborated with suppliers in 2009.

More than 50 percent of member companies and 25 percent of suppliers say they've lowered costs thanks to actions that also reduced their emissions, the typical result from cutting down on things like energy and fuel, but in this case it also sends a message to other suppliers that aren't tracking or tackling their carbon.

The number of companies with formal climate change strategies has grown from 63 percent in 2009 to 79 percent last year, though in 2010 the number of companies citing employee motivation, brand improvement and product differentiation as drivers jumped much more than with other factors.

Although suppliers are admittedly expected to lag behind larger companies due to having fewer resources and the fewer expectations and pressures put on them in previous years, the report shows that the same percentage of suppliers as in 2009, about 33 percent, have carbon reduction goals. That's compared to the 90 percent of member companies that have goals.

And while 72 percent of member companies have their supply chain emissions data verified externally, only 39 percent of suppliers do the same due to the costs of verification.

A bright spot in the report is that 45 percent of companies are tracking and reporting on supply chain emissions, double from 2009. But along with that, businesses said one of the major hurdles to tracking supply chain emissions is the lack of standardization for such Scope 3 emissions reporting.