@Risk

Companies need to better integrate carbon reduction strategies with their suppliers’ organizational policies, according to a new report by the Carbon Disclosure Project (CDP).

The report, “CDP 2009 Public Procurement Report for the UK Government,” released just days before the start of the international climate conference in Copenhagen, stresses that climate change is a business issue and that the UK government now expects its suppliers to disclose their greenhouse gas (GHG) emissions and climate change related risk.

Just over 80% of the 164 supplier companies taking part in the report were able to disclose their emissions. About 77% reported their Scope 1 and 2 emissions. But, Scope 3 emissions were reported far less. In fact, the study specifically identified the critical need to understand all aspects of Scope 3 (indirect) emissions.

As a reminder…

Scope 1: GHG emissions generated through the direct burning of fossil fuels.

Scope 2: GHG emissions generated from purchased electricity.

Scope 3: all other indirect emissions that include sources stemming from the company’s activities not owned or controlled, such as supply chain emissions and business travel.

“A significant proportion of those emissions, which the negotiations in Copenhagen will seek to cap, are being generated as a result of what the developed world purchases. Supply Chain emissions often make up the majority of an organization’s footprint,” says Paul Dickinson, Chief Executive Officer at CDP. “This report shows that Government is seeking to exert its influence through the supply chain which will complement more traditional fiscal measures pursued through the United Nations Framework Convention on Climate Change.”

More and more companies are beginning to recognize the business risks associated with climate change.

Do you?

It’s time to start identifying both the challenges and the opportunities. After all, changes in both global climate and resources availability will require your company to adapt –in order to succeed.

You can download a copy of the CDP’s latest report at http://www.cdproject.net.