Climate Action 2011-2012

BenchMarking perforMance
Comparing one supplier’s carbon reporting to another can
be like comparing oranges with apples. CDP disclosures are
analysed and scored for their quality and completeness. The
company’s performance in contributing to climate change
mitigation, adaptation and transparency is assessed and
ranked. Providing scores for benchmarking to procurement
teams empowers them to continue the discussion with
suppliers on areas for improvement. It is also a quick way
to highlight the leaders and identify best practice to share
among the supplier base.
idenTifying opporTuniTies for
collaBoraTion
Climate change cannot be solved by an individual company
in isolation. Suppliers often have suggestions on how their
customer can reduce emissions and providing opportunities
for suppliers to put forward these suggestions is the first step
to innovation in the value chain. For the first time this year
CDP asked companies’ suppliers to make specific proposals
to their customers for collaborative development of GHG
emission reduction projects. To protect commercially
sensitive information and ensure data is received in one
place, it is advisable to provide suppliers with access to a
secure web-based portal. Online systems allow companies
to see if and when suppliers have submitted information
and provide access to that information as soon as it has
been submitted. Guidance and training materials can be
made available in the same system to support the supplier
through their reporting.
Companies that fail to address climate change risks in
their supply chain are ultimately ignoring best practice in
supply chain management. Supply chains are interlinked
and, like a balloon, if you squeeze them in one place,
problems are likely to pop out further down. Real solutions
require a holistic approach to the entire value chain and an
understanding of potential implications for the company, its
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Corporations are migrating to a low-carbon
economy by setting a course built on strong
leadership and focused collaboration
suppliers and its consumers. Companies that do not attempt
to drive efficiency throughout their supply chain will not
provide the best value to the end customer and will fail to
gain competitive advantage in their market. In the future,
regulations such as carbon taxes and emissions trading
schemes are likely to impact the operating costs of suppliers
unless they are able to measure and reduce their emissions.
Online systems allow companies
to see if and when suppliers have
submitted information.
Preparing suppliers for this now by benchmarking their
performance and providing feedback on what is expected of
them will help to position them as business partners of the
future. Real success is dependent on a collaborative and trusting
relationship with suppliers that encourages transparency so that
solutions can be built on evidence and insights.
perforMance ManageMenT wiTh The
Balanced scorecard
The Balanced Scorecard is an established management
tool which incorporates non-financial information such as
high quality products, motivated and skilled employees,
responsive and predictable processes and loyal customers, into
performance measurement systems. A number of the companies
that CDP works with use balanced scorecards for suppliers
that include CDP data points. Dell, for instance, has a supplier
scorecard that includes cost, quality, delivery, a technology
rating and GHG emissions management. Primary suppliers
are asked to report emissions impacts to CDP, establish public
goals for reducing their operational GHG impacts, and that
they compel their own suppliers to manage and publicly
disclose their emissions impacts. Dell’s suppliers were told that
not meeting these expectations could diminish their ability to
compete for Dell’s business.
Frances Way is Programme Director of CDP. She joined CDP in
December 2007 to manage and expand the Supply Chain Programme.
In her role as Programme Director, Frances oversees the delivery
of Investor CDP, CDP Supply Chain, CDP Water Disclosure and CDP
Reporter Services. Before joining CDP, Frances spent eight years in
the finance sector, primarily in Dresdner Kleinwort’s Global Equities
Division. Frances has an MSc in Environmental Technology from
Imperial College, London.
The Carbon Disclosure Project (CDP) Supply Chain programme
works with 50 multinational companies including Walmart, Dell and
PepsiCo. In 2011 CDP collected climate change and emissions data
from over 1,800 suppliers.
Carbon Disclosure Project Headquarters
40 Bowling Green Lane, London, EC1R 0NE, UK
Tel: +44 (0)20 7970 5660
Web: www.cdproject.net
147 climateactionprogramme.org