CDP Responsible Sourcing Seminar: Managing Supply Chain GHG Emissions

On June 26, 2019, the CDP Ireland Network hosted a seminar to explore why many of the world’s leading companies are now assessing climate risk and opportunity in their value chain and are choosing to measure and report their Scope 3 emissions, which include indirect emissions from areas such as transportation and waste management.

Our keynote, Edward Cameron, set the scene by highlighting some of the key trends that are driving businesses to take meaningful action against climate change. Businesses now have an improved understanding of the risk and reward that climate change presents to their business. No longer just an environmental issue, it is now been considered across all departments including financial, legal & compliance, HR and operations. Edward challenged the businesses in the room to not only identifying the hazards impacting their businesses, but also to assess your exposure to these hazards and to ensure that you don’t have any underlying vulnerabilities. Examples of vulnerabilities mentioned included being overly reliant on one factory to produce a critical component in your supply chain, or if your workforce predominately came from one section of society, they may be unable to work in the event of an extreme weather event.

Continuing on an optimistic note, he highlighted how the transition has begun, emphasizing what an unprecedented achievement it was to get 196 countries to sign up to the Paris Agreement. And while the ambition has been set at a global policy level, he sees businesses as the partners that will drive real change and implementation. Already over 6,000 companies representing $36 trillion in revenue have committed to climate action. Coming from 120 countries, these businesses make up half the global economy. However, he warned the network to be careful on how their businesses are presenting their emission reduction targets and achievements. Citing the example of a large technology company, he pointed out that their claim to have already achieved net zero emissions was more than a little misleading, with the claim relating to their direct emissions only, however 96% of their overall emissions come from indirect sources (Scope 3).

To finish, he outlined how leadership is building in businesses on the topic of climate change. He urged organisations to first Act by setting targets in your own businesses and getting buy in from the leadership team; then Enable, by educating your supply chains or the companies you invest in; and finally Influence, by driving change in public policy and actively engage with your consumers or “captive” audience to change their behaviours.

CDP Supply Chain Programme

We then delved into the more practical side of the seminar, starting with Kate Redington from the CDP Supply Chain team who gave an overview of the CDP Supply Chain Programme. It is a platform for engagement with your suppliers to help them reduce their carbon emissions.

Some of the benefits of this programme include

• A standardized platform to engage with your supply chain on environmental issues;
• The opportunity to educate and involve the procurement team in driving climate action in the supply chain;
• Show leadership among your supply chain, especially among smaller companies who may not yet be looking at reducing their emissions yet;
• Improve disclosure of your Scope 3 emissions as your suppliers are now allocating a percentage of their emissions to your business; Kate pointed out that on average Scope 3 emissions account for 5.5 times a company’s direct emissions; and for some sectors, such as retail, this can be as high as 90%.
• Help to improve your overall CDP score and your Supplier Engagement Score;
• Reduce risk and improve efficiencies in your supply chain.

Measuring Transport Emissions

Paul Ledesve from TK’Blue, a non-financial rating and labelling agency that helps clients measure their transport emissions, then presented the argument for why companies should be measuring their transport emissions. While measuring your transport emissions is not hard, it can be very laborious to do it accurately, especially when you want to capture the actual energy consumption of journeys, use real distances, and know the technical characteristics of all the vehicles used. This level of detail requires a highlevel of cooperation with all the various transport carriers used by your business.

Paul also highlighted that while the focus at the moment is on monitoring and reporting transport emissions, in the future other transport related issues created by businesses may need to be recorded such as air pollution (NO_X, particles, SO₂ etc.) and noise levels.

Also announced was the news that Clearstream Solutions would be the partner for TK’Blue in Ireland.

Measuring Waste Emissions

Dr. Leigh Holloway of eco3, gave a thought-provoking presentation on the management and measurement of waste emissions. Some of the key takeaways included,

• You must first understand your waste generation before you embark on any initiatives to reduce, otherwise you make assumptions which can lead you to focus on the wrong issues;
• Always collect and analyse the data;
• While the carbon footprint of packaging is important, it alone should not be what drives your decision to select a certain type of packaging. Other factors such as its ability to be reused and its recyclability should always be considered;