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This blog combines articles from ADEC ESG Solutions, as well as FirstCarbon Solutions (FCS), an ADEC Innovation.
Benchmarking Climate Change Performance Across Supply Chains
Posted by Michele Carchman on Aug 26, 2014 8:27:00 AM
Supply chains are businesses’ lifeblood—they are the means through which products and services are created and delivered to the customer. Supply chains are where one can see how raw materials travel and transform into goods. They also reflect companies’ value chains, indicating cash outflow from costs of raw materials and resources along with profits from customers’ purchase of their products.
Creating green supply chains to link companies all over the world is fundamental to achieving global sustainability goals. As supply chains are a critical part of all operations, it is important to maximize their potential in managing climate risks, helping to increase bottom lines, and ultimately, drive more sustainable business. This is only possible with the availability of more data, strong metrics, and in-depth analyses on the benefits of creating sustainable supply chains to business success and the environment.
CDP’s Supply Chain Program
In addition to holding expansive repositories of environmental reports from both companies and cities, CDP (formerly the Carbon Disclosure Project) is one of the first organizations to recognize the importance of addressing and evaluating the impacts of supply chains on the environment. With that in mind, CDP established its supply chain program — a platform where purchasing companies and suppliers can communicate and collaborate to develop more sustainable supply chains worldwide.
Through the supply chain program, member purchasing companies are able to solicit information from their suppliers about their greenhouse gas (GHG) emission levels and resource consumption (water and energy) throughout the sourcing of materials and delivery of goods, along with assessing overall climate and risk management. As suppliers communicate their climate resiliency, purchasing companies are able to effectively collaborate with their supply chains, to reduce environmental impacts by engaging suppliers in sustainability programs or incentivizing sustainable sourcing.
Subsequently, there is a need to facilitate the development of sustainable supply chains to acheive more sustainable businesses. Suppliers must know how they compare to other like companies in terms of sustainability transparency and performance, while purchasing companies must be able to identify the most sustainable suppliers to do business with. This led to the launch of the Supplier Climate Performance Index (SCPLI).
Surmounting Challenges to Creating Sustainable Supply Chains with Measurement and Benchmarking
True to its commitment to further measurable, results-oriented sustainability initiatives across businesses and governments, FirstCarbon Solutions (FCS), in partnership with CDP, developed and launched the SCPLI as a means to recognize suppliers who extensively report and effectively carry out their initiatives to manage climate risks.
The SCPLI is one of CDP’s initiatives to combat the challenges with creating greener supply chains. Together with CDP, FCS aims to provide suppliers with a benchmark for their climate performance. CDP and FCS help identify suppliers who holistically manage their climate risks and reduce their GHG emissions. By distinguishing these leading suppliers, CDP and FCS determine the best practices of these businesses, giving other suppliers sustainability efforts to improve and/or aspire for.
With the SCPLI, suppliers whose executives and leaders establish and oversee the planning of climate change mitigation initiatives and monitor the incentives for emission-reducing practices are among the top climate resilient suppliers.
Top climate-resilient suppliers are also those with comprehensive Scope 1 and Scope 2 GHG measurements in their carbon inventories and corresponding reduction targets. In addition, top suppliers report emission reductions, along with supporting evidence, ensuring the accuracy of their GHG cutbacks. Ultimately, leading suppliers have their carbon inventories verified by a third-party organization, in order to identify more opportunities for emission reductions and to further the credibility of their emission reports.
Ensuring the Proliferation of Sustainable Supply Chains through Performance Leadership
As more suppliers and customers grow aware of the rising standards in supply chain climate performance, they will realize the practices and strategies they must employ, as well as the benefits of seizing business opportunities from reducing emissions and improving overall climate resiliency. Suppliers will evolve into becoming more efficient and reap cost savings throughout the process. They will be able to profit from products and services with less GHG emissions and, more importantly, be recognized by their clients and other key stakeholders as a contributor to achieving a sustainable low-carbon future.
FCS has been the exclusive scoring partner for CDP’s Supply Chain Program since 2011. Only FCS holds insight into CDP’s unique scoring methodology, enabling us to provide first-rate consultancy for improved CDP submissions. The growing number of our satisfied clients and our continually-expanding partnership with CDP is a testament to FCS’ strong capabilities and commitment to helping drive sustainable economies.