LONDON: The former Carbon Disclosure Project, now CDP, reports 56 percent of suppliers don’t have any climate targets and only 28 percent have a low-carbon transition plan to meet their climate goals.

Last year over 200 CDP supply chain members representing a US$5.5 trillion procurement budget asked 23,487 suppliers to disclose their emissions data, resulting in a record 11,400 responses.

Despite reporting emission reduction initiatives totaling 231 million tons of CO2e, CDP found at the current level of activity these suppliers would need another 10 years before they all set any climate target, let alone a science-based one.

The CDP’s latest supply chain report says only 38 percent of disclosing companies engage with their suppliers on climate change - falling to 16 percent for water security. CDP notes just 47 percent of traders, manufacturers and retailers are working beyond their first-tier suppliers to manage and mitigate deforestation risks.

In 2021, 71 percent of suppliers were prompted by customers to report their Scope 1 and 2 emissions to the CDP while saving US$29 billion and reducing CO2e emissions by 1.8 billion tons - equal to the annual output from 454 coal power plants.

This year CDP will request information on forests and water security from financial institutions in an acknowledgement that US$44 trillion of global GDP is at risk because of the corporate dependence on nature and its services.

Responses to the organisation’s 2021 climate change questionnaire revealed that while 86 percent of the 377 disclosing financial institutions assessed their portfolio’s exposure to climate risks, the figure dropped to around 67 percent for water security and 55 percent for deforestation.

“Our data shows that corporate environmental ambition is still far from being ambitious enough. Alongside that, companies have blinkers on when it comes to assessing their indirect impacts and engaging with suppliers to reduce them,” commented Sonya Bhonsle, CDP global head of Value Chains & regional director Corporations. “Companies must act urgently to cascade action and manage environmental impacts throughout their supply chains to scale the level of action to secure a 1.5°C future. This is essential for the transition towards a sustainable net-zero, deforestation-free and water-secure economy.”

CDP has included a ‘Sustainable Procurement Pathway’ tool in its latest report, designed to help companies go beyond their first-tier suppliers to manage and mitigate environmental risks inherent within their supply chain.

Begun in 2000 and now working with over 590 investors with more than US$110 trillion in assets, non-profit CDP pioneered the use of capital markets and corporate procurement to motivate companies disclose their environmental impacts, reduce greenhouse gas emissions, safeguard water resources and protect forests. It is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative.