Suppliers express concern about climate change regulations

By Guy Montague-Jones

- Last updated on GMT

Related tags Greenhouse gas Supply chain

The vast majority of large suppliers fear the impact of greenhouse
gas regulations on their businesses, according to a survey by the
Carbon Disclosure Project (CDP).

Unilever, L'Oreal and Nestle were among the leading global companies invited to question their suppliers about carbon emissions and climate risks as part of the CDP's Supply Chain Leadership Collaboration.

Greenhouse risks evaluated Taxation and emissions limits were the most commonly reported fears among the 94 per cent of suppliers that identified greenhouse gas regulation as a potential risk.

The companies were also concerned that extreme weather conditions would affect operations and slow productivity in the years to come.

Lack of preparation Despite the widespread anxiety about the impact of climate change on business many companies remain unprepared for the potential challenges that lie ahead.

Only 26 per cent of the respondents have already established greenhouse gas reduction targets so far.

Blocking their ability to set such goals is the fact that many suppliers are still ignorant of their own current carbon footprints.

Fifty eight per cent of respondents track their own emissions from fossil fuels burnt and electricity purchased and only 12 per cent estimate indirect emissions that are a consequence of their activities.

Commenting on the importance of the initiative, CDP's CEO Paul Dickinson said: "Engaging with suppliers is a key first step to understanding carbon liability and to bringing about emissions reductions through the supply chain."

Expanding the project The project is to be extended this year with more large companies joining including Colgate-Palmolive, Heinz and Kellogg Company.

Under the next phase of Supply Chain Leadership Collaboration the CDP will send out information requests on behalf of these corporate giants to over 1,000 suppliers and report their findings in January 2009.

The CDP is a not for profit organisation that aims to create a dialogue between investors, purchasers and corporations regarding the business world's response to climate change.

It holds the largest registry of corporate greenhouse gas emissions in the world and aims to inform investors about business related climate risks and opportunities.

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