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Holding Supply Chains Accountable for Carbon Emissions Saves Money, CDP Reports

A sustainable supply chain will result in a lot fewer carbon emissions, reports CDP, which looked at 89 supply chain members that cut those heat-trapping emissions by 434 million tons in 2016.

A story in Triple Pundit says that this then got the attention of financial executives by creating a savings of $12.4 billion last year. Among the businesses that were part of the survey: Unilever, Microsoft, Ford, Intel and WalMart, all of which have gone public as to their sustainability efforts.  The story, however, notes that only half the companies interviewed said they actually saved money by holding their supply chains accountable for carbon emissions. The half that did said they saved big.

It points to Intel, which it says used a carrot-and-stick approach to get its suppliers to disclose their carbon emissions. To be eligible to win supplier awards, for example, companies had to disclose their releases. To help them, Intel trained their managers and communicated with them, especially the ones at smaller companies.

Meantime, Walmart is the first retailer with an emissions-reduction plan approved by the Science Based Targets Initiative, in alignment with the Paris Climate Agreement in December 2015, the company says. Under the approved plan, Walmart will use a combination of energy-efficiency measures and renewable energy to achieve an 18 percent emissions reduction in its own operations by 2025. Additionally, Walmart will work with suppliers to reduce emissions by 1 Gigaton by 2030, equivalent to taking more than 211 million passenger vehicles off of U.S. roads and highways for a year.

“We want to make sure Walmart is a company that our associates and customers are proud of – and that we are always doing right by them and by the communities they live in,” says Doug McMillon, chief executive of WalMart. “That’s really what these commitments are about. And that’s why we’re so passionate about them.”

So, how do cost savings come about? CDP, which is a global disclosure system for companies, says that the preponderance of it happens because of better product design, waste diversion, energy efficiency and efficient transportation.

About 43 percent of Fortune 500 companies have already set targets to reduce carbon pollution, improve energy efficiency and procure more renewable energy, according to CERES, a business group dedicated to sustainability issues.

More than half of the Fortune 100 are publicly disclosing their climate and energy-saving targets – and they’ve collectively reduced carbon emissions by 58 million tons, while saving $1.1 billion annually by doing so, it adds. These carbon reductions by corporations are the equivalent of retiring 15 coal-fired power plants.

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