Businesses In Dark Over Climate Threat

While many corporate giants have woken up to the risks climate change poses for their business, many of those further down the supply change are blissfully unaware of how it may harm their trade.

This is the key finding of a study undertaken by the Carbon Disclosure Project (CDP), an initiative set up to encourage big business to be open about its emissions.

The CDP asked hundreds of suppliers working for major companies for their views on regulatory and physical risks and of the 634 who responded, a full third said they did not believe they faced any threat at all.

Only 58% considered climate change posed a risk to their operations.
Interestingly, the report showed that Asian suppliers expressed the highest level of concern over climate change and many are using governance and employee incentives to drive positive action.

Of the 77 responding suppliers based in Asia, 66% cite board level responsibility for climate change issues, well above the 54% global average.

In addition 39% of responding Asian companies reported the use of employee incentives, which can be a key lever for change.

As well as providing companies with a system for tracking and reporting their own emissions, the CDP also offers advice on helping them influence their suppliers in this area.

34 big name companies including Cadbury, Vodafone and Unilever use the system, requiring their major suppliers to report on their carbon footprint.

For most companies, 40% to 60% of their total carbon emissions are beyond their direct control and come from their supply chain, but by requesting those further down the chain to report - and address - their share of the impact, large businesses can have a significant impact.