Unilever recognised as a leader in tackling supply chain emissions

We are among just 2% of the 3,300 companies assessed by CDP to be awarded a position on its leader board. This recognises our efforts to reduce emissions and lower climate-related risks in our supply chain in the past year. This latest accolade means we are the only company to score A across all four of CDP’s programmes, building on last year’s top scores for climate, forests and water.

As Unilever’s Chief Supply Chain Officer, Marc Engel, says: “Disclosure through CDP helps us understand our upstream footprint better, what initiatives key suppliers have embarked on to reduce emissions associated with goods and services purchased, and to uncover opportunities for collaboration. Transparency and reporting are vital in building trust among consumers, customers, the communities we operate in, employees and also with our investors.”

Climate leadership pays dividends

Unilever is one of a growing number of companies leading the way. This year, CDP’s Supplier Engagement leader board recognises 58 organisations – double the 29 in 2017 – including Bank of America, Kellogg Company and Nestlé. This features in Closing the Gap: Scaling up sustainable supply chain practices, CDP’s Global Supply Chain Report 2018.

The report reveals that climate leadership is paying dividends, as awareness of climate change-related risks and opportunities is increasing down the supply chain. Over three-quarters (76%) of suppliers responding to CDP have identified some inherent climate-change risks to their organisation and more than half (52%) report that they have integrated climate change into their business strategy.

Much more could be achieved

There is huge potential for positive impact. According to CDP, reductions equivalent to over 550 million tonnes of carbon dioxide – more than Brazil’s total emissions in 2016 – were reported by suppliers worldwide in 2017. This is an increase from the 434 million tonnes reported in 2016. There’s a financial, as well as an environmental benefit. Cutting emissions saved suppliers a reported US$14 billion.

This impact is, however, only a fraction of what could be achieved if all organisations at each tier of the supply chain were engaged and working to drive down emissions. Currently, less than a quarter (23%) of supplier respondents are in turn engaging with their own suppliers to reduce emissions. This suggests that many may be missing out on business opportunities and financial savings.

At Unilever, we have begun to examine the wealth of information provided in the CDP data, to understand the upstream supply chain emissions associated with our products. This is leading to insights on where and how we might be able to engage with suppliers to reduce emissions and costs, and mitigate risks.

Large companies have huge influence

CDP leverages investor and buyer power to motivate companies to disclose and manage their environmental impacts. As a member of its supply chain programme, Unilever is one of 99 companies with over US$3 trillion in purchasing power working to engage its suppliers and tackle climate, water and forest-related risks in the supply chain.

Last week’s discussions at Davos – concerning international trade and the World Economic Forum’s recently published Global Risks Report 2018 – highlight the importance of addressing supply chains when tackling environmental challenges. This is especially significant because greenhouse gas emissions in the supply chain are on average four times higher than those from direct operations.